PRICESMART INC - FORM 8-K - October 30, 2012


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): October 30, 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 October 30, 2012, PriceSmart, Inc. issued a press release regarding the results of operations for the fourth quarter and fiscal year of 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 8.01. Other Events
The Company announced the opening of its second warehouse club in Colombia, located in the city of Cali, which opened on October 19, 2012.
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 October 30, 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: October 30, 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 October 30, 2012.






PriceSmart Announces Fourth Quarter and
Fiscal Year Results of Operations;
Opening of a New Warehouse Club in Colombia Also Announced


San Diego, CA (October 30, 2012) - PriceSmart, Inc. (NASDAQ: PSMT) today announced its results of operations for the fourth quarter and fiscal year 2012 which ended on August 31, 2012.

For the fourth quarter of fiscal year 2012, net warehouse club sales were $499.0 million, compared to $436.0 million in the fourth quarter of fiscal year 2011. Total revenue for the fourth quarter was $515.5 million, compared to $447.4 million in the prior year. The Company had 29 warehouse clubs in operation as of the end of fiscal years 2012 and 2011.

Operating income in the fourth quarter of fiscal year 2012 was $27.9 million, compared to operating income of $17.7 million in the fourth quarter of fiscal year 2011.

The Company recorded net income for the fourth quarter of $17.7 million or $0.58 per diluted share, compared to net income of $12.7 million or $0.42 per diluted share in the fourth quarter of fiscal year 2011.

Net warehouse club sales increased 19.4% to $2.0 billion during fiscal year 2012, compared to $1.68 billion in the prior year, and total revenue for fiscal year 2012 increased 19.6% to $2.05 billion from $1.71 billion in fiscal year 2011. For fiscal year 2012, the Company recorded operating income of $107.9 million and net income of $67.6 million, or $2.24 per diluted share. For fiscal year 2011, the Company recorded operating income of $88.6 million and net income of $61.8 million or $2.07 per diluted share.

The Company filed its Form 10-K for the year ended August 31, 2012 on October 30, 2012.

PriceSmart management will host a conference call at 12:00 p.m. Eastern time (9:00a.m. Pacific time) on Wednesday, October 31, 2012, to discuss the financial results. Individuals interested in participating in the conference call may do so by dialing (888) 438-5525 toll free, and entering participant code 7308094. A digital replay will be available through November 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 replay passcode 7308094.

PricesSmart also announced that on October 19, 2012 the Company successfully opened its second warehouse club in Colombia. This warehouse club, located in the city of Cali, brings to 30 the total number of warehouse clubs in operation by the Company.


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 30 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, Honduras, and Colombia; and one each in Aruba, Barbados, 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 faces 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; general economic conditions could adversely impact the Company's business in various respects; the Company is subject to changes in relationships and agreements with third parties with which the Company does business; a few of the Company's stockholders own nearly 29.8% 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 rates; 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 for the fiscal year ended August 31, 2012, filed pursuant to the Securities Exchange Act of 1934 on October 30, 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
(amounts in thousands, except per share data)


 
Three Months Ended
August 31,
 
Twelve Months Ended
August 31,

2012
 
2011
 
2012
 
2011
Revenues:

 

 

 

Net warehouse club sales
$
499,003

 
$
436,016

 
$
2,000,046

 
$
1,675,247

Export sales
6,844

 
3,660

 
15,320

 
8,831

Membership income
7,289

 
5,992

 
26,957

 
22,817

Other income
2,318

 
1,742

 
8,422

 
7,352

Total revenues
515,454

 
447,410

 
2,050,745

 
1,714,247

Operating expenses:
 
 
 
 
 
 
 
Cost of goods sold:
 
 
 
 
 
 
 
Net warehouse club
422,825

 
372,374

 
1,704,131

 
1,424,656

Export
6,574

 
3,466

 
14,649

 
8,372

Selling, general and administrative:

 

 

 

Warehouse club operations
47,311

 
43,628

 
182,401

 
154,819

General and administrative
10,462

 
9,459

 
41,021

 
36,436

Pre-opening expenses
362

 
736

 
617

 
1,408

Asset impairment and closure costs (income)
—

 
—

 
—

 
—

Total operating expenses
487,534

 
429,663

 
1,942,819

 
1,625,691

Operating income
27,920

 
17,747

 
107,926

 
88,556

Other income (expense):
 
 
 
 
 
 
 
Interest income
240

 
184

 
908

 
852

Interest expense
(1,368
)
 
(905
)
 
(5,283
)
 
(3,916
)
Other income (expense), net
138

 
971

 
(837
)
 
3,864

Total other income (expense)
(990
)
 
250

 
(5,212
)
 
