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PriceSmart Announces Third Quarter Results of Operations
Marketwire
Jul 10, 2009
SAN DIEGO, CA -- (Marketwire) -- 07/10/09 -- PriceSmart, Inc. (NASDAQ: PSMT) (www.pricesmart.com) today announced its results of operations for the third quarter of fiscal year 2009 which ended on May 31, 2009.
For the third quarter of fiscal year 2009, net warehouse sales increased 7.8% to $299.6 million from $278.0 million in the third quarter of fiscal year 2008. Total revenue for the third quarter was $306.5 million compared to $283.7 million in the prior year. The Company had 26 warehouse clubs in operation as of May 2009, compared to 25 warehouse clubs in 2008.
The Company recorded operating income in the quarter of $13.2 million, compared to operating income of $14.6 million in the prior year. Net income was $8.7 million, or $0.30 per diluted share, in the third quarter of fiscal 2009, compared to $10.6 million, or $0.36 per diluted share, in the third quarter of fiscal 2008. The third quarter of fiscal year 2008 included an expense reversal of $2.0 million resulting in a gain to operating income and net income of $2.0 million related to the reduction in fair value of put rights associated with the previously disclosed PSC Settlement.
For the first nine months of fiscal year 2009, net warehouse club sales increased 14.2% to $926.3 million from $811.4 million in the first nine months of fiscal year 2008. Total revenues for the first nine months of the fiscal year increased 14.3% to $946.5 million from $827.9 million in the same period of the prior year. For the first nine months of fiscal year 2009, the Company recorded operating income of $45.6 million and net income of $32.1 million, or $1.10 per diluted share. During the same nine month period in fiscal year 2008, the Company recorded operating income of $35.5 million and net income of $26.8 million, or $0.91 per share.
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 26 warehouse clubs in 11 countries and one U.S. territory (five in Costa Rica, four in Panama, three each in Guatemala and Trinidad, 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 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 own nearly one-half 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 12, 2008. 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.
PRICESMART, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED-AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
Three Months Ended Nine Months Ended
May 31, May 31,
--------------------- --------------------
2009 2008 2009 2008
---------- ---------- ---------- ---------
Revenues:
Net warehouse club sales $ 299,571 $ 277,979 $ 926,329 $ 811,382
Export 1,038 385 2,779 1,092
Membership income 4,518 4,094 13,268 11,811
Other income 1,417 1,207 4,169 3,628
---------- ---------- ---------- ---------
Total revenues 306,544 283,665 946,545 827,913
---------- ---------- ---------- ---------
Operating expenses:
Cost of goods sold:
Net warehouse club 255,854 236,074 790,273 689,918
Export 968 364 2,629 1,034
Selling, general and
administrative:
Warehouse club operations 28,197 26,495 84,025 75,749
General and administrative 7,989 7,455 23,341 22,625
Preopening expenses 344 9 443 996
Asset impairment and closure
costs (income) (48) 670 216 703
Provision for settlement of
litigation, including changes
in fair market value of put
agreement -- (2,042) -- 1,344
---------- ---------- ---------- ---------
Total operating expenses 293,304 269,025 900,927 792,369
---------- ---------- ---------- ---------
Operating income 13,240 14,640 45,618 35,544
Other income (expense):
Interest income 76 254 317 1,013
Interest expense (685) (437) (1,875) (950)
Other income (expense), net 26 (131) (36) (209)
---------- ---------- ---------- ---------
Total other income (expense) (583) (314) (1,594) (146)
---------- ---------- ---------- ---------
Income from continuing
operations before provision
for income taxes, loss of
unconsolidated affiliates and
minority interest 12,657 14,326 44,024 35,398
Provision for income taxes (3,960) (3,675) (11,697) (8,286)
Loss of unconsolidated
affiliates (8) -- (20) --
Minority interest (61) (76) (211) (368)
---------- ---------- ---------- ---------
Income from continuing
operations 8,628 10,575 32,096 26,744
Income (loss) from discontinued
operations, net of tax 55 26 (27) 71
---------- ---------- ---------- ---------
Net income $ 8,683 $ 10,601 $ 32,069 $ 26,815
========== ========== ========== =========
Basic income per share:
Continuing operations $ 0.30 $ 0.37 $ 1.11 $ 0.93
Discontinued operations, net of
tax $ -- $ -- $ -- $ --
---------- ---------- ---------- ---------
Net income $ 0.30 $ 0.37 $ 1.11 $ 0.93
========== ========== ========== =========
Diluted income per share:
Continuing operations $ 0.30 $ 0.36 $ 1.10 $ 0.91
Discontinued operations, net of
tax $ -- $ -- $ -- $ --
---------- ---------- ---------- ---------
Net income $ 0.30 $ 0.36 $ 1.10 $ 0.91
========== ========== ========== =========
Shares used in per share
computations:
Basic 29,010 28,914 28,929 28,848
========== ========== ========== =========
Diluted 29,202 29,224 29,164 29,316
========== ========== ========== =========
Dividends per share $ -- $ -- $ 0.50 $ 0.32
========== ========== ========== =========
PRICESMART, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED-AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)
May 31, August 31,
2009 2008
---------- ----------
ASSETS
Current Assets:
Cash and cash equivalents $ 39,035 $ 48,121
Short-term restricted cash 10 536
Receivables, net of allowance for doubtful accounts
of $13 and $11 in May 2009 and August 2008,
respectively 4,292 2,455
Merchandise inventories 112,990 113,894
Deferred tax asset - current 2,534 2,179
Prepaid expenses and other current assets 18,572 16,669
Notes receivable - short-term -- 2,104
Assets of discontinued operations 1,157 1,247
---------- ----------
Total current assets 178,590 187,205
Long-term restricted cash 590 673
Property and equipment, net 225,423 199,576
Goodwill 37,741 39,248
Deferred tax assets - long-term 20,102 21,198
Other assets 3,796 3,512
Investment in unconsolidated affiliates 7,607 --
---------- ----------
Total Assets $ 473,849 $ 451,412
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Short-term borrowings 5,795 3,473
Accounts payable 92,010 96,120
Accrued salaries and benefits 8,444 8,271
Deferred membership income 8,484 7,764
Income taxes payable 6,225 3,695
Common stock subject to put agreement -- 161
Other accrued expenses 11,409 11,877
Dividend payable 7,411 4,744
Long-term debt, current portion 3,608 2,737
Deferred tax liability - current 198 486
Liabilities of discontinued operations 291 277
---------- ----------
Total current liabilities 143,875 139,605
Deferred tax liability - long-term 1,360 2,339
Long-term portion of deferred rent 2,832 2,412
Accrued closure costs 3,558 3,489
Long-term income taxes payable, net of current
portion 3,403 5,553
Long-term debt, net of current portion 28,919 23,028
---------- ----------
Total liabilities 183,947 176,426
Minority interest 700 480
Stockholders' Equity:
Common stock, $0.0001 par value, 45,000,000 shares
authorized; 30,314,588 and 30,195,788 shares
issued, respectively, and 29,659,517 and
29,615,226 shares outstanding (net of treasury
shares), respectively 3 3
Additional paid-in capital 376,043 373,192
Tax benefit from stock-based compensation 4,388 4,563
Accumulated other comprehensive loss (16,870) (12,897)
Accumulated deficit (60,244) (77,510)
Less: treasury stock at cost; 655,071 shares as of
May 31, 2009 and 580,562 shares as of August 31,
2008 (14,118) (12,845)
---------- ----------
Total stockholders' equity 289,202 274,506
---------- ----------
Total Liabilities and Stockholders' Equity $ 473,849 $ 451,412
========== ==========
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