Thu, 5 Apr 2007 5:00:00 PDT
SAN DIEGO, CA -- (MARKET WIRE) -- 04/05/2007 -- PriceSmart, Inc. (
For the second quarter of fiscal year 2007, net warehouse club sales increased 19.6% to $226.7 million from $189.6 million in the second quarter of fiscal year 2006. Total revenues for the second quarter increased 20.0% to $231.9 million, compared to $193.3 million in the prior year. The Company had 23 warehouse clubs in operation as of February 28, 2007 and 2006.
The Company recorded operating income in the second quarter of $9.6 million, compared to operating income of $6.1 million in the second quarter of the prior year. Net income was $6.5 million, or $0.22 per diluted share, in the second quarter of fiscal 2007 compared to $3.2 million, or $0.12 per diluted share, in the second quarter of fiscal 2006.
For the first six months of fiscal 2007, net warehouse club sales increased 19.3% to $424.8 million from $356.1 million in the first six months of fiscal 2006. Total revenues for the first half of the fiscal year increased 19.6% to $434.4 million from $363.2 million in the same period of the prior year. For the first six months of fiscal 2007, the Company recorded operating income of $16.8 million, and net income of $10.6 million, or $0.36 per diluted share. During the same six month period in fiscal 2006, the Company recorded operating income of $9.2 million, and net income of $5.2 million, or $0.20 per diluted share.
The Company also announced that it completed the acquisition of land in Arima, Trinidad, and will begin construction of its previously announced third warehouse club in Trinidad. As a result of a delay in the land purchase, the Company now expects this warehouse club to open in November 2007. In addition, the Company announced that it has acquired land and will begin construction of a new warehouse club in the municipality of Fraijanes in the eastern outskirts of Guatemala City, Guatemala. This warehouse club, which is also expected to open in November 2007, will bring the number of PriceSmart warehouse clubs in Guatemala to three. Upon completion of both of these warehouse clubs, the total number of warehouse clubs in operation will be 25.
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 23 warehouse clubs in 11 countries and one U.S. territory (four each in Panama and Costa Rica; two each in Dominican Republic, El Salvador, Guatemala, Honduras, and Trinidad; 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 had substantial net losses in fiscal 2003, 2004 and 2005, and may not be able to sustain the profitability it achieved in fiscal 2006 in future periods; 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; although the Company has taken and continues to take steps to improve significantly its internal controls, there may be material weaknesses or significant deficiencies that the Company has not yet identified; 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 have control over the Company's voting stock, which will make it difficult to complete some corporate transactions without their support and may prevent 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 costs and 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 Form 10-K filed pursuant to the Securities Exchange Act of 1934 on November 13, 2006. 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)
February August
28,2007 31,2006
------------- -------------
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $ 33,441 $ 39,995
Short-term restricted cash 7,844 7,651
Receivables, net of allowance for
doubtful accounts of $176 and
$191, respectively 4,326 3,599
Merchandise inventories 84,108 77,432
Prepaid expenses and other current assets 10,596 8,985
Assets of discontinued operations 1,543 1,594
------------- -------------
Total current assets 141,858 139,256
------------- -------------
Long-term restricted cash 407 531
Note receivable 2,130 --
Property and equipment, net 160,918 162,029
Goodwill 31,702 31,870
Deferred tax asset 19,875 20,183
Other assets 3,926 1,903
Investment in unconsolidated affiliate 2,980 3,271
------------- -------------
Total Assets $ 363,796 $ 359,043
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Short-term borrowings $ 4,062 $ 158
Accounts payable 72,503 65,520
Accounts payable to unconsolidated
