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PriceSmart Inc.$61.70($.49)(.79%)

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 PriceSmart Announces Fourth Quarter and Fiscal Year Results of Operations
   Thursday, October 27, 2016 4:00:13 PM ET

SAN DIEGO, CA--(Marketwired - Oct 27, 2016) - PriceSmart, Inc. (PSMT ) today announced its results of operations for the fourth quarter and the twelve months of fiscal year 2016 which ended on August 31, 2016.

For the fourth quarter of fiscal year 2016, net warehouse club sales increased 1.3% to $686.4 million from $677.3 million in the fourth quarter of fiscal year 2015. Total revenues for the fourth quarter of fiscal year 2016 were $711.1 million compared to $699.2 million in the comparable period of the prior year. The Company had 38 warehouse clubs in operation as of August 2016 compared to 37 warehouse clubs in operation as of August 2015.

The Company recorded operating income during the quarter of $32.8 million, as compared to operating income of $34.9 million in the prior year. Net income was $22.3 million, or $0.74 per diluted share, in the fourth quarter of fiscal year 2016 as compared to $22.4 million, or $0.75 per diluted share, in the fourth quarter of fiscal year 2015.

For the twelve months ended August 31, 2016, net warehouse club sales increased 3.7% to $2.8 billion, from $2.7 billion for the twelve months ended August 31, 2015. Total revenues for the twelve months ended August 31, 2016 increased 3.7% to $2.9 billion from $2.8 billion in the same period of the prior year. For the twelve months ended August 31, 2016, the Company recorded operating income of $136.7 million and net income of $88.7 million, or $2.92 per diluted share. During the twelve months ended August 31, 2015, the Company recorded operating income of $146.4 million and net income of $89.1 million, or $2.95 per diluted share.

The net income for the fourth quarter and the fiscal year includes the beneficial effect of a reduced effective tax rate, contributing approximately $0.06 per diluted share for the three and twelve month periods.

The Company filed its Annual Report on Form 10-K for the year ended August 31, 2016 on October 27, 2016.

PriceSmart management will host a conference call at 12:00 p.m. Eastern time (9:00 a.m. Pacific time) on Friday, October 28, 2016, to discuss the financial results. Individuals interested in participating in the conference call may do so by dialing (866) 431-5320 toll free, or (719) 785-1748 for international callers and entering participant code 3727333. A digital replay will be available through November 30, 2016, 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 3727333.

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 39 warehouse clubs in 12 countries and one U.S. territory (seven in Colombia; six in Costa Rica; five in Panama; four in Trinidad; three each in Guatemala, the Dominican Republic and Honduras; two each in El Salvador and Nicaragua; and one each in Aruba, Barbados, Jamaica 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, 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 the following risks: our financial performance is dependent on international operations, which exposes us to various risks; any failure by us to manage our widely dispersed operations could adversely affect our business; we face significant competition; future sales growth depends, in part, on our ability to successfully open new warehouse clubs and grow sales in our existing locations; we might not identify in a timely manner or effectively respond to changes in consumer preferences for merchandise, which could adversely affect our relationship with members, demand for our products and market share; although we have begun to offer limited online shopping to our members, our sales could be adversely affected if one or more major international online retailers were to enter our markets or if other competitors were to offer a superior online experience; our profitability is vulnerable to cost increases; we face difficulties in the shipment of and risks inherent in the importation of, merchandise to our warehouse clubs; we are exposed to weather and other natural disaster risks that might not be adequately compensated by insurance; general economic conditions could adversely impact our business in various respects; our failure to maintain our brand and reputation could adversely affect our results of operations; we are subject to risks associated with possible changes in our relationships with third parties with which we do business, as well as the performance of such third parties; we rely extensively on computer systems to process transactions, summarize results and manage our business, and failure to adequately maintain our systems and disruptions in our systems could harm our business and adversely affect our results of operations; we could be subject to additional tax liabilities or subject to reserves on the recoverability of tax receivables; a few of our stockholders own approximately 25.3% of our voting stock as of August 31, 2016, which may make it difficult to complete some corporate transactions without their support and may impede a change in control; failure to attract and retain qualified employees, increases in wage and benefit costs, changes in laws and other labor issues could materially adversely affect our financial performance; we face the possibility of operational interruptions related to union work stoppages; we are subject to volatility in foreign currency exchange rates and limits on our ability to convert foreign currencies into U.S. dollars; we face the risk of exposure to product liability claims, a product recall and adverse publicity; any failure to maintain the security of the information relating to our company, members, employees and vendors that we hold, whether as a result of cybersecurity attacks on our information systems, failure of internal controls, employee negligence or malfeasance or otherwise, could damage our reputation with members, employees, vendors and others, could disrupt our operations, could cause us to incur substantial additional costs and to become subject to litigation and could materially adversely affect our operating results; we are subject to payment related risks; changes in accounting standards and assumptions, projections, estimates and judgments by management related to complex accounting matters could significantly affect our financial condition and results of operations; we face compliance risks related to our international operations; if remediation costs or hazardous substance contamination levels at certain properties for which we maintain financial responsibility exceed management’s current expectations, our financial condition and results of operations could be adversely impacted. The risks described above 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 filed for the fiscal year ended August 31, 2016 filed on October 27, 2016 pursuant to the Securities Exchange Act of 1934. 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.

