8-K 3rd Qtr FY13 Results of Operations and June Sales Document


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): July 10, 2013
_____________________
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 July 10, 2013, PriceSmart, Inc. issued a press release regarding the results of operations for the third quarter of fiscal year 2013 and its sales for the month of June. 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 July 10, 2013.











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: July 10, 2013
 
/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 July 10, 2013.








PriceSmart Announces Third Quarter Results of Operations
and June Sales

San Diego, CA (July 10, 2013) - PriceSmart, Inc. (NASDAQ: PSMT) today announced its results of operations for the third quarter of fiscal year 2013 which ended on May 31, 2013.

For the third quarter of fiscal year 2013, net warehouse club sales increased 12.3% to $555.8 million from $494.7 million in the third quarter of fiscal year 2012. Total revenues for the third quarter of fiscal year 2013 were $571.7 million compared to $505.3 million in the comparable period of the prior year. The Company had 31 warehouse clubs in operation as of May 2013 compared to 29 warehouse clubs in operation as of May 2012.

The Company recorded operating income during the quarter of $28.7 million, as compared to operating income of $25.4 million in the prior year. Net income was $18.5 million, or $0.61 per diluted share, in the third quarter of fiscal year 2013 as compared to $15.7 million, or $0.52 per diluted share, in the third quarter of fiscal year 2012.

For the first nine months of fiscal year 2013, net warehouse club sales increased 11.4% to $1,671.3 million from $1,500.6 million in the first nine months of fiscal year 2012. Total revenues for the first nine months of the fiscal year 2013 increased 12.0% to $1,714.4 million from $1,531.2 million in the same period of the prior year. For the first nine months of fiscal year 2013, the Company recorded operating income of $95.0 million and net income of $63.4 million, or $2.09 per diluted share. During the nine month period in fiscal year 2012, the Company recorded operating income of $80.0 million and net income of $49.9 million, or $1.66 per diluted share.

The Company also announced that for the month of June 2013, net warehouse club sales increased 14.2% to $186.9 million, from $163.7 million in June a year earlier. For the ten months ended June 30, 2013, net warehouse club sales increased 11.7% to $1,858.1 million, from $1,664.2 million for the ten months ended June 30, 2012. There were 31 warehouse clubs in operation at the end of June 2013 and 29 warehouse clubs in operation at the end of June 2012.

For the four weeks ended June 30, 2013, comparable warehouse sales for the 29 warehouse clubs open at least 13 1/2 full months increased 9.7%, compared to the same four-week period last year. For the forty-three week period ended June 30, 2013, comparable warehouse sales increased 9.0%, compared to the comparable forty-three week period a year ago.

PriceSmart management will host a conference call at 12:00 p.m. Eastern time (9:00a.m. Pacific time) on Thursday, July 11, 2013, to discuss the financial results. Individuals interested in participating in the conference call may do so by dialing (888) 455-2260 toll free, or (719) 457-2628 for international callers and entering participant code 9596291. A digital replay will be available through July 31, 2013, following the conclusion of the call by dialing (888) 203-1112 for domestic callers, or (719) 457-0820 for international callers, and entering replay passcode 9596291.


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 31 warehouse clubs in 12 countries and one U.S. territory (five in Costa Rica; four each in Panama and Trinidad; three each in Guatemala, the Dominican Republic and Colombia; 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; future sales growth could be dependent upon the Company acquiring suitable sites for additional warehouse clubs; the Company faces 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; general economic conditions could adversely impact the Company's business in various respects; the Company is subject to changes in relationships and agreements with third parties with which the Company does business; a few of the Company's stockholders own nearly 29.7% 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 rates; 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 for the fiscal year ended August 31, 2012, filed pursuant to the Securities Exchange Act of 1934 on October 30, 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 BALANCE SHEETS
(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)
 
May 31,
2013
 
August 31,
2012
 
(Unaudited)
 
ASSETS
 
 
 
Current Assets:
 
 
 
Cash and cash equivalents
$
92,408

 
$
91,248

Short-term restricted cash
4,386

 
1,241

Receivables, net of allowance for doubtful accounts of $5 and $1 as of May 31, 2013 and August 31, 2012, respectively
3,352

 
3,361

Merchandise inventories
220,923

 
201,043

Deferred tax assets – current
6,265

 
5,619

Prepaid expenses and other current assets
22,853

 
19,067

Total current assets
350,187

 
321,579

Long-term restricted cash
34,576

 
36,505

Property and equipment, net
329,914

 
299,567

Goodwill
36,622

 
36,886

Deferred tax assets – long term
13,657

 
14,835

Other non-current assets (includes $987 as of May 31, 2013 for the fair value of derivative instruments)
19,431

 
18,781

Investment in unconsolidated affiliates
8,107

 
7,559

Total Assets
$
792,494

 
$
735,712

LIABILITIES AND EQUITY
 
 
 
Current Liabilities:
 
 
 
