PriceSmart Announces Third Quarter Results of Operations and June Sales; Opening of New Warehouse Club in Panama Also Announced
SAN DIEGO, CA -- (Marketwired) -- 07/09/15 -- PriceSmart, Inc. (NASDAQ: PSMT) today announced its results of operations for the third quarter of fiscal year 2015 which ended on May 31, 2015.
For the third quarter of fiscal year 2015, net warehouse club sales increased 13.0% to $675.3 million from $597.9 million in the third quarter of fiscal year 2014. Total revenues for the third quarter of fiscal year 2015 were $697.1 million compared to $615.0 million in the comparable period of the prior year. The Company had 36 warehouse clubs in operation as of May 2015 compared to 33 warehouse clubs in operation as of May 2014.
The Company recorded operating income during the quarter of $33.5 million, as compared to operating income of $31.2 million in the prior year. Net income was $21.2 million, or $0.70 per diluted share, in the third quarter of fiscal year 2015 as compared to $21.3 million, or $0.70 per diluted share, in the third quarter of fiscal year 2014.
For the first nine months of fiscal year 2015, net warehouse club sales increased 10.8% to $2,043.8 million from $1,844.7 million in the first nine months of fiscal year 2014. Total revenues for the first nine months of the fiscal year 2015 increased 11.0% to $2,103.4 million from $1,895.0 million in the same period of the prior year. For the first nine months of fiscal year 2015, the Company recorded operating income of $111.5 million and net income of $66.7 million, or $2.20 per diluted share. During the nine month period in fiscal year 2014, the Company recorded operating income of $102.9 million and net income of $71.0 million, or $2.34 per diluted share.
The Company also announced that for the month of June 2015, net warehouse club sales increased 11.8% to $217.2 million, from $194.3 million in June a year earlier. For the ten months ended June 30, 2015, net warehouse club sales increased 10.9% to $2,261.0 million, from $2,039.0 million for the ten months ended June 30, 2014. There were 37 warehouse clubs in operation at the end of June 2015 and 33 warehouse clubs in operation at the end of June 2014.
For the four weeks ended June 28, 2015, comparable warehouse sales for the 32 warehouse clubs open at least 13 1/2 full months increased 4.0%, compared to the same four-week period last year. For the forty-three week period ended June 28, 2015, comparable warehouse sales increased 2.6%, compared to the comparable forty-three week period a year ago.
The Company also announced that on June 25, 2015, the Company successfully opened its warehouse club in Costa Verde, Panama, bringing to 37 the total number of warehouse clubs in operation by the Company. This warehouse club is the Company's fifth warehouse club in Panama.
PriceSmart management will host a conference call at 12:00 p.m. Eastern time (9:00a.m. Pacific time) on Friday, July 10, 2015, to discuss the financial results. Individuals interested in participating in the conference call may do so by dialing (888) 312-9849 toll free, or (719) 457-1517 for international callers and entering participant code 1552252. A digital replay will be available through July 31, 2015, following the conclusion of the call by dialing (888) 203-1112 for domestic callers, or (719) 457-0820 for international callers, and entering replay passcode 1552252.
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 37 warehouse clubs in 12 countries and one U.S. territory (six each in Costa Rica, and Colombia; five in Panama, four in Trinidad; three each in Guatemala, the Dominican Republic, and Honduras; two in El Salvador; 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, 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; 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; we face difficulties in the shipment of, and inherent risks in the importation of, merchandise to our warehouse clubs; we are exposed to weather and other natural disaster risks; general economic conditions could adversely impact our business in various respects; 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 or disruptions in our systems could harm our business and adversely affect our results of operations; we could be subject to additional tax liabilities; a few of our stockholders own approximately 28.1% of our voting stock as of August 31, 2014, which may make it difficult to complete some corporate transactions without their support and may impede a change in control; our inability to develop and retain existing key personnel or to attract highly qualified employees could adversely impact our business, financial condition and results of operations; we are subject to volatility in foreign currency exchange rates; we face the risk of exposure to product liability claims, a product recall and adverse publicity; if we do not maintain the privacy and security of confidential information, we could damage our reputation, incur substantial additional costs and become subject to litigation; we are subject to payment related risks; changes in accounting standards and assumptions, estimates and judgments by management related to complex accounting matters could significantly affect our financial condition and results of operations; we face increased public company compliance risks and compliance risks related to our international operations; we face increased compliance risks associated with compliance with Section 404 of the Sarbanes-Oxley Act of 2002; and 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. In addition to the risks described above, these statements are also subject to 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, 2014 filed on October 30, 2014 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 BALANCE SHEETS
