PriceSmart Announces First Quarter Results of Operations for Fiscal Year 2017

SAN DIEGO, CA -- (Marketwired) -- 01/05/17 -- PriceSmart, Inc. (NASDAQ: PSMT) today announced its results of operations for the first quarter of fiscal year 2017 which ended on November 30, 2016.

For the first quarter of fiscal year 2017, net warehouse club sales increased 3.7% to $716.1 million from $690.8 million in the first quarter of fiscal year 2016. Total revenues for the first quarter of fiscal year 2017 were $739.6 million compared to $711.9 million in the first quarter of the prior year. The Company had 39 clubs in operation as of November 30, 2016, compared to 38 warehouse clubs in operation as of November 30, 2015.

The Company recorded operating income for the first quarter of $38.4 million, compared to operating income of $37.3 million for the first quarter of the prior year. Net income was $24.9 million, or $0.82 per diluted share, in the first quarter of fiscal year 2017. Net income in the first quarter of fiscal year 2016 was $23.7 million, or $0.78 per diluted share.

PriceSmart management plans to host a conference call at 12:00 p.m. Eastern time (9:00 a.m. Pacific time) on Friday, January 6, 2017, to discuss the financial results. Individuals interested in participating in the conference call may do so by dialing (877) 675-4756 toll free, or (719) 325-4810 for international callers, and entering participant code 5691450. A digital replay will be available through January 31, 2017, following the conclusion of the call by dialing (888) 203-1112 for domestic callers, or (719) 457-0820 for international callers, and entering relay passcode 5691450.

About PriceSmart

PriceSmart, headquartered in San Diego, owns and operates U.S.-style membership shopping warehouse clubs in Latin America and the Caribbean, selling high quality merchandise at low prices to PriceSmart members. PriceSmart now operates 39 warehouse clubs in 12 countries and one U.S. territory (seven in Colombia; six in Costa Rica; five in Panama; four in Trinidad; three each in Guatemala, the Dominican Republic and Honduras; two each in El Salvador and Nicaragua; and one each in Aruba, Barbados, Jamaica 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, proposed warehouse club openings, the Company's performance relative to competitors, the outcome of tax proceedings and related matters. These forward-looking statements include, but are not limited to, statements containing the words "expect," "believe," "will," "may," "should," "project," "estimate," "anticipated," "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: our financial performance is dependent on international operations, which exposes us to various risks; any failure by us to manage our widely dispersed operations could adversely affect our business; we face significant competition; future sales growth depends, in part, on our ability to successfully open new warehouse clubs and grow sales in our existing locations; we might not identify in a timely manner or effectively respond to changes in consumer preferences for merchandise, which could adversely affect our relationship with members, demand for our products and market share; although we have begun to offer limited online shopping to our members, our sales could be adversely affected if one or more major international online retailers were to enter our markets or if other competitors were to offer a superior online experience; our profitability is vulnerable to cost increases; we face difficulties in the shipment of and risks inherent in the importation of, merchandise to our warehouse clubs; we are exposed to weather and other natural disaster risks that might not be adequately compensated by insurance; general economic conditions could adversely impact our business in various respects; our failure to maintain our brand and reputation could adversely affect our results of operations; we are subject to risks associated with possible changes in our relationships with third parties with which we do business, as well as the performance of such third parties; we rely extensively on computer systems to process transactions, summarize results and manage our business, and failure to adequately maintain our systems and disruptions in our systems could harm our business and adversely affect our results of operations; we could be subject to additional tax liabilities or subject to reserves on the recoverability of tax receivables; a few of our stockholders own approximately 25.3% of our voting stock as of August 31, 2016, which may make it difficult to complete some corporate transactions without their support and may impede a change in control; failure to attract and retain qualified employees, increases in wage and benefit costs, changes in laws and other labor issues could materially adversely affect our financial performance; we face the possibility of operational interruptions related to union work stoppages; we are subject to volatility in foreign currency exchange rates and limits on our ability to convert foreign currencies into U.S. dollars; we face the risk of exposure to product liability claims, a product recall and adverse publicity; any failure to maintain the security of the information relating to our company, members, employees and vendors that we hold, whether as a result of cybersecurity attacks on our information systems, failure of internal controls, employee negligence or malfeasance or otherwise, could damage our reputation with members, employees, vendors and others, could disrupt our operations, could cause us to incur substantial additional costs and to become subject to litigation and could materially adversely affect our operating results; we are subject to payment related risks; changes in accounting standards and assumptions, projections, estimates and judgments by management related to complex accounting matters could significantly affect our financial condition and results of operations; we face compliance risks related to our international operations; if remediation costs or hazardous substance contamination levels at certain properties for which we maintain financial responsibility exceed management's current expectations, our financial condition and results of operations could be adversely impacted. The risks described above as well as the other risks detailed in the Company's U.S. Securities and Exchange Commission ("SEC") reports, including the Company's Annual Report on Form 10-K filed for the fiscal year ended August 31, 2016 filed on October 27, 2016 pursuant to the Securities Exchange Act of 1934. 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
                                                 --------------------------
                                                 November 30,  November 30,
                                                     2016          2015
                                                 ------------  ------------
Revenues:
Net warehouse club sales                         $    716,079  $    690,831
Export sales                                           10,734         8,232
Membership income                                      11,710        11,466
Other income                                            1,049         1,402
                                                 ------------  ------------
Total revenues                                        739,572       711,931
                                                 ------------  ------------
Operating expenses:
Cost of goods sold:
Net warehouse club                                    608,490       590,183
Export                                                 10,181         7,832
Selling, general and administrative:
Warehouse club operations                              65,426        60,840
General and administrative                             16,802        15,463
Pre-opening expenses                                     (113)          305
Loss/(gain) on disposal of assets                         407            13
                                                 ------------  ------------
Total operating expenses                              701,193       674,636
                                                 ------------  ------------
Operating income                                       38,379        37,295
Other income (expense):
Interest income                                           502           178
Interest expense                                       (1,654)       (1,373)
Other income (expense), net                              (928)         (244)
                                                 ------------  ------------
Total other income (expense)                           (2,080)       (1,439)
                                                 ------------  ------------
Income before provision for income taxes and
 income (loss) of unconsolidated affiliates            36,299        35,856
Provision for income taxes                            (11,437)      (12,130)
Income (loss) of unconsolidated affiliates                  7           (54)
                                                 ------------  ------------
Net income                                       $     24,869        23,672
                                                 ============  ============
Net income per share available for distribution:
Basic net income per share                       $       0.82  $       0.78
                                                 ============  ============
Diluted net income per share                     $       0.82  $       0.78
                                                 ============  ============
Shares used in per share computations:
Basic                                                  29,982        29,890
                                                 ============  ============
Diluted                                                29,987        29,896
                                                 ============  ============
Dividends per share                              $         --  $         --
                                                 ============  ============