Accounts payable
$
175,037

 
$
173,198

Accrued salaries and benefits
16,267

 
14,729

Deferred membership income
16,568

 
13,747

Income taxes payable
7,208

 
8,193

Other accrued expenses
18,877

 
17,515

Dividends payable
9,065

 

Long-term debt, current portion
7,784

 
7,237

Deferred tax liability – current
188

 
122

Total current liabilities
250,994

 
234,741

Deferred tax liability – long-term
2,465

 
2,191

Long-term portion of deferred rent
4,423

 
4,336

Long-term income taxes payable, net of current portion
2,166

 
2,512

Long-term debt, net of current portion
68,068

 
71,422

Other long-term liabilities (includes $212 and $1,200 for the fair value of derivative instruments and $466 and $396 for the defined benefit plans as of May 31, 2013 and August 31, 2012, respectively)
678

 
1,596

Total liabilities
328,794

 
316,798

Equity:
 
 
 
Common stock, $0.0001 par value, 45,000,000 shares authorized; 30,920,998 and 30,855,651 shares issued and 30,233,138 and 30,210,255 shares outstanding (net of treasury shares) as of May 31, 2013 and August 31, 2012, respectively
3

 
3

Additional paid-in capital
389,133

 
384,154

Tax benefit from stock-based compensation
7,951

 
6,680

Accumulated other comprehensive loss
(36,656
)
 
(33,182
)
Retained earnings
123,035

 
77,739

Less: treasury stock at cost; 687,860 and 645,426 as of May 31, 2013 and August 31, 2012, respectively
(19,766
)
 
(16,480
)
Total equity
463,700

 
418,914

Total Liabilities and Equity
$
792,494

 
$
735,712







PRICESMART, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED—AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
 
Three Months Ended May 31,
 
Nine Months Ended May 31,
 
2013
 
2012
 
2013
 
2012
Revenues:
 
 
 
 
 
 
 
Net warehouse club sales
$
555,815

 
$
494,747

 
$
1,671,269

 
$
1,500,558

Export sales
6,224

 
2,768

 
15,620

 
8,476

Membership income
8,774

 
6,944

 
24,773

 
19,668

Other income
909

 
869

 
2,756

 
2,483

Total revenues
571,722

 
505,328

 
1,714,418

 
1,531,185

Operating expenses:
 
 
 
 
 
 
 
Cost of goods sold:
 
 
 
 
 
 
 
Net warehouse club
475,727

 
420,724

 
1,425,396

 
1,279,097

Export
5,907

 
2,622

 
14,728

 
8,075

Selling, general and administrative:
 
 
 
 
 
 
 
Warehouse club operations
49,421

 
45,540

 
143,476

 
133,193

General and administrative
11,404

 
10,940

 
34,450

 
30,559

Pre-opening expenses
525

 
94

 
1,409

 
255

Total operating expenses
542,984

 
479,920

 
1,619,459

 
1,451,179

Operating income
28,738

 
25,408

 
94,959

 
80,006

Other income (expense):
 
 
 
 
 
 
 
Interest income
338

 
279

 
1,078

 
668

Interest expense
(427
)
 
(1,344
)
 
(2,951
)
 
(3,915
)
Other income (expense), net
(1,034
)
 
(538
)
 
(1,404
)
 
(975
)
Total other expense
(1,123
)
 
(1,603
)
 
(3,277
)
 
(4,222
)
Income from continuing operations before provision for income taxes and income (loss) of unconsolidated affiliates
27,615

 
23,805

 
91,682

 
75,784

Provision for income taxes
(9,082
)
 
(8,078
)
 
(28,254
)
 
(25,854
)
Income (loss) of unconsolidated affiliates
6

 
(19
)
 
(2
)
 
(9
)
Income from continuing operations
18,539

 
15,708

 
63,426

 
49,921

Income (loss) from discontinued operations, net of tax

 
(2
)
 

 
(6
)
Net income
$
18,539

 
$
15,706

 
$
63,426

 
$
49,915

Net income per share available for distribution:
 
 
 
 
 
 
 
Basic net income per share from continuing operations
$
0.61

 
$
0.52

 
$
2.09

 
$
1.66

Basic net income (loss) per share from discontinued operations, net of tax
$

 
$

 
$

 
$

Basic net income per share
$
0.61

 
$
0.52

 
$
2.09

 
$
1.66

Diluted net income per share from continuing operations
$
0.61

 
$
0.52

 
$
2.09

 
$
1.66

Diluted net income (loss) per share from discontinued operations, net of tax
$

 
$

 
$

 
$

Diluted net income per share
$
0.61

 
$
0.52

 
$
2.09

 
$
1.66

Shares used in per share computations:
 
 
 
 
 
 
 
Basic
29,683

 
29,584

 
29,634

 
29,543

Diluted
29,692

 
29,595

 
29,644

 
29,555

Dividends per share
$

 
$

 
$
0.60

 
$
0.60