Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Feb. 28, 2017 | Mar. 31, 2017 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | PRICESMART INC | |
Entity Central Index Key | 1,041,803 | |
Current Fiscal Year End Date | --08-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Feb. 28, 2017 | |
Entity Common Stock, Shares Outstanding | 30,398,096 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Feb. 28, 2017 | Aug. 31, 2016 |
Current Assets: | ||
Cash and cash equivalents | $ 181,990 | $ 199,522 |
Short-term restricted cash | 816 | 518 |
Receivables, net of allowance for doubtful accounts of $7 as of February 28, 2017 and August 31, 2016, respectively | 6,384 | 7,464 |
Merchandise inventories | 296,984 | 282,907 |
Prepaid expenses and other current assets | 20,922 | 22,143 |
Total current assets | 507,096 | 512,554 |
Long-term restricted cash | 2,709 | 2,676 |
Property and equipment, net | 535,479 | 473,045 |
Goodwill | 35,692 | 35,637 |
Deferred tax assets | 12,251 | 12,258 |
Other non-current assets (includes $3,332 and $3,224 as of February 28, 2017 and August 31, 2016, respectively, for the fair value of derivative instruments) | 52,966 | 49,798 |
Investment in unconsolidated affiliates | 10,759 | 10,767 |
Total Assets | 1,156,952 | 1,096,735 |
Current Liabilities: | ||
Short-term borrowings | 6,561 | 16,534 |
Accounts payable | 265,756 | 267,173 |
Accrued salaries and benefits | 17,181 | 19,606 |
Deferred membership income | 22,921 | 20,920 |
Income taxes payable | 5,933 | 4,226 |
Other accrued expenses (includes $87 and $110 as of February 28, 2017 and August 31, 2016, respectively, for the fair value of foreign currency forward contracts) | 22,620 | 24,880 |
Dividends payable | 10,643 | |
Long-term debt, current portion | 14,623 | 14,565 |
Total current liabilities | 366,238 | 367,904 |
Deferred tax liability | 1,693 | 1,760 |
Long-term portion of deferred rent | 8,961 | 8,961 |
Long-term income taxes payable, net of current portion | 891 | 970 |
Long-term debt, net of current portion | 101,942 | 73,542 |
Other long-term liabilities (includes $665 and $1,514 for the fair value of derivative instruments and $4,868 and $4,013 for post employment plans as of February 28, 2017 and August 31, 2016, respectively) | 5,533 | 5,527 |
Total Liabilities | 485,258 | 458,664 |
Equity: | ||
Common stock, $0.0001 par value, 45,000,000 shares authorized; 31,264,387 and 31,237,658 shares issued and 30,404,645 and 30,401,307 shares outstanding (net of treasury shares) as of February 28, 2017 and August 31, 2016, respectively | 3 | 3 |
Additional paid-in capital | 417,776 | 412,369 |
Tax benefit from stock-based compensation | 11,534 | 11,321 |
Accumulated other comprehensive loss | (104,811) | (103,951) |
Retained earnings | 381,864 | 351,060 |
Less: treasury stock at cost, 859,742 shares and 836,351 shares as of February 28, 2017 and August 31, 2016, respectively | (34,672) | (32,731) |
Total Equity | 671,694 | 638,071 |
Total Liabilities and Equity | $ 1,156,952 | $ 1,096,735 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Feb. 28, 2017 | Aug. 31, 2016 |
CONSOLIDATED BALANCE SHEETS [Abstract] | ||
Receivables, allowance for doubtful account | $ 7 | $ 7 |
Other non-current assets, fair value of derivative instruments | 3,332 | 3,224 |
Other accrued expenses, fair value of foreign currency forward contracts | 87 | 110 |
Other long-term liabilities, fair value of derivative instruments | 665 | 1,514 |
Other long-term liabilities, defined benefit plan | $ 4,868 | $ 4,013 |
Common stock, par value per share | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 45,000,000 | 45,000,000 |
Common stock, shares issued | 31,264,387 | 31,237,658 |
Common stock, shares outstanding | 30,404,645 | 30,401,307 |
Treasury stock, shares | 859,742 | 836,351 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Feb. 28, 2017 | Feb. 29, 2016 | Feb. 28, 2017 | Feb. 29, 2016 | |
Revenues: | ||||
Net warehouse club sales | $ 772,273 | $ 758,987 | $ 1,488,352 | $ 1,449,818 |
Export sales | 8,172 | 6,549 | 18,906 | 14,781 |
Membership income | 11,833 | 11,285 | 23,543 | 22,751 |
Other income | 1,018 | 1,110 | 2,067 | 2,512 |
Total revenues | 793,296 | 777,931 | 1,532,868 | 1,489,862 |
Cost of goods sold: | ||||
Net warehouse club | 659,802 | 651,500 | 1,268,292 | 1,241,683 |
Export | 7,761 | 6,225 | 17,942 | 14,057 |
Selling, general and administrative: | ||||
Warehouse club operations | 67,784 | 64,763 | 133,210 | 125,603 |
General and administrative | 18,212 | 16,184 | 35,014 | 31,647 |
Pre-opening expenses | 71 | (113) | 376 | |
Loss/(gain) on disposal of assets | 335 | 52 | 742 | 65 |
Total operating expenses | 753,894 | 738,795 | 1,455,087 | 1,413,431 |
Operating income | 39,402 | 39,136 | 77,781 | 76,431 |
Other income (expense): | ||||
Interest income | 549 | 280 | 1,051 | 458 |
Interest expense | (1,644) | (1,536) | (3,298) | (2,909) |
Other income (expense), net | 915 | (552) | (13) | (796) |
Total other income (expense) | (180) | (1,808) | (2,260) | (3,247) |
Income before provision for income taxes and income (loss) of unconsolidated affiliates | 39,222 | 37,328 | 75,521 | 73,184 |
Provision for income taxes | (11,989) | (11,815) | (23,426) | (23,945) |
Income (loss) of unconsolidated affiliates | (14) | 429 | (7) | 375 |
Net income | $ 27,219 | $ 25,942 | $ 52,088 | $ 49,614 |
Net income per share available for distribution: | ||||
Basic net income per share | $ 0.90 | $ 0.85 | $ 1.72 | $ 1.63 |
Diluted net income per share | $ 0.90 | $ 0.85 | $ 1.72 | $ 1.63 |
Shares used in per share computations: | ||||
Basic | 30,004 | 29,914 | 29,993 | 29,902 |
Diluted | 30,008 | 29,919 | 29,997 | 29,907 |
Dividends per share | $ 0.70 | $ 0.70 | $ 0.70 | $ 0.70 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Feb. 28, 2017 | Feb. 29, 2016 | Feb. 28, 2017 | Feb. 29, 2016 | ||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME [Abstract] | |||||
Net income | $ 27,219 | $ 25,942 | $ 52,088 | $ 49,614 | |
Other Comprehensive Income, net of tax: | |||||
Foreign currency translation adjustments | [1] | 9,237 | (10,420) | (1,629) | (10,892) |
Defined benefit pension plan: | |||||
Amortization of prior service cost and actuarial gains included in net periodic pensions cost | (7) | (4) | (14) | (8) | |
Total defined benefit pension plan | (7) | (4) | (14) | (8) | |
Derivative instruments: | |||||
Unrealized gains/(losses) on change in fair value of interest rate swaps | [2] | 291 | (211) | 783 | (331) |
Total derivative instruments | [2] | 291 | (211) | 783 | (331) |
Other comprehensive income (loss) | 9,521 | (10,635) | (860) | (11,231) | |
Comprehensive income | $ 36,740 | $ 15,307 | $ 51,228 | $ 38,383 | |
[1] | Translation adjustments arising in translating the financial statements of a foreign entity have no effect on the income taxes of that foreign entity. They may, however, affect: (a) the amount, measured in the parent entity's reporting currency, of withholding taxes assessed on dividends paid to the parent entity and (b) the amount of taxes assessed on the parent entity by the government of its country. The Company has determined that the reinvestment of earnings of its foreign subsidiaries are indefinite because of the long-term nature of the Company's foreign investment plans. Therefore, deferred taxes are not provided for on translation adjustments related to non-remitted earnings of the Company's foreign subsidiaries. | ||||
[2] | See Note 7 - Derivative Instruments and Hedging Activities. |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Tax Benefit From Stock Based Compensation [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Retained Earnings [Member] | Treasury Stock [Member] | Total |
Balance at Aug. 31, 2015 | $ 3 | $ 403,168 | $ 10,711 | $ (101,512) | $ 283,611 | $ (29,397) | $ 566,584 |
Balance (in shares) at Aug. 31, 2015 | 30,978,000 | 793,000 | |||||
Purchase of treasury stock | $ (1,956) | (1,956) | |||||
Purchase of treasury stock (in shares) | 27,000 | ||||||
Issuance of restricted stock award | |||||||
Issuance of restricted stock award (in shares) | 208,000 | ||||||
Exercise of stock options | 80 | 80 | |||||
Exercise of stock options (in shares) | 4,000 | ||||||
Stock-based compensation | 4,578 | 558 | 5,136 | ||||
Dividend paid to stockholders | (10,629) | (10,629) | |||||
Dividends payable to stockholders | (10,629) | (10,629) | |||||
Net income | 49,614 | 49,614 | |||||
Other comprehensive income (loss) | (11,231) | (11,231) | |||||
Balance at Feb. 29, 2016 | $ 3 | 407,826 | 11,269 | (112,743) | 311,967 | $ (31,353) | 586,969 |
Balance (in shares) at Feb. 29, 2016 | 31,190,000 | 820,000 | |||||
Balance at Aug. 31, 2016 | $ 3 | 412,369 | 11,321 | (103,951) | 351,060 | $ (32,731) | $ 638,071 |
Balance (in shares) at Aug. 31, 2016 | 31,238,000 | 836,000 | 30,401,307 | ||||
Purchase of treasury stock | $ (1,941) | $ (1,941) | |||||
Purchase of treasury stock (in shares) | 24,000 | ||||||
Issuance of restricted stock award | |||||||
Issuance of restricted stock award (in shares) | 23,000 | ||||||
Forfeiture of restricted stock awards | |||||||
Forfeiture of restricted stock awards (in shares) | (2,000) | ||||||
Exercise of stock options | 229 | 229 | |||||
Exercise of stock options (in shares) | 5,000 | ||||||
Stock-based compensation | 5,178 | 213 | 5,391 | ||||
Dividend paid to stockholders | (10,641) | (10,641) | |||||
Dividends payable to stockholders | (10,643) | (10,643) | |||||
Net income | 52,088 | 52,088 | |||||
Other comprehensive income (loss) | (860) | (860) | |||||
Balance at Feb. 28, 2017 | $ 3 | $ 417,776 | $ 11,534 | $ (104,811) | $ 381,864 | $ (34,672) | $ 671,694 |
Balance (in shares) at Feb. 28, 2017 | 31,264,000 | 860,000 | 30,404,645 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Feb. 28, 2017 | Feb. 29, 2016 | |
Operating Activities: | ||
Net income | $ 52,088 | $ 49,614 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 22,562 | 18,732 |
(Gain)/loss on sale of property and equipment | 742 | 65 |
Deferred income taxes | (1,412) | 16 |
Excess tax benefit on stock-based compensation | (213) | (558) |
Equity in (gains) losses of unconsolidated affiliates | 7 | (375) |
Stock-based compensation | 5,178 | 4,578 |
Change in operating assets and liabilities: | ||
Receivables, prepaid expenses and other current assets, non-current assets, accrued salaries and benefits, deferred membership income and other accruals | 386 | (3,824) |
Merchandise inventories | (14,077) | 7,074 |
Accounts payable | (817) | (5,742) |
Net cash provided by (used in) operating activities | 64,444 | 69,580 |
Investing Activities: | ||
Additions to property and equipment | (87,020) | (32,177) |
Deposits for land purchase option agreements | (300) | (75) |
Proceeds from disposal of property and equipment | 181 | 129 |
Investment in joint ventures | (119) | |
Net cash provided by (used in) investing activities | (87,139) | (32,242) |
Financing Activities: | ||
Proceeds from long-term bank borrowings | 35,700 | 7,370 |
Repayment of long-term bank borrowings | (7,231) | (6,747) |
Proceeds from short-term bank borrowings | 5,650 | |
Repayment of short-term bank borrowings | (10,011) | (12,204) |
Cash dividend payments | (10,641) | (10,629) |
Excess tax benefit on stock-based compensation | 213 | 558 |
Purchase of treasury stock | (1,941) | (1,956) |
Proceeds from exercise of stock options | 229 | 80 |
Net cash provided by (used in) financing activities | 6,318 | (17,878) |
Effect of exchange rate changes on cash and cash equivalents | (1,155) | (3,524) |
Net increase (decrease) in cash and cash equivalents | (17,532) | 15,936 |
Cash and cash equivalents at beginning of period | 199,522 | 157,072 |
Cash and cash equivalents at end of period | 181,990 | 173,008 |
Supplemental disclosure of cash flow information: | ||
Dividends declared but not paid | $ 10,643 | $ 10,629 |
COMPANY OVERVIEW AND BASIS OF P
COMPANY OVERVIEW AND BASIS OF PRESENTATION | 6 Months Ended |
Feb. 28, 2017 | |
COMPANY OVERVIEW AND BASIS OF PRESENTATION [Abstract] | |
COMPANY OVERVIEW AND BASIS OF PRESENTATION | N OTE 1 – COMPANY OVERVIEW AND BASIS OF PRESENTATION PriceSmart, Inc.’s (“PriceSmart” or the “Company”) business consists primarily of international membership shopping warehouse clubs similar to, but smaller in size than, warehouse clubs in the United States. As of February 28, 2017 , the Company had 39 consolidated warehouse clubs in operation 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, Honduras and the Dominican Republic ; two each in El Salvador and Nicaragua ; and one each in Aruba, Barbados , Jamaica , and the United States Virgin Islands ), of which the Company owns 100% of the corresponding legal entities (see Note 2 - Summary of Significant Accounting Policies). The Company opened a new warehouse club in Chia, Colombia in September 2016, fiscal year 2017, which the Company constructed on land acquired in May 2015, bringing the total of warehouse clubs operating in Colombia to seven. In April 2015, the Company acquired land in Managua, Nicaragua. The Company constructed and then opened a warehouse club on this site in Novemb er 2015. On December 4, 2015 the Company signed an option to acquire two properties and then swap them for 59,353 square feet of land adjacent to our San Pedro Sula warehouse club in Honduras. The Company exercised this option and comple ted the swap during May 2016. The Company used the acquired land to expand the parking lot for the San Pedro Sula warehouse club. T he expansion was completed in December 2016 . The Company, on February 1, 2017, acquired land in Santa Ana, Costa Rica upon which the Company plans to construct a new warehouse club. The Company currently plans to open this new warehouse club in the fall of 2017. With the six warehouse clubs currently operating in Costa Rica, this new warehouse club will bring the number of PriceSmart warehouse clubs operating in Costa Rica to seven . The Company continues to explore other potential sites for future warehouse clubs in Central America, the Caribbean and Colombia. Basis of Presentation - The interim consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q for interim financial reporting pursuant to the rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). These interim consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2016 (the “2016 Form 10-K”). The interim consolidated financial statements include the accounts of PriceSmart, Inc., a Delaware corporation, and its subsidiaries. Inter-company transactions between the Company and its subsidiaries have been eliminated in consolidation. The Company has evaluated subsequent events through the date and time these financial statements were issued. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Feb. 28, 2017 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation – The interim consolidated financial statements of the Company included herein include the assets, liabilities and results of operations of the Company’s wholly owned subsidiaries and the Company's investment in, and the Company's share of the income (loss) of, joint ventures recorded under the equity method. All significant inter-company accounts and transactions have been eliminated in consolidation. The interim consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the SEC and reflect all adjustments (consisting of normal recurring adjustments) that are, in the opinion of management, necessary to fairly present the financial position, results of operations, and cash flows for the periods presented. The results for interim periods are not necessarily indicative of the results for the full year. As of February 28, 2017 , all of the Company's subsidiaries were wholly owned. Additionally, the Company's ownership interest in real estate development joint ventures as of February 28, 2017 is listed below: Real Estate Development Joint Ventures Countries Ownership Basis of Presentation GolfPark Plaza, S.A. Panama 50.0 % Equity (1) Price Plaza Alajuela PPA, S.A. Costa Rica 50.0 % Equity (1) (1) Joint venture interests are recorded as investment in unconsolidated affiliates on the consolidated balance sheets. The Company determines whether any of the joint ventures in which it has made investments is a Variable Interest Entity (“VIE”) at the start of each new venture and if a reconsideration event has occurred. At this time, the Company also considers whether it must consolidate a VIE and/or disclose information about its involvement in a VIE. A reporting entity must consolidate a VIE if that reporting entity has a variable interest (or combination of variable interests) that will absorb a majority of the VIE's expected losses, receive a majority of the VIE's expected residual returns, or both. A reporting entity must consider the rights and obligations conveyed by its variable interests and the relationship of its variable interests with variable interests held by other parties to determine whether its variable interests will absorb a majority of a VIE's expected losses, receive a majority of the VIE's expected residual returns, or both. The reporting entity that consolidates a VIE is called the primary beneficiary of that VIE. Due to the initial nature of the joint ventures and the continued commitments for additional financing, the Company determined these joint ventures are VIEs. Since all rights, obligations and the power to direct the activities of a VIE that most significantly impact the VIE's economic performance is shared equally by both parties within each joint venture, the Company has determined that it is not the primary beneficiary of the VIEs and, therefore, has accounted for these entities under the equity method. Under the equity method, the Company's investments in unconsolidated affiliates are initially recorded as an investment in the stock of an investee at cost and are adjusted for the carrying amount of the investment to recognize the investor's share of the earnings or losses of the investee after the date of the initial investment. Use of Estimates – The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Tax Receivables – The Company pays Value Added Tax (“VAT”) or similar taxes (“input VAT”), income taxes, and other taxes within the normal course of its business in most of the countries in which it operates related to the procurement of merchandise and/or services it acquires and/or on sales and taxable income. The Company also collects VAT or similar taxes on behalf of the government (“output VAT”) for merchandise and/or services it sells. If the output VAT exceeds the input VAT, then the difference is remitted to the government, usually on a monthly basis. If the input VAT exceeds the output VAT, this creates a VAT receivable. In most countries where the Company operates, the governments have implemented additional collection procedures, such as requiring credit and debit card processors to remit a portion of sales processed via credit and debit card directly to the government as advance payments of VAT and/or income tax. In the case of VAT, these procedures alter the natural offset of input and output VAT and generally leave the Company with a net VAT receivable, forcing the Company to process significant refund claims on a recurring basis. With respect to income taxes paid, if the estimated income taxes paid or withheld exceed the actual income tax due, this creates an income tax receivable. The Company either requests a refund of these tax receivables or applies the balance to expected future tax payments. These refund or offset processes can take anywhere from several months to several years to complete. In most countries where the Company operates, the tax refund process is defined and structured with regular refunds or offsets. However, in three countries there is either not a clearly defined process or the government has alleged there is not a clearly defined process to allow the authorities to refund VAT receivables. The Company, together with its tax and legal advisers, is currently appealing these interpretations in court and expects to prevail. In one of these countries, where there is recent favorable jurisprudence, the government performed an audit to verify the amount of the VAT receivables as a required precursor to any refund. The balance of the VAT receivables in these countries was $8.7 million and $7.6 million as of February 28, 2017 and August 31, 2016, respectively. In another country in which the Company operates warehouse clubs , a new minimum income tax mechanism took effect in fiscal year 2015, which requires the Company to pay taxes based on a percentage of sales rather than income. As a result, the Company is making income tax payments substantially in excess of those it would expect to pay based on taxable income. The current rules (which the Company has challenged in court) do not clearly allow the