                              PRICESMART, INC.
                        CONSOLIDATED BALANCE SHEETS
                 (AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)


                                                 November 30,
                                                     2016       August 31,
                                                  (Unaudited)      2016
                                                 ------------  ------------
ASSETS
Current Assets:
Cash and cash equivalents                        $    175,402  $    199,522
Short-term restricted cash                                517           518
Receivables, net of allowance for doubtful
 accounts of $7 as of November 30, 2016 and
 August 31, 2016, respectively                          7,761         7,464
Merchandise inventories                               326,989       282,907
Prepaid expenses and other current assets              24,194        22,143
                                                 ------------  ------------
Total current assets                                  534,863       512,554
Long-term restricted cash                               2,735         2,676
Property and equipment, net                           469,423       473,045
Goodwill                                               35,603        35,637
Deferred tax assets                                    11,783        12,258
Other non-current assets (includes $4,163 and
 $3,224 as of November 30, 2016 and August 31,
 2016, respectively, for the fair value of
 derivative instruments)                               52,690        49,798
Investment in unconsolidated affiliates                10,773        10,767
                                                 ------------  ------------
Total Assets                                     $  1,117,870  $  1,096,735
                                                 ============  ============
LIABILITIES AND EQUITY
Current Liabilities:
Short-term borrowings                            $     12,211  $     16,534
Accounts payable                                      280,601       267,173
Accrued salaries and benefits                          17,645        19,606
Deferred membership income                             20,905        20,920
Income taxes payable                                    4,892         4,226
Other accrued expenses (includes $153 and $110 as
 of November 30, 2016 and August 31, 2016,
 respectively, for the fair value of foreign
 currency forward contracts)                           25,450        24,880
Long-term debt, current portion                        14,664        14,565
                                                 ------------  ------------
Total current liabilities                             376,368       367,904
Deferred tax liability                                  1,647         1,760
Long-term portion of deferred rent                      8,759         8,961
Long-term income taxes payable, net of current
 portion                                                  883           970
Long-term debt, net of current portion                 69,788        73,542
Other long-term liabilities (includes $1,030 and
 $1,514 for the fair value of derivative
 instruments and $4,394 and $4,013 for post
 employment plans as of November 30, 2016 and
 August 31, 2016, respectively)                         5,424         5,527
                                                 ------------  ------------
Total Liabilities                                     462,869       458,664

Equity:
Common stock $0.0001 par value, 45,000,000 shares
 authorized; 31,242,784 and 31,237,658 shares
 issued and 30,406,433 and 30,401,307 shares
 outstanding (net of treasury shares) as of
 November 30, 2016 and August 31, 2016,
 respectively                                               3             3
Additional paid-in capital                            414,811       412,369
Tax benefit from stock-based compensation              11,321        11,321
Accumulated other comprehensive loss                 (114,332)     (103,951)
Retained earnings                                     375,929       351,060
Less: treasury stock at cost, 836,351 shares as
 of November 30, 2016 and August 31, 2016,
 respectively                                         (32,731)      (32,731)
                                                 ------------  ------------
Total Equity                                          655,001       638,071
                                                 ------------  ------------
Total Liabilities and Equity                     $  1,117,870  $  1,096,735
                                                 ============  ============

For further information, please contact
John M. Heffner
Principal Financial Officer and Principal Accounting
Officer
(858) 404-8826

Source: PriceSmart, Inc.

You May Also Be Interested In

• Fisker (FSR) files form 10-K, sees more job cuts, reiterates going concern doubts
• Siebert Financial Corp (SIEB) Receives Nasdaq Non-compliance Notice
• IBM (IBM) to Acquire HashiCorp (HCP) for $35/sh Cash or $6.4B