SAN DIEGO, July 5, 2017 /PRNewswire/ -- PriceSmart, Inc.
(NASDAQ: PSMT) today announced its results of operations for the
third quarter of fiscal year 2017 which ended on May 31, 2017.
For the third quarter of fiscal year 2017, net warehouse club
sales increased 3.8% to $710.7
million from $684.5 million in
the third quarter of fiscal year 2016. Total revenues for the third
quarter of fiscal year 2017 were $730.3
million compared to $704.3
million in the comparable period of the prior year. The
Company had 39 warehouse clubs in operation as of May 2017 compared to 38 warehouse clubs in
operation as of May 2016.
The Company recorded operating income during the quarter of
$27.6 million, as compared to
operating income of $27.5 million in
the prior year. Net income was $18.8
million, or $0.62 per diluted
share, in the third quarter of fiscal year 2017 as compared to
$16.8 million, or $0.55 per diluted share, in the third quarter of
fiscal year 2016.
For the first nine months of fiscal year 2017, net warehouse
club sales increased 3.0% to $2,199.1
million from $2,134.4 million
in the first nine months of fiscal year 2016. Total revenues for
the first nine months of the fiscal year 2017 increased 3.1% to
$2,263.1 million from $2,194.1 million in the same period of the prior
year. For the first nine months of fiscal year 2017, the Company
recorded operating income of $105.4
million and net income of $70.9
million, or $2.34 per diluted
share. During the nine month period in fiscal year 2016, the
Company recorded operating income of $103.9
million and net income of $66.5
million, or $2.19 per diluted
share.
PriceSmart management will host a conference call at
12:00 p.m. Eastern time (9:00a.m. Pacific time) on Thursday, July 6, 2017, to discuss the financial
results. Individuals interested in participating in the conference
call may do so by dialing (877) 870-4263 toll free, or (412)
317-0790 for international callers and asking to join the
PriceSmart, Inc. call. A digital replay will be available through
July 13, 2017, following the
conclusion of the call by dialing (877) 344-7529 for domestic
callers, or (412) 317-0088 for international callers, and entering
replay access code 10106771.
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.
For further information, please contact John M. Heffner, Principal Financial Officer and
Principal Accounting 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,
|
|
May 31,
|
|
May 31,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net warehouse club
sales
|
|
$
|
710,699
|
|
$
|
684,547
|
|
$
|
2,199,051
|
|
$
|
2,134,365
|
Export
sales
|
|
|
6,475
|
|
|
7,091
|
|
|
25,381
|
|
|
21,872
|
Membership
income
|
|
|
12,038
|
|
|
11,475
|
|
|
35,581
|
|
|
34,226
|
Other
income
|
|
|
1,046
|
|
|
1,149
|
|
|
3,113
|
|
|
3,661
|
Total
revenues
|
|
|
730,258
|
|
|
704,262
|
|
|
2,263,126
|
|
|
2,194,124
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net warehouse
club
|
|
|
611,455
|
|
|
590,500
|
|
|
1,879,747
|
|
|
1,832,183
|
Export
|
|
|
6,143
|
|
|
6,742
|
|
|
24,085
|
|
|
20,799
|
Selling, general and
administrative:
|
|
|
|
|
|
|
|
|
|
|
|
|
Warehouse club
operations
|
|
|
67,754
|
|
|
62,745
|
|
|
200,964
|
|
|
188,348
|
General and
administrative
|
|
|
16,907
|
|
|
16,439
|
|
|
51,921
|
|
|
48,086
|
Pre-opening
expenses
|
|
|
9
|
|
|
13
|
|
|
(104)
|
|
|
389
|
Loss/(gain) on
disposal of assets
|
|
|
364
|
|
|
334
|
|
|
1,106
|
|
|
399
|
Total operating
expenses
|
|
|
702,632
|
|
|
676,773
|
|
|
2,157,719
|
|
|
2,090,204
|
Operating
income
|
|
|
27,626
|
|
|
27,489
|
|
|
105,407
|
|
|
103,920
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
392
|
|
|
322
|
|
|
1,443
|
|
|
780
|
Interest
expense
|
|
|
(1,828)
|
|
|
(1,571)
|
|
|
(5,126)
|
|
|
(4,480)
|
Other income
(expense), net
|
|
|
1,101
|
|
|
(222)
|
|
|
1,088
|
|
|
(1,018)
|
Total other income
(expense)
|
|
|
(335)
|
|
|
(1,471)
|
|
|
(2,595)
|
|
|
(4,718)
|
Income before
provision for income taxes and
income (loss) of unconsolidated affiliates
|
|
|
27,291
|
|
|
26,018
|
|
|
102,812
|
|
|
99,202
|
Provision for income
taxes
|
|
|
(8,459)
|
|
|
(9,168)
|
|
|
(31,885)
|
|
|
(33,113)
|
Income (loss) of
unconsolidated affiliates
|
|
|
6
|
|
|
(13)
|
|
|
(1)
|
|
|
362
|
Net income
|
|
|
18,838
|
|
$
|
16,837
|
|
$
|
70,926
|
|
|
66,451
|
Net income per share
available for distribution:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income per
share
|
|
$
|
0.62
|
|
$
|
0.55
|
|
$
|
2.34
|
|
$
|
2.19
|
Diluted net income
per share
|
|
$
|
0.62
|
|
$
|
0.55
|
|
$
|
2.34
|
|
$
|
2.19
|
Shares used in per
share computations:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
30,043
|
|
|
29,951
|
|
|
30,010
|
|
|
29,918
|
Diluted
|
|
|
30,045
|
|
|
29,955
|
|
|
30,014
|
|
|
29,923
|
Dividends per
share
|
|
$
|
—
|
|
$
|
—
|
|
$
|
0.70
|
|
$
|
0.70
|
PRICESMART,
INC.