                                                                                                                                                                                              
PRICESMART, INC.                                                                                                                                                                                   
CONSOLIDATED STATEMENTS OF INCOME                                                                                                                                                                  
(UNAUDITED--AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)                                                                                                                                           
                                                                                                                                            
                                                                                                                                            
                                                                                                                                            
                                                                                   Three Months Ended                              Twelve Months Ended                              
                                                                                   August 31,                                      August 31,                                       
                                                                                   2016               2015               2016                 2015              
Revenues:                                                                                                                    
Net warehouse club sales                                                                $      686,375     $      677,282     $      2,820,740     $      2,721,132  
Export sales                                                                              11,941        9,154         33,813          33,279     
Membership income                                                                         11,555        11,471        45,781          43,673     
Other income                                                                              1,181         1,275         4,842           4,519      
Total revenues                                                                            711,052       699,182       2,905,176       2,802,603  
Operating expenses:                                                                                                          
Cost of goods sold:                                                                                                          
Net warehouse club                                                                        585,183       577,302       2,417,366       2,321,074  
Export                                                                                    11,461        8,812         32,260          31,765     
Selling, general and administrative:                                                                                         
Warehouse club operations                                                                 63,782        62,279        252,130         241,285    
General and administrative                                                                16,258        14,690        64,344          56,371     
Pre-opening expenses                                                                      802           326           1,191           3,737      
Loss/(gain) on disposal of assets                                                         763           918           1,162           2,005      
Total operating expenses                                                                  678,249       664,327       2,768,453       2,656,237  
Operating income                                                                          32,803        34,855        136,723         146,366    
Other income (expense):                                                                                                      
Interest income                                                                           527           245           1,307           1,058      
Interest expense                                                                          (1,411  )          (1,681  )          (5,891    )          (6,440    )
Other income (expense), net                                                               119           214           (899      )          (4,388    )
Total other income (expense)                                                              (765    )          (1,222  )          (5,483    )          (9,770    )
Income before provision for income taxes and income (loss) of unconsolidated affiliates   32,038        33,633        131,240         136,596    
Provision for income taxes                                                                (9,736  )          (11,188 )          (42,849   )          (47,566   )
Income (loss) of unconsolidated affiliates                                                (30     )          2             332             94         
Net income                                                                              $      22,272      $      22,447      $      88,723        $      89,124     
Net income per share available for distribution:                                                                             
Basic net income per share                                                              $      0.74        $      0.75        $      2.92          $      2.95       
Diluted net income per share                                                            $      0.74        $      0.75        $      2.92          $      2.95       
Shares used in per share computations:                                                                                       
Basic                                                                                     29,956        29,888        29,928          29,848     
Diluted                                                                                   29,961        29,895        29,933          29,855     
Dividends per share                                                                     $      0.35        $      0.35        $      0.70          $      0.70       
                                                                                                                        
                                                                                                                        
                                                                                                                        
PRICESMART, INC.                                                                                                                                                                                                                                      
CONSOLIDATED BALANCE SHEETS                                                                                                                                                                                                                                      
(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                               
                                                                                                                                                                                                                                                               
