PriceSmart Announces Fiscal 2021 Fourth Quarter Operating Results

12.7% GROWTH IN NET MERCHANDISE SALES
Published: Oct. 21, 2021 at 3:01 PM CDT

SAN DIEGO, Oct. 21, 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 fourth quarter and full year, which ended on August 31, 2021.

PriceSmart, Inc.
PriceSmart, Inc.

Comments from Sherry S. Bahrambeygui, Chief Executive Officer:

"Net merchandise sales grew 12.7%, and comparable net merchandise sales grew 10.3% in our fiscal fourth quarter as compared to the same period last year. For the entire fiscal year, net merchandise sales grew 8.6%, and comparable net merchandise sales grew 5.8%. Our 12-month trailing Membership renewal rate has risen to 89.6% and our Membership base now exceeds pre-COVID levels and is at an all-time high.

"This could not have been achieved, especially under some very challenging circumstances, had it not been for the unwavering commitment of our team of more than 10,000 employees who are dedicated to our Members and remain laser-focused on extracting operational efficiencies, expanding our digital capabilities, and maintaining an agile supply chain.

"While delivering strong results, we have added incremental benefits to the Membership, including our Wellness initiatives in Optical, Pharmacy and most recently introduced Audiology services. Our investments in technology and our omni-channel initiatives have enabled us to further expand services, benefits, and convenience for our Members to shop safely, and enhance the quality of their shopping experience. Data analytics is becoming an increasingly important tool in our decision-making. Applying recently developed technology and analytics capabilities are enabling us to build on a key characteristic of our business model, our Membership data. What we are learning is helping to sharpen our business strategy.

"Our team is innovating, elevating performance and delivering results in unprecedented ways. This inspires us all for the future of our Company."

Fourth Quarter Financial Results

Total revenues for the fourth quarter of fiscal year 2021 increased 12.2% to $909.6 million compared to $810.6 million in the comparable period of the prior year. For the fourth quarter of fiscal year 2021, net merchandise sales increased 12.7% to $871.2 million from $772.9 million in the fourth quarter of fiscal year 2020. Foreign currency exchange rate fluctuations impacted net merchandise sales negatively by $10.1 million, or 1.3%, versus the same period in the prior year.

The Company had 47 warehouse clubs in operation as of August 31, 2021 compared to 46 warehouse clubs in operation as of August 31, 2020.

Comparable net merchandise sales for the 45 warehouse clubs that have been open for greater than 13 ½ calendar months increased 10.3% for the 13-week period ended August 29, 2021 compared to the comparable period of the prior year. Foreign currency exchange rate fluctuations impacted comparable net merchandise sales negatively by $9.1 million or 1.1% versus the same period in the prior year.

The Company recorded operating income during the fiscal fourth quarter of $32.5 million compared to operating income of $29.0 million in the prior year period. Net income attributable to PriceSmart was $19.5 million, or $0.63 per diluted share, in the fourth quarter of fiscal year 2021 as compared to $20.1 million, or $0.65 per diluted share, in the fourth quarter of fiscal year 2020.

Full Year Financial Results

Total revenues for the twelve months ended August 31, 2021 increased 8.7% to $3,619.9 million compared to $3,329.2 million in the prior year.

Comparable net merchandise sales for warehouse clubs that have been open for greater than 13 ½ calendar months increased 5.8% for the 52-week period ended August 29, 2021 compared to the comparable period of the prior year. Foreign currency exchange rate fluctuations impacted comparable net merchandise sales negatively by $74.1 million, or 2.3%, versus the prior year.

For the twelve months ended August 31, 2021, the Company recorded operating income of $158.0 million and net income attributable to PriceSmart of $98.0 million, or $3.18 per diluted share. During the twelve months ended August 31, 2020, the Company recorded operating income of $122.5 million and net income of $78.1 million, or $2.55 per diluted share.

The Company intends to file its Annual Report on Form 10-K for the year ended August 31, 2021 on or around October 21, 2021.

PriceSmart management will host a conference call at 12:00 p.m. Eastern time (9:00 a.m. Pacific time) on Friday, October 22, 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 October 29, 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 10159925.

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 in October 2021 and in Bucaramanga, Colombia in November 2021 and in Portmore, Jamaica in the spring of 2022. Once these three new clubs are open, the Company will operate 50 warehouse clubs.

