PRICESMART ANNOUNCES FISCAL 2024 SECOND QUARTER OPERATING RESULTS; $1.00 PER SHARE SPECIAL DIVIDEND; PLANS FOR NINTH WAREHOUSE IN COSTA RICA
NET MERCHANDISE SALES GREW 13.0%
COMPARABLE NET MERCHANDISE SALES INCREASED 8.8%
$1.31
EARNINGS PER DILUTED SHARE & ADJUSTED EARNINGS PER DILUTED SHARE
Second Quarter Financial Results
Total revenues for the second quarter of fiscal year 2024 increased 13.1% to
The Company had 54 warehouse clubs in operation as of
Comparable net merchandise sales for the 50 warehouse clubs that have been open for greater than 13 ½ calendar months increased 8.8% for the 13-week period ended
The Company recorded operating income during the fiscal second quarter of
Adjusted net income for the second quarter of fiscal year 2024 was
Adjusted EBITDA for the second quarter of fiscal year 2024 was
Year-to-Date Financial Results
Total revenues for the six months ended
Comparable net merchandise sales for the 50 warehouse clubs that have been open for greater than 13 ½ calendar months increased 8.4% for the 26-week period ended
The Company recorded operating income during the first six months of fiscal year 2024 of
Adjusted net income for the first six months of fiscal year 2024 was
Adjusted EBITDA for the first six months of fiscal year 2024 was
Special Dividend
The Company has decided to distribute excess cash to stockholders in the form of a special dividend. On
New Club Growth
The Company has purchased land and plans to open its ninth warehouse club in
Note Regarding Non-GAAP (Generally Accepted Accounting Principles) Financial Measures
The foregoing discussion of the Company's operating results includes references to adjusted net income, adjusted net income per diluted share, adjusted EBITDA, net merchandise sales - constant currency and comparable net merchandise sales - constant currency, which are non-GAAP financial measures. We believe these supplemental measures are useful to investors and analysts because they exclude items that we do not believe are indicative of our core operating performance. These non-GAAP financial measures are defined and reconciled to the most comparable GAAP measures later in this document.
Conference Call Information
About PriceSmart
This press release may contain forward-looking statements concerning
For further information, please contact
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED—AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA) |
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Three Months Ended |
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Six Months Ended |
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Revenues: |
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|
|
|
|
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|
Net merchandise sales |
$ 1,260,916 |
|
$ 1,115,999 |
|
$ 2,395,930 |
|
$ 2,141,462 |
Export sales |
8,511 |
|
6,882 |
|
18,520 |
|
17,340 |
Membership income |
18,538 |
|
16,176 |
|
36,287 |
|
32,071 |
Other revenue and income |
3,985 |
|
3,132 |
|
7,688 |
|
6,122 |
Total revenues |
1,291,950 |
|
1,142,189 |
|
2,458,425 |
|
2,196,995 |
Operating expenses: |
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|
|
|
|
|
Cost of goods sold: |
|
|
|
|
|
|
|
Net merchandise sales |
1,062,685 |
|
937,462 |
|
2,015,413 |
|
1,796,530 |
Export sales |
8,178 |
|
6,563 |
|
17,728 |
|
16,552 |
Selling, general and administrative: |
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|
|
|
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|
Warehouse club and other operations |
117,774 |
|
103,630 |
|
227,739 |
|
200,522 |
General and administrative |
38,809 |
|
32,759 |
|
74,248 |
|
65,931 |
Separation costs associated with Chief Executive Officer departure |
— |
|
7,747 |
|
— |
|
7,747 |
Pre-opening expenses |
457 |
|
89 |
|
944 |
|
89 |
Loss on disposal of assets |
429 |
|
139 |
|
522 |
|
297 |
Total operating expenses |
1,228,332 |
|
1,088,389 |
|
2,336,594 |
|
2,087,668 |
Operating income |
63,618 |
|
53,800 |
|
121,831 |
|
109,327 |
Other income (expense): |
|
|
|
|
|
|
|
Interest income |
3,225 |
|
1,942 |
|
6,091 |
|
3,099 |
Interest expense |
(3,293) |
|
(2,814) |
|
(6,109) |
|
(5,563) |
Other expense, net |
(7,036) |
|
(5,344) |
|
(9,162) |
|
(9,910) |
Total other expense |
(7,104) |
|
(6,216) |
|
(9,180) |
|
(12,374) |
