PR Newswire | Jan 6, 2022 04:01PM EST

01/06 15:01 CST

PRICESMART ANNOUNCES FISCAL 2022 FIRST QUARTER OPERATING RESULTS12.6% GROWTH IN NET MERCHANDISE SALES9.4% GROWTH IN COMPARABLE NET MERCHANDISE SALESMEMBERSHIP BASE AT RECORD LEVELS3.3% INCREASE IN OPERATING INCOME$0.98 DILUTED EARNINGS PER SHARE SAN DIEGO, Jan. 6, 2022

SAN DIEGO, Jan. 6, 2022 /PRNewswire/ -- PriceSmart, Inc. (NASDAQ: PSMT), operator of 49 warehouse clubs in 12 countries and one U.S. territory, today announced its results of operations for the fiscal first quarter of 2022, which ended on November 30, 2021.

Comments fromSherry S. Bahrambeygui, Chief Executive Officer:

"Our team achieved a stellar first quarter, with Net merchandise sales growing by 12.6% and Comparable net merchandise sales growing 9.4% as compared to the same period last year. Our 12-month trailing Membership renewal rate is 89.0% and our membership base has grown to its all-time high.

"We continue to augment the benefits of our Membership, including our Wellness initiatives in areas of Optical, Pharmacy and most recently, Audiology services. Our investments in technology and our omni-channel initiatives have enabled us to further expand services, membership benefits, and convenience for our Members, allowing them to shop safely and enhancing the quality of their shopping experiences. Increasing our analytics capabilities is contributing to more timely and better decision-making in many areas of our business. In particular, the technology-enabled tools we are developing and applying are allowing us to unlock more value from our membership data, one of the key characteristics and differentiators of our business model."

First Quarter Financial Results

Total revenues for the first quarter of fiscal year 2022 increased 11.2% to $975.4 million compared to $877.4 million in the comparable period of the prior year. For the first quarter of fiscal year 2022, net merchandise sales increased 12.6% to $944.0 million from $838.4 million in the first quarter of fiscal year 2021. Foreign currency exchange rate fluctuations impacted net merchandise sales negatively by $8.4 million, or 1.0%, versus the same period in the prior year.

The Company had 49 warehouse clubs in operation as of November 30, 2021 compared to 46 warehouse clubs in operation as of November 30, 2020.

Comparable net merchandise sales for the 46 warehouse clubs that have been open for greater than 13 calendar months increased 9.4% for the 13-week period ended November 28, 2021 compared to the comparable period of the prior year. Foreign currency exchange rate fluctuations impacted comparable net merchandise sales negatively by $8.5 million or 1.0% versus the same period in the prior year.

The Company recorded operating income during the fiscal first quarter of $46.0 million compared to operating income of $44.5 million in the prior year period. Net income attributable to PriceSmart was $30.5 million, or $0.98 per diluted share, in the first quarter of fiscal year 2022 as compared to $27.7 million, or $0.90 per diluted share, in the first quarter of fiscal year 2021.

PriceSmart management will host a conference call at 12:00 p.m. Eastern time (9:00 a.m. Pacific time) on Friday, January 7, 2022, 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 14, 2022, 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 6014456.

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 49 warehouse clubs in 12 countries and one U.S. territory (nine in Colombia; eight in Costa Rica; seven in Panama; five in the Dominican Republic and Guatemala; four in Trinidad; three in Honduras; two each in El Salvador and Nicaragua; and one each in Aruba, Barbados, Jamaica and the United States Virgin Islands). In addition, the Company plans to open its 50th club in Portmore, Jamaica in April 2022.

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.

