PR Newswire | Jan 7, 2021 04:01PM EST

01/07 15:01 CST

PriceSmart Announces Fiscal 2021 First Quarter Operating ResultsSALES GROW 8.1% AND OPERATING INCOME INCREASES BY 45%DILUTED EARNINGS PER SHARE GROW BY 40.6%NET COMPARABLE MERCHANDISE SALES INCREASE BY 3.6%E-COMMERCE ACHIEVES 3.1% PENETRATION OF TOTAL MERCHANDISE SALES SAN DIEGO, Jan. 7, 2021

SAN DIEGO, Jan. 7, 2021 /PRNewswire/ -- PriceSmart, Inc. (NASDAQ: PSMT), operator of 47 warehouse clubs in 12 countries and one U.S. territory, today announced its results of operations for the fiscal first quarter of 2021 which ended on November 30, 2020.

Comments fromSherry S. Bahrambeygui, Chief Executive Officer:

"PriceSmart delivered solid results for the first quarter of fiscal year 2021. In November, mobility restrictions were reduced in many of our markets. We meanwhile expanded our Click and Go(tm) contactless shopping program, which provides for ordering online and curbside pickup, and as of Q1, includes delivery options in all of our markets.

We continue to improve operating efficiencies while making appropriate investments. Together, these initiatives have contributed to an increase in our operating income of 45.0% to $44.5 million and an earnings increase of 40.6% to $0.90 per diluted share in the first quarter of 2021 compared to the prior-year period.

Although varying pandemic-related restrictions throughout our markets were on the rise again in December and continue to impact the business in early January, thanks to our tremendous team, we are becoming increasingly adept at early monitoring and quickly adjusting to challenges as they arise, as well as anticipating the needs and preferences of our Members."

First Quarter Financial Results

Total revenues for the first quarter of fiscal year 2021 increased 8.1% to $877.4 million compared to $811.9 million in the comparable period of the prior year. For the first quarter of fiscal year 2021, net merchandise sales increased 7.7% to $838.4 million from $778.7 million in the first quarter of fiscal year 2020. Foreign currency exchange rate fluctuations impacted net merchandise sales negatively by $27.4 million, or 3.5%, versus the same period in the prior year.

The Company had 46 warehouse clubs in operation as of November 30, 2020 compared to 45 warehouse clubs in operation as of November 30, 2019.

Comparable net merchandise sales for the 43 warehouse clubs that have been open for greater than 13 calendar months increased 3.6% for the 13-week period ended November 29, 2020 compared to the comparable period of the prior year. Foreign currency exchange rate fluctuations impacted comparable net merchandise sales negatively by $27.0 million or 3.5% versus the same period in the prior year.

The Company recorded operating income during the fiscal first quarter of $44.5 million compared to operating income of $30.7 million in the prior year period. Net income attributable to PriceSmart was $27.7 million, or $0.90 per diluted share, in the first quarter of fiscal year 2021 as compared to $19.7 million, or $0.64 per diluted share, in the first quarter of fiscal year 2020.

The Company reports comparable net merchandise sales on a "same week" basis with 13 weeks in each quarter beginning on a Monday and ending on a Sunday. The periods are established at the beginning of the fiscal year to provide as close a match as possible to the calendar month and quarter that is used for financial reporting purposes. This approach equalizes the number of weekend days and weekdays in each period for an improved sales comparison, as the Company experiences higher merchandise club sales on the weekends. Each of the warehouse clubs used in the calculations was open for at least 13 calendar months before its results for the current period were compared with its results for the prior period.

The term "currency exchange rates" refers to the currency exchange rates the Company uses to convert net merchandise and comparable net merchandise sales for all countries where the functional currency is not the U.S. dollar into U.S. dollars. The Company calculates the effect of changes in currency exchange rates as the difference between current period activities translated using the current period's currency exchange rates and the comparable prior year period's currency exchange rates. The Company believes the disclosure of the effects of currency exchange rate fluctuations on the Company's results permits investors to understand better the Company's underlying performance.

PriceSmart management will host a conference call at 12:00 p.m. Eastern time (9:00 a.m. Pacific time) on Friday, January 8, 2021, to discuss the financial results. Individuals interested in participating in the conference call may do so by dialing (855) 209-8211 toll free, or (412) 317-5214 for international callers and asking to join the PriceSmart, Inc. call. A digital replay will be available through January 15, 2021, following the conclusion of the call by dialing (877) 344-7529 for domestic callers, or (412) 317-0088 for international callers, and entering replay passcode 10149960.

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 and services at low prices to PriceSmart Members. PriceSmart operates 47 warehouse clubs in 12 countries and one U.S. territory (eight in Costa Rica and Colombia; seven in Panama; five in the Dominican Republic, four in Trinidad and Guatemala; three in Honduras; two each in El Salvador and Nicaragua; and one each in Aruba, Barbados, Jamaica and the United States Virgin Islands). The Company also plans to open new warehouse clubs in Guatemala City, Guatemala and Portmore, Jamaica in the fall of 2021 and the spring of 2022, respectively. Once these two new clubs are open, the Company will operate 49 warehouse clubs.