affiliate -- 381
Accrued salaries and benefits 5,448 5,765
Deferred membership income 6,720 5,780
Income taxes payable 4,217 4,098
Other accrued expenses 14,469 15,194
Dividend payable 9,458 --
Long-term debt, current portion 1,000 5,417
Liabilities of discontinued operations 145 130
------------- -------------
Total current liabilities 118,022 102,443
Deferred tax liability 1,307 1,101
Deferred rent 1,708 1,730
Accrued closure costs 3,150 3,226
Long-term debt, net of current portion 53 13,252
------------- -------------
Total liabilities 124,240 121,752
Minority interest 2,928 2,672
Commitments and contingencies
Stockholders' Equity:
Common stock, $.0001 par value,
45,000,000 shares authorized;
29,552,580 and 29,404,457 shares
issued and 29,076,867 and 28,966,294
shares outstanding (net of treasury
shares), respectively 3 3
Additional paid-in capital 365,317 364,132
Tax benefit from stock-based compensation 3,902 3,509
Accumulated other comprehensive loss (14,010) (13,883)
Accumulated deficit (108,517) (109,676)
Less: treasury stock at cost; 475,713
shares and 438,163 shares held,
respectively (10,067) (9,466)
------------- -------------
Total stockholders' equity 236,628 234,619
------------- -------------
Total Liabilities and Stockholders' Equity $ 363,796 $ 359,043
============= =============
PRICESMART, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED-AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
Three Months Ended Six Months Ended
February 28, February 28,
==================== ====================
2007 2006 2007 2006
========= ========= ========= =========
Revenues:
Sales:
Net warehouse club $ 226,722 $ 189,562 $ 424,822 $ 356,075
Export 171 11 266 11
Membership income 3,421 2,817 6,662 5,462
Other income 1,543 868 2,604 1,684
--------- -------- --------- ---------
Total revenues 231,857 193,258 434,354 363,232
--------- -------- --------- ---------
Operating expenses:
Cost of goods sold:
Net warehouse club 192,959 162,170 361,457 304,690
Export 168 16 260 16
Selling, general and
administrative:
Warehouse club operations 21,749 19,134 42,042 37,488
General and
administrative 6,877 5,753 12,845 11,379
Preopening expenses 23 1 255 336
Asset impairment and
closure costs 472 60 663 113
--------- -------- --------- ---------
Total operating expenses 222,248 187,134 417,522 354,022
--------- -------- --------- ---------
Operating income 9,609 6,124 16,832 9,210
Other income (expense):
Interest income 479 412 843 724
Interest expense (90) (829) (445) (1,550)
Other income (expense), net (36) 1 (22) 25
--------- -------- --------- ---------
Total other income (expense) 353 (416) 376 (801)
--------- -------- --------- ---------
Income from continuing
operations before provision
for income taxes, loss of
unconsolidated affiliate and
minority interest 9,962 5,708 17,208 8,409
Provision for income taxes (3,219) (2,152) (6,192) (3,494)
Loss of unconsolidated
affiliate (99) (80) (183) (44)
Minority interest (128) (129) (262) (173)
--------- -------- --------- ---------
Income from continuing
operations 6,516 3,347 10,571 4,698
Discontinued operations, net of
tax 28 (107) 46 547
--------- -------- --------- ---------
Net income $ 6,544 $ 3,240 $ 10,617 $ 5,245
========= ========= ========= =========
Basic income per share:
Continuing operations $ 0.23 $ 0.12 $ 0.37 $ 0.18
Discontinued operations,
net of tax $ -- $ -- $ -- $ 0.02
--------- -------- --------- ---------
Net income $ 0.23 $ 0.12 $ 0.37 $ 0.20
========= ========= ========= =========
Diluted income per share:
Continuing operations $ 0.22 $ 0.12 $ 0.36 $ 0.18
Discontinued operations,
net of tax $ -- $ -- $ -- $ 0.02
--------- -------- --------- ---------
Net income $ 0.22 $ 0.12 $ 0.36 $ 0.20
========= ========= ========= =========
Shares used in per share
computations:
Basic 28,477 26,821 28,441 26,256
========= ========= ========= =========
Diluted 29,224 27,139 29,153 26,569
========= ========= ========= =========
Dividends per share $ 0.32 $ 0.00 $ 0.32 $ 0.00
========= ========= ========= =========
For further information, please contact: Robert E. Price Chief Executive Officer (858) 551-2336 John M. Heffner Executive Vice President and Chief Financial Officer (858) 404-8826
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