EX-99.1 2 ex99-1.htm PRESS RELEASE OF PRICESMART, INC. DATED JULY 9, 2010 ex99-1.htm

PriceSmart Announces Third Quarter Results of Operations and June 2010 Sales

 
San Diego, CA (July 9, 2010) – PriceSmart, Inc. (NASDAQ: PSMT, www.pricesmart.com) today announced its results of operations for the third quarter of fiscal year 2010 which ended on May 31, 2010.
 
For the third quarter of fiscal year 2010, net warehouse sales increased 13.9% to $341.2 million from $299.6 million in the third quarter of fiscal year 2009.  Total revenue for the third quarter was $348.6 million compared to $306.5 million in the prior year.  The Company had 27 warehouse clubs in operation as of May 2010 compared to 26 warehouse clubs in 2009.
 
The Company recorded operating income in the quarter of $18.1 million, compared to operating income of $13.2 million in the prior year.  Net income was $12.0 million, or $0.40 per diluted share, in the third quarter of fiscal 2010 compared to $8.7 million, or $0.29 per diluted share, in the third quarter of fiscal 2009.
 
For the first nine months of fiscal year 2010, net warehouse club sales increased 8.9% to $1,008.8 million from $926.3 million in the first nine months of fiscal year 2009.  Total revenues for the first nine months of the fiscal year increased 8.8% to $1,030.2 million from $946.5 million in the same period of the prior year.  For the first nine months of fiscal year 2010, the Company recorded operating income of $54.7 million and net income of $36.1 million, or $1.21 per diluted share.  During the same nine month period in fiscal year 2009, the Company recorded operating income of $45.6 million and net income of $32.1 million, or $1.08 per diluted share.
 
The Company also announced that for the month of June 2010 net sales increased 19.0% to $113.9 million, from $95.7 million in June a year earlier.  For the ten months ended June 30, 2010, net sales increased 9.8% to $1,122.6 million from $1,022.0 million for the ten months ended June 30, 2009.  There were 27 warehouse clubs in operation at the end of June 2010 and 26 warehouse clubs in operation at the end of June 2009.
 
For the four weeks ended June 27, 2010, comparable warehouse sales for the warehouse clubs open at least 12 full months increased 14.5%, compared to the same four-week period last year.  For the forty-three week period ended June 27, 2010, comparable ware­house sales increased 6.4%, compared to the comparable forty-three week period a year ago.
 
 
About PriceSmart
 
PriceSmart, headquartered in San Diego, owns and operates U.S.-style membership shopping warehouse clubs in Central America and the Caribbean, selling high quality merchandise at low prices to PriceSmart members. PriceSmart now operates 27 warehouse clubs in 11 countries and one U.S. territory (five in Costa Rica; four each in Panama and Trinidad; three in Guatemala, two each in Dominican Republic, El Salvador and Honduras; and one each in Aruba, Barbados, Jamaica, Nicaragua and the United States Virgin Islands).
 
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’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; the Company faces difficulties in the shipment of and inherent risks in the acquisition and importation of merchandise to its warehouse clubs; the Company is exposed to weather and other natural disaster 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 own nearly 40% of the Company's voting stock, which may make it difficult to complete some corporate transactions without their support and may impede 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 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 Annual Report on Form 10-K filed pursuant to the Securities Exchange Act of 1934 on November 9, 2009.  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.
 
 
For further information, please contact Robert E. Price, Principal Executive Officer (858) 551-2336; or John M. Heffner, Executive Vice President and Principal Financial Officer (858) 404-8826.


 
 
 

PRICESMART, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED—AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

   
Three Months Ended
    
Nine Months Ended
  
   
May 31,
    
May 31,
  
   
2010
    
2009
    
2010
    
2009
  
Revenues:
                        
Net warehouse club sales
  
$
341,215
    
$
299,571
    
$
1,008,760
    
$
926,329
  
Export sales
    
868
      
1,038
      
2,461
      
2,779
  
Membership income
    
5,056
      
4,518
      
14,532
      
13,268
  
Other income
    
1,477
      
1,417
      
4,404
      
4,169
  
Total revenues
    
348,616
      
306,544
      
1,030,157
      
946,545
  
Operating expenses:
                                
Cost of goods sold:
                                
Net warehouse club
    
288,289
      
255,854
      
854,873
      
790,273
  
Export
    
825
      
968
      
2,314
      
2,629
  
Selling, general and administrative:
                                
Warehouse club operations
    
31,834
      
28,197
      
92,109
      
84,025
  
General and administrative
    
8,752
      
7,989
      
24,987
      
23,341
  
Pre-opening expenses
    
840
      
344
      
1,126
      
443
  
Asset impairment and closure costs (income)
    
—
      
(48
)
    
—
      
216
  
Total operating expenses
    
330,540
      
293,304
      
975,409
      
900,927
  
Operating income
    
18,076
      
13,240
      
54,748
      
45,618
  
Other income (expense):
                                
Interest income
    
122
      
76
      
460
      
317
  
Interest expense
    
(595
)
    
(685
)
    
(1,859
)
    
(1,875
)
Other income (expense), net
    
(240
)
    
26
      
(247
)
    
(36
)
Total other expense
    
(713
)
    
(583
)
    
(1,646
)
    
(1,594
)
Income from continuing operations before provision for income taxes and loss of unconsolidated affiliates
    
