PSMT
$91.30
Pricesmart
($.15)
(.16%)
Earnings Details
4th Quarter August 2016
Thursday, October 27, 2016 4:00:13 PM
Tweet Share Watch
Summary

Pricesmart (PSMT) Recent Earnings

Pricesmart (PSMT) reported 4th Quarter August 2016 earnings of $0.74 per share on revenue of $711.1 million. The consensus earnings estimate was $0.65 per share on revenue of $706.3 million. Revenue grew 1.7% on a year-over-year basis.

Pricesmart Inc Pricesmart Inc, through its subsidiaries, is engaged in the ownership and operation of membership shopping warehouse clubs under the trade name PriceSmart in Central America and the Caribbean.

Results
Reported Earnings
$0.74
Earnings Whisper
-
Consensus Estimate
$0.65
Reported Revenue
$711.1 Mil
Revenue Estimate
$706.3 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

PriceSmart Announces Fourth Quarter and Fiscal Year Results of Operations

SAN DIEGO, CA--(Marketwired - Oct 27, 2016) - PriceSmart, Inc. (PSMT) today announced its results of operations for the fourth quarter and the twelve months of fiscal year 2016 which ended on August 31, 2016.

For the fourth quarter of fiscal year 2016, net warehouse club sales increased 1.3% to $686.4 million from $677.3 million in the fourth quarter of fiscal year 2015. Total revenues for the fourth quarter of fiscal year 2016 were $711.1 million compared to $699.2 million in the comparable period of the prior year. The Company had 38 warehouse clubs in operation as of August 2016 compared to 37 warehouse clubs in operation as of August 2015.

The Company recorded operating income during the quarter of $32.8 million, as compared to operating income of $34.9 million in the prior year. Net income was $22.3 million, or $0.74 per diluted share, in the fourth quarter of fiscal year 2016 as compared to $22.4 million, or $0.75 per diluted share, in the fourth quarter of fiscal year 2015.

For the twelve months ended August 31, 2016, net warehouse club sales increased 3.7% to $2.8 billion, from $2.7 billion for the twelve months ended August 31, 2015. Total revenues for the twelve months ended August 31, 2016 increased 3.7% to $2.9 billion from $2.8 billion in the same period of the prior year. For the twelve months ended August 31, 2016, the Company recorded operating income of $136.7 million and net income of $88.7 million, or $2.92 per diluted share. During the twelve months ended August 31, 2015, the Company recorded operating income of $146.4 million and net income of $89.1 million, or $2.95 per diluted share.

The net income for the fourth quarter and the fiscal year includes the beneficial effect of a reduced effective tax rate, contributing approximately $0.06 per diluted share for the three and twelve month periods.

The Company filed its Annual Report on Form 10-K for the year ended August 31, 2016 on October 27, 2016.

PriceSmart management will host a conference call at 12:00 p.m. Eastern time (9:00 a.m. Pacific time) on Friday, October 28, 2016, to discuss the financial results. Individuals interested in participating in the conference call may do so by dialing (866) 431-5320 toll free, or (719) 785-1748 for international callers and entering participant code 3727333. A digital replay will be available through November 30, 2016, 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 3727333.