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," "plan," "estimate," "anticipated," "scheduled," "intend," 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 and illiquidity of certain local currencies in our markets, 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 SHARE DATA)

Three Months Ended

November November 30, 30,

2021 2020

Revenues:

Net merchandise sales $ 944,043 $ 838,369

Export sales 10,534 10,881

Membership income 14,791 13,299

Other revenue and income 5,988 14,883

Total revenues 975,356 877,432

Operating expenses:

Cost of goods sold:

Net merchandise sales 793,193 703,619

Export sales 10,067 10,433

Non-merchandise 1,809 5,824

Selling, general and administrative:

Warehouse club and other operations 91,196 84,832

General and administrative 31,693 27,521

Pre-opening expenses 970 602

Loss on disposal of assets 411 70

Total operating expenses 929,339 832,901

Operating income 46,017 44,531

Other income (expense):

Interest income 518 491

Interest expense (1,590) (2,033)

Other income (expense), net 1,409 (1,545)

Total other income (expense) 337 (3,087)

Income before provision for income taxes and 46,354 41,444loss of unconsolidated affiliates

Provision for income taxes (15,814) (13,618)

Loss of unconsolidated affiliates (10) (9)

Net income 30,530 27,817

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

Net income attributable to PriceSmart, Inc. $ 30,511 $ 27,737

Net income attributable to PriceSmart, Inc. per shareavailable for distribution:

Basic $ 0.98 $ 0.90

Diluted $ 0.98 $ 0.90

Shares used in per share computations:

Basic 30,551 30,398

Diluted 30,603 30,420

PRICESMART, INC.

CONSOLIDATED BALANCE SHEETS

(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

November 30,

2021 August 31,

(Unaudited) 2021

ASSETS

Current Assets:

Cash and cash equivalents $ 176,072 $ 202,060

Short-term restricted cash 4,165 3,647

Short-term investments 39,201 50,233

Receivables, net of allowance for doubtful accountsof $42 as of November 30, 2021 and $94 as of August 15,572 12,35931, 2021, respectively

Merchandise inventories 500,767 389,711

Prepaid expenses and other current assets (includes$1,717 and $0 as of November 30, 2021 and August 31, 46,639 39,1942021, respectively, for the fair value of derivativeinstruments)

Total current assets 782,416 697,204

Long-term restricted cash 12,363 9,772

Property and equipment, net 733,219 730,204

Operating lease right-of-use assets, net 117,754 123,655

Goodwill 43,332 45,095

Other intangibles, net 1,922 7,762

Deferred tax assets 23,922 24,225

Other non-current assets (includes $4,412 and $2,464as of November 30, 2021 and August 31, 2021, 63,851 57,329respectively, for the fair value of derivativeinstruments)

Investment in unconsolidated affiliates 10,534 10,544

Total Assets $ 1,789,313 $ 1,705,790

LIABILITIES AND EQUITY

Current Liabilities:

Short-term borrowings $ 4,986 $ -

Accounts payable 461,046 388,791

Accrued salaries and benefits 30,221 41,896

Deferred income 28,128 26,898

Income taxes payable 6,955 8,310

Other accrued expenses and other current liabilities 39,204 39,736

Operating lease liabilities, current portion 6,771 8,526

Long-term debt, current portion 16,843 19,395

Total current liabilities 594,154 533,552

Deferred tax liability 1,631 1,568

Long-term income taxes payable, net of current 6,039 4,160portion

Long-term operating lease liabilities 125,046 129,256

Long-term debt, net of current portion 110,601 110,110

Other long-term liabilities (includes $2,097 and$3,010 for the fair value of derivative instrumentsand $7,599 and $7,380 for post-employment plans as 9,696 10,930of November 30, 2021 and August 31, 2021,respectively)

Total Liabilities 847,167 789,576

PRICESMART, INC.

CONSOLIDATED BALANCE SHEETS

(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

Stockholders' Equity:

Common stock $0.0001 par value, 45,000,000 sharesauthorized; 31,598,389 and 31,467,971 shares issuedand 30,862,489 and 30,755,308 shares outstanding (net 3 3of treasury shares) as of November 30, 2021 andAugust 31, 2021, respectively

Additional paid-in capital 469,170 465,015

Accumulated other comprehensive loss (188,639) (182,508)

Retained earnings 689,430 658,919

Less: treasury stock at cost, 735,900 shares as ofNovember 30, 2021 and 712,663 shares as of August 31, (27,818) (26,084)2021

Total stockholders' equity attributable to 942,146 915,345PriceSmart, Inc. stockholders

Noncontrolling interest in consolidated subsidiaries - 869

Total Stockholders' Equity 942,146 916,214

Total Liabilities and Equity $ 1,789,313 $ 1,705,790

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SOURCE PriceSmart, Inc.