800

Income from continuing operations before provision for income taxes and loss of unconsolidated affiliates
26,930

 
17,997

 
102,714

 
89,356

Provision for income taxes
(9,199
)
 
(5,375
)
 
(35,053
)
 
(27,468
)
Income (loss) of unconsolidated affiliates
(6
)
 
(7
)
 
(15
)
 
(52
)
Income from continuing operations
17,725

 
12,615

 
67,646

 
61,836

Income (loss) from discontinued operations, net of tax
(19
)
 
75

 
(25
)
 
(86
)
Net income
$
17,706

 
$
12,690

 
$
67,621

 
$
61,750

Net income per share available for distribution:

 

 

 

Basic net income per share from continuing operations
$
0.58

 
$
0.42

 
$
2.24

 
$
2.07

Basic net income per share from discontinued operations, net of tax
—

 
—

 
—

 
—

Basic net income per share
$
0.58

 
$
0.42

 
$
2.24

 
$
2.07


 
 
 
 
 
 
 
Diluted net income per share from continuing operations
$
0.58

 
$
0.42

 
$
2.24

 
$
2.07

Diluted net income per share from discontinued operations, net of tax
—

 
—

 
—

 
—

Diluted net income per share
$
0.58

 
$
0.42

 
$
2.24

 
$
2.07

Shares used in per share computations:

 

 

 

Basic
29,589

 
29,498

 
29,554

 
29,441



PRICESMART, INC.
CONSOLIDATED STATEMENTS OF INCOME
(amounts in thousands, except per share data)

Diluted
29,600

 
29,509

 
29,566

 
29,450

Dividends per share
$
0.30

 
$
0.30

 
$
0.60

 
$
0.60






PRICESMART, INC.
CONSOLIDATED BALANCE SHEETS
(amounts in thousands, except share data)


 
August 31,
 
2012
 
2011
ASSETS
 
 
 
Current Assets:
 
 
 
Cash and cash equivalents
$
91,248

 
$
76,817

Short-term restricted cash
1,241

 
1,240

Receivables, net of allowance for doubtful accounts of $1 and $5 as of August 31, 2012 and 2011, respectively
6,231

 
3,655

Merchandise inventories
201,043

 
177,232

Deferred tax assets – current
5,619

 
4,252

Prepaid expenses and other current assets
31,232

 
29,117

Assets of discontinued operations
—

 
464

Total current assets
336,614

 
292,777

Long-term restricted cash
36,505

 
22,626

Property and equipment, net
297,845

 
281,111

Goodwill
36,886

 
37,361

Deferred tax assets – long term
14,835

 
17,000

Other non-current assets
5,468

 
5,390

Investment in unconsolidated affiliates
7,559

 
8,063

Total Assets
$
735,712

 
$
664,328

LIABILITIES AND EQUITY
 
 
 
Current Liabilities:
 
 
 
Short-term borrowings
$
—

 
$
2,259

Accounts payable
173,198

 
163,432

Accrued salaries and benefits
14,729

 
11,681

Deferred membership income
13,747

 
11,416

Income taxes payable
8,578

 
7,655

Other accrued expenses
17,130

 
12,556

Long-term debt, current portion
7,237

 
7,771

Deferred tax liability – current
122

 
533

Liabilities of discontinued operations
—

 
40

Total current liabilities
234,741

 
217,343

Deferred tax liability – long-term
2,191

 
1,888

Long-term portion of deferred rent
4,336

 
4,143

Long-term income taxes payable, net of current portion
2,512

 
3,310

Long-term debt, net of current portion
71,422

 
60,451

Other long-term liabilities (includes $1.2 million and $884 for the fair value of derivative instruments and $396 and $471 for the defined benefit plans as of August 31, 2012 and 2011, respectively)
1,596

 
1,355

Total liabilities
316,798

 
288,490

Equity:
 
 
 


PRICESMART, INC.
CONSOLIDATED BALANCE SHEETS
(amounts in thousands, except share data)

Common stock, $0.0001 par value, 45,000,000 shares authorized; 30,855,651 and 30,695,933 shares issued and 30,210,225 and 29,900,030 shares outstanding (net of treasury shares) as of August 31, 2012 and 2011, respectively.
3

 
3

Additional paid-in capital
384,154

 
383,549

Tax benefit from stock-based compensation
6,680

 
5,242

Accumulated other comprehensive loss
(33,182
)
 
(22,915
)
Retained earnings
77,739

 
28,238

Less: treasury stock at cost; 645,426 and 795,903 shares as of August 31, 2012 and 2011, respectively.
(16,480
)
 
(18,279
)
Total equity
418,914

 
375,838

Total Liabilities and Equity
$
735,712

 
$
664,328




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