Company to obtain a refund or to offset this excess income tax against other taxes. As of February 28, 2017, the Company had deferred tax assets of approximately $2.0 million in this country. Also, the Company had an income tax receivable balance of $3.5 million as of February 28, 2017 related to excess payments from fiscal years 2015, 2016 and 2017. The Company has not placed any type of allowance on the recoverability of these tax receivables or deferred tax assets, because the Company believes that it is more likely than not that it will ultimately succeed in its refund requests, related appeals and/or court challenge on this matter. The Company's policy for classification and presentation of VAT receivables, income tax receivables and other tax receivables is as follows: · Short-term VAT and Income tax receivables, recorded as Other current assets: This classification is used for any countries where the Company's subsidiary has generally demonstrated the ability to recover the VAT or income tax receivable within one year. The Company also classifies as short-term any approved refunds or credit notes to the extent that the Company expects to receive the refund or use the credit notes within one year. · Long-term VAT and Income tax receivables, recorded as Other non-current assets: This classification is used for amounts not approved for refund or credit in countries where the Company's subsidiary has not demonstrated the ability to obtain refunds within one year and/or for amounts which are subject to outstanding disputes. An allowance is provided against VAT and income tax receivable balances in dispute when the Company does not expect to eventually prevail in its recovery. The Company does not currently have any allowances provided against VAT and income tax receivables. The following table summarizes the VAT receivables reported by the Company (in thousands): February 28, August 31, 2017 2016 Prepaid expenses and other current assets $ 1,702 $ 1,635 Other non-current assets 34,060 32,502 Total amount of VAT receivable reported $ 35,762 $ 34,137 The following table summarizes the Income tax receivables reported by the Company (in thousands): February 28, August 31, 2017 2016 Prepaid expenses and other current assets $ 4,756 $ 6,402 Other non-current assets 12,037 10,376 Total amount of income tax receivable reported $ 16,793 $ 16,778 Merchandise Inventories – Merchandise inventories, which include merchandise for resale, are valued at the lower of cost (average cost) or market. The Company provides for estimated inventory losses and obsolescence between physical inventory counts on the basis of a percentage of sales. The provision is adjusted periodically to reflect the trend of actual physical inventory count results, with physical inventories occurring primarily in the second and fourth fiscal quarters. In addition, the Company may be required to take markdowns below the carrying cost of certain inventory to expedite the sale of such merchandise. Stock Based Compensation – The Company offers three types of equity awards : stock options (“options”), restricted stock awards (“RSAs”) and restricted stock units (“RSUs”). Compensation related to options is accounted for by applying the valuation technique based on the Black-Scholes model. Compensation related to RSAs and RSUs is based on the fair market value at the time of grant with the application of an estimated forfeiture rate. The Company recognizes the compensation cost related to these awards over the requisite service period as determined by the grant, amortized ratably or on a straight line basis over the life of the grant. The Company utilizes “modified grant-date accounting” for true-ups due to actual forfeitures at the vesting dates. The Company records the tax savings resulting from tax deductions in excess of expense for stock-based compensation as additional paid-in capital and the tax deficiency resulting from stock-based compensation in excess of the related tax deduction as a reduction in paid-in capital, based on the Tax Law Ordering method. In addition, the Company reflects the tax savings (deficiency) resulting from the taxation of stock-based compensation as a financing cash flow in its consolidated statement of cash flows, rather than as an operating cash flow. RSAs have the same cash dividend and voting rights as other common stock and are considered to be currently issued and outstanding shares of common stock. Shares of common stock subject to RSUs are not issued nor outstanding until vested, and RSUs do not have the same dividend and voting rights as common stock. However, all outstanding RSUs have accompanying dividend equivalents, requiring payment to the employees and directors with unvested RSUs of amounts equal to the dividend they would have received had the shares of common stock underlying the RSUs been actually issued and outstanding. Payments of dividend equivalents to employees are recorded as compensation expense. Fair Value Measurements – The Company measures the fair value for all financial and nonfinancial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring or nonrecurring basis. The fair value of an asset is the price at which the asset could be sold in an orderly transaction between unrelated, knowledgeable and willing parties able to engage in the transaction. A liability’s fair value is defined as the amount that would be paid to transfer the liability to a new obligor in a transaction between such parties, not the amount that would be paid to settle the liability with the creditor. The Company has established a three-tier fair value hierarchy, which prioritizes the inputs used in measuring and revaluing fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. The Company was not required to revalue any assets or liabilities utilizing Level 1 or Level 3 inputs at the balance sheet dates. The Company's Level 2 assets and liabilities revalued at the balance sheet dates, on a recurring basis, consisted of cash flow hedges (interest rate swaps and cross-currency interest rate swaps) and forward foreign exchange contracts. In addition, the Company utilizes Level 2 inputs in determining the fair value of long-term debt. The Company did not make any significant transfers in and out of Level 1 and Level 2 fair value tiers during the periods reported on herein. Non-financial assets and liabilities are revalued and recognized at fair value subsequent to initial recognition when there is evidence of impairment. For the periods reported, no impairment of such non-financial assets was recorded. The Company’s current financial assets and liabilities have fair values that approximate their carrying values. The Company’s long-term financial assets have fair values that approximate their carrying values. The Company’s long-term financial liabilities consist of long-term debt, which is recorded on the balance sheet at issuance price and adjusted for any applicable unamortized discounts or premiums and debt issuance costs. There have been no significant changes in fair market value of the Company’s current and long-term financial assets, and there have been no material changes to the valuation techniques utilized in the fair value measurement of assets and liabilities as disclosed in the Company’s 2016 Form 10-K. Derivatives Instruments and Hedging Activities – The Company uses derivative financial instruments for hedging and non-trading purposes to manage its exposure to changes in interest and currency exchange rates. In using derivative financial instruments for the purpose of hedging the Company’s exposure to interest and currency exchange rate risks, the contractual terms of a hedged instrument closely mirror those of the hedged item, providing a high degree of risk reduction and correlation. Contracts that are effective at meeting the risk reduction and correlation criteria (effective hedge) are recorded using hedge accounting. If a derivative financial instrument is an effective hedge, changes in the fair value of the instrument will be offset in accumulated other comprehensive income (loss) until the hedged item completes its contractual term. If any portion of the hedge is deemed ineffective, the change in fair value of the hedged assets or liabilities will be immediately recognized in earnings during the period. Instruments that do not meet the criteria for hedge accounting, or contracts for which the Company has not elected hedge accounting, are valued at fair value with unrealized gains or losses reported in earnings during the period of the change. The Company did not change valuation techniques utilized in the fair value measurement of assets and liabilities presented on the Company’s consolidated balance sheets from previous practice during the reporting period. The Company seeks to manage counterparty risk associated with these contracts by limiting transactions to counterparties with which the Company has an established banking relationship. There can be no assurance, however, that this practice effectively mitigates counterparty risk. Cash Flow Instruments. The Company is a party to receive floating interest rate, pay fixed-rate interest rate swaps to hedge the interest rate risk of certain U.S. dollar denominated debt within its international subsidiaries. The swaps are designated as cash flow hedges of interest expense risk. These instruments are considered effective hedges and are recorded using hedge accounting. The Company is also a party to receive variable interest rate, pay fixed interest rate cross-currency interest rate swaps to hedge the interest rate and currency exposure associated with the expected payments of principal and interest of U.S. denominated debt within its international subsidiaries whose functional currency is other than the U.S. dollar. The swaps are designated as cash flow hedges of the currency risk related to payments on the U.S. denominated debt. These instruments are also considered to be effective hedges and are recorded using hedge accounting. Under cash flow hedging, the effective portion of the fair value of the derivative, calculated as the net present value of the future cash flows, is deferred on the consolidated balance sheets in accumulated other comprehensive loss. If any portion of an interest rate swap is determined to be an ineffective hedge, the gains or losses from changes in fair value would be recorded directly in the consolidated statements of income. Amounts recorded in accumulated other comprehensive loss are released to earnings in the same period that the hedged transaction impacts consolidated earnings. See Note 7 - Derivative Instruments and Hedging Activities for information on the fair value of interest rate swaps and cross-currency interest rate swaps as of February 28, 2017 and August 31, 2016 . Fair Value Instruments. The Company is exposed to foreign-currency exchange rate fluctuations in the normal course of business. This includes exposure to foreign-currency exchange rate fluctuations on U.S. dollar denominated liabilities within the Company’s international subsidiaries whose functional currency is other than the U.S. dollar. The Company manages these fluctuations, in part, through the use of non-deliverable forward foreign-exchange contracts that are intended to offset changes in cash flows attributable to currency exchange movements. The contracts are intended primarily to economically address exposure to U.S. dollar merchandise inventory expenditures made by the Company’s international subsidiaries whose functional currency is other than the U.S. dollar. Currently, these contracts are treated for accounting purposes as fair value instruments and do not qualify for derivative hedge accounting, and as such the Company does not apply derivative hedge accounting to record these transactions. As a result, these contracts are valued at fair value with unrealized gains or losses reported in earnings during the period of the change. The Company seeks to mitigate foreign-currency exchange-rate risk with the use of these contracts and does not intend to engage in speculative transactions. These contracts do not contain any credit-risk-related contingent features and are limited to less than one year in duration. See Note 7 - Derivative Instruments and Hedging Activities for information on the fair value of open, unsettled forward foreign-exchange contracts as of February 28, 2017 and August 31, 2016 . Insurance Reimbursements – Receipts from insurance reimbursements up to the amount of the losses recognized are considered recoveries. These recoveries are accounted for when they are probable of receipt. Insurance recoveries are not recognized prior to the recognition of the related cost. Anticipated proceeds in excess of the amount of loss recognized are considered gains and are subject to gain contingency guidance. Anticipated proceeds in excess of a loss recognized in the financial statements are not recognized until all contingencies related to the insurance claim are resolved. The Company’s Guatemala Pradera warehouse club experienced a fire in its merchandise receiving department during the early morning hours of June 4, 2015. No members or employees were in the warehouse club at the time. The fire was extinguished, but caused considerable smoke and some fire damage. The warehouse club was closed for nine days and reopened on June 13, 2015. The Company is insured for these costs and filed an insurance claim with its insurance provider. As of August 31, 2015, the Company's receivable related to this insurance claim was approximately $2.6 million. The Company’s insurance policy also addresses coverage for business interruption. During the fourth quarter of fiscal year 2015, the Company filed a claim with its insurance carrier for approximately $332,000 related to business interruption for which the Company did not record a receivable. The Company received the final insurance settlement payments of approximately $3.1 million during the quarter ended November 30, 2015. As a result, the Company recorded a credit to cost of goods sold of approximately $165,000 during the period that reflects the reversal of the inventory written off previously and now covered under the claim and gain on the disposal of assets for $85,000 that included reimbursement from the insurance for assets disposed of in fiscal year 2015. Additionally, the Company recorded during the quarter ended November 30, 2015 other income from insurance proceeds of approximately $202,000 during the period that reflects the amount reimbursed to the Company for business interruption coverage, net of taxes and other miscellaneous amounts charged to the Company by the insurance company for storage of the damaged inventory. Foreign Currency Translation – The assets and liabilities of the Company’s foreign operations are translated to U.S. dollars when the functional currency in the Company’s international subsidiaries is the local currency and not U.S. dollars. Assets and liabilities of these foreign subsidiaries are translated to U.S. dollars at the exchange rate on the balance sheet date, and revenue, costs and expenses are translated at average rates of exchange in effect during the period. The corresponding translation gains and losses are recorded as a component of accumulated other comprehensive income or loss. These adjustments will affect net income upon the sale or liquidation of the underlying investment. Monetary assets and liabilities denominated in currencies other than the functional currency of the respective entity (primarily U.S. dollars) are revalued to the functional currency using the exchange rate on the balance sheet date. These foreign exchange transaction gains (losses), including transactions recorded involving these monetary assets and liabilities, are recorded as Other income (expense) in the consolidated statements of income. The following table summarizes the amounts recorded for the three and six months ended February 28, 2017 and February 29, 2016 (in thousands): Three Months Ended Six Months Ended February 28, February 29, February 28, February 29, 2017 2016 2017 2016 Currency gain (loss) $ 915 $ (552) $ (13) $ (796) Recent Accounting Pronouncements – Not Yet Adopted FASB ASC 230 ASU 2016-18- Statement of Cash Flows (Topic 230)—Restricted Cash In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230)—Restricted Cash. This ASU addresses the diversity in practice that exists regarding the classification and the presentation of changes in restricted cash on the statement of cash flows. The amendments in ASU No. 2016-18 require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. Thus, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and the end-of-period total amounts set forth on the statement of cash flows. The amendments in this ASU are effective for annual periods beginning after December 15, 2017 and interim periods within those fiscal years and will be applied using a retrospective transition method to each period presented. The adoption of this ASU will impact the presentation of cash flows with inclusion of restricted cash flows for each of the presented periods. FASB ASC 740 ASU 2016-16- Income Taxes (Topic 740)—Intra-Entity Transfers of Assets Other Than Inventory In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740)—Intra-Entity Transfers of Assets Other Than Inventory. Currently, U.S. GAAP prohibits recognizing current and deferred income tax consequences for an intra-entity asset transfer until the asset has been sold to an outside party. ASU 2016-16 states that an entity should recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The amendments in this ASU are effective for annual periods beginning after December 15, 2017 and interim periods within those annual periods. Early adoption is permitted. The amendments should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The Company will evaluate the impact adoption of this guidance may have on the Company’s consolidated financial statements. FASB ASC 230 ASU 2016-15- Statement of Cash Flows (Topic 230)—Classification of Certain Cash Receipts and Cash Payments (a consensus of the FASB Emerging Issues Task Force) In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This ASU addresses stakeholders’ concerns regarding diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows under Topic 230, Statement of Cash Flows, and other Topics. In particular, ASU No. 2016-15 addresses eight specific cash flow issues in an effort to reduce this diversity in practice: (1) debt prepayment or debt extinguishment costs; (2) settlement of zero-coupon bonds; (3) contingent consideration payments made after a business combination; (4) proceeds from the settlement of insurance claims; (5) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies; (6) distributions received from equity method investees; (7) beneficial interests in securitization transactions; and (8) separately identifiable cash flows and application of the predominance principle. The amendments in this ASU are effective for annual periods beginning after December 15, 2017 and interim periods within those annual periods. Early adoption is permitted. The amendments in this ASU should be applied using a retrospective transition method to each period presented. If it is impracticable to apply the amendments retrospectively for some of the issues, the amendments for those issues would be applied prospectively as of the earliest date practicable. The Company will evaluate the impact adoption of this guidance may have on the Company's consolidated financial statements. FASB ASC 718 ASU 2016-09 - Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting In March 2016, the FASB issued amendments to the guidance on employee share-based payment accounting intended to improve the accounting for employee share-based payments. This ASU simplifies several aspects of the accounting for share-based payment award transactions, including: · The income tax consequences , · Classification of awards as either equity or liabilities, and · Classification on the statement of cash flows The amendments in this ASU are effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. Early adoption is permitted in any interim or annual period. Amendments related to the timing of when excess tax benefits are recognized, minimum statutory withholding requirements, forfeitures, and intrinsic value should be applied using a modified retrospective transition method by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is adopted. Amendments related to the presentation of employee taxes paid on the statement of cash flows when an employer withholds shares to meet the minimum statutory withholding requirement should be applied retrospectively. Amendments requiring recognition of excess tax benefits and tax deficiencies in the income statement and the practical expedient for estimating expected term should be applied prospectively. An entity may elect to apply the amendments related to the presentation of excess tax benefits on the statement of cash flows using either a prospective transition method or a retrospective transition method. The Company plans to adopt this guidance at the beginning of its first quarter of fiscal year 2018. Adoption of this guidance will likely be material to the provision for income taxes on the Company’s consolidated income statements and earnings per share amounts for the change in the recognition of excess tax benefits or deficiencies. This may create increased volatility in the provision for income tax amounts reported during the interim periods and fiscal year 2018. Previously these amounts were reflected in equity. Additionally, cash paid by the employer when directly withholding shares for tax-withholding purposes will be classified as a financing activity and any excess tax benefits will be classified along with other income tax cash flows as an operating activity. Adoption of this guidance is not expected to have a material effect on the consolidated balance sheets, statements of cash flows or related disclosures. FASB ASC 842 ASU 2016-02 -Leases (Topic 842): Amendments to the FASB Accounting Standards Codification In February 2016, the FASB issued amendments to the guidance on lease accounting. Under the new guidance, for all leases longer than 12 months, a lessee will be required to record a lease liability for all payments arising from a lease and also record a right of use asset for the term of the lease. Under the new guidance lessor accounting is largely unchanged. The amendment in this ASU is effective on a prospective or modified retrospective basis for public entities for fiscal years and interim periods within those annual periods beginning after December 15, 2018. Early adoption is permitted. