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PriceSmart Announces First Quarter Results of Operations and December Sales; and Property Acquisition for New Warehouse Club in Colombia

SAN DIEGO, CA -- (Marketwired) -- 01/09/14 -- PriceSmart, Inc. (NASDAQ: PSMT) today announced its results of operations for the first quarter of fiscal year 2014 which ended on November 30, 2013.

For the first quarter of fiscal year 2014, net warehouse club sales increased 12.6% to $589.7 million from $523.6 million in the first quarter of fiscal year 2013. Total revenues for the first quarter of fiscal year 2014 was $605.6 million compared to $535.3 million in the first quarter of the prior year. The Company had 32 clubs in operation as of November 30, 2013, compared to 30 warehouse clubs in operation as of November 30, 2012.

The Company recorded operating income for the first quarter of $32.4 million, compared to operating income of $29.7 million for the first quarter of the prior year. Net income was $21.4 million, or $0.71 per diluted share, in the first quarter of fiscal year 2014. Net income in the first quarter of fiscal year 2013 was $20.0 million, or $0.66 per diluted share.

For the month of December 2013, net sales increased 10.7% to $280.8 million from $253.7 million in December a year earlier. For the four months ended December 31, 2013, net sales increased 12.0% to $870.5 million from $777.3 million in the same period last year. There were 32 warehouse clubs in operation at the end of December 2013 compared to 30 warehouse clubs in operation in December 2012.

For the four weeks ended December 29, 2013, comparable warehouse sales for the 29 warehouse clubs open at least 13 1/2 full months increased 6.7% compared to the same four-week period last year. For the seventeen-week period ended December 29, 2013, comparable warehouse sales increased 7.5% compared to the comparable seventeen-week period a year ago.

PriceSmart Inc. also announced that on January 8, 2014, it acquired approximately 128,600 usable square feet (11,947 usable square meters) of land in the southern area of Pereira, Colombia, upon which the Company plans to construct a new warehouse club that is currently planned to open in November 2014. This additional club will be the fourth PriceSmart warehouse club operating in Colombia.

PriceSmart management plans to host a conference call at 12:00 p.m. Eastern time (9:00 a.m. Pacific time) on Friday, January 10, 2014, to discuss the financial results.

Individuals interested in participating in the conference call may do so by dialing (877) 627-6581 toll free, or (719) 325-4893 for international callers, and entering participant code 8610355.

A digital replay will be available through January 31, 2014, following the conclusion of the call by dialing (888) 203-1112 for domestic callers, or (719) 457-0820 for international callers, and entering relay passcode 8610355.

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 32 warehouse clubs in 12 countries and one U.S. territory (six in Costa Rica; four each in Panama and Trinidad; three each in Guatemala, the Dominican Republic and Colombia; two each in El Salvador and Honduras; and one each in Aruba, Barbados, Jamaica, Nicaragua 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 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: the Company's financial performance is dependent on international operations, which exposes the Company to various risks; any failure by the Company to manage its widely dispersed operations could adversely affect its business; the Company faces significant competition; future sales growth depends, in part, on the Company's ability to successfully open new warehouse clubs; the Company might not identify in a timely manner or effectively respond to changes in consumer trends and changes in consumer preferences for merchandise and shopping modalities, which could adversely affect its relationship with members, demand for its products and market share; the Company faces difficulties in the shipment of, and risks inherent in the importation of, merchandise to its warehouse clubs; the Company is exposed to weather and other natural disaster risks; general economic conditions could adversely impact the Company's business in various respects; the Company is subject to changes in relationships and agreements with third parties with which the Company does business and/or from which the Company acquires merchandise; the Company relies extensively on computer systems to process transactions, summarize results and manage its business and a failure to adequately maintain the Company's systems and disruptions in its systems could harm its business and adversely affect its results of operations; the Company could be subject to additional tax liabilities; a few of the Company's stockholders own approximately 28.3% of the Company's voting stock, which may make it difficult to complete some corporate transactions without their support and may impede a change in control; the loss of key personnel could harm the Company's business; the Company is subject to volatility in foreign currency exchange rates; the Company faces the risk of exposure to product liability claims, a product recall and adverse publicity; potential future impairments of long lived assets could adversely affect the Company's future results of operations and financial position; write-offs of goodwill and other intangible assets could adversely affect the Company's future results of operations and financial position; the Company faces increased public company compliance risks and compliance risks related to the Company's international operations; the Company faces increased compliance risks associated with compliance with Section 404 of the Sarbanes-Oxley Act of 2002; if remediation costs or hazardous substance contamination levels at certain properties for which the Company maintains financial responsibility exceed management's current expectations, the Company's 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, 2013 filed on October 30, 2013 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.

