PriceSmart
Announces Fourth Quarter and Fiscal Year Results of Operation
For the fourth quarter of fiscal 2006 net
warehouse sales were $182.7 million, compared to $155.4 million in the
fourth quarter of fiscal 2005. Total revenue for the fourth quarter was
$186.8 million, compared to $158.8 million in the prior year. The Company had 23 warehouse clubs in
operation at the end of fiscal 2006 compared to 22 at the end of fiscal 2005. The
net warehouse sales, total revenues, and number of warehouse clubs for the
prior year do not include PriceSmart
The Company recorded operating income in the
quarter of $4.3 million compared to an operating loss of $465,000 in the fourth
quarter of fiscal 2005. Fourth quarter
2006 results included asset impairment and closure costs of $1.7 million
whereas fourth quarter 2005 asset impairment and closure costs were $2.6 million.
Net income attributable to common
stockholders for the fourth quarter was $3.4 million or $0.12 per diluted share
compared to a net loss of $24.1 million or ($0.95) per diluted share in the
fourth quarter of fiscal 2005. Net
income in the current period included $3.0 million of income, net of tax,
primarily associated with the collection of a previously fully reserved loan
from the Company’s former Philippine subsidiary. The loss in the fourth quarter of fiscal 2005
included: $16.7 million ($0.66 per diluted share) for discontinued operations,
net of tax resulting from the sale of the Company’s interest in the Philippines
operation; $1.3 million ($0.05 per diluted share) in charges related to the
Company’s equity investment in PriceSmart Mexico which was closed in February
2005; and $5.1 million ($.20 per diluted share) in current period tax
provisions and reserves for tax contingencies.
Total revenue for fiscal 2006 increased
18.7% to $734.7 million from $618.8 million in fiscal 2005 and net warehouse
sales increased 18.9% to $719.6 million during that same period. For fiscal year 2006 the Company recorded
operating income of $18.1 million and net income attributable to common stockholders
of $11.9 million or $0.43 per diluted share.
For fiscal year 2005 the Company recorded a net loss attributable to
common stockholders of $63.6 million or ($3.15) per diluted share, of which,
$20.6 million ($1.02 per diluted share) was attributable to deemed dividends
related to the conversion of Series A and Series B preferred stock to common
stock; $19.5 million ($0.96 per diluted share) related to discontinued
operations, primarily PriceSmart Philippines; and $4.4 million ($0.22 per
diluted share) was related to non-cash charges associated with the write-down
of the Company’s equity investment in PriceSmart Mexico.
The Company ended the fiscal year with $40.0
million in unrestricted cash and, subsequent to year end, on
Commenting on the fourth quarter and full
year results, PriceSmart President,
About
PriceSmart
PriceSmart, headquartered in
This press release may contain
forward-looking statements concerning the Company's anticipated future revenues
and earnings, adequacy of future cash flow and related matters. These
forward-looking statements include, but are not limited to, statements
containing the words "expect," "believe," "will,"
"may," "should," "project," "estimate,"
"scheduled," and like expressions, and the negative thereof. These
statements are subject to risks and uncertainties that could cause actual
results to differ materially, including the following risks: the Company had
substantial net losses in fiscal 2003, 2004 and 2005, and may not be able to
sustain the profitability it achieved in fiscal 2006 in future periods; the
Company’s financial performance is dependent on international operations which
exposes the Company to various risks; any failure by the Company to manage its
widely dispersed operations could adversely affect the Company’s business;
although the Company has taken and continues to take steps to improve
significantly its internal controls, there may be material weaknesses or
significant deficiencies that the Company has not yet identified; the Company
faces significant competition; the Company faces difficulties in the shipment
of and inherent risks in the importation of merchandise to its warehouse clubs;
the Company is exposed to weather and other risks associated with international
operations; declines in the economies of the countries in which the Company
operates its warehouse clubs would harm its business; a few of the Company’s
stockholders have control over the Company's voting stock, which will make it
difficult to complete some corporate transactions without their support and may
prevent a change in control; the loss of key personnel could harm the Company’s
business; the Company is subject to volatility in foreign currency exchange;
the Company faces the risk of exposure to product liability claims, a product
recall and adverse publicity; a determination that the Company's long-lived or
intangible assets have been impaired could adversely affect the Company's
future results of operations and financial position; and the Company faces
increased costs and compliance risks associated with compliance with Section
404 of the Sarbanes-Oxley Act of 2002; as well as the other risks detailed in
the Company's SEC reports, including the Company's Form 10-Q filed pursuant to
the Securities Exchange Act of 1934 on July 14, 2006. We assume no obligation
and expressly disclaim any duty to update any forward-looking statement to
reflect events or circumstances after the date of this presentation or to reflect
the occurrence of unanticipated events.
Certain prior period amounts may have been reclassified to conform to
the current period presentation.
For further
information, please contact Robert E. Price, Chief Executive Officer (858)
551-2336; or John M. Heffner, Executive Vice President and Chief Financial
Officer (858) 404-8826.
PRICESMART, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)