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): April 4, 2012
PriceSmart, Inc.
(Exact name of registrant as specified in its charter)
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Delaware
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000-22793
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33-0628530
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(State or Other Jurisdiction of
Incorporation)
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(Commission File Number)
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(I.R.S. Employer
Identification No.)
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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):
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o
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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o
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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o
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2)(b))
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o
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 2.02. Results of Operations and Financial Condition.
On April 4, 2012, PriceSmart, Inc. issued a press release regarding its results of operations for its second quarter ended February 29, 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.
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(d)
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The following exhibit is furnished herewith:
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Exhibit
No.
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Description
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99.1
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Press Release of PriceSmart, Inc. dated April 4, 2012.
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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.
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Date: April 4, 2012
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/S/ JOHN M. HEFFNER
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John M. Heffner
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Executive Vice President and Chief Financial Officer
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(Principal Financial Officer and
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Principal Accounting Officer)
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EXHIBIT INDEX
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Exhibit
Number
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Description
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99.1
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Press Release of PriceSmart, Inc. dated April 4, 2012.
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PriceSmart Announces Second Quarter Results of Operations
San Diego, CA (April 4, 2012) – PriceSmart, Inc. (NASDAQ: PSMT, www.pricesmart.com) today announced its results of operations for the second quarter of fiscal year 2012 which ended on February 29, 2012.
For the second quarter of fiscal year 2012, net warehouse club sales increased 22.2% to $537.8 million from $440.3 million in the second quarter of fiscal year 2011. Total revenues for the second quarter of fiscal year 2012 were $549.8 million compared to $449.6 million in the comparable period of the prior year. The Company had 29 clubs in operation as of February 2012 and 28 clubs in operation as of February 2011.
The Company recorded operating income during the quarter of $30.3 million, as compared to operating income of $26.7 million in the prior year. Net income attributable to PriceSmart was $20.2 million, or $0.67 per diluted share, in the second quarter of fiscal year 2012 as compared to $17.9 million, or $0.60 per diluted share, in the second quarter of fiscal year 2011.
For the first six months of fiscal year 2012, net warehouse club sales increased 23.1% to $1,006.1 million from $817.6 million in the first six months of fiscal year 2011. Total revenues for the first half of fiscal year 2012 increased 23.1% to $1,028.5 million from $835.7 million in the same period of the prior year. For the first six months of fiscal year 2012, the Company recorded operating income of $54.6 million and net income attributable to PriceSmart of $34.2 million, or $1.14 per diluted share. During the same six month period in fiscal year 2011, the Company recorded operating income of $48.9 million and net income attributable to PriceSmart of $32.8 million, or $1.11 per diluted share.
PriceSmart management will host a conference call at 12:00 p.m. Eastern time (9:00 a.m. Pacific time) on Thursday, April 5, 2012, to discuss the financial results. Individuals interested in participating in the conference call may do so by dialing (888) 282-4056 toll free, and entering participant code 2522346. A digital replay will be available through April 30, 2012, 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 2522346.
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 29 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 El Salvador and Honduras; and one each in Aruba, Barbados, Colombia, 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 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 approximately 31.1% 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 Amendment No. 1 to Annual Report on Form 10-K/A for the fiscal year ended August 31, 2011, filed pursuant to the Securities Exchange Act of 1934 on January 9, 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)
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Three Months Ended
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Six Months Ended
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||||||||||||
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February 29,
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February 28,
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February 29,
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February 28,
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||||||||||
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2012
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2011
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2012
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2011
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||||||||||
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Revenues:
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|||||||||||||
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Net warehouse club sales
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$
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537,816
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$
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440,263
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$
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1,006,145
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$
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817,595
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|||||
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Export sales
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3,459
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1,872
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5,708
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3,280
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|||||||||
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Membership income
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6,393
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5,576
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12,724
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11,001
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|||||||||
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Other income
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2,165
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1,906
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3,941
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3,813
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|||||||||
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Total revenues
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549,833
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449,617
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1,028,518
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835,689
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|||||||||
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Operating expenses:
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|||||||||||||
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Cost of goods sold:
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|||||||||||||
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Net warehouse club
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459,313
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375,027
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859,794
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693,215
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|||||||||
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Export
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3,292
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1,758
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5,453
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3,102
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|||||||||
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Selling, general and administrative:
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|||||||||||||
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Warehouse club operations
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46,384
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37,239
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88,893
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72,373
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|||||||||
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General and administrative
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10,508
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8,874
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19,619
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17,684
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|||||||||
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Pre-opening expenses
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(1
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)
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(15
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)
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161
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388
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|||||||
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Total operating expenses
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519,496
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422,883
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973,920
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786,762
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|||||||||
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Operating income
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30,337
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26,734
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54,598
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48,927
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|||||||||
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Other income (expense):
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|||||||||||||
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Interest income
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205
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239
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389
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367
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|||||||||
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Interest expense
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(1,317
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)
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(1,071
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)
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(2,571
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)
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(2,028
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)
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|||||
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Other income (expense), net
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832
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194
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(437
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)
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526
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||||||||
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Total other expense
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(280
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)
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(638
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)
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(2,619
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)
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(1,135
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)
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|||||
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Income from continuing operations before provision for income taxes and loss of unconsolidated affiliates
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30,057
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26,096
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51,979
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47,792
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|||||||||
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Provision for income taxes
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(9,843
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)
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(8,049
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)
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(17,776
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)
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(14,894
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)
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|||||
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Income (loss) of unconsolidated affiliates
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3
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(37
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)
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10
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(42
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)
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|||||||
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Income from continuing operations
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20,217
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18,010
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34,213
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32,856
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|||||||||
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Income (loss) from discontinued operations, net of tax
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3
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(93
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)
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(4
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)
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(86
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)
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||||||
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Net income
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20,220
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17,917
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34,209
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32,770
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|||||||||
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Net income per share available for distribution:
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|||||||||||||
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Basic net income per share from continuing operations
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$
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0.67
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$
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0.60
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$
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1.14
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$
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1.11
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|||||
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Basic net income (loss) per share from discontinued operations, net of tax
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$
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—
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$
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—
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$
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—
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$
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—
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|||||
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Basic net income per share
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$
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0.67
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$
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0.60
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$
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1.14
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$
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1.11
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|||||
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Diluted net income per share from continuing operations
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$
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0.67
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$
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0.60
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$
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1.14
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$
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1.11
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|||||
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Diluted net income (loss) per share from discontinued operations, net of tax
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$
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—
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$
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—
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$
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—
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$
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—
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|||||
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Diluted net income per share
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$
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0.67
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$
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0.60
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$
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1.14
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$
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1.11
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|||||
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Shares used in per share computations:
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|||||||||||||
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Basic
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29,541
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29,414
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29,522
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29,385
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|||||||||
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Diluted
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29,553
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29,423
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29,535
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29,392
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|||||||||
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Dividends per share
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$
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0.60
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$
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0.60
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$
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0.60
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$
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0.60
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|||||
PRICESMART, INC.
CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)
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February 29,
|
|||||||
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2012
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August 31,
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||||||
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(Unaudited)
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2011
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||||||
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ASSETS
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|||||||
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Current Assets:
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|||||||
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Cash and cash equivalents
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$
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90,799
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$
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76,817
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|||
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Short-term restricted cash
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1,288
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1,240
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|||||
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Receivables, net of allowance for doubtful accounts of $8 and $5 as of February 29, 2012 and August 31, 2011, respectively
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4,114
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3,655
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|||||
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Merchandise inventories
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179,904
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177,232
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|||||
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Deferred tax assets – current
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4,550
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4,252
|
|||||
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Prepaid expenses and other current assets
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32,401
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29,117
|
|||||
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Assets of discontinued operations
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46
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464
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|||||
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Total current assets
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313,102
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292,777
|
|||||
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Long-term restricted cash
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36,662
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22,626
|
|||||
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Property and equipment, net
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282,264
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281,111
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|||||
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Goodwill
|
37,221
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37,361
|
|||||
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Deferred tax assets – long term
|
15,134
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17,000
|
|||||
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Other non-current assets
|
5,560
|
5,390
|
|||||
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Investment in unconsolidated affiliates
|
7,584
|
8,063
|
|||||
|
Total Assets
|
$
|
697,527
|
$
|
664,328
|
|||
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LIABILITIES AND EQUITY
|
|||||||
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Current Liabilities:
|
|||||||
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Short-term borrowings
|
$
|
135
|
$
|
2,259
|
|||
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Accounts payable
|
167,418
|
163,432
|
|||||
|
Accrued salaries and benefits
|
11,052
|
11,681
|
|||||
|
Deferred membership income
|
13,185
|
11,416
|
|||||
|
Income taxes payable
|
7,754
|
7,655
|
|||||
|
Other accrued expenses
|
11,573
|
12,556
|
|||||
|
Dividends payable
|
9,063
|
—
|
|||||
|
Long-term debt, current portion
|
7,282
|
7,771
|
|||||
|
Deferred tax liability – current
|
364
|
533
|
|||||
|
Liabilities of discontinued operations
|
2
|
40
|
|||||
|
Total current liabilities
|
227,828
|
217,343
|
|||||
|
Deferred tax liability – long-term
|
1,615
|
1,888
|
|||||
|
Long-term portion of deferred rent
|
4,297
|
4,143
|
|||||
|
Long-term income taxes payable, net of current portion
|
3,380
|
3,310
|
|||||
|
Long-term debt, net of current portion
|
76,396
|
60,451
|
|||||
|
Other long-term liabilities (includes $2.2 million and $884,000 for the fair value of derivative instruments and $561,000 and $471,000 for the defined benefit plan as of February 29, 2012 and August 31, 2011, respectively)
|
2,760
|
1,355
|
|||||
|
Total liabilities
|
316,276
|
288,490
|
|||||
|
Equity:
|
|||||||
|
Common stock, $0.0001 par value, 45,000,000 shares authorized; 30,840,358 and 30,695,933 shares issued and 30,199,395 and 29,900,030 shares outstanding (net of treasury shares) as of February 29, 2012 and August 31, 2011
|
3
|
3
|
|||||
|
Additional paid-in capital
|
381,037
|
383,549
|
|||||
|
Tax benefit from stock-based compensation
|
5,880
|
5,242
|
|||||
|
Accumulated other comprehensive loss
|
(33,828
|
)
|
(22,915
|
)
|
|||
|
Retained earnings
|
44,324
|
28,238
|
|||||
|
Less: treasury stock at cost; 640,963 and 795,903 shares as of February 29, 2012 and August 31, 2011.
|
(16,165
|
)
|
(18,279
|
)
|
|||
|
Total equity
|
381,251
|
375,838
|
|||||
|
Total Liabilities and Equity
|
$
|
697,527
|
$
|
664,328
|
|||