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 ½ 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," "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


Twelve Months Ended



August 31,


August 31,



2021


2020


2021


2020

Revenues:













Net merchandise sales


$

871,191


$

772,940


$

3,465,442


$

3,191,762

Export sales



10,720



9,345



41,520



34,374

Membership income



14,603



13,137



56,030



54,501

Other revenue and income



13,092



15,159



56,879



48,551

Total revenues



909,606



810,581



3,619,871



3,329,188

Operating expenses:













Cost of goods sold:













Net merchandise sales



733,036



656,526



2,912,489



2,723,942

Export sales



9,945



8,632



39,513



32,676

Non-merchandise



5,489



5,744



23,336



18,160

Selling, general and administrative:













Warehouse club and other operations



94,618



81,352



359,221



323,178

General and administrative



33,400



28,866



125,416



106,776

Pre-opening expenses



198



291



849



1,545

Loss on disposal of assets



459



192



1,027



443

Total operating expenses



877,145



781,603



3,461,851



3,206,720

Operating income



32,461



28,978



158,020



122,468

Other income (expense):













Interest income



525



598



1,979



2,031

Interest expense



(1,353)



(2,509)



(7,210)



(7,625)

Other income (expense), net



(1,471)



992



(5,603)



(834)

Total other expense



(2,299)



(919)



(10,834)



(6,428)

Income before provision for income taxes and
loss of unconsolidated affiliates



30,162



28,059



147,186



116,040

Provision for income taxes



(10,704)



(7,915)



(48,969)



(37,764)

Loss of unconsolidated affiliates



(24)



(16)



(58)



(95)

Net income



19,434



20,128



98,159



78,181

Less: net (income) loss attributable to noncontrolling interest



27



(52)



(196)



(72)

Net income attributable to PriceSmart, Inc.


$

19,461


$

20,076


$

97,963


$

78,109

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













Basic


$

0.63


$

0.65


$

3.18


$

2.55

Diluted


$

0.63


$

0.65


$

3.18


$

2.55

Shares used in per share computations:













Basic



30,424



30,234



30,403



30,259

Diluted



30,424



30,234



30,403



30,259

Dividends per share


$

0.35


$

0.35


$

0.70


$

0.70

PRICESMART, INC.

CONSOLIDATED BALANCE SHEETS

(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)










August 31,



2021


2020

ASSETS







Current Assets:







Cash and cash equivalents


$

202,060


$

299,481

Short-term restricted cash



3,647



185

Short-term investments



50,233



46,509

Receivables, net of allowance for doubtful accounts of $94 as of August 31, 2021
and $147 as of August 31, 2020, respectively



12,359



13,153

Merchandise inventories



389,711



309,509

Prepaid expenses and other current assets



39,194



30,165

Total current assets



697,204



699,002

Long-term restricted cash



9,772



4,105

Property and equipment, net



730,204



692,279

Operating lease right-of-use assets, net



123,655



119,533

Goodwill



45,095



45,206

Other intangibles, net



7,762



10,166

Deferred tax assets



24,225



21,672

Other non-current assets (includes $2,464 and $872 as of August 31, 2021 and
August 31, 2020, respectively, for the fair value of derivative instruments)



57,329



54,260

Investment in unconsolidated affiliates



10,544



10,602

Total Assets


$

1,705,790


$

1,656,825

LIABILITIES AND EQUITY







Current Liabilities:







Short-term borrowings


$


$

65,143

Accounts payable



388,791



373,172

Accrued salaries and benefits



41,896



32,946

Deferred income



26,898



23,525

Income taxes payable



8,310



7,727

Other accrued expenses and other current liabilities



39,736



37,731

Operating lease liabilities, current portion



8,526



8,594

Long-term debt, current portion



19,395



19,437

Total current liabilities



533,552



568,275

Deferred tax liability



1,568



1,713

Long-term income taxes payable, net of current portion



4,160



5,132

Long-term operating lease liabilities



129,256



124,181

Long-term debt, net of current portion



110,110



112,610

Other long-term liabilities (includes $3,010 and $4,685 for the fair value of
derivative instruments and $7,380 and $6,155 for post-employment plans as of
August 31, 2021 and August 31, 2020, respectively)



10,930



12,182

Total Liabilities



789,576



824,093

PRICESMART, INC.

CONSOLIDATED BALANCE SHEETS

(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)








Stockholders' Equity:







Common stock $0.0001 par value, 45,000,000 shares authorized; 31,467,971 and
31,417,576 shares issued and 30,755,308 and 30,670,712 shares outstanding (net of
treasury shares) as of August 31, 2021 and August 31, 2020, respectively



3



3

Additional paid-in capital



465,015



454,455

Accumulated other comprehensive loss



(182,508)



(176,820)

Retained earnings



658,919



582,487

Less: treasury stock at cost, 712,663 shares as of August 31, 2021 and 746,864
shares as of August 31, 2020



(26,084)



(28,406)

Total stockholders' equity attributable to PriceSmart, Inc. stockholders



915,345



831,719

Noncontrolling interest in consolidated subsidiaries



869



1,013

Total stockholders' equity 



916,214



832,732

Total Liabilities and Equity


$

1,705,790


$

1,656,825

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