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The modified retrospective approach includes a number of optional practical expedients that entities may elect to apply. These practical expedients relate to the identification and classification of leases that commenced before the effective date, initial direct costs for leases that commenced before the effective date, and the ability to use hindsight in evaluating lessee options to extend or terminate a lease or to purchase the underlying asset. An entity that elects to apply the practical expedients will, in effect, continue to account for leases that commence before the effective date in accordance with previous GAAP unless the lease is modified, except that lessees are required to recognize a right-of-use asset and a lease liability for all operating leases at each reporting date based on the present value of the remaining minimum rental payments that were tracked and disclosed under previous GAAP. The Company plans to adopt this guidance at the beginning of its first quarter of fiscal year 2020. While the Company continues to evaluate this standard and the effect on related disclosures, the primary effect of adoption will be to record right-of-use assets and corresponding lease obligations for current operating leases. The adoption is expected to have a material impact on the Company's consolidated balance sheets, but not on results of operations or cash flows. FASB ASC 330 ASU 2015-11 -Inventory (Topic 330): Simplifying the Measurement of Inventory In July 2015, the FASB issued guidance that will require an entity to measure in-scope inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. This amendment applies to entities, like the Company, that measure inventory value |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Feb. 28, 2017 | |
EARNINGS PER SHARE [Abstract] | |
EARNINGS PER SHARE | NOTE 3 – EARNINGS PER SHARE The Company presents basic net income per share using the two-class method. The two-class method is an earnings allocation formula that treats a participating security as having rights to earnings that otherwise would have been available to common stockholders and that determines basic net income per share for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings that would have been available to common stockholders. A participating security is defined as a security that may participate in undistributed earnings with common stock. The Company’s capital structure includes securities that participate with common stock on a one-for-one basis for distribution of dividends. These are the restricted stock awards and restricted stock units authorized within the 2013 Equity Incentive Award Plan. The Company determines the diluted net income per share by using the more dilutive of the two class-method or the treasury stock method and by including the basic weighted average of outstanding stock options in the calculation of diluted net income per share under the two-class method and including all potential common shares assumed issued in the calculation of diluted net income per share under the treasury stock method. The following table sets forth the computation of net income per share for the three and six months ended February 28, 2017 and February 29, 2016 (in thousands, except per share amounts): Three Months Ended Six Months Ended February 28, February 29, February 28, February 29, 2017 2016 2017 2016 Net income $ 27,219 $ 25,942 $ 52,088 $ 49,614 Less: Allocation of income to unvested stockholders (345) (371) (758) (742) Net earnings available to common stockholders $ 26,874 $ 25,571 $ 51,330 $ 48,872 Basic weighted average shares outstanding 30,004 29,914 29,993 29,902 Add dilutive effect of stock options (two-class method) 4 5 4 5 Diluted average shares outstanding 30,008 29,919 29,997 29,907 Basic net income per share $ 0.90 $ 0.85 $ 1.72 $ 1.63 Diluted net income per share $ 0.90 $ 0.85 $ 1.72 $ 1.63 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 6 Months Ended |
Feb. 28, 2017 | |
STOCKHOLDERS' EQUITY [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 4 – STOCKHOLDERS’ EQUITY Dividends The following table summarizes the dividends declared and paid during fiscal years 2017 and 2016 (amounts are per share). First Payment Second Payment Declared Amount Record Date Date Paid Date Payable Amount Record Date Date Paid Date Payable Amount 2/1/2017 $ 0.70 2/15/2017 2/28/2017 N/A $ 0.35 8/15/2017 N/A 8/31/2017 $ 0.35 2/3/2016 $ 0.70 2/15/2016 2/29/2016 N/A $ 0.35 8/15/2016 8/31/2016 N/A $ 0.35 The Company anticipates the ongoing payment of semi-annual dividends in subsequent periods, although the actual declaration of future dividends, the amount of such dividends, and the establishment of record and payment dates is subject to final determination by the Board of Directors at its discretion after its review of the Company’s financial performance and anticipated capital requirements. Com prehensive Income and Accumulated Other Comprehensive Loss The following tables disclose the effects of each component of other comprehensive income (loss), net of tax (in thousands): Six Months Ended February 28, 2017 Foreign currency translation adjustments Defined benefit pension plans Derivative Instruments Total Beginning balance, September 1, 2016 $ (102,242) $ (315) $ (1,394) (1) $ (103,951) Other comprehensive income (loss) (1,629) — 783 (846) Amounts reclassified from accumulated other comprehensive income (loss) — (14) (2) — (14) Ending balance, February 28, 2017 $ (103,871) $ (329) $ (611) $ (104,811) Six Months Ended February 29, 2016 Foreign currency translation adjustments Defined benefit pension plans Derivative Instruments Total Beginning balance, September 1, 2015 $ (100,540) $ (113) $ (859) $ (101,512) Other comprehensive income (loss) (10,892) — (331) (1) (11,223) Amounts reclassified from accumulated other comprehensive income (loss) — (8) (2) — (8) Ending balance, February 29, 2016 $ (111,432) $ (121) $ (1,190) $ (112,743) Twelve Months Ended August 31, 2016 Foreign currency translation adjustments Defined benefit pension plans Derivative Instruments Total Beginning balance, September 1, 2015 $ (100,540) $ (113) $ (859) $ (101,512) Other comprehensive income (loss) (1,702) (182) (535) (1) (2,419) Amounts reclassified from accumulated other comprehensive income (loss) — (20) (2) — (20) Ending balance, August 31, 2016 $ (102,242) $ (315) $ (1,394) $ (103,951) (1) See Note 7 - Derivative Instruments and Hedging Activities. (2) Amounts reclassified from accumulated other comprehensive income (loss) related to the minimum pension liability are included in warehouse club operations in the Company's Consolidated Statements of Income. Retained Earnings Not Available for Distribution The following table summarizes retained earnings designated as legal reserves of various subsidiaries which cannot be distributed as dividends to PriceSmart, Inc. according to applicable statutory regulations (in thousands): February 28, August 31, 2017 2016 Retained earnings not available for distribution $ 6,213 $ 5,926 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Feb. 28, 2017 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 5 – COMMITMENTS AND CONTINGENCIES Legal Proceedings From time to time, the Company and its subsidiaries are subject to legal proceedings, claims and litigation arising in the ordinary course of business related to the Company’s operations and property ownership. The Company evaluates such matters on a case by case basis, and vigorously contests any such legal proceedings or claims which the Company believes are without merit. The Company establishes an accrual for legal proceedings if and when those matters reach a stage where they present loss contingencies that are both probable and reasonably estimable. In such cases, there may be a possible exposure to loss in excess of any amounts accrued. The Company monitors those matters for developments that would affect the likelihood of a loss and the accrued amount, if any, thereof, and adjusts the amount as appropriate. If the loss contingency at issue is not both probable and reasonably estimable, the Company does not establish an accrual, but will continue to monitor the matter for developments that will make the loss contingency both probable and reasonably estimable. If it is at least a reasonable possibility that a material loss will occur, the Company will provide disclosure regarding the contingency. The Company believes that the final disposition of the pending legal proceedings, claims and litigation will not have a material adverse effect on its financial position, results of operations or liquidity. It is possible, however, that the Company's future results of operations for a particular quarter or fiscal year could be impacted by changes in circumstances relating to such matters. Taxes Income Taxes – The Company accounts for income taxes using the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributed to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences and carry-forwards are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established when necessary to reduce deferred tax assets to amounts expected to be realized. The Company is required to file federal and state tax returns in the United States and various other tax returns in foreign jurisdictions. The preparation of these tax returns requires the Company to interpret the applicable tax laws and regulations in effect in such jurisdictions, which could affect the amount of tax paid by the Company. The Company, in consultation with its tax advisors, bases its tax returns on interpretations that are believed to be reasonable under the circumstances. The tax returns, however, are subject to routine reviews by the various taxing authorities in the jurisdictions in which the Company files its returns. As part of these reviews, a taxing authority may disagree with respect to the interpretations the Company used to calculate its tax liability and therefore require the Company to pay additional taxes. The Company accrues an amount for its estimate of probable additional income tax liability. In certain cases, the impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more likely than not to be sustained upon audit by the relevant tax authority. An uncertain income tax position will not be recognized if it has less than 50% likelihood of being sustained. This requires significant judgment, the use of estimates, and the interpretation and application of complex tax laws. When facts and circumstances change, the Company reassesses these probabilities and records any changes in the consolidated financial statements as appropriate. There were no material changes in the Company's uncertain income tax positions as of February 28, 2017 and August 31, 2016. In evaluating the exposure associated with various non-income tax filing positions, the Company accrues for probable and estimable exposures for non-income tax related tax contingencies. As of February 28, 2017 and August 31, 2016, the Company has recorded within other accrued expenses a total of $3.9 million and $4.0 million, respectively, for various non-income tax related tax contingencies. While the Company believes the recorded liabilities are adequate, there are inherent limitations in projecting the outcome of litigation, in estimating probable additional income tax liability taking into account uncertain tax positions and in evaluating the probable additional tax associated with various non-income tax filing positions. As such, the Company is unable to make a reasonable estimate of the sensitivity to change of estimates affecting its recorded liabilities. As additional information becomes available, the Company assesses the potential liability and revises its estimates as appropriate. During the first quarter of fiscal year 2015, the Company received provisional tax assessments with respect to deductibility and withholdings. One of the Company’s subsidiaries received provisional assessments claiming $2.5 million of taxes, penalties and interest related to withholding taxes on certain charges for services rendered by the Company. In addition, this subsidiary received provisional assessments totaling $5.1 million for lack of deductibility of the underlying service charges due to the lack of withholding. Based on a review of the Company's tax advisers' interpretation of local law, rulings and jurisprudence (including Supreme Court precedents with respect to the deductibility assessment), the Company expects to prevail in both instances and has not recorded a provision for these assessments. Also, in another country where the Company operates, beginning in fiscal year 2015, a new minimum income tax mechanism took effect, which requires the Company to pay taxes based on a percentage of sales rather than income. As a result, the Company is making income tax payments substantially in excess of those it would expect to pay based on taxable income. The current rules (which the Company has appealed) do not clearly allow the Company to obtain a refund or offset this excess income tax against other taxes. As of February 28, 2017, the Company had deferred tax assets of approximately $2.0 million in this country. Also, the Company had an income tax receivable balance of $3.5 million as of February 28, 2017 related to excess payments from fiscal years 2015, 2016 and 2017 . The Company has not placed any type of allowance on the recoverability of these tax receivables or deferred income taxes, because the Company believes that it is more likely than not that it will succeed in its appeal on this matter. The Company has not provided for U.S. deferred taxes on cumulative non-U.S. undistributed earnings as such earnings are deemed by the Company to be indefinitely reinvested. It is not practicable to determine the U.S. federal income tax liability that would be associated with such earnings because of the complexity of the computation. Other Commitments The Company is committed under non-cancelable operating leases for the rental of facilities and land. Future minimum lease commitments for facilities under these leases with an initial term in excess of one year are as follows (in thousands): Open Years ended February 28, Locations (1) 2018 $ 11,570 2019 11,124 2020 (3) 10,559 2021 9,481 2022 8,082 Thereafter 91,164 Total $ 141,980 (2) (1) Operating lease obligations have been reduced by approximately $316,678 to reflect sub-lease income. Certain obligations under leasing arrangements are collateralized by the underlying asset being leased. (2) As of August 31, 2016, total future minimum lease commitments were $120.9 million. The increase during the period ending February 28, 2017 is primarily related to the extension of an existing lease within the Company’s Guatemala subsidiary for its Pradera location. The subsidiary signed an extension on November 25, 2016, extending the lease termination date from May 31, 2021 to November 30, 2043 . The lease extension included the real property at this location currently used by the Company and added additional square footage in the same shopping center to the lease. This has effectively provided the Company with possession of substantially all of the real property available at that location. The Company plans to expand and upgrade the current warehouse club and parking areas and to improve access into and out from the location. (3) The year 2020 is a leap year with the period ending February 29 th . The Company is also committed to non-cancelable construction service obligations for various warehouse club developments and expansions. As of February 28, 2017 and August 31, 2016 , these commitments were approximately $8.2 million and $1.5 million, respectively, for construction services not yet rendered. The Company has entered into land purchase option agreements that have not been recorded as commitments, for which the Company has recorded deposits of approximately $785,000 . The land purchase option agreements can generally be canceled at the sole option of the Company , with the deposits being fully refundable up and until all permits are issued. However, the deposit on one piece of land totaling approximately $50,000 would be forfeited if pending permit s are not received and the Company were to decide not to proceed with the acquisition. The Company does not have a timetable for when or if it will exercise these land purchase options, due to the uncertainty related to the completion of the Company's due diligence review. The Company's due diligence review includes evaluations of the legal status of the property, the zoning and permitting issues related to acquiring approval for the construction and operation of a warehouse club and any other issues related to the property itself that could render the property unsuitable or limit the property's economic viability as a warehouse club site. If the purchase option agreements are exercised, the cash use for purchase of land would be approximately $24.5 million . The Company may enter into additional land purchase option agreements in the future. The table below summarizes the Company’s interest in real estate joint ventures, commitments to additional future investments and the Company’s maximum exposure to loss as a result of its involvement in these joint venture as of February 28, 2017 (in thousands): Entity % Ownership Initial Investment Additional Investments Net (Loss)/Income Inception to Date Company’s Variable Interest in Entity Commitment to Future Additional Investments (1) Company's Maximum Exposure to Loss in Entity (2) GolfPark Plaza, S.A. 50 % $ 4,616 $ 2,402 $ 296 $ 7,314 $ 99 $ 7,413 Price Plaza Alajuela, S.A. 50 % 2,193 1,236 16 3,445 785 4,230 Total $ 6,809 $ 3,638 $ 312 $ 10,759 $ 884 $ 11,643 (1) The parties intend to seek alternate financing for the project, which could reduce the amount of investments each party would be required to provide. The parties may mutually agree on changes to the project, which could increase or decrease the amount of contributions each party is required to provide. (2) The maximum exposure is determined by adding the Company’s variable interest in the entity and any explicit or implicit arrangements that could require the Company to provide additional financial support. The Company contracts for distribution center services in Mexico. The contract for this distribution center's services expires on August 31, 2017, with the applicable fees and rates to be reviewed at the beginning of each calendar year. Future minimum service commitments related to this contract through the end of the contract term are approximately $82,000 . The Company contracts for off-site data recovery services as part of its disaster recovery plan. The contract for these data recovery services expires on November 30, 2019. Future minimum service commitments related to this contract are approximately $372,000 for each of the 12-month periods ending February 28, 2018 and 2019 and approximately $279,000 for the 12-month period ending February 28, 2020. |
