PriceSmart Inc. (NASDAQ:PSMT) Q4 2020 Earnings Conference Call - Final Transcript
Oct 30, 2020 • 12:00 pm ET
deposit of Trinidad dollars we have on hand. The increase in certificates of deposit were offset by a fewer capital expenditures. Although Trinidad is a market that has performed very well in the current year with mid single digit comparable net merchandise sales growth, we continue to experience a very illiquid market with respect to source in U.S. dollars and other tradable currencies in Trinidad.
As a result, as of August 31st, 2020, our Trinidad subsidiary had Trinidad dollar denominated cash, cash equivalents and short and long-term investments, measured in U.S. dollars of approximately $79.6 million. In August, the liquidity situation began deteriorating further, and as a result of not being able to source enough U.S. dollars to pay for our imports into Trinidad, we recently began to restrict shipments into this country in line with the amount of U.S. dollars we are able to secure. This situation is dynamic and we are making all reasonable efforts to source tradable currencies with our banks as well as taking actions to convert to locally sourced products where feasible and looking for alternatives to export merchandise from Trinidad to generate more tradable currencies.
If this situation does not improve rapidly, it is likely that sales and our profitability in Trinidad will be negatively impacted as soon as our fiscal second quarter. Returning to our cash flow activities, the $107.6 million increase in cash provided by financing activities is primarily the result of the net increase of proceeds from long-term borrowings of $55.7 million compared to a year ago to finance our warehouse club construction projects and a net $50.6 million increase in cash provided by short-term borrowings, which we access as a precautionary measure at the beginning of the COVID-19 pandemic.
As conditions evolve during fiscal 2021, we continue to monitor our cash position closely. However, based on current trends and forecast, we currently expect to have fully paid down these lines of credit by the end of our fiscal third quarter. Despite the challenges we faced during the second half of the fiscal year, we believe that we are emerging as a stronger Company. We will continue to focus on the Six Rights of Merchandising with the goal of driving same-store sales, continuing to expand our Click & Go service, and developing and growing our digitally-enabled omnichannel platform.
Our balance sheet, liquidity and cash flow remains strong, which provides a solid foundation for driving same-store sales and future growth and we believe will benefit our members and stakeholders alike. Thank you all for your support during these times of uncertainty. We believe that we are on the right path for continued success.
I will now turn the call over to the operator to take your questions. Operator, you may now start taking our callers' questions.