                                                   Three Months Ended
                                                      November 30,
                                                  2013            2012
                                             --------------  --------------
Net warehouse club sales                     $      589,694  $      523,599
Export sales                                          5,721           3,073
Membership income                                     9,268           7,673
Other income                                            918             941
                                             --------------  --------------
Total revenues                                      605,601         535,286
                                             --------------  --------------
Operating expenses:
Cost of goods sold:
Net warehouse club                                  504,287         444,944
Export                                                5,441           2,835
Selling, general and administrative:
Warehouse club operations                            51,772          45,842
General and administrative                           11,184          11,158
Pre-opening expenses                                    474             737
Loss/(gain) on disposal of assets                        84              57
                                             --------------  --------------
Total operating expenses                            573,242         505,573
                                             --------------  --------------
Operating income                                     32,359          29,713
Other income (expense):
Interest income                                         181             294
Interest expense                                     (1,038)         (1,218)
Other income (expense), net                             311              (1)
                                             --------------  --------------
Total other expense                                    (546)           (925)
                                             --------------  --------------
Income before provision for income taxes and
 income (loss) of unconsolidated affiliates          31,813          28,788
Provision for income taxes                          (10,385)         (8,779)
Income (loss) of unconsolidated affiliates                4              (4)
                                             --------------  --------------
Net income                                   $       21,432  $       20,005
                                             ==============  ==============
Net income per share available for
Basic net income per share                   $         0.71  $         0.66
                                             ==============  ==============
Diluted net income per share                 $         0.71  $         0.66
                                             ==============  ==============
Shares used in per share computations:
Basic                                                29,690          29,592
                                             ==============  ==============
Diluted                                              29,702          29,604
                                             ==============  ==============
Dividends per share                          $           --  $         0.60
                                             ==============  ==============

                              PRICESMART, INC.
                         CONSOLIDATED BALANCE SHEETS

                                              November 30,
                                                  2013         August 31,
                                               (Unaudited)        2013
                                             --------------  --------------
Current Assets:
Cash and cash equivalents                    $       77,226  $      121,874
Short-term restricted cash                            3,100           5,984
Receivables, net of allowance for doubtful
 accounts of $7 and $0 as of November 30,
 2013 and August 31, 2013, respectively               3,481           3,130
Merchandise inventories                             298,721         217,413
Deferred tax assets - current                         7,126           6,290
Prepaid expenses and other current assets            30,717          20,890
                                             --------------  --------------
Total current assets                                420,371         375,581
Long-term restricted cash                            26,759          34,775
Property and equipment, net                         351,210         338,478
Goodwill                                             36,289          36,364
Deferred tax assets - long term                      12,038          12,871
Other non-current assets (includes $1,324
 and $1,505 as of November 30, 2013 and
 August 31, 2013, respectively, for the fair
 value of derivative instruments)                    25,787          19,866
Investment in unconsolidated affiliates               8,108           8,104
                                             --------------  --------------
Total Assets                                 $      880,562  $      826,039
                                             ==============  ==============
Current Liabilities:
Short-term borrowings                        $       13,000  $           --
Accounts payable                                    230,890         199,425
Accrued salaries and benefits                        16,171          17,862
Deferred membership income                           17,231          16,528
Income taxes payable                                  7,455           8,059
Other accrued expenses                               17,646          20,136
Long-term debt, current portion                      16,375          12,757
Deferred tax liability - current                        128             111
                                             --------------  --------------
Total current liabilities                           318,896         274,878
Deferred tax liability - long-term                    2,603           2,622
Long-term portion of deferred rent                    4,452           4,440
Long-term income taxes payable, net of
 current portion                                      2,014           2,184
Long-term debt, net of current portion               46,907          60,263
Other long-term liabilities (includes $9 and
 $14 for the fair value of derivative
 instruments and $621 and $589 for the
 defined benefit plans as of November 30,
 2013 and August 31, 2013, respectively)                630             603
                                             --------------  --------------
Total liabilities                                   375,502         344,990
Common stock, $0.0001 par value, 45,000,000
 shares authorized; 30,923,393 and
 30,924,392 shares issued and 30,233,507 and
 30,234,506 shares outstanding (net of
 treasury shares) as of November 30, 2013
 and August 31, 2013, respectively                        3               3
Additional paid-in capital                          392,011         390,581
Tax benefit from stock-based compensation             8,016           8,016
Accumulated other comprehensive loss                (40,326)        (41,475)
Retained earnings                                   165,303         143,871
Less: treasury stock at cost; 689,886 shares
 as of November 30, 2013 and August 31,
 2013, respectively                                 (19,947)        (19,947)
                                             --------------  --------------
Total equity                                        505,060         481,049
                                             --------------  --------------
Total Liabilities and Equity                 $      880,562  $      826,039
                                             ==============  ==============

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

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