DEBT
DEBT | 6 Months Ended |
Feb. 28, 2017 | |
DEBT [Abstract] | |
DEBT | NOTE 6 – DEBT Short-term borrowings consist of lines of credit that are secured by certain assets of the Company and its subsidiaries, which, in some cases, are guaranteed by the Company. The following table summarizes the balances of total facilities, facilities used and facilities available (in thousands): Facilities Used Total Amount Short-term Letters of Facilities Weighted average of Facilities Borrowings Credit Available interest rate February 28, 2017 $ 69,000 $ 6,561 $ — $ 62,439 10.1 % August 31, 2016 $ 65,000 $ 16,534 $ 9,224 $ 39,242 10.1 % As of February 28, 2017 and August 31, 2016 , the Company had approximately $40.0 million of short-term facilities in the U.S. that require compliance with certain quarterly financial covenants. As of February 28, 2017 and August 31, 2016, the Company was in compliance with respect to these covenants. E ach of the facilities expires annually and is normally renewed. The following table provides the changes in long-term debt for the six months ended February 28, 2017: (Amounts in thousands) Current portion of long-term debt Long-term debt (net of current portion) Total Balances as of August 31, 2016 $ 14,565 $ 73,542 $ 88,107 (1) Proceeds from long-term debt incurred during the period: MFUG Union Bank — 35,700 35,700 Repayments of long-term debt: Regularly scheduled loan payments — (7,231) (7,231) Translation adjustments on foreign-currency debt of subsidiaries whose functional currency is not the U.S. dollar (2) 58 (69) (11) Balances as of February 28, 2017 $ 14,623 $ 101,942 $ 116,565 (3) (1) The carrying amount o f non-cash assets assigned as collateral for th ese loans was $102.4 million. No cash assets were assigned as collateral for th ese loans . (2) These foreign currency translation adjustments are recorded within Other comprehensive income. (3) The carrying amount o f non-cash assets assigned as collateral for th ese loans was $141.8 million. No cash assets were assigned as collateral for th ese loans . In January 2017, the Company finalized its acquisition of a distribution center in Medley, Miami-Dade County, Florida , for a total purchase price of approximately $46.0 million. The Company will transfer the majority of its Miami distribution center activities located in the previously leased facilities. This should be completed by the end of the third quarter of fiscal year 2017. To finance the acquisition of this prop erty, the Company entered into a 10 -year real estate secured loan with MUFG Union Bank, N.A. (“Union Bank”) of $35.7 million in January 2017 . This loan has a variable interest rate of 30 -day LIBOR plus 1.7% , with monthly principal and interest payments maturing in 2027 . The Company also entered into an interest rate hedge with Union Bank for $35.7 million, the notional amount. Under the hedge, the Company will receive variable 30 -day LIBOR plus 1.7% and pay fixed ( 3.6 5 % ), with an effective date of March 1, 2017 and maturity date of March 1, 2027 . The Company intends to terminate portions of the existing leased Miami distribution facilities or enter into sublease agreements for portions of the leased facility. The Company will record costs related to the termination of the leased facility as liabilities, with the related expenses as warehouse expenses, once the leased facility is available for subleasing. As of February 28, 2017 , the Company had approximately $105.3 million of long-term loans in the U.S., Trinidad, Panama, El Salvador, Honduras, Costa Rica, Barbados and Colombia that require these subsidiaries to comply with certain annual or quarterly financial covenants, which include debt service and leverage ratios. As of February 28, 2017 , the Company was in compliance with all covenants or amended covenants. As of August 31, 2016 , the Company had approximately $76.0 million of long-term loans in Trinidad, Panama, El Salvador, Honduras, Costa Rica, Barbados, and Colombia that require these subsidiaries to comply with certain annual or quarterly financial covenants, which include debt service and leverage ratios. As of August 31, 2016 , the Company was in compliance with all covenants or amended covenants. Annual maturities of long-term debt are as follows (in thousands): Twelve Months Ended February 28, Amount 2018 $ 14,165 2019 13,760 2020 (1) 29,364 2021 19,354 2022 3,405 Thereafter 33,322 Total (2) $ 113,370 (1) The year 2020 is a leap year with the period ending February 29th. (2) In the case of loans subject to cross-currency interest rate swaps, the Company has used the effective rate to the Company under the applicable derivative obligation as of February 28, 2017 to disclose the future commitments of the related long-term debt . |
DERIVATIVE INSTRUMENTS AND HEDG
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 6 Months Ended |
Feb. 28, 2017 | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES [Abstract] | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | NOTE 7 – DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES The Company is exposed to interest rate risk relating to its ongoing business operations. To manage interest rate exposure, the Company enters into hedge transactions (interest rate swaps) using derivative financial instruments. The objective of entering into interest rate swaps is to eliminate the variability of cash flows in the LIBOR interest payments associated with variable-rate loans over the life of the loans. As changes in interest rates impact the future cash flow of interest payments, the hedges provide a synthetic offset to interest rate movements. In addition, the Company is exposed to foreign currency and interest rate cash flow exposure related to non-functional currency long-term debt of three of its wholly owned subsidiaries. To manage this foreign currency and interest rate cash flow exposure, the Company’s subsidiaries entered into cross-currency interest rate swaps that convert their U.S. dollar denominated floating interest payments to functional currency fixed interest payments during the life of the hedging instrument. As changes in foreign exchange and interest rates impact the future cash flow of interest payments, the hedges are intended to offset changes in cash flows attributable to interest rate and foreign exchange movements. These derivative instruments (cash flow hedging instruments) are designated and qualify as cash flow hedges, with the effective portion of the gain or loss on the derivative reported as a component of other comprehensive income (loss) and reclassified into earnings in the same period or periods during which the hedged transaction is determined to be ineffective. There were no such amounts recorded for ineffectiveness for the periods reported herein related to the interest rate or cross-currency interest rate swaps of long-term debt. The Company is exposed to foreign-currency exchange-rate fluctuations in the normal course of business, including foreign-currency exchange-rate fluctuations on U.S. dollar denominated liabilities within its international subsidiaries whose functional currency is other than the U.S. dollar. The Company manages these fluctuations, in part, through the use of non-deliverable forward foreign-exchange contracts that are intended to offset changes in cash flow attributable to currency exchange movements. These contracts are intended primarily to economically address exposure to U.S. dollar merchandise inventory expenditures made by the Company’s international subsidiaries whose functional currency is other than the U.S. dollar. Currently, these contracts do not qualify for derivative hedge accounting. The Company seeks to mitigate foreign-currency exchange-rate risk with the use of these contracts and does not intend to engage in speculative transactions. These contracts do not contain any credit-risk-related contingent features. Cash Flow Hedges As of February 28, 2017 , all of the Company’s interest rate swap and cross-currency interest rate swap derivative financial instruments are designated and qualify as cash flow hedges. The Company formally documents the hedging relationships for its derivative instruments that qualify for hedge accounting. The following table summarizes agreements for which the Company has recorded cash flow hedge accounting for the six months ended February 28, 2017 : Subsidiary Date Entered into Derivative Financial Counter- party Derivative Financial Instruments Initial US$ Notional Amount Bank US$ loan Held with Floating Leg (swap counter-party) Fixed Rate for PSMT Subsidiary Settlement Dates Effective Period of swap PriceSmart, Inc (1) 7-Nov-16 MUFG Union Bank, N.A. ("Union Bank") Interest rate swap $ 35,700,000 Union Bank Variable rate 1-month Libor plus 1.7% 3.65 % 1st day of each month beginning on April 1, 2017 March 1, 2017 - March 1, 2027 Costa Rica 28-Aug-15 Citibank, N.A. ("Citi") Cross currency interest rate swap $ 7,500,000 Citibank, N.A. Variable rate 3-month Libor plus 2.50% 7.65 % 28th day of August, November, February, and May beginning on November 30, 2015 August 28, 2015 - August 28, 2020 Honduras 24-Mar-15 Citibank, N.A. ("Citi") Cross currency interest rate swap $ 8,500,000 Citibank, N.A. Variable rate 3-month Libor plus 3.25% 10.75 % 24th day of March, June, September, and December beginning on June 24, 2015 March 24,2015 - March 20, 2020 El Salvador 16-Dec-14 Bank of Nova Scotia ("Scotiabank") Interest rate swap $ 4,000,000 Bank of Nova Scotia Variable rate 30-day Libor plus 3.5% 4.78 % 29th day of each month beginning on December 29, 2014 December 1, 2014 - August 29, 2019 Colombia 10-Dec-14 Citibank, N.A. ("Citi") Cross currency interest rate swap $ 15,000,000 Citibank, N.A. Variable rate 3-month Libor plus 2.8% 8.25 % 4th day of March, June, Sept, Dec. beginning on March 4, 2015 December 4, 2014 - December 3, 2019 Panama 9-Dec-14 Bank of Nova Scotia ("Scotiabank") Interest rate swap $ 10,000,000 Bank of Nova Scotia Variable rate 30-day Libor plus 3.5% 5.16 % 28th day of each month beginning December 29, 2014 November 28, 2014 - November 29, 2019 Honduras 23-Oct-14 Citibank, N.A. ("Citi") Cross currency interest rate swap $ 5,000,000 Citibank, N.A. Variable rate 3-month Libor plus 3.5% 11.6 % 22nd day of January, April, July, and October beginning on January 22, 2015 October 22, 2014 - October 22, 2017 Panama 1-Aug-14 Bank of Nova Scotia ("Scotiabank") Interest rate swap $ 5,000,000 Bank of Nova Scotia Variable rate 30-day Libor plus 3.5% 4.89 % 21st day of each month beginning on September 22, 2014 August 21, 2014 - August 21, 2019 Panama 22-May-14 Bank of Nova Scotia ("Scotiabank") Interest rate swap $ 19,800,000 Bank of Nova Scotia Variable rate 30-day Libor plus 3.5% 4.98 % 4th day of each month beginning on June 4, 2014 May 5, 2014 - April 4, 2019 Panama 22-May-14 Bank of Nova Scotia ("Scotiabank") Interest rate swap $ 3,970,000 Bank of Nova Scotia Variable rate 30-day Libor plus 3.5% 4.98 % 4th day of each month beginning on June 4, 2014 May 5, 2014 - April 4, 2019 (1) The initial notional amount and fixed rate were modified effective January 2017. For the three and six months ended February 28, 2017 and February 29, 2016, the Company included the gain or loss on the hedged items (that is, variable-rate borrowings) in the same line item—interest expense—as the offsetting gain or loss on the related interest rate swaps as follows (in thousands): Income Statement Classification Interest expense on borrowings (1) Cost of swaps (2) Total Interest expense for the three months ended February 28, 2017 $ 755 $ 358 $ 1,113 Interest expense for the three months ended February 29, 2016 $ 813 $ 471 $ 1,284 Interest expense for the six months ended February 28, 2017 $ 1,504 $ 782 $ 2,286 Interest expense for the six months ended February 29, 2016 $ 1,565 $ 1,018 $ 2,583 (1) This amount is representative of the interest expense recognized on the underlying hedged transactions. (2) This amount is representative of the interest expense recognized on the cross-currency interest rate swaps designated as cash flow hedging instruments. The total notional balance of the Company’s pay-fixed/receive-variable interest rate swaps and cross-currency interest rate swaps was as follows (in thousands): Notional Amount as of February 28, August 31, Floating Rate Payer (Swap Counterparty) 2017 2016 Scotiabank $ 29,657 $ 30,188 Union Bank 35,700 — Citibank N.A. 28,138 32,258 Total $ 93,495 $ 62,446 Derivatives listed on the table below were designated as cash flow hedging instruments. The table summarizes the effect of the fair value of interest rate swap and cross-currency interest rate swap derivative instruments that qualify for derivative hedge accounting and its associated tax effect on accumulated other comprehensive (income)/loss (in thousands): February 28, 2017 August 31, 2016 Derivatives designated as cash flow hedging instruments Balance Sheet Location Fair Value Net Tax Effect Net OCI Fair Value Net Tax Effect Net OCI Cross-currency interest rate swaps Other non-current assets $ 2,719 (987) 1,732 $ 3,224 $ (1,248) $ 1,976 Interest rate swaps Other non-current assets 613 (220) 393 — — — Interest rate swaps Other long-term liabilities (69) 19 (50) (448) 115 (333) Cross-currency interest rate swaps Other long-term liabilities (596) 179 (417) (1,066) 320 (746) Net fair value of derivatives designated as hedging instruments $ 2,667 $ (1,009) $ 1,658 $ 1,710 $ (813) $ 897 Fair Value Instruments The Company entered into non-deliverable forward foreign-exchange contracts during fiscal year 2016. These contracts are treated for accounting purposes as fair value contracts and do not qualify for derivative hedge accounting. The use of non-deliverable forward foreign-exchange contracts is intended to offset changes in cash flow attributable to currency exchange movements. These contracts are intended primarily to economically hedge exposure to U.S. dollar merchandise inventory expenditures made by the Company’s international subsidiaries whose functional currency is other than the U.S. dollar. The Company did not enter into any additional non-deliverable forward foreign exchange contracts during the six months ended February 28, 2017 . The following table summarizes the non-deliverable forward foreign exchange contracts that are open as of February 28, 2017: Subsidiary Dates entered into Financial Derivative (Counterparty) Derivative Financial Instrument Notional Amount (in thousands) Settlement Date Effective Period of Forward Costa Rica 31-Aug-16 Citibank, N.A. Forward foreign exchange contracts $ 3,750 August 30, 2017 August 31, 2016- August 30, 2017 For the three and six months ended February 28, 2017 and February 29, 2016 , the Company included in its consolidated statements of income the forward derivative gain or (loss) on the non-deliverable forward foreign-exchange contracts as follows (in thousands): Three Months Ended Six Months Ended February 28, February 29, February 28, February 29, Income Statement Classification 2017 2016 2017 2016 Other income (expense), net $ 64 $ (88) $ 283 $ (151) The following table summarizes the fair value of foreign currency forward contracts that do not qualify for derivative hedge accounting (in thousands): February 28, 2017 August 31, 2016 Non-deliverable forward foreign exchange contracts Balance Sheet Location Fair Value Balance Sheet Location Fair Value Foreign currency forward contracts Other accrued expenses $ (87) Other accrued expenses $ (110) Net fair value of non-deliverable forward foreign exchange contracts designated as hedging instruments that do not qualify for hedge accounting $ (87) $ (110) |
SEGMENTS
SEGMENTS | 6 Months Ended |
Feb. 28, 2017 | |
SEGMENTS [Abstract] | |
SEGMENTS | NOTE 8 – SEGMENTS The Company and its subsidiaries are principally engaged in the international operation of membership shopping in 39 warehouse clubs located in 13 countries/territories that are located in Central America, the Caribbean and Colombia. In addition, the Company operates distribution centers and corporate offices in the United States. The Company has aggregated its warehouse clubs, distribution centers and corporate offices into reportable segments. The Company’s reportable segments are based on management’s organization of these locations into operating segments by general geographic location, used by management and the Company's chief operating decision maker in setting up management lines of responsibility, providing support services, and making operational decisions and assessments of financial performance. Segment amounts are presented after converting to U.S. dollars and consolidating eliminations. Certain revenues, operating costs and inter-company charges included in the United States segment are not allocated to the segments within this presentation, as it is impractical to do so, and they appear as reconciling items to reflect the amount eliminated on consolidation of intersegment transactions. The following tables summarize by segment certain revenues, operating costs and balance sheet items (in thousands): United States Operations Central American Operations Caribbean Operations Colombia Operations Reconciling Items (1) Total Three Months Ended February 28, 2017 Revenue from external customers $ 8,171 $ 473,994 $ 219,515 $ 91,616 $ — $ 793,296 Intersegment revenues 270,369 — 1,175 12 (271,556) — Depreciation and amortization 1,475 5,140 2,531 2,299 — 11,445 Operating income 841 38,371 13,958 1,142 (14,910) 39,402 Net income 2,652 30,545 8,568 364 (14,910) 27,219 Capital expenditures, net 49,792 15,461 2,101 1,045 — 68,399 Six Months Ended February 28, 2017 Revenue from external customers $ 18,926 $ 912,228 $ 426,537 $ 175,177 $ — $ 1,532,868 Intersegment revenues 588,031 — 2,873 22 (590,926) — Depreciation and amortization 3,049 10,004 4,989 4,520 — 22,562 Operating income 7,088 72,708 26,484 2,260 (30,759) 77,781 Net income 4,960 57,605 19,741 541 (30,759) 52,088 Capital expenditures, net 52,129 26,217 6,539 1,518 — 86,403 Long-lived assets (other than deferred tax assets) 68,872 288,855 109,353 134,833 — 601,913 Goodwill — 31,153 4,539 — — 35,692 Total assets 126,494 538,628 300,983 190,847 — 1,156,952 Three Months Ended February 29, 2016 Revenue from external customers $ 6,567 $ 474,924 $ 230,035 $ 66,405 $ — $ 777,931 Intersegment revenues 245,041 — 1,326 — (246,367) — Depreciation and amortization 1,031 4,570 2,441 1,487 — 9,529 Operating income/(loss) 5,183 38,980 14,658 (1,698) (17,987) 39,136 Net income/(loss) 1,591 31,433 13,100 (2,195) (17,987) 25,942 Capital expenditures, net 2,418 4,497 1,768 5,721 — 14,404 Six Months Ended February 29, 2016 Revenue from external customers $ 14,816 $ 898,484 $ 441,698 $ 134,864 $ — $ 1,489,862 Intersegment revenues 559,662 — 2,764 — (562,426) — Depreciation and amortization 1,961 8,811 4,849 3,111 — 18,732 Operating income 10,662 72,689 28,248 (2,032) (33,136) 76,431 Net income 3,318 57,635 24,903 (3,106) (33,136) 49,614 Capital expenditures, net 3,327 15,678 5,750 8,996 — 33,751 Long-lived assets (other than deferred tax assets) 16,776 265,262 107,945 104,860 — 494,843 Goodwill — 31,090 4,611 — — 35,701 Total assets 72,661 505,567 280,293 150,322 — 1,008,843 As of August 31, 2016 Long-lived assets (other than deferred tax assets) $ 19,222 $ 271,039 $ 108,426 $ 137,599 $ — $ 536,286 Goodwill — 31,091 4,546 — — 35,637 Total assets 100,744 515,478 287,088 193,425 — 1,096,735 (1) The reconciling items reflect the amount eliminated on consolidation of intersegment transactions. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Feb. 28, 2017 | |
SUBSEQUENT EVENTS [Abstract] | |
SUBSEQUENT EVENTS | NOTE 9 – SUBSEQUENT EVENTS The Company has evaluated all events subsequent to the balance sheet date of February 28, 2017 through the date of issuance of these consolidated financial statements and has determined that, except as set forth below, there are no subsequent events that require disclosure. Financing Transactions On March 31, 2017 , the Company's Trinidad subsidiary entered into a loan agreement with Citibank, N.A. The agreement provides for a US $12.0 million loan to be repaid in 8 quarterly principal payments plus interest. The interest rate is set at the 90 day LIBOR rate plus 3% . The loan was funded on March 31, 2017. Non-deliverable forward foreign-exchange contracts The Company's Colombia subsidiary has entered into forward exchange contracts for approximately $6.0 million with settlement dates of May and June 201 7 . |
SUMMARY OF SIGNIFICANT ACCOUN17
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policy) | 6 Months Ended |
