PriceSmart, Inc. (PSMT) Earnings Call Transcript & Summary

Good morning, everyone. I'm Robert Price, Chairman of the Board of PriceSmart. It is my pleasure to welcome you to the 2022 Virtual Annual Meeting of the company's stockholders. We have stockholders attending via the web portal and the 800 number that we have provided. I'd like to now formally call to order the Annual Meeting. The meeting is being held to elect directors, to hold an advisory vote on executive compensation, to ratify the selection of Ernst & Young LLP as the company's independent registered public accounting firm for the fiscal year ending August 31, 2022, and to transact such other business as may properly come before the meeting. At this time, I would like to introduce the individuals who are nominees for election to the Board of Directors. Jeffrey Fisher, Gordon Hanson, Beatriz Infante, Leon Janks, Patricia Márquez, David Price, David Snyder, Edgar Zurcher, Sherry Bahrambeygui, Chief Executive Officer of PriceSmart, and myself, Robert Price. We are also joined here today by Ernst & Young, our independent auditors. Additionally, I'd like to introduce Francisco Velasco, General Counsel and Secretary of PriceSmart, who will now make a preliminary comment.

Good morning, Robert, and good morning to all stockholders, and thank you for attending our meeting. Please note that the statements made during this meeting may contain forward-looking statements concerning the company's anticipated future plans, revenues and related matters. These forward-looking statements include, but are not limited to, statements containing the words expect, believe, will, may, should, estimate and similar expressions. These statements are subject to risks and uncertainties that could cause actual results to differ materially, including the risks detailed in the company's current report on Form 10-K filed with the Securities and Exchange Commission on October 21, 2021. We assume no obligation and expressly disclaim any duty to update any forward-looking statements to reflect the occurrence of events or circumstances that may arise after the date of this meeting. I will now report on the mailing of the notice of annual meeting and proxy materials and advise if there is a quorum present so that we may begin. The notice of meeting, proxy statement, formal proxy and the company's annual report were all distributed on or about December 17, 2021, to all stockholders of record as of December 6, 2021. As of the record date of this meeting, there were 3,862,499 shares entitled to vote. I have the official stockholding list showing the name, adverts and the number of shares held by each stockholder of record as well as an affidavit certifying the mailings. The list of stockholders and the affidavit of mailing will be available for stockholders starting to review them. They are represented at this meeting in person or by proxy at least 96.30% of the shares of common stock outstanding. This is more than a majority of voting power of all shares and the meeting may proceed.

Thank you, Francisco. A quorum is present, and the meeting is, therefore, properly constituted to transact business. The polls for the matters to be voted on at this meeting are now open. Any stockholders who haven't yet voted or wish to change their votes may do so by clicking on the voting button on the web portal and following the instructions there. Stockholders who have sent in proxies or voted via telephone or internet and do not want to change their vote, do not need to take any further action. The first proposal for this meeting is the election of directors. The slate of nominees for the Board of Directors consists of 10 nominees for director. Information about the 10 nominees is set forth on Pages 5 through 16 of the proxy statement. The second proposal for this meeting is to approve or disapprove, on an advisory basis, the compensation of the named executive officers as disclosed in the company's proxy statement for this annual meeting. The Board of Directors is recommending a vote for the approval on an advisory basis of the compensation of the named executive officers. The third proposal for this meeting relates to the ratification of the selection of Ernst & Young LLP as the company's independent registered public accounting firm for the fiscal year ended August 31, 2022. The Board of Directors is recommending a vote for the ratification of the selection of E&Y as our independent registered public accounting firm. The polls will be closing shortly. If you plan to vote at the meeting, please do so now using the voting button on the web portal. I will now ask the named proxies to cast their ballot. And once they have done so, the polls will be closed. Now that everyone has had the opportunity to vote, I now declare the polls for the 2022 PriceSmart Annual Meeting of Stockholders closed. Francisco, are the specific results of the balloting available?

Yes, Robert. As Inspector of Elections, I will provide a report on the results. With regard to Proposal 1, the election of directors, a plurality of the shares present and voting in person or by proxy at this meeting is required to elect directors. Each of the 10 nominees on the slate of nominees of the Board of Directors has received affirmative vote of a plurality of the shares present and voting in person or by proxy at this meeting. With each nominee having received in excess of 95.62% affirmative votes considerably more than required for this election. With regards to proposal 2 and the advisory vote on compensation and proposal 3, the ratification of the selection of Ernst & Young as company's independent registered public accounting firm, a majority of the aggregate shares present on voting in person or by proxy at this meeting is required for approval. The compensation of the named executive officers as disclosed in the proxy statement for this meeting was approved by no less than 91% of the shares present and voting in person or by proxy at this meeting. And the notification of the selection of EY as disclosed in the proxy statement for this meeting was approved by no less than 99% of the shares present and voting in person or by proxy at this meeting, which is considerably more than required.

Thank you, Francisco. I declare the formal meeting to be adjourned. And it is now my pleasure to introduce our Chief Executive Officer, Sherry Bahrambeygui, who will make a few comments.

Thank you, Robert. Good day, everyone. With the official part of the meeting over, I'd like to take a moment to thank Mitchell Lynn, who has retired from the board. Mitch has dedicated decades to PriceSmart and the betterment of our company through countless hours of board service. I'd also like to welcome David Price to the board. He has worked for several years in a broad number of areas in the company. David represents the third generation of the Price family, including Sol Price and Robert Price and the next generation of their entrepreneurial spirit as well as the core values that make PriceSmart extraordinary. David's passion and background will strengthen our work, especially in the area of environmental and social responsibility. Welcome to the board, David. I'd like to also thank every one of our board members that were elected by the shareholders for your continued support as we position our company for the future. PriceSmart had an extraordinary fiscal 2021 and as reported for fiscal '21 as well as Q1 of fiscal '22 and December results were showing that these investments that we're making are moving us in the right direction, and we are continuing to move in a positive direction for the future. We now have approximately 1.7 million member accounts. And we remain focused on our 3 main drivers for growth. First in the area of real estate, to open new clubs and invest in our distribution system, to expand our reach to more members and maximize efficiencies in getting products to the members. Whether in club or online, we do this in the most cost-effective way possible. Second, we are expanding the benefits of the membership to increase the value of the membership and make our proposition so compelling that members see our business as an important part of their daily lives. And third, we're very focused on driving incremental sales, whether online or in club, by smartly utilizing our new and continually improving online platform and digital tools so that we can be more connected to our members. I want to thank our team of 10,000 employees across 13 markets. You continue to up your performance every day and rise to every occasion demonstrating we have the capacity to do more. We will drive growth, and we'll do more for our members, for our employees and for our shareholders. Thank you all for your continued commitment to PriceSmart and to all our investors who make this possible. We're excited about fiscal year '22 and beyond, and we'll be sharing our progress as it develops. Have a good day. I think that concludes our remarks.

Nick, is that -- can you conclude and stop recording or stop the broadcast?

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.