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 7, 2011 
 




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 7, 2011, PriceSmart, Inc. issued a press release regarding its results of operations for its first quarter ended November 30, 2010 and sales for the month of December 2010.  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 7, 2011.


 



 
 

 



 
 
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 7, 2011
 
/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 7, 2011.




 

 
 

 
 
 
PriceSmart Announces First Quarter Results of Operations;
December Sales Also Announced


 
San Diego, CA (January 7, 2011) – PriceSmart, Inc. (NASDAQ: PSMT, www.pricesmart.com) today announced its results of operations for the first quarter of fiscal year 2011 which ended on November 30, 2010.
 
For the first quarter of fiscal year 2011, net warehouse sales increased 22.3% to $377.3 million from $308.7 million in the first quarter of fiscal year 2010.  Total revenue for the first quarter was $386.1 million compared to $315.4 million in the prior year.  The Company had 28 clubs in operation as of November 30, 2010, compared to 26 warehouse clubs in operation as of November 30, 2009.
 
The Company recorded operating income in the quarter of $22.6 million, compared to operating income of $16.2 million in the prior year.  Net income attributable to PriceSmart was $14.9 million, or $0.50 per diluted share, in the first quarter of fiscal year 2011.  Net income attributable to PriceSmart in the first quarter of fiscal year 2010 was $10.4 million, or $0.35 per diluted share.  The Company will release its quarterly report on Form 10-Q for the first quarter of fiscal year 2011 on or before January 10, 2011.

The Company also announced that for the month of December 2010, net sales increased 22.0% to $185.4 million from $152.1 million in December a year earlier.  For the four months ended December 31, 2010, net sales increased 22.2% to $562.8 million from $460.7 million in the same period last year.  There were 28 warehouse clubs in operation at the end of December 2010 compared to 26 warehouse clubs in operation in December 2009.
 
For the four weeks ended January 2, 2011, comparable warehouse sales for warehouse clubs open at least 12 full months increased 15.6% compared to the same four-week period last year.  For the seventeen-week period ended January 2, 2011, comparable warehouse sales increased 16.5% compared to the comparable seventeen-week period a year ago.

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 28 warehouse clubs in 11 countries and one U.S. territory (five in Costa Rica; four each in Panama and Trinidad; three each in Guatemala and Dominican Republic, two each in 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; the Company may encounter 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; 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 39% 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; 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 filed for the year ended August 31, 2010 filed pursuant to the Securities Exchange Act of 1934 on November 9, 2010.  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,
 
   
2010
   
2009
 
Revenues:
           
Net warehouse club sales
 
$
377,331
   
$
308,653
 
Export sales
   
1,409
     
587
 
Membership income
   
5,425
     
4,649
 
Other income
   
1,907
     
1,530
 
Total revenues
   
386,072
     
315,419
 
Operating expenses:
               
Cost of goods sold:
               
Net warehouse club
   
317,813
     
261,717
 
Export
   
1,344
     
554
 
Selling, general and administrative:
               
Warehouse club operations
   
35,133
     
29,234
 
General and administrative
   
8,810
     
7,568
 
Pre-opening expenses
   
403
     
111
 
Total operating expenses
   
363,503
     
299,184
 
Operating income
   
22,569
     
16,235
 
Other income (expense):
               
Interest income
   
129
     
215
 
Interest expense
   
(956
)
   
(630
)
Other income (expense), net
   
(46
)
   
4
 
Total other expense
   
(873
)
   
(411
)
Income from continuing operations before provision for income taxes and loss of unconsolidated affiliates
   
21,696
     
15,824
 
Provision for income taxes
   
(6,845
)
   
(5,401
)
Loss of unconsolidated affiliates
   
(5
)
   
(2
)
Income from continuing operations
   
14,846
     
10,421
 
Income from discontinued operations, net of tax
   
7
     
9
 
Net income
   
14,853
     
10,430
 
Net income attributable to noncontrolling interest
   
     
(53
)
Net income attributable to PriceSmart
 
$
14,853
   
$
10,377
 
                 
Net income attributable to PriceSmart:
               