Income before provision for income taxes and income (loss) of unconsolidated affiliates |
56,514 |
|
47,584 |
|
112,651 |
|
96,953 |
Provision for income taxes |
(17,259) |
|
(16,202) |
|
(35,412) |
|
(32,628) |
Income (loss) of unconsolidated affiliates |
16 |
|
(35) |
|
79 |
|
(73) |
Net income |
$ 39,271 |
|
$ 31,347 |
|
$ 77,318 |
|
$ 64,252 |
Net income per share available for distribution: |
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Basic |
$ 1.31 |
|
$ 1.02 |
|
$ 2.54 |
|
$ 2.07 |
Diluted |
$ 1.31 |
|
$ 1.02 |
|
$ 2.54 |
|
$ 2.07 |
Shares used in per share computations: |
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Basic |
29,920 |
|
30,741 |
|
30,095 |
|
30,727 |
Diluted |
29,920 |
|
30,760 |
|
30,095 |
|
30,740 |
CONSOLIDATED BALANCE SHEETS (AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA) |
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ASSETS |
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Current Assets: |
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Cash and cash equivalents |
$ 170,563 |
|
$ 239,984 |
Short-term restricted cash |
2,834 |
|
2,865 |
Short-term investments |
93,630 |
|
91,081 |
Receivables, net of allowance for doubtful accounts of |
19,819 |
|
17,904 |
Merchandise inventories |
502,292 |
|
471,407 |
Prepaid expenses and other current assets (includes respectively, for the fair value of derivative instruments) |
58,514 |
|
53,866 |
Total current assets |
847,652 |
|
877,107 |
Long-term restricted cash |
9,178 |
|
9,353 |
Property and equipment, net |
925,035 |
|
850,328 |
Operating lease right-of-use assets, net |
100,175 |
|
114,201 |
|
43,131 |
|
43,110 |
Deferred tax assets |
32,147 |
|
32,039 |
Other non-current assets (includes fair value of derivative instruments) |
68,900 |
|
68,991 |
Investment in unconsolidated affiliates |
10,558 |
|
10,479 |
Total Assets |
$ 2,036,776 |
|
$ 2,005,608 |
LIABILITIES AND EQUITY |
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Current Liabilities: |
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|
Short-term borrowings |
$ 6,101 |
|
$ 8,679 |
Accounts payable |
507,077 |
|
453,229 |
Accrued salaries and benefits |
36,016 |
|
45,441 |
Deferred income |
38,277 |
|
32,613 |
Income taxes payable |
8,302 |
|
9,428 |
Other accrued expenses and other current liabilities (includes 2023, respectively, for the fair value of derivative instruments) |
50,390 |
|
57,273 |
Operating lease liabilities, current portion |
7,181 |
|
7,621 |
Dividends payable |
17,771 |
|
— |
Long-term debt, current portion |
37,615 |
|
20,193 |
Total current liabilities |
708,730 |
|
634,477 |
Deferred tax liability |
1,744 |
|
1,936 |
Long-term income taxes payable, net of current portion |
5,010 |
|
5,045 |
Long-term operating lease liabilities |
107,835 |
|
122,195 |
Long-term debt, net of current portion |
102,350 |
|
119,487 |
Other long-term liabilities (includes
for
post-employment plans as of |
17,233 |
|
15,425 |
Total Liabilities |
942,902 |
|
898,565 |
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|
Stockholders' Equity: |
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|
Common stock
31,934,900 shares issued and 30,656,141 and 30,976,941 shares outstanding (net of
treasury shares) as of
2024
and |
3 |
|
3 |
Additional paid-in capital |
505,349 |
|
497,434 |
Accumulated other comprehensive loss |
(155,289) |
|
(163,992) |
Retained earnings |
859,325 |
|
817,559 |
Less: treasury stock at cost, 1,922,401 shares as of |
(115,514) |
|
(43,961) |
Total Stockholders' Equity |
1,093,874 |
|
1,107,043 |
Total Liabilities and Equity |
$ 2,036,776 |
|
$ 2,005,608 |
Reconciliation of Non-GAAP Financial Measures
The following tables calculate the Company's adjusted net income, adjusted net income per diluted share, adjusted EBITDA, net merchandise sales - constant currency and comparable net merchandise sales - constant currency, all of which are considered non-GAAP financial measures. Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. These measures are customary for our industry and commonly used by competitors. However, these non-GAAP financial measures should not be reviewed in isolation or considered as an alternative to any other performance measure derived in accordance with GAAP and may not be comparable to similarly titled measures used by other companies in our industry or across different industries.