Feb. 28, 2017 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Principles of Consolidation | Principles of Consolidation – The interim consolidated financial statements of the Company included herein include the assets, liabilities and results of operations of the Company’s wholly owned subsidiaries and the Company's investment in, and the Company's share of the income (loss) of, joint ventures recorded under the equity method. All significant inter-company accounts and transactions have been eliminated in consolidation. The interim consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the SEC and reflect all adjustments (consisting of normal recurring adjustments) that are, in the opinion of management, necessary to fairly present the financial position, results of operations, and cash flows for the periods presented. The results for interim periods are not necessarily indicative of the results for the full year. As of February 28, 2017 , all of the Company's subsidiaries were wholly owned. Additionally, the Company's ownership interest in real estate development joint ventures as of February 28, 2017 is listed below: Real Estate Development Joint Ventures Countries Ownership Basis of Presentation GolfPark Plaza, S.A. Panama 50.0 % Equity (1) Price Plaza Alajuela PPA, S.A. Costa Rica 50.0 % Equity (1) (1) Joint venture interests are recorded as investment in unconsolidated affiliates on the consolidated balance sheets. The Company determines whether any of the joint ventures in which it has made investments is a Variable Interest Entity (“VIE”) at the start of each new venture and if a reconsideration event has occurred. At this time, the Company also considers whether it must consolidate a VIE and/or disclose information about its involvement in a VIE. A reporting entity must consolidate a VIE if that reporting entity has a variable interest (or combination of variable interests) that will absorb a majority of the VIE's expected losses, receive a majority of the VIE's expected residual returns, or both. A reporting entity must consider the rights and obligations conveyed by its variable interests and the relationship of its variable interests with variable interests held by other parties to determine whether its variable interests will absorb a majority of a VIE's expected losses, receive a majority of the VIE's expected residual returns, or both. The reporting entity that consolidates a VIE is called the primary beneficiary of that VIE. Due to the initial nature of the joint ventures and the continued commitments for additional financing, the Company determined these joint ventures are VIEs. Since all rights, obligations and the power to direct the activities of a VIE that most significantly impact the VIE's economic performance is shared equally by both parties within each joint venture, the Company has determined that it is not the primary beneficiary of the VIEs and, therefore, has accounted for these entities under the equity method. Under the equity method, the Company's investments in unconsolidated affiliates are initially recorded as an investment in the stock of an investee at cost and are adjusted for the carrying amount of the investment to recognize the investor's share of the earnings or losses of the investee after the date of the initial investment. |
Use of Estimates | Use of Estimates – The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. |
Tax Receivables | Tax Receivables – The Company pays Value Added Tax (“VAT”) or similar taxes (“input VAT”), income taxes, and other taxes within the normal course of its business in most of the countries in which it operates related to the procurement of merchandise and/or services it acquires and/or on sales and taxable income. The Company also collects VAT or similar taxes on behalf of the government (“output VAT”) for merchandise and/or services it sells. If the output VAT exceeds the input VAT, then the difference is remitted to the government, usually on a monthly basis. If the input VAT exceeds the output VAT, this creates a VAT receivable. In most countries where the Company operates, the governments have implemented additional collection procedures, such as requiring credit and debit card processors to remit a portion of sales processed via credit and debit card directly to the government as advance payments of VAT and/or income tax. In the case of VAT, these procedures alter the natural offset of input and output VAT and generally leave the Company with a net VAT receivable, forcing the Company to process significant refund claims on a recurring basis. With respect to income taxes paid, if the estimated income taxes paid or withheld exceed the actual income tax due, this creates an income tax receivable. The Company either requests a refund of these tax receivables or applies the balance to expected future tax payments. These refund or offset processes can take anywhere from several months to several years to complete. In most countries where the Company operates, the tax refund process is defined and structured with regular refunds or offsets. However, in three countries there is either not a clearly defined process or the government has alleged there is not a clearly defined process to allow the authorities to refund VAT receivables. The Company, together with its tax and legal advisers, is currently appealing these interpretations in court and expects to prevail. In one of these countries, where there is recent favorable jurisprudence, the government performed an audit to verify the amount of the VAT receivables as a required precursor to any refund. The balance of the VAT receivables in these countries was $8.7 million and $7.6 million as of February 28, 2017 and August 31, 2016, respectively. In another country in which the Company operates warehouse clubs , a new minimum income tax mechanism took effect in fiscal year 2015, which requires the Company to pay taxes based on a percentage of sales rather than income. As a result, the Company is making income tax payments substantially in excess of those it would expect to pay based on taxable income. The current rules (which the Company has challenged in court) do not clearly allow the Company to obtain a refund or to offset this excess income tax against other taxes. As of February 28, 2017, the Company had deferred tax assets of approximately $2.0 million in this country. Also, the Company had an income tax receivable balance of $3.5 million as of February 28, 2017 related to excess payments from fiscal years 2015, 2016 and 2017. The Company has not placed any type of allowance on the recoverability of these tax receivables or deferred tax assets, because the Company believes that it is more likely than not that it will ultimately succeed in its refund requests, related appeals and/or court challenge on this matter. The Company's policy for classification and presentation of VAT receivables, income tax receivables and other tax receivables is as follows: · Short-term VAT and Income tax receivables, recorded as Other current assets: This classification is used for any countries where the Company's subsidiary has generally demonstrated the ability to recover the VAT or income tax receivable within one year. The Company also classifies as short-term any approved refunds or credit notes to the extent that the Company expects to receive the refund or use the credit notes within one year. · Long-term VAT and Income tax receivables, recorded as Other non-current assets: This classification is used for amounts not approved for refund or credit in countries where the Company's subsidiary has not demonstrated the ability to obtain refunds within one year and/or for amounts which are subject to outstanding disputes. An allowance is provided against VAT and income tax receivable balances in dispute when the Company does not expect to eventually prevail in its recovery. The Company does not currently have any allowances provided against VAT and income tax receivables. The following table summarizes the VAT receivables reported by the Company (in thousands): February 28, August 31, 2017 2016 Prepaid expenses and other current assets $ 1,702 $ 1,635 Other non-current assets 34,060 32,502 Total amount of VAT receivable reported $ 35,762 $ 34,137 The following table summarizes the Income tax receivables reported by the Company (in thousands): February 28, August 31, 2017 2016 Prepaid expenses and other current assets $ 4,756 $ 6,402 Other non-current assets 12,037 10,376 Total amount of income tax receivable reported $ 16,793 $ 16,778 |
Merchandise Inventories | Merchandise Inventories – Merchandise inventories, which include merchandise for resale, are valued at the lower of cost (average cost) or market. The Company provides for estimated inventory losses and obsolescence between physical inventory counts on the basis of a percentage of sales. The provision is adjusted periodically to reflect the trend of actual physical inventory count results, with physical inventories occurring primarily in the second and fourth fiscal quarters. In addition, the Company may be required to take markdowns below the carrying cost of certain inventory to expedite the sale of such merchandise. |
Stock Based Compensation | Stock Based Compensation – The Company offers three types of equity awards : stock options (“options”), restricted stock awards (“RSAs”) and restricted stock units (“RSUs”). Compensation related to options is accounted for by applying the valuation technique based on the Black-Scholes model. Compensation related to RSAs and RSUs is based on the fair market value at the time of grant with the application of an estimated forfeiture rate. The Company recognizes the compensation cost related to these awards over the requisite service period as determined by the grant, amortized ratably or on a straight line basis over the life of the grant. The Company utilizes “modified grant-date accounting” for true-ups due to actual forfeitures at the vesting dates. The Company records the tax savings resulting from tax deductions in excess of expense for stock-based compensation as additional paid-in capital and the tax deficiency resulting from stock-based compensation in excess of the related tax deduction as a reduction in paid-in capital, based on the Tax Law Ordering method. In addition, the Company reflects the tax savings (deficiency) resulting from the taxation of stock-based compensation as a financing cash flow in its consolidated statement of cash flows, rather than as an operating cash flow. RSAs have the same cash dividend and voting rights as other common stock and are considered to be currently issued and outstanding shares of common stock. Shares of common stock subject to RSUs are not issued nor outstanding until vested, and RSUs do not have the same dividend and voting rights as common stock. However, all outstanding RSUs have accompanying dividend equivalents, requiring payment to the employees and directors with unvested RSUs of amounts equal to the dividend they would have received had the shares of common stock underlying the RSUs been actually issued and outstanding. Payments of dividend equivalents to employees are recorded as compensation expense. |
Fair Value Measurements | Fair Value Measurements – The Company measures the fair value for all financial and nonfinancial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring or nonrecurring basis. The fair value of an asset is the price at which the asset could be sold in an orderly transaction between unrelated, knowledgeable and willing parties able to engage in the transaction. A liability’s fair value is defined as the amount that would be paid to transfer the liability to a new obligor in a transaction between such parties, not the amount that would be paid to settle the liability with the creditor. The Company has established a three-tier fair value hierarchy, which prioritizes the inputs used in measuring and revaluing fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. The Company was not required to revalue any assets or liabilities utilizing Level 1 or Level 3 inputs at the balance sheet dates. The Company's Level 2 assets and liabilities revalued at the balance sheet dates, on a recurring basis, consisted of cash flow hedges (interest rate swaps and cross-currency interest rate swaps) and forward foreign exchange contracts. In addition, the Company utilizes Level 2 inputs in determining the fair value of long-term debt. The Company did not make any significant transfers in and out of Level 1 and Level 2 fair value tiers during the periods reported on herein. Non-financial assets and liabilities are revalued and recognized at fair value subsequent to initial recognition when there is evidence of impairment. For the periods reported, no impairment of such non-financial assets was recorded. The Company’s current financial assets and liabilities have fair values that approximate their carrying values. The Company’s long-term financial assets have fair values that approximate their carrying values. The Company’s long-term financial liabilities consist of long-term debt, which is recorded on the balance sheet at issuance price and adjusted for any applicable unamortized discounts or premiums and debt issuance costs. There have been no significant changes in fair market value of the Company’s current and long-term financial assets, and there have been no material changes to the valuation techniques utilized in the fair value measurement of assets and liabilities as disclosed in the Company’s 2016 Form 10-K. |
Derivative Instruments and Hedging Activities | Derivatives Instruments and Hedging Activities – The Company uses derivative financial instruments for hedging and non-trading purposes to manage its exposure to changes in interest and currency exchange rates. In using derivative financial instruments for the purpose of hedging the Company’s exposure to interest and currency exchange rate risks, the contractual terms of a hedged instrument closely mirror those of the hedged item, providing a high degree of risk reduction and correlation. Contracts that are effective at meeting the risk reduction and correlation criteria (effective hedge) are recorded using hedge accounting. If a derivative financial instrument is an effective hedge, changes in the fair value of the instrument will be offset in accumulated other comprehensive income (loss) until the hedged item completes its contractual term. If any portion of the hedge is deemed ineffective, the change in fair value of the hedged assets or liabilities will be immediately recognized in earnings during the period. Instruments that do not meet the criteria for hedge accounting, or contracts for which the Company has not elected hedge accounting, are valued at fair value with unrealized gains or losses reported in earnings during the period of the change. The Company did not change valuation techniques utilized in the fair value measurement of assets and liabilities presented on the Company’s consolidated balance sheets from previous practice during the reporting period. The Company seeks to manage counterparty risk associated with these contracts by limiting transactions to counterparties with which the Company has an established banking relationship. There can be no assurance, however, that this practice effectively mitigates counterparty risk. Cash Flow Instruments. The Company is a party to receive floating interest rate, pay fixed-rate interest rate swaps to hedge the interest rate risk of certain U.S. dollar denominated debt within its international subsidiaries. The swaps are designated as cash flow hedges of interest expense risk. These instruments are considered effective hedges and are recorded using hedge accounting. The Company is also a party to receive variable interest rate, pay fixed interest rate cross-currency interest rate swaps to hedge the interest rate and currency exposure associated with the expected payments of principal and interest of U.S. denominated debt within its international subsidiaries whose functional currency is other than the U.S. dollar. The swaps are designated as cash flow hedges of the currency risk related to payments on the U.S. denominated debt. These instruments are also considered to be effective hedges and are recorded using hedge accounting. Under cash flow hedging, the effective portion of the fair value of the derivative, calculated as the net present value of the future cash flows, is deferred on the consolidated balance sheets in accumulated other comprehensive loss. If any portion of an interest rate swap is determined to be an ineffective hedge, the gains or losses from changes in fair value would be recorded directly in the consolidated statements of income. Amounts recorded in accumulated other comprehensive loss are released to earnings in the same period that the hedged transaction impacts consolidated earnings. See Note 7 - Derivative Instruments and Hedging Activities for information on the fair value of interest rate swaps and cross-currency interest rate swaps as of February 28, 2017 and August 31, 2016 . Fair Value Instruments. The Company is exposed to foreign-currency exchange rate fluctuations in the normal course of business. This includes exposure to foreign-currency exchange rate fluctuations on U.S. dollar denominated liabilities within the Company’s international subsidiaries whose functional currency is other than the U.S. dollar. The Company manages these fluctuations, in part, through the use of non-deliverable forward foreign-exchange contracts that are intended to offset changes in cash flows attributable to currency exchange movements. The contracts are intended primarily to economically address exposure to U.S. dollar merchandise inventory expenditures made by the Company’s international subsidiaries whose functional currency is other than the U.S. dollar. Currently, these contracts are treated for accounting purposes as fair value instruments and do not qualify for derivative hedge accounting, and as such the Company does not apply derivative hedge accounting to record these transactions. As a result, these contracts are valued at fair value with unrealized gains or losses reported in earnings during the period of the change. The Company seeks to mitigate foreign-currency exchange-rate risk with the use of these contracts and does not intend to engage in speculative transactions. These contracts do not contain any credit-risk-related contingent features and are limited to less than one year in duration. See Note 7 - Derivative Instruments and Hedging Activities for information on the fair value of open, unsettled forward foreign-exchange contracts as of February 28, 2017 and August 31, 2016 . |
Insurance Reimbursements | Insurance Reimbursements – Receipts from insurance reimbursements up to the amount of the losses recognized are considered recoveries. These recoveries are accounted for when they are probable of receipt. Insurance recoveries are not recognized prior to the recognition of the related cost. Anticipated proceeds in excess of the amount of loss recognized are considered gains and are subject to gain contingency guidance. Anticipated proceeds in excess of a loss recognized in the financial statements are not recognized until all contingencies related to the insurance claim are resolved. The Company’s Guatemala Pradera warehouse club experienced a fire in its merchandise receiving department during the early morning hours of June 4, 2015. No members or employees were in the warehouse club at the time. The fire was extinguished, but caused considerable smoke and some fire damage. The warehouse club was closed for nine days and reopened on June 13, 2015. The Company is insured for these costs and filed an insurance claim with its insurance provider. As of August 31, 2015, the Company's receivable related to this insurance claim was approximately $2.6 million. The Company’s insurance policy also addresses coverage for business interruption. During the fourth quarter of fiscal year 2015, the Company filed a claim with its insurance carrier for approximately $332,000 related to business interruption for which the Company did not record a receivable. The Company received the final insurance settlement payments of approximately $3.1 million during the quarter ended November 30, 2015. As a result, the Company recorded a credit to cost of goods sold of approximately $165,000 during the period that reflects the reversal of the inventory written off previously and now covered under the claim and gain on the disposal of assets for $85,000 that included reimbursement from the insurance for assets disposed of in fiscal year 2015. Additionally, the Company recorded during the quarter ended November 30, 2015 other income from insurance proceeds of approximately $202,000 during the period that reflects the amount reimbursed to the Company for business interruption coverage, net of taxes and other miscellaneous amounts charged to the Company by the insurance company for storage of the damaged inventory. |
