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SIGNATURES

 

 

        Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

Date: July 10, 2009		/S/ JOHN M. HEFFNER
		John M. Heffner
		Executive Vice President and Chief Financial Officer
		(Principal Financial Officer and
		Chief Accounting Officer)

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EXHIBIT INDEX

 

Exhibit Number		Description
99.1		Press Release of PriceSmart, Inc. dated July 10, 2009.

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PriceSmart Announces Third Quarter Results of Operations

 

San Diego, CA (July 10, 2009) – 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.

 

 

For further information, please contact Robert E. Price, Chief Executive Officer (858) 551-2336; or John M. Heffner, Executive Vice President and Chief Financial Officer (858) 404-8826.

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PRICESMART, INC.

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED—AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA) 

 

		Three Months Ended May 31,								Nine Months Ended 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

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PRICESMART, INC.

CONSOLIDATED BALANCE SHEETS

(UNAUDITED—AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

 

		May 31,  2009				August 31, 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