|
CONSOLIDATED
BALANCE SHEETS
|
(AMOUNTS IN
THOUSANDS, EXCEPT SHARE DATA)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
May 31,
|
|
|
|
|
|
2017
|
|
August 31,
|
|
|
(Unaudited)
|
|
2016
|
ASSETS
|
|
|
|
|
|
|
Current
Assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
192,106
|
|
$
|
199,522
|
Short-term restricted
cash
|
|
|
816
|
|
|
518
|
Receivables, net of
allowance for doubtful accounts of $7 as of May 31, 2017
and August 31, 2016, respectively
|
|
|
6,591
|
|
|
7,464
|
Merchandise
inventories
|
|
|
279,417
|
|
|
282,907
|
Prepaid expenses and
other current assets (includes $3 and $34 as of May 31, 2017 and
August 31, 2016, respectively, for the fair value of foreign
currency forward contracts)
|
|
|
21,805
|
|
|
22,143
|
Total current
assets
|
|
|
500,735
|
|
|
512,554
|
Long-term restricted
cash
|
|
|
2,765
|
|
|
2,676
|
Property and
equipment, net
|
|
|
533,157
|
|
|
473,045
|
Goodwill
|
|
|
35,632
|
|
|
35,637
|
Deferred tax
assets
|
|
|
13,893
|
|
|
12,258
|
Other non-current
assets (includes $2,679 and $3,224 as of May 31, 2017 and August
31, 2016, respectively, for the fair value of derivative
instruments)
|
|
|
46,928
|
|
|
49,798
|
Investment in
unconsolidated affiliates
|
|
|
10,766
|
|
|
10,767
|
Total
Assets
|
|
$
|
1,143,876
|
|
$
|
1,096,735
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
|
|
Short-term
borrowings
|
|
$
|
—
|
|
$
|
16,534
|
Accounts
payable
|
|
|
233,226
|
|
|
267,173
|
Accrued salaries and
benefits
|
|
|
20,664
|
|
|
19,606
|
Deferred membership
income
|
|
|
22,346
|
|
|
20,920
|
Income taxes
payable
|
|
|
5,257
|
|
|
4,226
|
Other accrued
expenses (includes $400 and $144 as of May 31, 2017 and August 31,
2016, respectively, for the fair value of foreign currency forward
contracts)
|
|
|
20,788
|
|
|
24,880
|
Dividends
payable
|
|
|
10,643
|
|
|
—
|
Long-term debt,
current portion
|
|
|
20,376
|
|
|
14,565
|
Total current
liabilities
|
|
|
333,300
|
|
|
367,904
|
Deferred tax
liability
|
|
|
1,472
|
|
|
1,760
|
Long-term portion of
deferred rent
|
|
|
8,890
|
|
|
8,961
|
Long-term income
taxes payable, net of current portion
|
|
|
801
|
|
|
970
|
Long-term debt, net
of current portion
|
|
|
104,338
|
|
|
73,542
|
Other long-term
liabilities (includes $600 and $1,514 for the fair value of
derivative instruments and $4,806 and $4,013 for post employment
plans as of May 31, 2017 and August 31, 2016,
respectively)
|
|
|
5,688
|
|
|
5,527
|
Total
Liabilities
|
|
|
454,489
|
|
|
458,664
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
Common stock $0.0001
par value, 45,000,000 shares authorized; 31,258,752 and 31,237,658
shares issued and 30,398,239 and 30,401,307 shares outstanding (net
of treasury shares) as of May 31, 2017 and August 31, 2016,
respectively
|
|
|
3
|
|
|
3
|
Additional paid-in
capital
|
|
|
420,130
|
|
|
412,369
|
Tax benefit from
stock-based compensation
|
|
|
11,552
|
|
|
11,321
|
Accumulated other
comprehensive loss
|
|
|
(108,258)
|
|
|
(103,951)
|
Retained
earnings
|
|
|
400,702
|
|
|
351,060
|
Less: treasury stock
at cost, 860,513 shares and 836,351 shares as of May 31, 2017 and
August 31, 2016, respectively
|
|
|
(34,742)
|
|
|
(32,731)
|
Total
Equity
|
|
|
689,387
|
|
|
638,071
|
Total Liabilities and
Equity
|
|
$
|
1,143,876
|
|
$
|
1,096,735
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/pricesmart-announces-third-quarter-results-of-operations-300483508.html
SOURCE PriceSmart, Inc.