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 39 warehouse clubs in 12 countries and one U.S. territory (seven in Colombia; six in Costa Rica; five in Panama; four in Trinidad; three each in Guatemala, the Dominican Republic and Honduras; two each in El Salvador and Nicaragua; and one each in Aruba, Barbados, Jamaica 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, proposed warehouse club openings, the Company’s performance relative to competitors, the outcome of tax proceedings 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: our financial performance is dependent on international operations, which exposes us to various risks; any failure by us to manage our widely dispersed operations could adversely affect our business; we face significant competition; future sales growth depends, in part, on our ability to successfully open new warehouse clubs and grow sales in our existing locations; we might not identify in a timely manner or effectively respond to changes in consumer preferences for merchandise, which could adversely affect our relationship with members, demand for our products and market share; although we have begun to offer limited online shopping to our members, our sales could be adversely affected if one or more major international online retailers were to enter our markets or if other competitors were to offer a superior online experience; our profitability is vulnerable to cost increases; we face difficulties in the shipment of and risks inherent in the importation of, merchandise to our warehouse clubs; we are exposed to weather and other natural disaster risks that might not be adequately compensated by insurance; general economic conditions could adversely impact our business in various respects; our failure to maintain our brand and reputation could adversely affect our results of operations; we are subject to risks associated with possible changes in our relationships with third parties with which we do business, as well as the performance of such third parties; we rely extensively on computer systems to process transactions, summarize results and manage our business, and failure to adequately maintain our systems and disruptions in our systems could harm our business and adversely affect our results of operations; we could be subject to additional tax liabilities or subject to reserves on the recoverability of tax receivables; a few of our stockholders own approximately 25.3% of our voting stock as of August 31, 2016, which may make it difficult to complete some corporate transactions without their support and may impede a change in control; failure to attract and retain qualified employees, increases in wage and benefit costs, changes in laws and other labor issues could materially adversely affect our financial performance; we face the possibility of operational interruptions related to union work stoppages; we are subject to volatility in foreign currency exchange rates and limits on our ability to convert foreign currencies into U.S. dollars; we face the risk of exposure to product liability claims, a product recall and adverse publicity; any failure to maintain the security of the information relating to our company, members, employees and vendors that we hold, whether as a result of cybersecurity attacks on our information systems, failure of internal controls, employee negligence or malfeasance or otherwise, could damage our reputation with members, employees, vendors and others, could disrupt our operations, could cause us to incur substantial additional costs and to become subject to litigation and could materially adversely affect our operating results; we are subject to payment related risks; changes in accounting standards and assumptions, projections, estimates and judgments by management related to complex accounting matters could significantly affect our financial condition and results of operations; we face compliance risks related to our international operations; if remediation costs or hazardous substance contamination levels at certain properties for which we maintain financial responsibility exceed management’s current expectations, our financial condition and results of operations could be adversely impacted. The risks described above 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 fiscal year ended August 31, 2016 filed on October 27, 2016 pursuant to the Securities Exchange Act of 1934. 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.

 
 
PRICESMART, INC.
 
CONSOLIDATED STATEMENTS OF INCOME
 
(UNAUDITED--AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
 
 
 
     
     
     
 
 
 
     
     
     
 
 
 
     
     
     
 
 
Three Months Ended
    Twelve Months Ended
 
 
August 31,
    August 31,
 
 
2016
    2015
    2016
    2015
 
Revenues:
   
       
       
       
 
Net warehouse club sales
$
686,375     $
677,282     $
2,820,740     $
2,721,132  
Export sales
  11,941
      9,154
      33,813
      33,279
 
Membership income
  11,555
      11,471
      45,781
      43,673
 
Other income
  1,181
      1,275
      4,842
      4,519
 
Total revenues
  711,052       699,182       2,905,176       2,802,603  
Operating expenses:
   
       
       
       
 
Cost of goods sold:
   
       
       
       
 
Net warehouse club
  585,183       577,302       2,417,366       2,321,074  
Export
  11,461
      8,812
      32,260
      31,765
 
Selling, general and administrative:
   
       
       
       
 
Warehouse club operations
  63,782
      62,279
      252,130
      241,285
 
General and administrative
  16,258
      14,690
      64,344
      56,371
 
Pre-opening expenses
  802
      326
      1,191
      3,737
 
Loss/(gain) on disposal of assets
  763
      918
      1,162
      2,005
 
Total operating expenses
  678,249       664,327       2,768,453       2,656,237  
Operating income
  32,803
      34,855
      136,723
      146,366
 
Other income (expense):
   
       
       
       
 
Interest income
  527
      245
      1,307
      1,058
 
Interest expense
  (1,411
)
    (1,681
)
    (5,891
)
    (6,440
)
Other income (expense), net
  119
      214
      (899
)
    (4,388
)
Total other income (expense)
  (765
)
    (1,222
)
    (5,483
)
    (9,770
)
Income before provision for income taxes and income (loss) of unconsolidated affiliates   32,038
      33,633
      131,240
      136,596
 
