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