Foreign Currency Translation | Foreign Currency Translation – The assets and liabilities of the Company’s foreign operations are translated to U.S. dollars when the functional currency in the Company’s international subsidiaries is the local currency and not U.S. dollars. Assets and liabilities of these foreign subsidiaries are translated to U.S. dollars at the exchange rate on the balance sheet date, and revenue, costs and expenses are translated at average rates of exchange in effect during the period. The corresponding translation gains and losses are recorded as a component of accumulated other comprehensive income or loss. These adjustments will affect net income upon the sale or liquidation of the underlying investment. Monetary assets and liabilities denominated in currencies other than the functional currency of the respective entity (primarily U.S. dollars) are revalued to the functional currency using the exchange rate on the balance sheet date. These foreign exchange transaction gains (losses), including transactions recorded involving these monetary assets and liabilities, are recorded as Other income (expense) in the consolidated statements of income. The following table summarizes the amounts recorded for the three and six months ended February 28, 2017 and February 29, 2016 (in thousands): Three Months Ended Six Months Ended February 28, February 29, February 28, February 29, 2017 2016 2017 2016 Currency gain (loss) $ 915 $ (552) $ (13) $ (796) |
Recent Accounting Pronouncements - Not Yet Adopted | Recent Accounting Pronouncements – Not Yet Adopted FASB ASC 230 ASU 2016-18- Statement of Cash Flows (Topic 230)—Restricted Cash In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230)—Restricted Cash. This ASU addresses the diversity in practice that exists regarding the classification and the presentation of changes in restricted cash on the statement of cash flows. The amendments in ASU No. 2016-18 require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. Thus, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and the end-of-period total amounts set forth on the statement of cash flows. The amendments in this ASU are effective for annual periods beginning after December 15, 2017 and interim periods within those fiscal years and will be applied using a retrospective transition method to each period presented. The adoption of this ASU will impact the presentation of cash flows with inclusion of restricted cash flows for each of the presented periods. FASB ASC 740 ASU 2016-16- Income Taxes (Topic 740)—Intra-Entity Transfers of Assets Other Than Inventory In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740)—Intra-Entity Transfers of Assets Other Than Inventory. Currently, U.S. GAAP prohibits recognizing current and deferred income tax consequences for an intra-entity asset transfer until the asset has been sold to an outside party. ASU 2016-16 states that an entity should recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The amendments in this ASU are effective for annual periods beginning after December 15, 2017 and interim periods within those annual periods. Early adoption is permitted. The amendments should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The Company will evaluate the impact adoption of this guidance may have on the Company’s consolidated financial statements. FASB ASC 230 ASU 2016-15- Statement of Cash Flows (Topic 230)—Classification of Certain Cash Receipts and Cash Payments (a consensus of the FASB Emerging Issues Task Force) In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This ASU addresses stakeholders’ concerns regarding diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows under Topic 230, Statement of Cash Flows, and other Topics. In particular, ASU No. 2016-15 addresses eight specific cash flow issues in an effort to reduce this diversity in practice: (1) debt prepayment or debt extinguishment costs; (2) settlement of zero-coupon bonds; (3) contingent consideration payments made after a business combination; (4) proceeds from the settlement of insurance claims; (5) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies; (6) distributions received from equity method investees; (7) beneficial interests in securitization transactions; and (8) separately identifiable cash flows and application of the predominance principle. The amendments in this ASU are effective for annual periods beginning after December 15, 2017 and interim periods within those annual periods. Early adoption is permitted. The amendments in this ASU should be applied using a retrospective transition method to each period presented. If it is impracticable to apply the amendments retrospectively for some of the issues, the amendments for those issues would be applied prospectively as of the earliest date practicable. The Company will evaluate the impact adoption of this guidance may have on the Company's consolidated financial statements. FASB ASC 718 ASU 2016-09 - Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting In March 2016, the FASB issued amendments to the guidance on employee share-based payment accounting intended to improve the accounting for employee share-based payments. This ASU simplifies several aspects of the accounting for share-based payment award transactions, including: · The income tax consequences , · Classification of awards as either equity or liabilities, and · Classification on the statement of cash flows The amendments in this ASU are effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. Early adoption is permitted in any interim or annual period. Amendments related to the timing of when excess tax benefits are recognized, minimum statutory withholding requirements, forfeitures, and intrinsic value should be applied using a modified retrospective transition method by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is adopted. Amendments related to the presentation of employee taxes paid on the statement of cash flows when an employer withholds shares to meet the minimum statutory withholding requirement should be applied retrospectively. Amendments requiring recognition of excess tax benefits and tax deficiencies in the income statement and the practical expedient for estimating expected term should be applied prospectively. An entity may elect to apply the amendments related to the presentation of excess tax benefits on the statement of cash flows using either a prospective transition method or a retrospective transition method. The Company plans to adopt this guidance at the beginning of its first quarter of fiscal year 2018. Adoption of this guidance will likely be material to the provision for income taxes on the Company’s consolidated income statements and earnings per share amounts for the change in the recognition of excess tax benefits or deficiencies. This may create increased volatility in the provision for income tax amounts reported during the interim periods and fiscal year 2018. Previously these amounts were reflected in equity. Additionally, cash paid by the employer when directly withholding shares for tax-withholding purposes will be classified as a financing activity and any excess tax benefits will be classified along with other income tax cash flows as an operating activity. Adoption of this guidance is not expected to have a material effect on the consolidated balance sheets, statements of cash flows or related disclosures. FASB ASC 842 ASU 2016-02 -Leases (Topic 842): Amendments to the FASB Accounting Standards Codification In February 2016, the FASB issued amendments to the guidance on lease accounting. Under the new guidance, for all leases longer than 12 months, a lessee will be required to record a lease liability for all payments arising from a lease and also record a right of use asset for the term of the lease. Under the new guidance lessor accounting is largely unchanged. The amendment in this ASU is effective on a prospective or modified retrospective basis for public entities for fiscal years and interim periods within those annual periods beginning after December 15, 2018. Early adoption is permitted. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The modified retrospective approach includes a number of optional practical expedients that entities may elect to apply. These practical expedients relate to the identification and classification of leases that commenced before the effective date, initial direct costs for leases that commenced before the effective date, and the ability to use hindsight in evaluating lessee options to extend or terminate a lease or to purchase the underlying asset. An entity that elects to apply the practical expedients will, in effect, continue to account for leases that commence before the effective date in accordance with previous GAAP unless the lease is modified, except that lessees are required to recognize a right-of-use asset and a lease liability for all operating leases at each reporting date based on the present value of the remaining minimum rental payments that were tracked and disclosed under previous GAAP. The Company plans to adopt this guidance at the beginning of its first quarter of fiscal year 2020. While the Company continues to evaluate this standard and the effect on related disclosures, the primary effect of adoption will be to record right-of-use assets and corresponding lease obligations for current operating leases. The adoption is expected to have a material impact on the Company's consolidated balance sheets, but not on results of operations or cash flows. FASB ASC 330 ASU 2015-11 -Inventory (Topic 330): Simplifying the Measurement of Inventory In July 2015, the FASB issued guidance that will require an entity to measure in-scope inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. This amendment applies to entities, like the Company, that measure inventory value using the average cost method. The amendments in this ASU more closely align the measurement of inventory in GAAP with the measurement of inventory in International Financial Reporting Standards. The amendment in this ASU is effective on a prospective basis for public entities for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early application is permitted as of the beginning of an interim or annual reporting period. The Company will evaluate the impact adoption of this guidance may have on the Company's consolidated financial statements. FASB ASC 606 ASU 2014-09 - Revenue from Contracts with Customers In May 2014, the FASB issued amended guidance on contracts with customers to transfer goods or services or contracts for the transfer of nonfinancial assets, unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). The guidance requires an entity to recognize revenue on contracts with customers relating to the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance requires that an entity depict the consideration by applying the following steps: Step 1: Identify the contract(s) with a customer. Step 2: Identify the performance obligations in the contract. Step 3: Determine the transaction price. Step 4: Allocate the transaction price to the performance obligations in the contract. Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation. The amendments in this ASU were deferred by ASU 2015-14 for all entities by one year and is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. This amendment is to be either retrospectively adopted to each prior reporting period presented or retrospectively with the cumulative effect of initially applying this ASU recognized at the date of initial application. The Company plans to adopt this guidance at the beginning of its first quarter of fiscal year 2019 and is in the process of evaluating the impact and method of adoption of the standard and its related amendments. The Company is reviewing current accounting policies, business processes, systems and controls to identify potential differences or changes that would result from applying the new standard. The Company is still evaluating whether or not there will be a material impact on the Company's consolidated financial statements and related disclosures as a result of adopting this standard. |
Recent Accounting Pronouncements Adopted | Recent Accounting Pronouncements Adopted FASB ASC 740 ASU 2015-17 -Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes In November 2015, the FASB issued amended guidance eliminating the requirement for organizations to present deferred tax liabilities and assets as current and noncurrent in a classified balance sheet. Instead, organizations will be required to classify all deferred tax assets and liabilities as noncurrent. The amendment in this ASU is effective on a prospective or retrospective basis for public entities for fiscal years and interim periods within those annual periods beginning after December 15, 2016. Early adoption is allowed. The Company retrospectively adopted this amend ed guidance during the second quarter of fiscal year 2016 and now presents all deferred taxes as either long-term assets or long-term liabilities. The Company disclosed within its Annual Report on Form 10-K filed for fiscal year 2016 and within the Quarterly Reports on Form 10-Q for the quarterly periods for fiscal year 2016 the financial impact to the Consolidated Balance Sheet. FASB ASC 350 ASU 2015-05 - Customers Accounting for Fees Paid in a Cloud Computing Arrangement In April 2015, the FASB issued amended guidance about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The amendments do not change the accounting for a customer’s accounting for service contracts. The amendments in this ASU are effective for public entities for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. Early adoption was permitted. An entity was able to adopt the amendments either: (1) prospectively to all arrangements entered into or materially modified after the effective date; or (2) retrospectively. The Company adopted this amended guidance as of September 1, 2016. Adoption of this guidance did not generate a change in accounting principle, changes in financial statement line items, or the requirement to prospectively or retrospectively adopt a method of transition. |
SUMMARY OF SIGNIFICANT ACCOUN18
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Feb. 28, 2017 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Schedule of Real Estate Development Joint Ventures | Real Estate Development Joint Ventures Countries Ownership Basis of Presentation GolfPark Plaza, S.A. Panama 50.0 % Equity (1) Price Plaza Alajuela PPA, S.A. Costa Rica 50.0 % Equity (1) (1) Joint venture interests are recorded as investment in unconsolidated affiliates on the consolidated balance sheets. |
Summary of Value Added Tax Receivables | February 28, August 31, 2017 2016 Prepaid expenses and other current assets $ 1,702 $ 1,635 Other non-current assets 34,060 32,502 Total amount of VAT receivable reported $ 35,762 $ 34,137 |
Summary of Income Tax Receivables | February 28, August 31, 2017 2016 Prepaid expenses and other current assets $ 4,756 $ 6,402 Other non-current assets 12,037 10,376 Total amount of income tax receivable reported $ 16,793 $ 16,778 |
Summary of Foreign Currency Gains and Losses | Three Months Ended Six Months Ended February 28, February 29, February 28, February 29, 2017 2016 2017 2016 Currency gain (loss) $ 915 $ (552) $ (13) $ (796) |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Feb. 28, 2017 | |
EARNINGS PER SHARE [Abstract] | |
Schedule of the Computation of Net Income Per Share | Three Months Ended Six Months Ended February 28, February 29, February 28, February 29, 2017 2016 2017 2016 Net income $ 27,219 $ 25,942 $ 52,088 $ 49,614 Less: Allocation of income to unvested stockholders (345) (371) (758) (742) Net earnings available to common stockholders $ 26,874 $ 25,571 $ 51,330 $ 48,872 Basic weighted average shares outstanding 30,004 29,914 29,993 29,902 Add dilutive effect of stock options (two-class method) 4 5 4 5 Diluted average shares outstanding 30,008 29,919 29,997 29,907 Basic net income per share $ 0.90 $ 0.85 $ 1.72 $ 1.63 Diluted net income per share $ 0.90 $ 0.85 $ 1.72 $ 1.63 |
STOCKHOLDERS EQUITY (Tables)
STOCKHOLDERS EQUITY (Tables) | 6 Months Ended |
Feb. 28, 2017 | |
STOCKHOLDERS' EQUITY [Abstract] | |
Schedule of Dividends | First Payment Second Payment Declared Amount Record Date Date Paid Date Payable Amount Record Date Date Paid Date Payable Amount 2/1/2017 $ 0.70 2/15/2017 2/28/2017 N/A $ 0.35 8/15/2017 N/A 8/31/2017 $ 0.35 2/3/2016 $ 0.70 2/15/2016 2/29/2016 N/A $ 0.35 8/15/2016 8/31/2016 N/A $ 0.35 |
Schedule of Components of Other Comprehensive Income (Loss) | Six Months Ended February 28, 2017 Foreign currency translation adjustments Defined benefit pension plans Derivative Instruments Total Beginning balance, September 1, 2016 $ (102,242) $ (315) $ (1,394) (1) $ (103,951) Other comprehensive income (loss) (1,629) — 783 (846) Amounts reclassified from accumulated other comprehensive income (loss) — (14) (2) — (14) Ending balance, February 28, 2017 $ (103,871) $ (329) $ (611) $ (104,811) Six Months Ended February 29, 2016 Foreign currency translation adjustments Defined benefit pension plans Derivative Instruments Total Beginning balance, September 1, 2015 $ (100,540) $ (113) $ (859) $ (101,512) Other comprehensive income (loss) (10,892) — (331) (1) (11,223) Amounts reclassified from accumulated other comprehensive income (loss) — (8) (2) — (8) Ending balance, February 29, 2016 $ (111,432) $ (121) $ (1,190) $ (112,743) Twelve Months Ended August 31, 2016 Foreign currency translation adjustments Defined benefit pension plans Derivative Instruments Total Beginning balance, September 1, 2015 $ (100,540) $ (113) $ (859) $ (101,512) Other comprehensive income (loss) (1,702) (182) (535) (1) (2,419) Amounts reclassified from accumulated other comprehensive income (loss) — (20) (2) — (20) Ending balance, August 31, 2016 $ (102,242) $ (315) $ (1,394) $ (103,951) (1) See Note 7 - Derivative Instruments and Hedging Activities. (2) Amounts reclassified from accumulated other comprehensive income (loss) related to the minimum pension liability are included in warehouse club operations in the Company's Consolidated Statements of Income. |
Summary of Retained Earnings Not Available for Distribution | February 28, August 31, 2017 2016 Retained earnings not available for distribution $ 6,213 $ 5,926 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended |
Feb. 28, 2017 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
Schedule of Future Minimum Lease Commitments | Open Years ended February 28, Locations (1) 2018 $ 11,570 2019 11,124 2020 (3) 10,559 2021 9,481 2022 8,082 Thereafter 91,164 Total $ 141,980 (2) (1) Operating lease obligations have been reduced by approximately $316,678 to reflect sub-lease income. Certain obligations under leasing arrangements are collateralized by the underlying asset being leased. (2) As of August 31, 2016, total future minimum lease commitments were $120.9 million. The increase during the period ending February 28, 2017 is primarily related to the extension of an existing lease within the Company’s Guatemala subsidiary for its Pradera location. The subsidiary signed an extension on November 25, 2016, extending the lease termination date from May 31, 2021 to November 30, 2043 . The lease extension included the real property at this location currently used by the Company and added additional square footage in the same shopping center to the lease. This has effectively provided the Company with possession of substantially all of the real property available at that location. The Company plans to expand and upgrade the current warehouse club and parking areas and to improve access into and out from the location. (3) The year 2020 is a leap year with the period ending February 29 th . |
Schedule of Variable Interest Entities Maximum Loss Exposure | Entity % Ownership Initial Investment Additional Investments Net (Loss)/Income Inception to Date Company’s Variable Interest in Entity Commitment to Future Additional Investments (1) Company's Maximum Exposure to Loss in Entity (2) GolfPark Plaza, S.A. 50 % $ 4,616 $ 2,402 $ 296 $ 7,314 $ 99 $ 7,413 Price Plaza Alajuela, S.A. 50 % 2,193 1,236 16 3,445 785 4,230 Total $ 6,809 $ 3,638 $ 312 $ 10,759 $ 884 $ 11,643 (1) The parties intend to seek alternate financing for the project, which could reduce the amount of investments each party would be required to provide. The parties may mutually agree on changes to the project, which could increase or decrease the amount of contributions each party is required to provide. (2) The maximum exposure is determined by adding the Company’s variable interest in the entity and any explicit or implicit arrangements that could require the Company to provide additional financial support. |
