8-K 1Q FY13 Earnings Release and December Sales 2012

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K


CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 9, 2013

PriceSmart, Inc.
(Exact name of registrant as specified in its charter)

Delaware
000-22793
33-0628530
(State or Other Jurisdiction of
Incorporation)
(Commission File Number)
(I.R.S. Employer
Identification No.)

9740 Scranton Road, San Diego, CA 92121
(Address of Principal Executive Offices, including Zip Code)

Registrant's telephone number, including area code: (858) 404-8800

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2)(b))

o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))




Item 2.02. Results of Operations and Financial Condition.

On January 9, 2013, PriceSmart, Inc. issued a press release regarding its results of operations for its first quarter ended November 30, 2012 and its net warehouse club sales for the month ended December 31, 2012. A copy of the press release is furnished herewith as Exhibit 99.1. Pursuant to the rules and regulations of the Securities and Exchange Commission, such exhibit and the information set forth therein and herein shall be deemed “furnished” and not “filed” for purpose of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability under that section.

Item 9.01. Financial Statements and Exhibits.

(d)
The following exhibit is furnished herewith:
Exhibit
No.
 
Description
99.1
 
Press Release of PriceSmart, Inc. dated January 9, 2013.





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: January 9, 2013
 
/S/ JOHN M. HEFFNER
 
 
John M. Heffner
 
 
Executive Vice President and Chief Financial Officer
 
 
(Principal Financial Officer and
 
 
Principal Accounting Officer)






EXHIBIT INDEX
Exhibit
Number
 
Description
99.1
 
Press Release of PriceSmart, Inc. dated January 9, 2013.






PriceSmart Announces First Quarter Results of Operations and December Sales

San Diego, CA (January 9, 2013) - PriceSmart, Inc. (NASDAQ: PSMT,) today announced its results of operations for the first quarter of fiscal year 2013 which ended on November 30, 2012.

For the first quarter of fiscal year 2013, net warehouse club sales increased 11.8% to $523.6 million from $468.2 million in the first quarter of fiscal year 2012. Total revenues for the first quarter of fiscal year 2013 was $535.3 million compared to $477.5 million in the first quarter of the prior year. The Company had 30 clubs in operation as of November 30, 2012, compared to 29 warehouse clubs in operation as of November 30, 2011.

The Company recorded operating income for the first quarter of $29.8 million, compared to operating income of $24.3 million for the first quarter of the prior year. Net income was $20.0 million, or $0.66 per diluted share, in the first quarter of fiscal year 2013. Net income in the first quarter of fiscal year 2012 was $14.0 million, or $0.47 per diluted share.

For the month of December 2012, net sales increased 11.6% to $253.7 million from $227.4 million in December a year earlier. For the four months ended December 31, 2012, net sales increased 11.7% to $777.3 million from $695.6 million in the same period last year. There were 30 warehouse clubs in operation at the end of December 2012 compared to 29 warehouse clubs in operation in December 2011.

For the four weeks ended December 30, 2012, comparable warehouse sales for the 29 warehouse clubs open at least 13 1/2 full months increased 13.7% compared to the same four-week period last year. For the seventeen-week period ended December 30, 2012, comparable warehouse sales increased 9.9% compared to the comparable seventeen-week period a year ago.

PriceSmart management plans to host a conference call at 12:00 p.m. Eastern time (9:00 a.m. Pacific time) on Thursday, January 10, 2013, to discuss the financial results.

Individuals interested in participating in the conference call may do so by dialing (888) 359-3624 toll free, and entering participant code 4470837.

A digital replay will be available through January 31, 2013, 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 4470837.

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 30 warehouse clubs in 12 countries and one U.S. territory (five in Costa Rica; four each in Panama and Trinidad; three each in Guatemala and the Dominican Republic; two each in Colombia, 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,” “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: 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 its business; the Company faces significant competition; future sales growth could be dependent upon the Company acquiring suitable sites for additional


warehouse clubs; the Company faces difficulties in the shipment of, and risks inherent in the acquisition and importation of, merchandise to its warehouse clubs; the Company is exposed to weather and other natural disaster risks; general economic conditions could adversely impact the Company's business in various respects; the Company is subject to changes in relationships and agreements with third parties with which the Company does business; a few of the Company's stockholders own nearly 30.4% 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 rates; 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; although the Company takes steps to continuously review, enhance, and implement improvements to its internal controls, there may be material weaknesses or significant deficiencies that the Company has not yet identified; 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 for the fiscal year ended August 31, 2012, filed pursuant to the Securities Exchange Act of 1934 on October 30, 2012. 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 November 30,
 
2012
 
2011
Revenues:
 
 
 
Net warehouse club sales
$
523,599

 
 
$
468,192

 
Export sales
3,073
 
 
 
2,249
 
 
Membership income
7,673
 
 
 
6,331
 
 
Other income
941
 
 
 
679
 
 
Total revenues
535,286
 
 
 
477,451
 
 
Operating expenses:
 
 
 
Cost of goods sold:
 
 
 
Net warehouse club
444,944
 
 
 
399,865
 
 
Export
2,835
 
 
 
2,161
 
 
Selling, general and administrative:
 
 
 