Income from continuing operations
   
14,846
     
10,368
 
Income (loss) from discontinued operations, net of tax
   
7
     
9
 
   
$
14,853
   
$
10,377
 
Net income per share attributable to PriceSmart and available for distribution:
               
Basic net income per share from continuing operations
 
$
0.50
   
$
0.35
 
Basic net income (loss) per share from discontinued operations, net of tax
 
$
0.00
   
$
0.00
 
Basic net income per share
 
$
0.50
   
$
0.35
 
                 
Diluted net income per share from continuing operations
 
$
0.50
   
$
0.35
 
Diluted net income (loss) per share from discontinued operations, net of tax
 
$
0.00
   
$
0.00
 
Diluted net income per share
 
$
0.50
   
$
0.35
 
Shares used in per share computations:
               
Basic
   
29,356
     
29,105
 
Diluted
   
29,362
     
29,163
 
Dividends per share
 
$
0.00
   
$
0.00
 

 
 

 
 
 

 


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

   
November 30,
       
   
2010
   
August 31,
 
   
(Unaudited)
   
2010
 
ASSETS
           
Current Assets:
           
Cash and cash equivalents
$
48,454
   
$
  73,346
 
Short-term restricted cash
 
1,240
     
  1,240
 
Receivables, net of allowance for doubtful accounts of $17 and $15 as of November 30 and August 31, 2010, respectively.
 
3,669
     
  2,855
 
Merchandise inventories
 
169,355
     
  131,190
 
Deferred tax assets – current
 
4,494
     
  3,639
 
Prepaid expenses and other current assets
 
25,400
     
  21,879
 
Assets of discontinued operations
 
924
     
  692
 
Total current assets
 
253,536
     
  234,841
 
Long-term restricted cash
 
13,631
     
  5,640
 
Property and equipment, net
 
277,467
     
  265,544
 
Goodwill
 
37,445
     
  37,471
 
Deferred tax assets – long term
 
15,361
     
  16,637
 
Other assets
 
4,369
     
  4,341
 
Investment in unconsolidated affiliates
 
8,092
     
  8,091
 
Total Assets
$
609,901
   
$
  572,565
 
LIABILITIES AND EQUITY
             
Current Liabilities:
             
Short-term borrowings
$
3,972
   
$
  3,551
 
Accounts payable
 
143,813
     
  124,401
 
Accrued salaries and benefits
 
10,798
     
  10,911
 
Deferred membership income
 
9,999
     
  9,729
 
Income taxes payable
 
4,054
     
  6,615
 
Other accrued expenses
 
12,805
     
  12,095
 
Long-term debt, current portion
 
7,734
     
  7,715
 
Deferred tax liability – current
 
409
     
  357
 
Liabilities of discontinued operations
 
115
     
  109
 
Total current liabilities
 
193,699
     
  175,483
 
Deferred tax liability – long-term
 
1,554
     
  1,198
 
Long-term portion of deferred rent
 
3,525
     
  3,272
 
Long-term income taxes payable, net of current portion
 
3,654
     
  3,564
 
Long-term debt, net of current portion
 
55,783
     
  53,005
 
Total liabilities
 
258,215
     
  236,522
 
Equity:
             
Common stock, $0.0001 par value, 45,000,000 shares authorized; 30,625,666 and 30,624,666 shares issued and 29,898,909 and 29,897,909 shares outstanding (net of treasury shares) as of November 30 and August 31, 2010, respectively.
 
3
     
  3
 
Additional paid-in capital
 
380,307
     
  379,368
 
Tax benefit from stock-based compensation
 
4,489
     
  4,490
 
Accumulated other comprehensive loss
 
(16,820
)
   
  (16,672
)
Accumulated deficit
 
(725
)
   
  (15,578
)
Less: treasury stock at cost; 726,757 and 726,757 shares as of November 30 and August 31, 2010, respectively.
 
(15,568
)
   
  (15,568
)
Total PriceSmart stockholders’ equity and total equity
 
351,686
     
  336,043
 
Total Liabilities and Equity
$
609,901
   
$
  572,565