DEBT (Tables)
DEBT (Tables) | 6 Months Ended |
Feb. 28, 2017 | |
DEBT [Abstract] | |
Schedule of Short-Term Borrowings | Facilities Used Total Amount Short-term Letters of Facilities Weighted average of Facilities Borrowings Credit Available interest rate February 28, 2017 $ 69,000 $ 6,561 $ — $ 62,439 10.1 % August 31, 2016 $ 65,000 $ 16,534 $ 9,224 $ 39,242 10.1 % |
Summary of Changes in Long-Term Debt | (Amounts in thousands) Current portion of long-term debt Long-term debt (net of current portion) Total Balances as of August 31, 2016 $ 14,565 $ 73,542 $ 88,107 (1) Proceeds from long-term debt incurred during the period: MFUG Union Bank — 35,700 35,700 Repayments of long-term debt: Regularly scheduled loan payments — (7,231) (7,231) Translation adjustments on foreign-currency debt of subsidiaries whose functional currency is not the U.S. dollar (2) 58 (69) (11) Balances as of February 28, 2017 $ 14,623 $ 101,942 $ 116,565 (3) (1) The carrying amount o f non-cash assets assigned as collateral for th ese loans was $102.4 million. No cash assets were assigned as collateral for th ese loans . (2) These foreign currency translation adjustments are recorded within Other comprehensive income. (3) The carrying amount o f non-cash assets assigned as collateral for th ese loans was $141.8 million. No cash assets were assigned as collateral for th ese loans . |
Schedule of Annual Maturities of Long-Term Debt | Twelve Months Ended February 28, Amount 2018 $ 14,165 2019 13,760 2020 (1) 29,364 2021 19,354 2022 3,405 Thereafter 33,322 Total (2) $ 113,370 (1) The year 2020 is a leap year with the period ending February 29th. (2) In the case of loans subject to cross-currency interest rate swaps, the Company has used the effective rate to the Company under the applicable derivative obligation as of February 28, 2017 to disclose the future commitments of the related long-term debt . |
DERIVATIVE INSTRUMENTS AND HE23
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | 6 Months Ended |
Feb. 28, 2017 | |
Cash Flow Hedging [Member] | |
Derivative [Line Items] | |
Schedule of Interest Rate Derivatives | Subsidiary Date Entered into Derivative Financial Counter- party Derivative Financial Instruments Initial US$ Notional Amount Bank US$ loan Held with Floating Leg (swap counter-party) Fixed Rate for PSMT Subsidiary Settlement Dates Effective Period of swap PriceSmart, Inc (1) 7-Nov-16 MUFG Union Bank, N.A. ("Union Bank") Interest rate swap $ 35,700,000 Union Bank Variable rate 1-month Libor plus 1.7% 3.65 % 1st day of each month beginning on April 1, 2017 March 1, 2017 - March 1, 2027 Costa Rica 28-Aug-15 Citibank, N.A. ("Citi") Cross currency interest rate swap $ 7,500,000 Citibank, N.A. Variable rate 3-month Libor plus 2.50% 7.65 % 28th day of August, November, February, and May beginning on November 30, 2015 August 28, 2015 - August 28, 2020 Honduras 24-Mar-15 Citibank, N.A. ("Citi") Cross currency interest rate swap $ 8,500,000 Citibank, N.A. Variable rate 3-month Libor plus 3.25% 10.75 % 24th day of March, June, September, and December beginning on June 24, 2015 March 24,2015 - March 20, 2020 El Salvador 16-Dec-14 Bank of Nova Scotia ("Scotiabank") Interest rate swap $ 4,000,000 Bank of Nova Scotia Variable rate 30-day Libor plus 3.5% 4.78 % 29th day of each month beginning on December 29, 2014 December 1, 2014 - August 29, 2019 Colombia 10-Dec-14 Citibank, N.A. ("Citi") Cross currency interest rate swap $ 15,000,000 Citibank, N.A. Variable rate 3-month Libor plus 2.8% 8.25 % 4th day of March, June, Sept, Dec. beginning on March 4, 2015 December 4, 2014 - December 3, 2019 Panama 9-Dec-14 Bank of Nova Scotia ("Scotiabank") Interest rate swap $ 10,000,000 Bank of Nova Scotia Variable rate 30-day Libor plus 3.5% 5.16 % 28th day of each month beginning December 29, 2014 November 28, 2014 - November 29, 2019 Honduras 23-Oct-14 Citibank, N.A. ("Citi") Cross currency interest rate swap $ 5,000,000 Citibank, N.A. Variable rate 3-month Libor plus 3.5% 11.6 % 22nd day of January, April, July, and October beginning on January 22, 2015 October 22, 2014 - October 22, 2017 Panama 1-Aug-14 Bank of Nova Scotia ("Scotiabank") Interest rate swap $ 5,000,000 Bank of Nova Scotia Variable rate 30-day Libor plus 3.5% 4.89 % 21st day of each month beginning on September 22, 2014 August 21, 2014 - August 21, 2019 Panama 22-May-14 Bank of Nova Scotia ("Scotiabank") Interest rate swap $ 19,800,000 Bank of Nova Scotia Variable rate 30-day Libor plus 3.5% 4.98 % 4th day of each month beginning on June 4, 2014 May 5, 2014 - April 4, 2019 Panama 22-May-14 Bank of Nova Scotia ("Scotiabank") Interest rate swap $ 3,970,000 Bank of Nova Scotia Variable rate 30-day Libor plus 3.5% 4.98 % 4th day of each month beginning on June 4, 2014 May 5, 2014 - April 4, 2019 |
Fair Value Hedging [Member] | |
Derivative [Line Items] | |
Summary of Fair Value of Foreign Currency Forward Contracts | February 28, 2017 August 31, 2016 Non-deliverable forward foreign exchange contracts Balance Sheet Location Fair Value Balance Sheet Location Fair Value Foreign currency forward contracts Other accrued expenses $ (87) Other accrued expenses $ (110) Net fair value of non-deliverable forward foreign exchange contracts designated as hedging instruments that do not qualify for hedge accounting $ (87) $ (110) |
Derivative Swap [Member] | Cash Flow Hedging [Member] | |
Derivative [Line Items] | |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | February 28, 2017 August 31, 2016 Derivatives designated as cash flow hedging instruments Balance Sheet Location Fair Value Net Tax Effect Net OCI Fair Value Net Tax Effect Net OCI Cross-currency interest rate swaps Other non-current assets $ 2,719 (987) 1,732 $ 3,224 $ (1,248) $ 1,976 Interest rate swaps Other non-current assets 613 (220) 393 — — — Interest rate swaps Other long-term liabilities (69) 19 (50) (448) 115 (333) Cross-currency interest rate swaps Other long-term liabilities (596) 179 (417) (1,066) 320 (746) Net fair value of derivatives designated as hedging instruments $ 2,667 $ (1,009) $ 1,658 $ 1,710 $ (813) $ 897 |
Derivative Swap [Member] | Cash Flow Hedging [Member] | Interest Expense [Member] | |
Derivative [Line Items] | |
Schedule of Cash Flow Hedging Instruments, Statements of Financial Performance and Financial Position, Location | Income Statement Classification Interest expense on borrowings (1) Cost of swaps (2) Total Interest expense for the three months ended February 28, 2017 $ 755 $ 358 $ 1,113 Interest expense for the three months ended February 29, 2016 $ 813 $ 471 $ 1,284 Interest expense for the six months ended February 28, 2017 $ 1,504 $ 782 $ 2,286 Interest expense for the six months ended February 29, 2016 $ 1,565 $ 1,018 $ 2,583 (1) This amount is representative of the interest expense recognized on the underlying hedged transactions. (2) This amount is representative of the interest expense recognized on the cross-currency interest rate swaps designated as cash flow hedging instruments. |
Interest Rate Swaps [Member] | Cash Flow Hedging [Member] | |
Derivative [Line Items] | |
Schedule of Notional Amounts of Outstanding Derivative Positions | Notional Amount as of February 28, August 31, Floating Rate Payer (Swap Counterparty) 2017 2016 Scotiabank $ 29,657 $ 30,188 Union Bank 35,700 — Citibank N.A. 28,138 32,258 Total $ 93,495 $ 62,446 |
Forward Foreign Exchange Contracts [Member] | Fair Value Hedging [Member] | |
Derivative [Line Items] | |
Schedule of Notional Amounts of Outstanding Derivative Positions | Subsidiary Dates entered into Financial Derivative (Counterparty) Derivative Financial Instrument Notional Amount (in thousands) Settlement Date Effective Period of Forward Costa Rica 31-Aug-16 Citibank, N.A. Forward foreign exchange contracts $ 3,750 August 30, 2017 August 31, 2016- August 30, 2017 |
Forward Foreign Exchange Contracts [Member] | Fair Value Hedging [Member] | Other Income (Expense) [Member] | |
Derivative [Line Items] | |
Schedule of Cash Flow Hedging Instruments, Statements of Financial Performance and Financial Position, Location | Three Months Ended Six Months Ended February 28, February 29, February 28, February 29, Income Statement Classification 2017 2016 2017 2016 Other income (expense), net $ 64 $ (88) $ 283 $ (151) |
SEGMENTS (Tables)
SEGMENTS (Tables) | 6 Months Ended |
Feb. 28, 2017 | |
SEGMENTS [Abstract] | |
Summary of Segment Revenues, Operating Costs and Balance Sheet Items | United States Operations Central American Operations Caribbean Operations Colombia Operations Reconciling Items (1) Total Three Months Ended February 28, 2017 Revenue from external customers $ 8,171 $ 473,994 $ 219,515 $ 91,616 $ — $ 793,296 Intersegment revenues 270,369 — 1,175 12 (271,556) — Depreciation and amortization 1,475 5,140 2,531 2,299 — 11,445 Operating income 841 38,371 13,958 1,142 (14,910) 39,402 Net income 2,652 30,545 8,568 364 (14,910) 27,219 Capital expenditures, net 49,792 15,461 2,101 1,045 — 68,399 Six Months Ended February 28, 2017 Revenue from external customers $ 18,926 $ 912,228 $ 426,537 $ 175,177 $ — $ 1,532,868 Intersegment revenues 588,031 — 2,873 22 (590,926) — Depreciation and amortization 3,049 10,004 4,989 4,520 — 22,562 Operating income 7,088 72,708 26,484 2,260 (30,759) 77,781 Net income 4,960 57,605 19,741 541 (30,759) 52,088 Capital expenditures, net 52,129 26,217 6,539 1,518 — 86,403 Long-lived assets (other than deferred tax assets) 68,872 288,855 109,353 134,833 — 601,913 Goodwill — 31,153 4,539 — — 35,692 Total assets 126,494 538,628 300,983 190,847 — 1,156,952 Three Months Ended February 29, 2016 Revenue from external customers $ 6,567 $ 474,924 $ 230,035 $ 66,405 $ — $ 777,931 Intersegment revenues 245,041 — 1,326 — (246,367) — Depreciation and amortization 1,031 4,570 2,441 1,487 — 9,529 Operating income/(loss) 5,183 38,980 14,658 (1,698) (17,987) 39,136 Net income/(loss) 1,591 31,433 13,100 (2,195) (17,987) 25,942 Capital expenditures, net 2,418 4,497 1,768 5,721 — 14,404 Six Months Ended February 29, 2016 Revenue from external customers $ 14,816 $ 898,484 $ 441,698 $ 134,864 $ — $ 1,489,862 Intersegment revenues 559,662 — 2,764 — (562,426) — Depreciation and amortization 1,961 8,811 4,849 3,111 — 18,732 Operating income 10,662 72,689 28,248 (2,032) (33,136) 76,431 Net income 3,318 57,635 24,903 (3,106) (33,136) 49,614 Capital expenditures, net 3,327 15,678 5,750 8,996 — 33,751 Long-lived assets (other than deferred tax assets) 16,776 265,262 107,945 104,860 — 494,843 Goodwill — 31,090 4,611 — — 35,701 Total assets 72,661 505,567 280,293 150,322 — 1,008,843 As of August 31, 2016 Long-lived assets (other than deferred tax assets) $ 19,222 $ 271,039 $ 108,426 $ 137,599 $ — $ 536,286 Goodwill — 31,091 4,546 — — 35,637 Total assets 100,744 515,478 287,088 193,425 — 1,096,735 (1) The reconciling items reflect the amount eliminated on consolidation of intersegment transactions. |
COMPANY OVERVIEW AND BASIS OF25
COMPANY OVERVIEW AND BASIS OF PRESENTATION (Narrative) (Details) | Dec. 04, 2015ft²property | Feb. 28, 2017countrywarehouse |
Company Overview And Basis Of Presentation [Line Items] | ||
Number of stores | 39 | |
Number of countries | country | 13 | |
Subsidiaries [Member] | ||
Company Overview And Basis Of Presentation [Line Items] | ||
Noncontrolling interest | 100.00% | |
Costa Rica [Member] | ||
Company Overview And Basis Of Presentation [Line Items] | ||
Number of stores | 6 | |
Number of stores expected in the future | 7 | |
Colombia [Member] | ||
Company Overview And Basis Of Presentation [Line Items] | ||
Number of stores | 7 | |
Panama [Member] | ||
Company Overview And Basis Of Presentation [Line Items] | ||
Number of stores | 5 | |
Trinidad [Member] | ||
Company Overview And Basis Of Presentation [Line Items] | ||
Number of stores | 4 | |
Guatemala [Member] | ||
Company Overview And Basis Of Presentation [Line Items] | ||
Number of stores | 3 | |
Honduras [Member] | ||
Company Overview And Basis Of Presentation [Line Items] | ||
Number of stores | 3 | |
Option to acquire, Number of properties | property | 2 | |
Area of land | ft² | 59,353 | |
Dominican Republic [Member] | ||
Company Overview And Basis Of Presentation [Line Items] | ||
Number of stores | 3 | |
El Salvador [Member] | ||
Company Overview And Basis Of Presentation [Line Items] | ||
Number of stores | 2 | |
Nicaragua [Member] | ||
Company Overview And Basis Of Presentation [Line Items] | ||
Number of stores | 2 | |
Aruba [Member] | ||
Company Overview And Basis Of Presentation [Line Items] | ||
Number of stores | 1 | |
Barbados [Member] | ||
Company Overview And Basis Of Presentation [Line Items] | ||
Number of stores | 1 | |
Jamaica [Member] | ||
Company Overview And Basis Of Presentation [Line Items] | ||
Number of stores | 1 | |
United States Virgin Islands [Member] | ||
Company Overview And Basis Of Presentation [Line Items] | ||
Number of stores | 1 | |
Foreign Countries [Member] | ||
Company Overview And Basis Of Presentation [Line Items] | ||
Number of countries | country | 12 | |
Domestic Territories [Member] | ||
Company Overview And Basis Of Presentation [Line Items] | ||
Number of countries | country | 1 |
SUMMARY OF SIGNIFICANT ACCOUN26
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tax Receivables) (Narrative) (Details) - USD ($) $ in Thousands | Feb. 28, 2017 | Aug. 31, 2016 |
Tax Receivables [Line Items] | ||
Value added tax receivable | $ 35,762 | $ 34,137 |
Deferred tax assets, net | 2,000 | |
Income taxes receivable | 16,793 | 16,778 |
Unknown Country [Member] | ||
Tax Receivables [Line Items] | ||
Value added tax receivable | 8,700 | $ 7,600 |
Deferred tax assets, net | 2,000 | |
Income taxes receivable | $ 3,500 |
SUMMARY OF SIGNIFICANT ACCOUN27
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Stock Based Compensation) (Narrative) (Details) | 6 Months Ended |
Feb. 28, 2017item | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Number Of Equity Awards Offered | 3 |
SUMMARY OF SIGNIFICANT ACCOUN28
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Fair Value Measurements) (Narrative) (Details) | 6 Months Ended |
Feb. 28, 2017USD ($) | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Non-financial asset impairment | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN29
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Insurance Reimbursements) (Narrative) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Nov. 30, 2015 | Aug. 31, 2015 | Aug. 31, 2015 | |
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Proceeds from insurance settlement, Investing activities | $ 3,100,000 | ||
Insurance settlements receivable | $ 2,600,000 | $ 2,600,000 | |
Reversal of inventory write-down | 165,000 | ||
Claim for business interruption [Member] | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Insurance claim filed | $ 332,000 | ||
Proceeds from insurance settlement, Investing activities | $ 202,000 | ||
Insurance Proceeds [Member] | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Assets disposed of by method other than sale, in period of disposition, Gain (Loss) on disposition | $ 85,000 |
SUMMARY OF SIGNIFICANT ACCOUN30
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Schedule of Real Estate Development Joint Ventures) (Details) | Feb. 28, 2017 | [1] |
Panama [Member] | Golf Park Plaza, S.A [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Equity Method Investment, Ownership Percentage | 50.00% | |
Costa Rica [Member] | Price Plaza Alajuela PPA, S.A [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Equity Method Investment, Ownership Percentage | 50.00% | |
[1] | Joint venture interests are recorded as investment in unconsolidated affiliates on the consolidated balance sheets. |
SUMMARY OF SIGNIFICANT ACCOUN31
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Summary of Value Added Tax Receivables) (Details) - USD ($) $ in Thousands | Feb. 28, 2017 | Aug. 31, 2016 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ||
Value Added Tax, Prepaid expenses and other current assets | $ 1,702 | $ 1,635 |
Value Added Tax, Other non-current assets | 34,060 | 32,502 |
Total amount of VAT receivable reported | $ 35,762 | $ 34,137 |
SUMMARY OF SIGNIFICANT ACCOUN32
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Summary of Income Tax Receivables) (Details) - USD ($) $ in Thousands | Feb. 28, 2017 | Aug. 31, 2016 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ||
Income Taxes Receivable, Prepaid expenses and other current assets | $ 4,756 | $ 6,402 |
Income Taxes Receivable, Other non-current assets | 12,037 | 10,376 |
Total amount of income tax receivable reported | $ 16,793 | $ 16,778 |
SUMMARY OF SIGNIFICANT ACCOUN33
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Schedule of Goodwill) (Details) - USD ($) $ in Thousands | Feb. 28, 2017 | Aug. 31, 2016 | Feb. 29, 2016 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |||
Goodwill | $ 35,692 | $ 35,637 | $ 35,701 |
SUMMARY OF SIGNIFICANT ACCOUN34
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Summary of Foreign Currency Gains and Losses) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Feb. 28, 2017 | Feb. 29, 2016 | Feb. 28, 2017 | Feb. 29, 2016 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ||||
Currency gain (loss) | $ 915 | $ (552) | $ (13) | $ (796) |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Feb. 28, 2017 | Feb. 29, 2016 | Feb. 28, 2017 | Feb. 29, 2016 | |
EARNINGS PER SHARE [Abstract] | ||||
Net income | $ 27,219 | $ 25,942 | $ 52,088 | $ 49,614 |
Less: Allocation of income to unvested stockholders | (345) | (371) | (758) | (742) |
Net earnings available to common stockholders | $ 26,874 | $ 25,571 | $ 51,330 | $ 48,872 |
Basic weighted average shares outstanding | 30,004 | 29,914 | 29,993 | 29,902 |
Add dilutive effect of stock options (two-class method) | 4 | 5 | 4 | 5 |
Diluted average shares outstanding | 30,008 | 29,919 | 29,997 | 29,907 |
Basic net income per share | $ 0.90 | $ 0.85 | $ 1.72 | $ 1.63 |
Diluted net income per share | $ 0.90 | $ 0.85 | $ 1.72 | $ 1.63 |
STOCKHOLDERS EQUITY (Schedule o
STOCKHOLDERS EQUITY (Schedule of Dividends) (Details) - $ / shares | Aug. 31, 2017 | Feb. 28, 2017 | Feb. 01, 2017 | Feb. 29, 2016 | Feb. 03, 2016 | Feb. 28, 2017 | Feb. 29, 2016 | Feb. 28, 2017 | Feb. 29, 2016 | Aug. 31, 2016 |
Dividends Payable [Line Items] | ||||||||||
Amount | $ 0.70 | $ 0.70 | $ 0.70 | $ 0.70 | ||||||
2017 Dividend Declared [Member] | ||||||||||
Dividends Payable [Line Items] | ||||||||||
Declared | Feb. 1, 2017 | |||||||||
Amount | $ 0.70 | |||||||||
2016 Dividend Declared [Member] | ||||||||||
Dividends Payable [Line Items] | ||||||||||
Declared | Feb. 3, 2016 | |||||||||
Amount | $ 0.70 | |||||||||
2017 First Dividend Paid [Member] | ||||||||||
Dividends Payable [Line Items] | ||||||||||
Record Date | Feb. 15, 2017 | |||||||||
Date Paid | Feb. 28, 2017 | |||||||||
Payment Amount | $ 0.35 | |||||||||
2017 Second Dividend Paid [Member] | ||||||||||
Dividends Payable [Line Items] | ||||||||||
Record Date | Aug. 15, 2017 | |||||||||
Date Payable | Aug. 31, 2017 | |||||||||
2017 Second Dividend Paid [Member] | Scenario, Forecast [Member] | ||||||||||
Dividends Payable [Line Items] | ||||||||||
Payment Amount | $ 0.35 | |||||||||
2016 First Dividend Paid [Member] | ||||||||||
Dividends Payable [Line Items] | ||||||||||
Record Date | Feb. 15, 2016 | |||||||||
Date Paid | Feb. 29, 2016 | |||||||||
Payment Amount | $ 0.35 | |||||||||
2016 Second Dividend Paid [Member] | ||||||||||
Dividends Payable [Line Items] | ||||||||||
Record Date | Aug. 15, 2016 | |||||||||
Date Paid | Aug. 31, 2016 | |||||||||
Payment Amount | $ 0.35 |
STOCKHOLDERS EQUITY (Schedule37
STOCKHOLDERS EQUITY (Schedule of Components of Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |||||
Feb. 28, 2017 | Feb. 29, 2016 | Aug. 31, 2016 | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Beginning balance | $ (103,951) | $ (101,512) | $ (101,512) | ||||
Other comprehensive income (loss) | (846) | (11,223) | (2,419) | ||||
Amounts reclassified from accumulated other comprehensive income (loss) | (14) | (8) | (20) | ||||
Ending balance | (104,811) | (112,743) | (103,951) | ||||
Foreign Currency Translation Adjustments [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Beginning balance | (102,242) | (100,540) | (100,540) | ||||
Other comprehensive income (loss) | (1,629) | (10,892) | (1,702) | ||||
Amounts reclassified from accumulated other comprehensive income (loss) | |||||||
Ending balance | (103,871) | (111,432) | (102,242) | ||||
Defined Benefit Pension Plans [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Beginning balance | (315) | (113) | (113) | ||||
Other comprehensive income (loss) | (182) | ||||||