Warehouse club operations
45,842
 
 
 
41,891
 
 
General and administrative
11,158
 
 
 
9,111
 
 
Pre-opening expenses
737
 
 
 
162
 
 
Total operating expenses
505,516
 
 
 
453,190
 
 
Operating income
29,770
 
 
 
24,261
 
 
Other income (expense):
 
 
 
Interest income
294
 
 
 
184
 
 
Interest expense
(1,218
)
 
 
(1,254
)
 
Other income (expense), net
(58
)
 
 
(1,269
)
 
Total other expense
(982
)
 
 
(2,339
)
 
Income from continuing operations before provision for income taxes and income (loss) of unconsolidated affiliates
28,788
 
 
 
21,922
 
 
Provision for income taxes
(8,779
)
 
 
(7,933
)
 
Income (loss) of unconsolidated affiliates
(4
)
 
 
7
 
 
Income from continuing operations
20,005
 
 
 
13,996
 
 
Income (loss) from discontinued operations, net of tax
—
 
 
 
(7
)
 
Net income
20,005
 
 
 
13,989
 
 
Net income per share available for distribution:
 
 
 
Basic net income per share from continuing operations
$
0.66

 
 
$
0.47

 
Basic net income (loss) per share from discontinued operations, net of tax
$
—

 
 
$
—

 
Basic net income per share
$
0.66

 
 
$
0.47

 
Diluted net income per share from continuing operations
$
0.66

 
 
$
0.47

 
Diluted net income (loss) per share from discontinued operations, net of tax
$
—

 
 
$
—

 
Diluted net income per share
$
0.66

 
 
$
0.47

 
Shares used in per share computations:
 
 
 
Basic
29,592
 
 
 
29,503
 
 
Diluted
29,604
 
 
 
29,517
 
 
Dividends per share
$
0.60

 
 
$
—

 



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

 
November 30,
2012
 
August 31,
2012
 
(Unaudited)
 
 
ASSETS
 
 
 
Current Assets:
 
 
 
Cash and cash equivalents
$
84,350

 
 
$
91,248

 
Short-term restricted cash
1,220
 
 
 
1,241
 
 
Receivables, net of allowance for doubtful accounts of $1 as of  November 30 and August 31, 2012, respectively
6,085
 
 
 
5,786
 
 
Merchandise inventories
239,978
 
 
 
201,043
 
 
Deferred tax assets - current
5,941
 
 
 
5,619
 
 
Prepaid expenses and other current assets
34,628
 
 
 
29,955
 
 
Total current assets
372,202
 
 
 
334,892
 
 
Long-term restricted cash
36,520
 
 
 
36,505
 
 
Property and equipment, net
307,346
 
 
 
299,567
 
 
Goodwill
36,821
 
 
 
36,886
 
 
Deferred tax assets - long term
13,515
 
 
 
14,835
 
 
Other non-current assets
5,395
 
 
 
5,468
 
 
Investment in unconsolidated affiliates
8,105
 
 
 
7,559
 
 
Total Assets
$
779,904

 
 
$
735,712

 
LIABILITIES AND EQUITY
 
 
 
Current Liabilities:
 
 
 
Accounts payable
$
200,829

 
 
$
173,197

 
Accrued salaries and benefits
12,641
 
 
 
14,729
 
 
Deferred membership income
15,002
 
 
 
13,747
 
 
Income taxes payable
6,690
 
 
 
8,193
 
 
Other accrued expenses
13,834
 
 
 
17,516
 
 
Dividends payable
18,129
 
 
 
—
 
 
Long-term debt, current portion
7,798
 
 
 
7,237
 
 
Deferred tax liability - current
173
 
 
 
122
 
 
Total current liabilities
275,096
 
 
 
234,741
 
 
Deferred tax liability - long-term
2,351
 
 
 
2,191
 
 
Long-term portion of deferred rent
4,368
 
 
 
4,336
 
 
Long-term income taxes payable, net of current portion
2,108
 
 
 
2,512
 
 
Long-term debt, net of current portion
73,165
 
 
 
71,422
 
 
Other long-term liabilities (includes $1.4 million and $1.2 million for the fair value of derivative instruments and $419 and $396 for the defined benefit plans as of November 30 and August 31, 2012, respectively)
1,803
 
 
 
1,596
 
 
Total liabilities
358,891
 
 
 
316,798
 
 
Equity:
 
 
 
Common stock, $0.0001 par value, 45,000,000 shares authorized; 30,861,245 and 30,855,651 shares issued and 30,215,819 and 30,210,255 shares outstanding (net of treasury shares) as of November 30 and August 31, 2012, respectively.
3
 
 
 
3
 
 
Additional paid-in capital
385,977
 
 
 
384,154
 
 
Tax benefit from stock-based compensation
6,680
 
 
 
6,680
 
 
Accumulated other comprehensive loss
(34,782
)
 
 
(33,182
)
 
Retained earnings
79,615
 
 
 
77,739
 
 
Less: treasury stock at cost; 645,426 as of November 30 and August 31, 2012, respectively.
(16,480
)
 
 
(16,480
)
 
Total equity
421,013
 
 
 
418,914
 
 
Total Liabilities and Equity
$
779,904

 
 
$
735,712