(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)
May 31, 2015 August 31,
(Unaudited) 2014
------------- -------------
ASSETS
Current Assets:
Cash and cash equivalents $ 145,593 $ 137,098
Short-term restricted cash 16,249 2,353
Receivables, net of allowance for doubtful
accounts of $2 and $0 as of May 31, 2015 and
August 31, 2014, respectively 8,261 7,910
Merchandise inventories 266,184 226,383
Deferred tax assets - current 7,520 6,177
Prepaid expenses and other current assets
(includes $4,425 and $495 as of May 31, 2015
and August 31, 2014, respectively, for the
fair value of derivative instruments) 31,055 17,260
------------- -------------
Total current assets 474,862 397,181
Long-term restricted cash 9,489 27,013
Property and equipment, net 442,723 426,325
Goodwill 35,965 36,108
Deferred tax assets - long term 7,178 11,825
Other non-current assets (includes $3,736 and
$1,095 as of May 31, 2015 and August 31,
2014, respectively, for the fair value of
derivative instruments) 35,651 30,755
Investment in unconsolidated affiliates 10,315 8,863
------------- -------------
Total Assets $ 1,016,183 $ 938,070
============= =============
LIABILITIES AND EQUITY
Current Liabilities:
Short-term borrowings $ - $ -
Accounts payable 240,426 223,559
Accrued salaries and benefits 18,767 17,799
Deferred membership income 21,244 17,932
Income taxes payable 8,769 7,718
Other accrued expenses (includes $0 and $14 as
of May 31, 2015 and August 31, 2014,
respectively, for the fair value of foreign
currency forward contracts) 27,916 21,030
Dividends payable 10,564 -
Long-term debt, current portion 26,956 11,848
Deferred tax liability - current 130 157
------------- -------------
Total current liabilities 354,772 300,043
Deferred tax liability - long-term 2,458 2,290
Long-term portion of deferred rent 6,374 5,591
Long-term income taxes payable, net of current
portion 1,406 1,918
Long-term debt, net of current portion 74,852 79,591
Other long-term liabilities (includes $1,497
and $0 for the fair value of derivative
instruments and $389 and $372 for the defined
benefit plan as of May 31, 2015 and August
31, 2014, respectively) 1,886 372
------------- -------------
Total liabilities 441,748 389,805
Equity:
Common stock, $0.0001 par value, 45,000,000
shares authorized; 30,969,402 and 30,950,701
shares issued and 30,177,979 and 30,209,917
shares outstanding (net of treasury shares)
as of May 31, 2015 and August 31, 2014,
respectively 3 3
Preferred stock $0.0001 par value; 2,000,000
shares authorized; no shares issued and
outstanding as of May 31, 2015 and August 31,
2014 - -
Additional paid-in capital 401,821 397,150
Tax benefit from stock-based compensation 10,725 9,505
Accumulated other comprehensive loss (70,056) (49,286)
Retained earnings 261,162 215,613
Less: treasury stock at cost; 791,423 and
740,784 shares as of May 31, 2015 and August
31, 2014, respectively (29,220) (24,720)
------------- -------------
Total equity 574,435 548,265
------------- -------------
Total Liabilities and Equity $ 1,016,183 $ 938,070
============= =============
PRICESMART, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED--AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
Three Months Ended Nine Months Ended
May 31, May 31,
---------------------- ------------------------
2015 2014 2015 2014
---------- ---------- ----------- -----------
Revenues:
Net warehouse club sales $ 675,314 $ 597,885 $ 2,043,849 $ 1,844,746
Export sales 9,465 6,577 24,126 19,062
Membership income 11,189 9,552 32,202 28,301
Other income 1,135 1,023 3,244 2,903
---------- ---------- ----------- -----------
Total revenues 697,103 615,037 2,103,421 1,895,012
---------- ---------- ----------- -----------
Operating expenses:
Cost of goods sold:
Net warehouse club 578,868 509,684 1,743,772 1,575,623
Export 8,992 6,246 22,953 18,110
Selling, general and
administrative:
Warehouse club operations 60,754 53,617 179,006 158,592
General and administrative 14,214 12,604 41,681 37,065
Pre-opening expenses 33 1,125 3,411 1,939
Loss/(gain) on disposal of
assets 724 558 1,087 746
---------- ---------- ----------- -----------
Total operating expenses 663,585 583,834 1,991,910 1,792,075
---------- ---------- ----------- -----------
Operating income 33,518 31,203 111,511 102,937
Other income (expense):
Interest income 283 202 813 576
Interest expense (1,615) (1,043) (4,759) (2,967)
Other income (expense), net (311) 489 (4,602) 1,512
---------- ---------- ----------- -----------
Total other income
(expense) (1,643) (352) (8,548) (879)
---------- ---------- ----------- -----------
Income before provision for
income taxes and income
(loss) of unconsolidated
affiliates 31,875 30,851 102,963 102,058
Provision for income taxes (10,750) (9,534) (36,378) (31,035)
Income (loss) of
unconsolidated affiliates 70 3 92 7
---------- ---------- ----------- -----------
Net income 21,195 $ 21,320 $ 66,677 71,030
========== ========== =========== ===========
Net income per share
available for
distribution:
Basic net income per share $ 0.70 $ 0.70 $ 2.20 $ 2.35
========== ========== =========== ===========
Diluted net income per
share $ 0.70 $ 0.70 $ 2.20 $ 2.34
========== ========== =========== ===========
Shares used in per share
computations:
Basic 29,883 29,784 29,834 29,733
========== ========== =========== ===========
Diluted 29,888 29,792 29,841 29,743
========== ========== =========== ===========
Dividends per share $ - $ - $ 0.70 $ 0.70
========== ========== =========== ===========
For further information, please contact John M. Heffner Principal Financial Officer and Principal Accounting Officer (858) 404-8826
Source: PriceSmart, Inc.