PriceSmart (PSMT)

Warehouse Club in Costa Rica and Acquisition of Panama City Real Estate Also Announced

SAN DIEGO, CA (November 23, 2005) – PriceSmart, Inc. (NASDAQ: PSMT, www.pricesmart.com) today announced its results of operations for the fourth quarter and fiscal year 2005 which ended on August 31, 2005.

For the fourth quarter of fiscal 2005 net warehouse sales were $155.4 million, compared to $131.0 million in the fourth quarter of fiscal 2004. Total revenue for the fourth quarter was $158.8 million, compared to $133.9 million in the prior year. The sales and revenue numbers for both years do not include the operational results of the Company’s PriceSmart Philippines subsidiary which was sold in August 2005. The Company had 22 warehouse clubs in operation in both years.

The Company recorded an operating loss in the quarter of $465,000, compared to an operating loss of $3.1 million in the prior year. Significant items affecting the operating loss in the period included $2.6 million in asset impairment and closure costs primarily related to a non-cash $2.4 million write down of real estate in the Dominican Republic. The pre-tax loss from continuing operations for the Company in the quarter was $1.2 million, compared to a pre-tax loss from continuing operations of $4.4 million in the prior year.

The net loss attributable to common shareholders for the fourth quarter was $24.1 million or ($0.95) per diluted share. The net loss attributable to common shareholders included: $16.7 million ($0.66 per diluted share) for discontinued operations, net of tax resulting from the sale of the Company’s Philippines operation; $1.3 million ($0.05 per diluted share) related to the Company’s equity investment in PriceSmart Mexico which was closed in February 2005; and $5.1 million ($0.20 per diluted share) in current period tax provisions and tax contingencies.

Total revenue for fiscal 2005 increased 13.7% to $618.8 million from $544.2 million and net warehouse sales increased 14.1% during that same period. For fiscal year 2005, the Company recorded an operating loss of $5.3 million and a loss from continuing operations before taxes of $9.9 million, both of which were impacted by $11.4 million in charges associated with asset impairment and closure costs. The fiscal 2005 net loss attributable to common shareholders was $63.6 million or ($3.15) per diluted share. Of that amount, $20.6 million ($1.02 per diluted share) is attributable to deemed dividends related to the exchange of common stock for outstanding shares of Series A and Series B preferred stock to common stock in the first quarter of fiscal year 2005; $19.5 million ($0.96 per diluted share) related to discontinued operations, primarily PriceSmart Philippines; and $4.4 million ($0.22 per diluted share) associated with the Company’s equity investment in PriceSmart Mexico. For fiscal 2004, the Company recorded an operating loss of $6.7 million and a net loss attributable to common shareholders of $33.3 million, or ($4.57) per diluted share.

Commenting on the fourth quarter and full year results, Robert E. Price, Chairman and Interim Chief Executive Officer, said, “We are encouraged by the improvement in operating results for our Company. Sales increased 18.6% in the most recent quarter, membership sign ups and renewals are very good and expenses have improved. Fiscal year 2005 was an extremely productive year for PriceSmart as operations improved, the balance sheet was strengthened, and losing operations in Mexico and the Philippines were discontinued.”

The Company ended the fiscal year with $30.1 million in cash and cash equivalents. The current ratio at year end was 1.28 and the Company was in compliance with all loan covenants. PriceSmart’s Chief Financial Officer, John M. Heffner commented, “The financial decisions that were taken this year had a significant positive impact on strengthening the Company’s financial condition. The Company either retired or converted to equity $77.1 million in short and long-term debt, thereby reducing interest expense by nearly $1.3 million in the fourth quarter of fiscal 2005 compared to a year ago, and eliminating $3.4 million in annualized dividend expense. We are pleased with the progress that has been achieved.”

PriceSmart also announced that on November 18 the Company successfully opened its fourth warehouse club in Costa Rica. On November 18 the Company acquired for $12.5 million a 35,000 square meter commercial center in Panama City, Panama, which includes an existing operating PriceSmart warehouse club along with additional commercial property which the Company plans to develop.

Q4 FY05 Earnings Release

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