This press release may contain forward-looking statements concerning the Company's anticipated future revenues and earnings, adequacy of future cash flows, omni-channel initiatives, 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, but not limited to: adverse changes in economic conditions in the Company's markets, natural disasters, compliance risks, volatility in currency exchange rates, competition, consumer and small business spending patterns, political instability, increased costs associated with the integration of online commerce with our traditional business, whether the Company can successfully execute strategic initiatives, cybersecurity breaches that could cause disruptions in our systems or jeopardize the security of member or business information, cost increases from product and service providers, interruption of supply chains, COVID-19 related factors and challenges, including among others, the duration of the pandemic, the unknown long-term economic impact, the impact of government policies and restrictions that have limited access for our Members, and shifts in demand away from discretionary or higher priced products to lower priced products, exposure to product liability claims and product recalls, recoverability of moneys owed to PriceSmart from governments, and other important factors discussed in the Risk Factors section of the Company's most recent Annual Report on Form 10-K, and other factors discussed from time to time in other filings with the SEC, which are accessible on the SEC's website at www.sec.gov, including Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Forward-looking statements speak only as of the date that they are made, and the Company does not undertake to update them, except as required by law.

For further information, please contact Michael L. McCleary, EVP, Chief Financial Officer and Principal Accounting Officer (858) 404-8826 or send an email to ir@pricesmart.com.

PRICESMART, INC.

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

Three Months Ended

November 30, November 30,

2020 2019

Revenues:

Net merchandise sales $ 838,369 $ 778,728

Export sales 10,881 8,274

Membership income 13,299 13,746

Other revenue and income 14,883 11,193

Total revenues 877,432 811,941

Operating expenses:

Cost of goods sold:

Net merchandise sales 703,619 662,724

Export sales 10,433 7,971

Non-merchandise 5,824 4,251

Selling, general and administrative:

Warehouse club and other operations 84,832 79,373

General and administrative 27,521 25,884

Pre-opening expenses 602 953

Loss on disposal of assets 70 71

Total operating expenses 832,901 781,227

Operating income 44,531 30,714

Other income (expense):

Interest income 491 293

Interest expense (2,033) (862)

Other expense, net (1,545) (985)

Total other expense (3,087) (1,554)

Income before provision for income taxes and 41,444 29,160loss of unconsolidated affiliates

Provision for income taxes (13,618) (9,403)

Loss of unconsolidated affiliates (9) (48)

Net income 27,817 19,709

Less: net (income) loss attributable to (80) 19noncontrolling interest

Net income attributable to PriceSmart, Inc. $ 27,737 $ 19,728

Net income attributable to PriceSmart, Inc. pershare available for distribution:

Basic $ 0.90 $ 0.64

Diluted $ 0.90 $ 0.64

Shares used in per share computations:

Basic 30,398 30,277

Diluted 30,420 30,284

Dividends per share $ - $ -

PRICESMART, INC.

CONSOLIDATED BALANCE SHEETS

(UNAUDITED AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

November 30,

2020 August 31,

(Unaudited) 2020

ASSETS

Current Assets:

Cash and cash equivalents $ 207,955 $ 299,481

Short-term restricted cash 185 185

Short-term investments 73,980 46,509

Receivables, net of allowance for doubtful accountsof $157 as of November 30, 2020 and $147 as of 15,150 13,153August 31, 2020, respectively

Merchandise inventories 373,178 309,509

Prepaid expenses and other current assets 40,103 30,165

Total current assets 710,551 699,002

Long-term restricted cash 4,255 4,105

Property and equipment, net 700,837 692,279

Operating lease right-of-use assets, net 119,316 119,533

Goodwill 45,123 45,206

Other intangibles, net 9,566 10,166

Deferred tax assets 20,246 21,672

Other non-current assets (includes $144 and $872 asof November 30, 2020 and August 31, 2020, 57,508 54,260respectively, for the fair value of derivativeinstruments)

Investment in unconsolidated affiliates 10,593 10,602

Total Assets $ 1,677,995 $ 1,656,825

LIABILITIES AND EQUITY

Current Liabilities:

Short-term borrowings $ 47,349 $ 65,143

Accounts payable 384,086 373,172

Accrued salaries and benefits 28,630 32,946

Deferred income 25,125 23,525

Income taxes payable 9,559 7,727

Other accrued expenses and other current liabilities 35,228 37,731

Operating lease liabilities, current portion 8,649 8,594

Long-term debt, current portion 19,771 19,437

Total current liabilities 558,397 568,275

Deferred tax liability 1,401 1,713

Long-term income taxes payable, net of current 5,243 5,132portion

Long-term operating lease liabilities 124,383 124,181

Long-term debt, net of current portion 108,104 112,610

Other long-term liabilities (includes $5,321 and$4,685 for the fair value of derivative instrumentsand $6,313 and $6,155 for post-employment plans as 13,176 12,182of November 30, 2020 and August 31, 2020,respectively)

Total Liabilities 810,704 824,093

PRICESMART, INC.

CONSOLIDATED BALANCE SHEETS

(UNAUDITED AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

Stockholders' Equity:

Common stock $0.0001 par value, 45,000,000 sharesauthorized; 31,395,847 and 31,417,576 shares issuedand 30,738,334 and 30,670,712 shares outstanding (net 3 3of treasury shares) as of November 30, 2020 andAugust 31, 2020, respectively

Additional paid-in capital 450,666 454,455

Accumulated other comprehensive loss (173,658) (176,820)

Retained earnings 610,224 582,487

Less: treasury stock at cost, 657,513 shares as ofNovember 30, 2020 and 746,864 shares as of August 31, (21,068) (28,406)2020

Total stockholders' equity attributable to 866,167 831,719PriceSmart, Inc. stockholders

Noncontrolling interest in consolidated subsidiaries 1,124 1,013

Total stockholders' equity 867,291 832,732

Total Liabilities and Equity $ 1,677,995 $ 1,656,825

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SOURCE PriceSmart, Inc.