form8k.htm


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 6, 2012
 
 
 
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):

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

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

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

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 6, 2012, PriceSmart, Inc. issued a press release regarding its results of operations for the quarter ended November 30, 2011.  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 6, 2012.


 
 
 
 

 
 



 
 
 
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 6, 2012
 
/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 6, 2012.


 
 
 
 

 
 


PriceSmart Announces First Quarter Results of Operations


 
San Diego, CA (January 6, 2012) – PriceSmart, Inc. (NASDAQ: PSMT,) today announced its results of operations for the first quarter of fiscal year 2012 which ended on November 30, 2011.
 
For the first quarter of fiscal year 2012, net warehouse sales increased 24.1% to $468.3 million from $377.3 million in the first quarter of fiscal year 2011.  Total revenue for the first quarter of fiscal year 2012 was $478.7 million compared to $386.1 million in the first quarter of the prior year.  The Company had 29 clubs in operation as of November 30, 2011, compared to 28 warehouse clubs in operation as of November 30, 2010.
 
The Company recorded operating income for the first quarter of $24.3 million, compared to operating income of $22.2 million for the first quarter of the prior year.  Net income attributable to PriceSmart was $14.0 million, or $0.47 per diluted share, in the first quarter of fiscal year 2012.  Net income attributable to PriceSmart in the first quarter of fiscal year 2011 was $14.9 million, or $0.50 per diluted share.

Beginning with the current quarter, the Company now reports gains and losses associated with foreign exchange in other income (expense) on the consolidated statement of income, formerly it was reported in net warehouse club cost of goods sold.  The Company believes that foreign currency gains and losses are not directly related to the cost of sales but are more closely linked to the financing activities of the Company and its subsidiaries.  For example, in the first quarter of fiscal year 2012, the Company incurred a net $1.2 million ($0.04 per share) foreign exchange loss resulting primarily from a devaluation of the Colombian peso.  During the first quarter of fiscal year 2011, the Company recorded a $378,000 ($0.01 per share) gain in foreign exchange that was reclassified to conform to the current presentation. 

The Company plans to release its quarterly report on Form 10-Q for the first quarter of fiscal year 2012 on or before January 9, 2012, which will contain additional information about the quarter’s results.

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 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 club: 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 31.4% 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; 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, 2011 filed pursuant to the Securities Exchange Act of 1934 on November 9, 2011.  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,
 
   
2011
   
2010
 
Revenues:
           
Net warehouse club sales
 
$
468,329
   
$
377,331
 
Export sales
   
2,249
     
1,409
 
Membership income
   
6,331
     
5,425
 
Other income
   
1,776
     
1,907
 
Total revenues
   
478,685
     
386,072
 
Operating expenses:
               
Cost of goods sold:
               
Net warehouse club
   
400,481
     
318,191
 
Export
   
2,161
     
1,344
 
Selling, general and administrative:
               
Warehouse club operations
   
42,509
     
35,133
 
General and administrative
   
9,111
     
8,810
 
Pre-opening expenses
   
162
     
403
 
Total operating expenses
   
454,424
     
363,881
 
Operating income
   
24,261
     
22,191
 
Other income (expense):
               
Interest income
   
184
     
129
 
Interest expense
   
(1,254
)
   
(956
)
Other income (expense), net
   
(1,269
)
   
332
 
Total other expense
   
(2,339
)
   
(495
)
Income from continuing operations before provision for income taxes and loss of unconsolidated affiliates
   
21,922
     
21,696
 
Provision for income taxes
   
(7,933
)
   
(6,845
)
Loss of unconsolidated affiliates
   
7
     
(5
)
Income from continuing operations
   
13,996
     
14,846
 
Income from discontinued operations, net of tax
   
(7
)
   
7
 
Net income
   
13,989
     
14,853
 
                 
Net income per share available for distribution:
               
Basic net income per share from continuing operations
 
$
0.47
   
$
0.50
 
Basic net income per share from discontinued operations, net of tax
 
$
0.00
   
$
0.00
 
Basic net income per share
 
$
0.47
   
$
0.50
 
                 
Diluted net income per share from continuing operations
 
$
0.47
   
$
0.50
 
Diluted net income per share from discontinued operations, net of tax
 
$
0.00
   
$
0.00
 
Diluted net income per share
 
$
0.47
   
$
0.50
 
Shares used in per share computations:
               
Basic
   
29,503
     
29,356
 
Diluted
   
29,517
     
29,362
 
Dividends per share
 
$
0.00
   
$
0.00
 



 
 

 


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

   
November 30,
       
   
2011
   
August 31,
 
   
(Unaudited)
   
2011
 
ASSETS
           
Current Assets:
           
Cash and cash equivalents
$
58,276
   
$
76,817
 
Short-term restricted cash
 
1,240
     
1,240
 
Receivables, net of allowance for doubtful accounts of $3 and $5 as of November 30 and August 31, 2011, respectively
 
3,978
     
3,655
 
Merchandise inventories
 
219,593
     
177,232
 
Deferred tax assets – current
 
5,042
     
4,252
 
Prepaid expenses and other current assets
 
32,581
     
29,117
 
Assets of discontinued operations
 
41
     
464
 
Total current assets
 
320,751
     
292,777
 
Long-term restricted cash
 
28,662
     
22,626
 
Property and equipment, net
 
272,997
     
281,111
 
Goodwill
 
37,236
     
37,361
 
Deferred tax assets – long term
 
15,258
     
17,000
 
Other non-current assets (includes $399,000 as of November 30, 2011 for the fair value of derivative instruments)
 
5,556
     
5,390
 
Investment in unconsolidated affiliates
 
7,582
     
8,063
 
Total Assets
$
688,042
   
$
664,328
 
LIABILITIES AND EQUITY
             
Current Liabilities:
             
Short-term borrowings
$
5,812
   
$
2,259
 
Accounts payable
 
179,852
     
163,432
 
Accrued salaries and benefits
 
10,781
     
11,681
 
Deferred membership income
 
12,027
     
11,416
 
Income taxes payable
 
4,869
     
7,655
 
Other accrued expenses
 
10,905
     
12,556
 
Long-term debt, current portion
 
7,287
     
7,771
 
Deferred tax liability – current
 
433
     
533
 
Liabilities of discontinued operations
 
2
     
40
 
Total current liabilities
 
231,968
     
217,343
 
Deferred tax liability – long-term
 
1,714
     
1,888
 
Long-term portion of deferred rent
 
4,220
     
4,143
 
Long-term income taxes payable, net of current portion
 
3,313
     
3,310
 
Long-term debt, net of current portion
 
63,490
     
60,451
 
Other long-term liabilities (includes $460,000 and $884,000 for the fair value of derivative instruments and $515,000 and $471,000 for the defined benefit plan as of November 30 and August 31, 2011, respectively)
 
975
     
1,355
 
Total liabilities
 
305,680
     
288,490
 
Equity:
             
Common stock, $0.0001 par value, 45,000,000 shares authorized; 30,695,933 shares issued and 29,900,030 shares outstanding (net of treasury shares) as of November 30 and August 31, 2011
 
3
     
3
 
Additional paid-in capital
 
384,515
     
383,549
 
Tax benefit from stock-based compensation
 
5,242
     
5,242
 
Accumulated other comprehensive loss
 
(31,349
)
   
(22,915
)
Retained earnings
 
42,227
     
28,238
 
Less: treasury stock at cost; 795,903 shares as of November 30 and August 31, 2011.
 
(18,276
)
   
(18,279
)
Total equity
 
382,362
     
375,838
 
Total Liabilities and Equity
$
688,042
   
$
664,328