Provision for income taxes
  (9,736
)
    (11,188 )
    (42,849
)
    (47,566
)
Income (loss) of unconsolidated affiliates
  (30
)
    2
      332
      94
 
Net income
$
22,272
    $
22,447
    $
88,723
    $
89,124
 
Net income per share available for distribution:
   
       
       
       
 
Basic net income per share
$
0.74
    $
0.75
    $
2.92
    $
2.95
 
Diluted net income per share
$
0.74
    $
0.75
    $
2.92
    $
2.95
 
Shares used in per share computations:
   
       
       
       
 
Basic
  29,956
      29,888
      29,928
      29,848
 
Diluted
  29,961
      29,895
      29,933
      29,855
 
Dividends per share
$
0.35
    $
0.35
    $
0.70
    $
0.70
 
 
   
       
       
       
 
 
   
       
       
       
 
 
   
       
       
       
 
PRICESMART, INC.
 
CONSOLIDATED BALANCE SHEETS
 
(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)
 
 
 
     
 
 
 
     
 
 
August 31,
 
 
2016
    2015
 
ASSETS
   
       
 
Current Assets:
   
       
 
Cash and cash equivalents
$
199,522
    $
157,072
 
Short-term restricted cash
  518
      61
 
Receivables, net of allowance for doubtful accounts of $7 as of August 31, 2016 and $0 as of August 31, 2015, respectively
  7,464
      9,662
 
Merchandise inventories
  282,907
      267,175
 
Prepaid expenses and other current assets
  22,143
      22,535
 
Total current assets
  512,554
      456,505
 
Long-term restricted cash
  2,676
      1,464
 
Property and equipment, net
  473,045
      433,040
 
Goodwill
  35,637
      35,871
 
Deferred tax assets
  12,258
      14,845
 
Other non-current assets (includes $3,224 and $4,129 as of August 31, 2016 and August 31, 2015, respectively, for the fair value of derivative instruments)
  49,798
      39,182
 
Investment in unconsolidated affiliates
  10,767
      10,317
 
Total Assets
$
1,096,735     $
991,224
 
LIABILITIES AND EQUITY
   
       
 
Current Liabilities:
   
       
 
Short-term borrowings
$
16,534
    $
6,606
 
Accounts payable
  267,173
      241,978
 
Accrued salaries and benefits
  19,606
      17,977
 
Deferred membership income
  20,920
      20,184
 
Income taxes payable
  4,226
      9,595
 
Other accrued expenses (includes $110 and $66 as of August 31, 2016 and August 31, 2015, respectively, for the fair value of foreign currency forward contracts)
  24,880
      23,558
 
Long-term debt, current portion
  14,565
      17,169
 
Total current liabilities
  367,904
      337,067
 
Deferred tax liability
  1,760
      1,755
 
Long-term portion of deferred rent
  8,961
      6,595
 
Long-term income taxes payable, net of current portion
  970
      1,402
 
Long-term debt, net of current portion
  73,542
      73,365
 
Other long-term liabilities includes $1,514 and $1,699 for the fair value of derivative instruments and $4,013 and $2,757 for post employment plans as of August 31, 2016 and August 31, 2015, respectively)
  5,527
      4,456
 
Total Liabilities
  458,664
      424,640
 
 
   
       
 
 
   
       
 
Equity:
   
       
 
Common stock $0.0001 par value, 45,000,000 shares authorized; 31,237,658 and 30,977,764 shares issued and 30,401,307 and 30,184,584 shares outstanding (net of treasury shares) as of August 31, 2016 and August 31, 2015, respectively   3
      3
 
Additional paid-in capital
  412,369
      403,168
 
Tax benefit from stock-based compensation
  11,321
      10,711
 
Accumulated other comprehensive loss
  (103,951
)
    (101,512 )
Retained earnings
  351,060
      283,611
 
Less: treasury stock at cost, 836,351 and 793,180 shares as of August 31, 2016 and August 31, 2015, respectively
  (32,731
)
    (29,397
)
Total Equity
  638,071
      566,584
 
Total Liabilities and Equity
$
1,096,735     $
991,224
 
 
   
       
 

For further information, please contact John M. Heffner Principal Financial Officer and Principal Accounting Officer (858) 404-8826