PriceSmart Inc. (NASDAQ:PSMT) Q3 2019 Earnings Conference Call Transcript

Jul 10, 2019 • 08:00 pm ET


PriceSmart Inc. (NASDAQ:PSMT) Q3 2019 Earnings Conference Call Transcript


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Maarten O. Jager

drive member value in coordination with our warehouse clubs and distribution footprint. The legacy Aeropost business adversely impacted net income by $1.0 million for the quarter. The investments into our digital platform, during the past quarter, adversely impacted net income by $1.8 million. And, finally, as I've mentioned before, there are the acquisition-related accounting impacts, which adversely impacted net income by $0.1 million for the quarter. The total of these three buckets is $2.9 million of net income impact or $0.09 per share.

Moving on to the balance sheet, which remains very strong. The company ended the quarter with cash and cash equivalents of $114.0 million, an increase of $17.1 million during the first nine months of the year. During the first nine months, cash provided by operating activities was $113 million versus $90.8 million in the same quarter last year for a favorable swing of $22.2 million. This was primarily due to improved working capital.

Net cash used in investing activities declined by $81.2 million, primarily due to the non-recurring business acquisition purchased last year. In other words, the Aeropost acquisition of $29 million, along with significantly fewer purchases of short-term investments. Investing activities for this year were primarily associated with the construction of a four new warehouse clubs, again Veraguas, Metropark, Bolivar and San Cristobal. That's in Panama, the Dominican Republic and Guatemala, respectively.

Net cash used in financing activities increased $9.1 million, primarily due to the regularly scheduled loan payments.

In summary, we've seen some headwinds in US dollar reported sales, which were largely impacted by a continuation of foreign currency devaluation. The fundamentals of our business as evidenced by our membership counts and renewal rates, our constant currency sales overall, reinforce that we have a strong business model and significant growth opportunities. We will continue to focus on The Six Rights, driving same-store sales, delivering on our announced real estate pipeline, and launching and continuing to develop our digitally-enabled omni-channel platform. Our balance sheet, liquidity and cash flow remains strong, which provides a solid foundation for driving same-store sales and future growth that will benefit our members and shareholders alike.

Operator, we will now turn it over to Q&A.