The adjusted net income and adjusted net income per diluted share metrics are important measures used by management to compare the performance of our core operations between periods. We define adjusted net income as net income, as reported, adjusted for: separation costs associated with the departure of our former Chief Executive Officer, the write-off of certain
We believe adjusted net income and adjusted net income per diluted share are useful metrics to investors and analysts because they present more accurate year-over-year comparisons for our net income and net income per diluted share because adjusted items are not the result of our normal operations.
The following table shows the Company's reconciliation of net income to adjusted net income and adjusted net income per diluted share for the periods indicated:
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Three Months Ended |
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Six Months Ended |
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Net income as reported |
$ 39,271 |
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$ 31,347 |
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$ 77,318 |
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$ 64,252 |
Adjustments: |
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Separation costs associated with Chief Executive Officer departure (1) |
— |
|
7,747 |
|
— |
|
7,747 |
|
— |
|
— |
|
— |
|
2,125 |
Tax impact of adjustments to net income (3) |
— |
|
(550) |
|
— |
|
(550) |
Adjusted net income |
$ 39,271 |
|
$ 38,544 |
|
$ 77,318 |
|
$ 73,574 |
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Net income per diluted share |
$ 1.31 |
|
$ 1.02 |
|
$ 2.54 |
|
$ 2.07 |
Separation costs associated with Chief Executive Officer departure |
— |
|
0.23 |
|
— |
|
0.23 |
|
— |
|
— |
|
— |
|
0.07 |
Adjusted net income per diluted share |
$ 1.31 |
|
$ 1.25 |
|
$ 2.54 |
|
$ 2.37 |
|
|
(1) |
Reflects |
(2) |
Reflects |
(3) |
Reflects the tax effect of the above-mentioned adjustments. |
Adjusted EBITDA
Adjusted EBITDA is defined as net income before interest expense, net, provision for income taxes and depreciation and amortization, adjusted for the impact of certain other items, including interest income; other income (expense), net; separation costs associated with Chief Executive Officer departure; and
|
Three Months Ended |
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Six Months Ended |
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Net income as reported |
$ 39,271 |
|
$ 31,347 |
|
$ 77,318 |
|
$ 64,252 |
Adjustments: |
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|
|
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Interest expense |
3,293 |
|
2,814 |
|
6,109 |
|
5,563 |
Provision for income taxes |
17,259 |
|
16,202 |
|
35,412 |
|
32,628 |
Depreciation and amortization |
20,491 |
|
17,875 |
|
39,985 |
|
35,443 |
Interest income |
(3,225) |
|
(1,942) |
|
(6,091) |
|
(3,099) |
Other expense, net (1) |
7,036 |
|
5,344 |
|
9,162 |
|
9,910 |
Separation costs associated with Chief Executive Officer departure (2) |
— |
|
7,747 |
|
— |
|
7,747 |
|
— |
|
— |
|
— |
|
2,125 |
Adjusted EBITDA |
$ 84,125 |
|
$ 79,387 |
|
$ 161,895 |
|
$ 154,569 |
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(1) |
Primarily consists of transaction costs of converting the local currencies into available tradable currencies in some of our countries with liquidity issues and foreign currency losses or gains due to the revaluation of monetary assets and liabilities (primarily |
(2) |
Reflects |
(3) |
Reflects |
Net Merchandise Sales - Constant Currency and Comparable Net Merchandise Sales – Constant Currency
As a multinational enterprise, we are exposed to changes in foreign currency exchange rates. The translation of the operations of our foreign-based entities from their local currencies into
Net merchandise sales growth rate on a net merchandise sales - constant currency basis is calculated as follows:
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Three Months Ended |
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Six Months Ended |
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Net |
|
% Growth |
|
Net |
|
% Growth |
Net merchandise sales |
$ 1,260,916 |
|
13.0 % |
|
$ 2,395,930 |
|
11.9 % |
Favorable impact of foreign currency exchange |
44,151 |
|
4.0 % |
|
84,141 |
|
3.9 % |
Net merchandise sales on a constant-currency basis |
$ 1,216,765 |
|
9.0 % |
|
$ 2,311,789 |
|
8.0 % |
Comparable net merchandise sales growth rate on a net merchandise sales - constant currency basis is calculated as follows:
|
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Thirteen Weeks Ended |
Twenty-Six Weeks Ended |
|
|
% Growth |
|
% Growth |
Comparable net merchandise sales |
8.8 % |
|
8.4 % |
Favorable impact of foreign currency exchange |
3.6 % |
|
3.7 % |
Comparable net merchandise sales on a constant-currency basis |
5.2 % |
|
4.7 % |
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