17,363
      
12,657
      
53,102
      
44,024
  
Provision for income taxes
    
(5,309
)
    
(3,960
)
    
(16,901
)
    
(11,697
)
Loss of unconsolidated affiliates
    
(6
)
    
(8
)
    
(11
)
    
(20
)
Income from continuing operations
    
12,048
      
8,689
      
36,190
      
32,307
  
Income (loss) from discontinued operations, net of tax
    
(4
)
    
55
      
40
      
(27
)
Net income
    
12,044
      
8,744
      
36,230
      
32,280
  
Net loss attributable to noncontrolling interest
    
(20
)
    
(61
)
    
(132
)
    
(211
)
Net income attributable to PriceSmart
  
$
12,024
    
$
8,683
    
$
36,098
    
$
32,069
  
                                 
Net income attributable to PriceSmart:
                                
Income from continuing operations
    
12,028
      
8,628
      
36,058
      
32,096
  
Income (loss) from discontinued operations, net of tax
    
(4
)
    
55
      
40
      
(27
)
   
$
12,024
    
$
8,683
    
$
36,098
    
$
32,069
  
Net income per share attributable to PriceSmart and available for distribution:
                                
Basic net income per share from continuing operations
  
$
0.40
    
$
0.29
    
$
1.21
    
$
1.09
  
Basic net income (loss) per share from discontinued operations, net of tax
  
$
0.00
    
$
0.00
    
$
0.00
    
$
0.00
  
Basic net income per share
  
$
0.40
    
$
0.29
    
$
1.21
    
$
1.09
  
                                 
Diluted net income per share from continuing operations
  
$
0.40
    
$
0.29
    
$
1.21
    
$
1.08
  
Diluted net income (loss) per share from discontinued operations, net of tax
  
$
0.00
    
$
0.00
    
$
0.00
    
$
0.00
  
Diluted net income per share
  
$
0.40
    
$
0.29
    
$
1.21
    
$
1.08
  
Shares used in per share computations:
                                
Basic
    
29,336
      
29,010
      
29,221
      
28,929
  
Diluted
    
29,345
      
29,108
      
29,253
      
29,032
  
Dividends per share
  
$
0.00
    
$
0.00
    
$
0.50
    
$
0.50
  


 
 
 

PRICESMART, INC.
CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)
     
N
        
   
May 31,
2010
(Unaudited)
    
August 31,
2009
  
ASSETS
              
Current Assets:
              
Cash and cash equivalents
  
$
55,091
    
$
44,193
  
Short-term restricted cash
    
1,200
      
10
  
Receivables, net of allowance for doubtful accounts of $6 and $10 as of May 31, 2010 and August 31, 2009, respectively
    
2,572
      
2,187
  
Merchandise inventories
    
133,059
      
115,841
  
Deferred tax assets – current
    
3,219
      
2,618
  
Prepaid expenses and other current assets
    
18,337
      
19,033
  
Assets of discontinued operations
    
980
      
900
  
Total current assets
    
214,458
      
184,782
  
Long-term restricted cash
    
5,665
      
732
  
Property and equipment, net
    
259,619
      
231,798
  
Goodwill
    
37,533
      
37,538
  
Deferred tax assets – long term
    
18,019
      
20,938
  
Other assets
    
4,195
      
3,927
  
Investment in unconsolidated affiliates
    
8,096
      
7,658
  
Total Assets
  
$
547,585
    
$
487,373
  
LIABILITIES AND EQUITY
                
Current Liabilities:
                
Short-term borrowings
  
$
3,618
    
$
2,303
  
Accounts payable
    
113,494
      
101,412
  
Accrued salaries and benefits
    
9,637
      
8,831
  
Deferred membership income
    
9,433
      
8,340
  
Income taxes payable
    
6,199
      
5,942
  
Other accrued expenses
    
11,057
      
10,022
  
Dividends payable
    
7,429
      
—
  
Long-term debt, current portion
    
7,222
      
4,590
  
Deferred tax liability – current
    
183
      
189
  
Liabilities of discontinued operations
    
117
      
299
  
Total current liabilities
    
168,389
      
141,928
  
Deferred tax liability – long-term
    
1,088
      
1,026
  
Long-term portion of deferred rent
    
3,005
      
2,673
  
Long-term income taxes payable, net of current portion
    
3,303
      
3,458
  
Long-term debt, net of current portion
    
50,151
      
37,120
  
Total liabilities
    
225,936
      
186,205
  
Equity:
                
Common stock, $0.0001 par value, 45,000,000 shares authorized; 30,580,686 and 30,337,109 shares issued and 29,855,630 and 29,681,031 shares outstanding (net of treasury shares) as of May 31, 2010 and August 31, 2009, respectively.
    
3
      
3
  
Additional paid-in capital
    
378,381
      
377,210
  
Tax benefit from stock-based compensation
    
4,501
      
4,547
  
Accumulated other comprehensive loss
    
(16,952
)
    
(17,230
)
Accumulated deficit
    
(28,762
)
    
(49,998
)
Less: treasury stock at cost; 725,056 and 656,078 shares as of May 31, 2010 and August 31, 2009, respectively.
    
(15,522
)
    
(14,134
)
Total PriceSmart stockholders’ equity
    
321,649
      
300,398
  
Noncontrolling interest
    
—
      
770
  
Total equity
    
321,649
      
301,168
  
Total Liabilities and Equity
  
$
547,585
    
$
487,373