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):  April 4, 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):

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 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.
 
(d)
 
The following exhibit is furnished herewith:
 
Exhibit
No.
  
Description
99.1
  
Press Release of PriceSmart, Inc. dated April 4, 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: April 4, 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 April 4, 2012.


 
 

 



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)
 
   
Three Months Ended
   
Six Months Ended
 
   
February 29,
   
February 28,
   
February 29,
 
February 28,
 
   
2012
   
2011
   
2012
 
2011
 
Revenues:
                     
Net warehouse club sales
$
537,816
 
$
440,263
   
$
1,006,145
 
$
817,595
 
Export sales
 
3,459
   
1,872
     
5,708
   
3,280
 
Membership income
 
6,393
   
5,576
     
12,724
   
11,001
 
Other income
 
2,165
   
1,906
     
3,941
   
3,813
 
Total revenues
 
549,833
   
449,617
     
1,028,518
   
835,689
 
Operating expenses:
                         
Cost of goods sold:
                         
Net warehouse club
 
459,313
   
375,027
     
859,794
   
693,215
 
Export
 
3,292
   
1,758
     
5,453
   
3,102
 
Selling, general and administrative:
                         
Warehouse club operations
 
46,384
   
37,239
     
88,893
   
72,373
 
General and administrative
 
10,508
   
8,874
     
19,619
   
17,684
 
Pre-opening expenses
 
(1
)
 
(15
)
   
161
   
388
 
Total operating expenses
 
519,496
   
422,883
     
973,920
   
786,762
 
Operating income
 
30,337
   
26,734
     
54,598
   
48,927
 
Other income (expense):
                         
Interest income
 
205
   
239
     
389
   
367
 
Interest expense
 
(1,317
)
 
(1,071
)
   
(2,571
)
 
(2,028
)
Other income (expense), net
 
832
   
194
     
(437
)
 
526
 
Total other expense
 
(280
)
 
(638
)
   
(2,619
)
 
(1,135
)
Income from continuing operations before provision for income taxes and loss of unconsolidated affiliates
 
30,057
   
 26,096
     
51,979
   
47,792
 
Provision for income taxes
 
(9,843
)
 
(8,049
)
   
(17,776
)
 
(14,894
)
Income (loss) of unconsolidated affiliates
 
3
   
(37
)
   
10
   
(42
)
Income from continuing operations
 
20,217
   
18,010
     
34,213
   
32,856
 
Income (loss) from discontinued operations, net of tax
 
3
   
(93
)
   
(4
)
 
(86
)
Net income
 
20,220
   
17,917
     
34,209
   
32,770
 
                           
Net income per share available for distribution:
                         
Basic net income per share from continuing operations
$
0.67
 
$
0.60
   
$
1.14
 
$
1.11
 
Basic net income (loss) per share from discontinued operations, net of tax
$
 —
 
$
 —
   
$
 
$
 
Basic net income per share
$
0.67
 
$
0.60
   
$
1.14
 
$
1.11
 
                           
Diluted net income per share from continuing operations
$
0.67
 
$
0.60
   
$
1.14
 
$
1.11
 
Diluted net income (loss) per share from discontinued operations, net of tax
$
 
 $
 —
   
$
 
$
 
Diluted net income per share
$
0.67
 
$
0.60
   
$
1.14
 
$
1.11
 
Shares used in per share computations:
                         
Basic
 
29,541
   
29,414
     
29,522
   
29,385
 
Diluted
 
29,553
   
29,423
     
29,535
   
29,392
 
Dividends per share
$
0.60
 
$
0.60
   
$
0.60
 
$
0.60
 


 
 

 


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

   
February 29,
       
   
2012
   
August 31,
 
   
(Unaudited)
   
2011
 
ASSETS
           
Current Assets:
           
Cash and cash equivalents
$
90,799
   
$
76,817
 
Short-term restricted cash
 
1,288
     
1,240
 
Receivables, net of allowance for doubtful accounts of $8 and $5 as of February 29, 2012 and August 31, 2011, respectively
 
4,114
     
3,655
 
Merchandise inventories
 
179,904
     
177,232
 
Deferred tax assets – current
 
4,550
     
4,252
 
Prepaid expenses and other current assets
 
32,401
     
29,117
 
Assets of discontinued operations
 
46
     
464
 
Total current assets
 
313,102
     
292,777
 
Long-term restricted cash
 
36,662
     
22,626
 
Property and equipment, net
 
282,264
     
281,111
 
Goodwill
 
37,221
     
37,361
 
Deferred tax assets – long term
 
15,134
     
17,000
 
Other non-current assets
 
5,560
     
5,390
 
Investment in unconsolidated affiliates
 
7,584
     
8,063
 
Total Assets
$
697,527
   
$
664,328
 
LIABILITIES AND EQUITY
             
Current Liabilities:
             
Short-term borrowings
$
135
   
$
2,259
 
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