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