                                                                                                                                                                                                                                   August 31,                                      
                                                                                                                                                                                                                                   2016                 2015             
ASSETS                                                                                                                                                                                                                                                    
Current Assets:                                                                                                                                                                                                                                           
Cash and cash equivalents                                                                                                                                                                                                               $      199,522       $      157,072   
Short-term restricted cash                                                                                                                                                                                                                518             61        
Receivables, net of allowance for doubtful accounts of $7 as of August 31, 2016 and $0 as of August 31, 2015, respectively                                                                                                                7,464           9,662     
Merchandise inventories                                                                                                                                                                                                                   282,907         267,175   
Prepaid expenses and other current assets                                                                                                                                                                                                 22,143          22,535    
Total current assets                                                                                                                                                                                                                      512,554         456,505   
Long-term restricted cash                                                                                                                                                                                                                 2,676           1,464     
Property and equipment, net                                                                                                                                                                                                               473,045         433,040   
Goodwill                                                                                                                                                                                                                                  35,637          35,871    
Deferred tax assets                                                                                                                                                                                                                       12,258          14,845    
Other non-current assets (includes $3,224 and $4,129 as of August 31, 2016 and August 31, 2015, respectively, for the fair value of derivative instruments)                                                                               49,798          39,182    
Investment in unconsolidated affiliates                                                                                                                                                                                                   10,767          10,317    
Total Assets                                                                                                                                                                                                                            $      1,096,735     $      991,224   
LIABILITIES AND EQUITY                                                                                                                                                                                                                                    
Current Liabilities:                                                                                                                                                                                                                                      
Short-term borrowings                                                                                                                                                                                                                   $      16,534        $      6,606     
Accounts payable                                                                                                                                                                                                                          267,173         241,978   
Accrued salaries and benefits                                                                                                                                                                                                             19,606          17,977    
Deferred membership income                                                                                                                                                                                                                20,920          20,184    
Income taxes payable                                                                                                                                                                                                                      4,226           9,595     
Other accrued expenses (includes $110 and $66 as of August 31, 2016 and August 31, 2015, respectively, for the fair value of foreign currency forward contracts)                                                                          24,880          23,558    
Long-term debt, current portion                                                                                                                                                                                                           14,565          17,169    
Total current liabilities                                                                                                                                                                                                                 367,904         337,067   
Deferred tax liability                                                                                                                                                                                                                    1,760           1,755     
Long-term portion of deferred rent                                                                                                                                                                                                        8,961           6,595     
Long-term income taxes payable, net of current portion                                                                                                                                                                                    970             1,402     
Long-term debt, net of current portion                                                                                                                                                                                                    73,542          73,365    
Other long-term liabilities includes $1,514 and $1,699 for the fair value of derivative instruments and $4,013 and $2,757 for post employment plans as of August 31, 2016 and August 31, 2015, respectively)                              5,527           4,456     
Total Liabilities                                                                                                                                                                                                                         458,664         424,640   
                                                                                                                                                                                                                                                     
                                                                                                                                                                                                                                                     
Equity:                                                                                                                                                                                                                                                   
Common stock $0.0001 par value, 45,000,000 shares authorized; 31,237,658 and 30,977,764 shares issued and 30,401,307 and 30,184,584 shares outstanding (net of treasury shares) as of August 31, 2016 and August 31, 2015, respectively   3               3         
Additional paid-in capital                                                                                                                                                                                                                412,369         403,168   
Tax benefit from stock-based compensation                                                                                                                                                                                                 11,321          10,711    
Accumulated other comprehensive loss                                                                                                                                                                                                      (103,951  )          (101,512 )
Retained earnings                                                                                                                                                                                                                         351,060         283,611   
Less: treasury stock at cost, 836,351 and 793,180 shares as of August 31, 2016 and August 31, 2015, respectively                                                                                                                          (32,731   )          (29,397  )
Total Equity                                                                                                                                                                                                                              638,071         566,584   
Total Liabilities and Equity                                                                                                                                                                                                            $      1,096,735     $      991,224   
                                                                                                                                                                                                                                                     

For further information, please contact John M. Heffner Principal Financial Officer and Principal Accounting Officer (858) 404-8826



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