Amounts reclassified from accumulated other comprehensive income (loss) | [1] | (14) | (8) | (20) | |||
Ending balance | (329) | (121) | (315) | ||||
Derivative Instruments [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Beginning balance | (1,394) | [2] | (859) | (859) | |||
Other comprehensive income (loss) | 783 | (331) | [2] | (535) | [2] | ||
Amounts reclassified from accumulated other comprehensive income (loss) | |||||||
Ending balance | $ (611) | $ (1,190) | $ (1,394) | [2] | |||
[1] | Amounts reclassified from accumulated other comprehensive income (loss) related to the minimum pension liability are included in warehouse club operations in the Company's Consolidated Statements of Income. | ||||||
[2] | See Note 7 - Derivative Instruments and Hedging Activities. |
STOCKHOLDERS EQUITY (Summary of
STOCKHOLDERS EQUITY (Summary of Retained Earnings Not Available for Distribution) (Details) - USD ($) $ in Thousands | Feb. 28, 2017 | Aug. 31, 2016 |
STOCKHOLDERS' EQUITY [Abstract] | ||
Retained earning not available for distribution | $ 6,213 | $ 5,926 |
COMMITMENTS AND CONTINGENCIES39
COMMITMENTS AND CONTINGENCIES (Narrative) (Details) - USD ($) | 3 Months Ended | |||||
Nov. 30, 2014 | Feb. 29, 2020 | Feb. 28, 2019 | Feb. 28, 2018 | Feb. 28, 2017 | Aug. 31, 2016 | |
Commitments And Contingencies [Line Items] | ||||||
Accrual for taxes other than income taxes, Current | $ 3,900,000 | $ 4,000,000 | ||||
Contractual obligation | 8,200,000 | 1,500,000 | ||||
Land purchase option agreement | 785,000 | |||||
Deposit that could be forfeited | 50,000 | |||||
Land under purchase options, Not recorded | 24,500,000 | |||||
Purchase commitment, Remaining minimum amount committed | 82,000 | |||||
Provisional assessments, includes taxes, penalties and interest related to withholding taxes | $ 2,500,000 | |||||
Additional provisional assessment | $ 5,100,000 | |||||
Deferred tax assets, net | 2,000,000 | |||||
Income taxes receivable | 16,793,000 | $ 16,778,000 | ||||
Unknown Country [Member] | ||||||
Commitments And Contingencies [Line Items] | ||||||
Deferred tax assets, net | 2,000,000 | |||||
Income taxes receivable | $ 3,500,000 | |||||
Scenario, Forecast [Member] | ||||||
Commitments And Contingencies [Line Items] | ||||||
Purchase commitment, Remaining minimum amount committed | $ 279,000 | $ 372,000 | $ 372,000 |
COMMITMENTS AND CONTINGENCIES40
COMMITMENTS AND CONTINGENCIES (Schedule of Future Minimum Lease Commitments) (Details) - USD ($) | Nov. 25, 2016 | Nov. 24, 2016 | Feb. 28, 2017 | Aug. 31, 2016 | ||
COMMITMENTS AND CONTINGENCIES [Abstract] | ||||||
2,018 | [1] | $ 11,570,000 | ||||
2,019 | [1] | 11,124,000 | ||||
2,020 | [1],[2] | 10,559,000 | ||||
2,021 | [1] | 9,481,000 | ||||
2,022 | [1] | 8,082,000 | ||||
Thereafter | [1] | 91,164,000 | ||||
Total | 141,980,000 | [1],[3] | $ 120,900,000 | |||
Sub-lease income | $ 316,678 | |||||
Lease expiration date | Nov. 30, 2043 | May 31, 2021 | ||||
[1] | Operating lease obligations have been reduced by approximately $316,678 to reflect sub-lease income. Certain obligations under leasing arrangements are collateralized by the underlying asset being leased. | |||||
[2] | The year 2020 is a leap year with the period ending February 29th. | |||||
[3] | As of August 31, 2016, total future minimum lease commitments were $120.9 million. The increase during the period ending February 28, 2017 is primarily related to the extension of an existing lease within the Company's Guatemala subsidiary for its Pradera location. The subsidiary signed an extension on November 25, 2016, extending the lease termination date from May 31, 2021 to November 30, 2043. The lease extension included the real property at this location currently used by the Company and added additional square footage in the same shopping center to the lease. This has effectively provided the Company with possession of substantially all of the real property available at that location. The Company plans to expand and upgrade the current warehouse club and parking areas and to improve access into and out from the location. |
COMMITMENTS AND CONTINGENCIES41
COMMITMENTS AND CONTINGENCIES (Schedule of Variable Interest Entities Maximum Loss Exposure) (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Feb. 28, 2017 | Aug. 31, 2016 | ||
Maximum Loss Exposure | |||
Initial Investment | $ 6,809 | ||
Additional Investments | 3,638 | ||
Net (Loss)/Income Inception to Date | 312 | ||
Company's Variable Interest in Entity | 10,759 | $ 10,767 | |
Commitment to Future Additional Investments | [1] | 884 | |
Company's Maximum Exposure to Loss in Entity | [2] | $ 11,643 | |
Golf Park Plaza, S.A [Member] | |||
Maximum Loss Exposure | |||
Ownership Percentage Interest in Joint Venture | 50.00% | ||
Initial Investment | $ 4,616 | ||
Additional Investments | 2,402 | ||
Net (Loss)/Income Inception to Date | 296 | ||
Company's Variable Interest in Entity | 7,314 | ||
Commitment to Future Additional Investments | [1] | 99 | |
Company's Maximum Exposure to Loss in Entity | [2] | $ 7,413 | |
Price Plaza Alajuela, S.A. [Member] | |||
Maximum Loss Exposure | |||
Ownership Percentage Interest in Joint Venture | 50.00% | ||
Initial Investment | $ 2,193 | ||
Additional Investments | 1,236 | ||
Net (Loss)/Income Inception to Date | 16 | ||
Company's Variable Interest in Entity | 3,445 | ||
Commitment to Future Additional Investments | [1] | 785 | |
Company's Maximum Exposure to Loss in Entity | [2] | $ 4,230 | |
[1] | The parties intend to seek alternate financing for the project, which could reduce the amount of investments each party would be required to provide. The parties may mutually agree on changes to the project, which could increase or decrease the amount of contributions each party is required to provide. | ||
[2] | The maximum exposure is determined by adding the Company's variable interest in the entity and any explicit or implicit arrangements that could require the Company to provide additional financial support. |
DEBT (Narrative) (Details)
DEBT (Narrative) (Details) - USD ($) $ in Thousands | 1 Months Ended | 6 Months Ended | |||
Jan. 31, 2017 | Feb. 28, 2017 | Aug. 31, 2016 | |||
Debt Instrument [Line Items] | |||||
Total | $ 116,565 | [1] | $ 88,107 | [2] | |
Debt With Covenants [Member] | |||||
Debt Instrument [Line Items] | |||||
Line of credit, Current | 40,000 | 40,000 | |||
Group Of Subsidiaries [Member] | Debt With Covenants [Member] | |||||
Debt Instrument [Line Items] | |||||
Total | $ 105,300 | $ 76,000 | |||
Miami-Dade County, Florida [Member] | |||||
Debt Instrument [Line Items] | |||||
Purchase price | $ 46,000 | ||||
Union Bank [Member] | Miami-Dade County, Florida [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt term | 10 years | ||||
Credit facility funded | $ 35,700 | ||||
Credit facility, expiration date | Dec. 31, 2027 | ||||
London Interbank Offered Rate (LIBOR) [Member] | Union Bank [Member] | Miami-Dade County, Florida [Member] | |||||
Debt Instrument [Line Items] | |||||
LIBOR measurement period | 30 days | ||||
Credit facility, variable interest rate | 1.70% | ||||
Interest Rate Contract [Member] | Union Bank [Member] | Miami-Dade County, Florida [Member] | |||||
Debt Instrument [Line Items] | |||||
Notional amount | $ 35,700 | ||||
Derivative, fixed interest rate | 3.65% | ||||
Derivative, effective date | Mar. 1, 2017 | ||||
Derivative, maturity date | Mar. 1, 2027 | ||||
Interest Rate Contract [Member] | London Interbank Offered Rate (LIBOR) [Member] | Union Bank [Member] | Miami-Dade County, Florida [Member] | |||||
Debt Instrument [Line Items] | |||||
LIBOR measurement period | 30 days | ||||
Derivative, variable interest rate | 1.70% | ||||
[1] | The carrying amount of non-cash assets assigned as collateral for these loans was $141.8 million. No cash assets were assigned as collateral for these loans. | ||||
[2] | The carrying amount of non-cash assets assigned as collateral for these loans was $102.4 million. No cash assets were assigned as collateral for these loans. |
DEBT (Schedule of Short-Term Bo
DEBT (Schedule of Short-Term Borrowings) (Details) - USD ($) $ in Thousands | Feb. 28, 2017 | Aug. 31, 2016 |
Short-term Debt [Line Items] | ||
Total Amount of Facilities | $ 69,000 | $ 65,000 |
Facilities Available | $ 62,439 | $ 39,242 |
Short-term Borrowings Letters Of Credit Facilities Available [Member] | ||
Short-term Debt [Line Items] | ||
Weighted average interest rate | 10.10% | 10.10% |
Short-term Borrowings [Member] | ||
Short-term Debt [Line Items] | ||
Line of credit, Current | $ 6,561 | $ 16,534 |
Letters Of Credit [Member] | ||
Short-term Debt [Line Items] | ||
Line of credit, Current | $ 9,224 |
DEBT (Summary of Changes in Lon
DEBT (Summary of Changes in Long-Term Debt) (Details) - USD ($) $ in Thousands | 6 Months Ended | |||
Feb. 28, 2017 | Feb. 29, 2016 | Aug. 31, 2016 | ||
Debt Instrument [Line Items] | ||||
Long-term debt, Current Balance | $ 14,565 | |||
Long-term debt, Noncurrent Balance | 73,542 | |||
Total | [1] | 88,107 | ||
Proceeds from long-term debt incurred during the period, Noncurrent | 35,700 | |||
Proceeds from long-term debt total | 35,700 | $ 7,370 | ||
Regularly scheduled loan payments, Noncurrent | (7,231) | |||
Regularly scheduled loan payments total | (7,231) | |||
Translation adjustments on foreign-currency debt of subsidiaries whose functional currency is not the U.S. dollar, Current | [2] | 58 | ||
Translation adjustments on foreign-currency debt of subsidiaries whose functional currency is not the U.S. dollar, Noncurrent | [2] | (69) | ||
Translation adjustments on foreign-currency debt of subsidiaries whose functional currency is not the U.S. dollar | [2] | (11) | ||
Long-term debt, Current Balance | 14,623 | |||
Long-term debt, Noncurrent Balance | 101,942 | |||
Total | [3] | 116,565 | ||
Cash Asset [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Collateral amount | 0 | $ 0 | ||
NonCash Asset [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Collateral amount | $ 141,800 | $ 102,400 | ||
[1] | The carrying amount of non-cash assets assigned as collateral for these loans was $102.4 million. No cash assets were assigned as collateral for these loans. | |||
[2] | These foreign currency translation adjustments are recorded within Other comprehensive income. | |||
[3] | The carrying amount of non-cash assets assigned as collateral for these loans was $141.8 million. No cash assets were assigned as collateral for these loans. |
DEBT (Schedule of Annual Maturi
DEBT (Schedule of Annual Maturities of Long-Term Debt) (Details) $ in Thousands | Feb. 28, 2017USD ($) | |
DEBT [Abstract] | ||
2,018 | $ 14,165 | |
2,019 | 13,760 | |
2,020 | 29,364 | [1] |
2,021 | 19,354 | |
2,022 | 3,405 | |
Thereafter | 33,322 | |
Total | $ 113,370 | [2] |
[1] | The year 2020 is a leap year with the period ending February 29th. | |
[2] | In the case of loans subject to cross-currency interest rate swaps, the Company has used the effective rate to the Company under the applicable derivative obligation as of February 28, 2017 to disclose the future commitments of the related long-term debt. |
DERIVATIVE INSTRUMENTS AND HE46
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Schedule of Interest Rate Derivatives) (Details) - Cash Flow Hedging [Member] | Feb. 28, 2017USD ($) | |
Derivative [Line Items] | ||
Derivative, Notional amount | $ 35,700,000 | [1] |
Debt instrument, Basis spread on variable rate | 1.70% | [1] |
Derivative, Fixed interest rate | 3.65% | [1] |
Costa Rica $7.5M Cross Currency Interest Rate Swap [Member] | ||
Derivative [Line Items] | ||
Derivative, Notional amount | $ 7,500,000 | |
Debt instrument, Basis spread on variable rate | 2.50% | |
Derivative, Fixed interest rate | 7.65% | |
Honduras $8.5M Cross Currency Interest Rate Swap [Member] | ||
Derivative [Line Items] | ||
Derivative, Notional amount | $ 8,500,000 | |
Debt instrument, Basis spread on variable rate | 3.25% | |
Derivative, Fixed interest rate | 10.75% | |
El Salvador $4M Interest Rate Swap [Member] | ||
Derivative [Line Items] | ||
Derivative, Notional amount | $ 4,000,000 | |
Debt instrument, Basis spread on variable rate | 3.50% | |
Derivative, Fixed interest rate | 4.78% | |
Colombia $15M Cross Currency Interest Rate Swap [Member] | ||
Derivative [Line Items] | ||
Derivative, Notional amount | $ 15,000,000 | |
Debt instrument, Basis spread on variable rate | 2.80% | |
Derivative, Fixed interest rate | 8.25% | |
Panama $10M Interest Rate Swap [Member] | ||
Derivative [Line Items] | ||
Derivative, Notional amount | $ 10,000,000 | |
Debt instrument, Basis spread on variable rate | 3.50% | |
Derivative, Fixed interest rate | 5.16% | |
Honduras $5M Cross Currency Interest Rate Swap [Member] | ||
Derivative [Line Items] | ||
Derivative, Notional amount | $ 5,000,000 | |
Debt instrument, Basis spread on variable rate | 3.50% | |
Derivative, Fixed interest rate | 11.60% | |
Panama $5M Interest Rate Swap [Member] | ||
Derivative [Line Items] | ||
Derivative, Notional amount | $ 5,000,000 | |
Debt instrument, Basis spread on variable rate | 3.50% | |
Derivative, Fixed interest rate | 4.89% | |
Panama $20M Interest Rate Swap [Member] | ||
Derivative [Line Items] | ||
Derivative, Notional amount | $ 19,800,000 | |
Debt instrument, Basis spread on variable rate | 3.50% | |
Derivative, Fixed interest rate | 4.98% | |
Panama $4M Interest Rate Swap [Member] | ||
Derivative [Line Items] | ||
Derivative, Notional amount | $ 3,970,000 | |
Debt instrument, Basis spread on variable rate | 3.50% | |
Derivative, Fixed interest rate | 4.98% | |
[1] | The initial notional amount and fixed rate were modified effective January 2017. |
DERIVATIVE INSTRUMENTS AND HE47
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Schedule of Cash Flow Hedging Instruments, Statements of Financial Performance and Financial Position, Location) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Feb. 28, 2017 | Feb. 29, 2016 | Feb. 28, 2017 | Feb. 29, 2016 | ||
Interest Expense [Member] | Cash Flow Hedging [Member] | |||||
Derivative [Line Items] | |||||
Derivative, gain (loss) on derivative, Net | $ 1,113 | $ 1,284 | $ 2,286 | $ 2,583 | |
Interest Rate Contract [Member] | Interest Expense [Member] | Cash Flow Hedging [Member] | |||||
Derivative [Line Items] | |||||
Derivative, gain (loss) on derivative, Net | [1] | 755 | 813 | 1,504 | 1,565 |
Cross-Currency Interest Rate Swaps [Member] | Interest Expense [Member] | Cash Flow Hedging [Member] | |||||
Derivative [Line Items] | |||||
Derivative, gain (loss) on derivative, Net | [2] | 358 | 471 | 782 | 1,018 |
Forward Foreign Exchange Contracts [Member] | Other Income (Expense) [Member] | Fair Value Hedging [Member] | |||||
Derivative [Line Items] | |||||
Other income (expense), net | $ 64 | $ (88) | $ 283 | $ (151) | |
[1] | This amount is representative of the interest expense recognized on the underlying hedged transactions. | ||||
[2] | This amount is representative of the interest expense recognized on the cross-currency interest rate swaps designated as cash flow hedging instruments. |
DERIVATIVE INSTRUMENTS AND HE48
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Schedule of Notional Amounts of Outstanding Derivative Positions) (Details) - USD ($) $ in Thousands | Feb. 28, 2017 | Aug. 31, 2016 |
Cash Flow Hedging [Member] | ||
Derivative [Line Items] | ||
Derivative Liability, Notional Amount | $ 93,495 | $ 62,446 |
Scotiabank [Member] | Cash Flow Hedging [Member] | ||
Derivative [Line Items] | ||
Derivative Liability, Notional Amount | 29,657 | 30,188 |
Union Bank [Member] | Cash Flow Hedging [Member] | ||
Derivative [Line Items] | ||
Derivative Liability, Notional Amount | 35,700 | |
Citibank N.A. [Member] | Cash Flow Hedging [Member] | ||
Derivative [Line Items] | ||
Derivative Liability, Notional Amount | $ 28,138 | 32,258 |
Citibank N.A. [Member] | Forward Foreign Exchange Contracts [Member] | Fair Value Hedging [Member] | ||
Derivative [Line Items] | ||
Derivative Liability, Notional Amount | $ 3,750 |
DERIVATIVE INSTRUMENTS AND HE49
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Schedule of Derivative Instruments in Statement of Financial Position, Fair Value and Summary of Fair Value of Foreign Currency Forward Contracts) (Details) - USD ($) $ in Thousands | Feb. 28, 2017 | Aug. 31, 2016 |
Derivative [Line Items] | ||
Derivative Asset, Noncurrent | $ 3,332 | $ 3,224 |
Designated as Hedging Instrument [Member] | ||
Derivative [Line Items] | ||
Derivative Asset, Noncurrent | 2,667 | 1,710 |
Net Tax Effect | (1,009) | (813) |
Total Net OCI | 1,658 | 897 |
Interest Rate Swaps [Member] | Other Noncurrent Assets [Member] | Designated as Hedging Instrument [Member] | ||
Derivative [Line Items] | ||
Derivative Asset, Noncurrent | 613 | |
Net Tax Effect | (220) | |
Total Net OCI | 393 | |
Interest Rate Swaps [Member] | Other Long-Term Liability [Member] | Designated as Hedging Instrument [Member] | ||
Derivative [Line Items] | ||
Derivative Liability, Noncurrent | (69) | (448) |
Net Tax Effect | 19 | 115 |
Total Net OCI | (50) | (333) |
Forward Foreign Exchange Contracts [Member] | Fair Value, Inputs, Level 2 [Member] | Not Designated as Hedging Instrument [Member] | Recurring [Member] | Fair Value Hedging [Member] | ||
Derivative [Line Items] | ||
Total Net OCI | (87) | (110) |
Forward Foreign Exchange Contracts [Member] | Fair Value, Inputs, Level 2 [Member] | Other Accrued Expenses [Member] | Not Designated as Hedging Instrument [Member] | Recurring [Member] | Fair Value Hedging [Member] | ||
Derivative [Line Items] | ||
Total Net OCI | (87) | (110) |
Cross-Currency Interest Rate Swaps [Member] | Other Noncurrent Assets [Member] | Designated as Hedging Instrument [Member] | ||
Derivative [Line Items] | ||
Derivative Asset, Noncurrent | 2,719 | 3,224 |
Net Tax Effect | (987) | (1,248) |
Total Net OCI | 1,732 | 1,976 |
Cross-Currency Interest Rate Swaps [Member] | Other Long-Term Liability [Member] | Designated as Hedging Instrument [Member] | ||
Derivative [Line Items] | ||
Derivative Liability, Noncurrent | (596) | (1,066) |
Net Tax Effect | 179 | 320 |
Total Net OCI | $ (417) | $ (746) |
SEGMENTS (Summary of Segment Re
SEGMENTS (Summary of Segment Revenues, Operating Costs and Balance Sheet Items) (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Feb. 28, 2017USD ($)countrywarehouse | Feb. 29, 2016USD ($) | Feb. 28, 2017USD ($)countrywarehouse | Feb. 29, 2016USD ($) | Aug. 31, 2016USD ($) | ||
Segment Reporting Information [Line Items] | ||||||
Number of stores | warehouse | 39 | 39 | ||||
Number of countries | country | 13 | 13 | ||||
Segment Reporting Information | ||||||
Revenues | $ 793,296 | $ 777,931 | $ 1,532,868 | $ 1,489,862 | ||
Depreciation and amortization | 11,445 | 9,529 | 22,562 | 18,732 | ||
Operating income/(loss) | 39,402 | 39,136 | 77,781 | 76,431 | ||
Net income/(loss) | 27,219 | 25,942 | 52,088 | 49,614 | ||
Capital expenditures, net | 68,399 | 14,404 | 86,403 | 33,751 | ||
Long-lived assets (other than deferred tax assets) | 601,913 | 494,843 | 601,913 | 494,843 | $ 536,286 | |
Goodwill | 35,692 | 35,701 | 35,692 | 35,701 | 35,637 | |
Total assets | 1,156,952 | 1,008,843 | 1,156,952 | 1,008,843 | 1,096,735 | |
United States Operations [Member] | ||||||
Segment Reporting Information | ||||||
Revenues | 8,171 | 6,567 | 18,926 | 14,816 | ||
Depreciation and amortization | 1,475 | 1,031 | 3,049 | 1,961 | ||
Operating income/(loss) | 841 | 5,183 | 7,088 | 10,662 | ||
Net income/(loss) | 2,652 | 1,591 | 4,960 | 3,318 | ||
Capital expenditures, net | 49,792 | 2,418 | 52,129 | 3,327 | ||
Long-lived assets (other than deferred tax assets) | 68,872 | 16,776 | 68,872 | 16,776 | 19,222 | |
Total assets | 126,494 | 72,661 | 126,494 | 72,661 | 100,744 | |
Central American Operations [Member] | ||||||
Segment Reporting Information | ||||||
Revenues | 473,994 | 474,924 | 912,228 | 898,484 | ||
Depreciation and amortization | 5,140 | 4,570 | 10,004 | 8,811 | ||
Operating income/(loss) | 38,371 | 38,980 | 72,708 | 72,689 | ||
Net income/(loss) | 30,545 | 31,433 | 57,605 | 57,635 | ||
Capital expenditures, net | 15,461 | 4,497 | 26,217 | 15,678 | ||
Long-lived assets (other than deferred tax assets) | 288,855 | 265,262 | 288,855 | 265,262 | 271,039 | |
Goodwill | 31,153 | 31,090 | 31,153 | 31,090 | 31,091 | |
Total assets | 538,628 | 505,567 | 538,628 | 505,567 | 515,478 | |
Caribbean Operations [Member] | ||||||
Segment Reporting Information | ||||||
Revenues | 219,515 | 230,035 | 426,537 | 441,698 | ||
Depreciation and amortization | 2,531 | 2,441 | 4,989 | 4,849 | ||
Operating income/(loss) | 13,958 | 14,658 | 26,484 | 28,248 | ||
Net income/(loss) | 8,568 | 13,100 | 19,741 | 24,903 | ||
Capital expenditures, net | 2,101 | 1,768 | 6,539 | 5,750 | ||
Long-lived assets (other than deferred tax assets) | 109,353 | 107,945 | 109,353 | 107,945 | 108,426 | |
Goodwill | 4,539 | 4,611 | 4,539 | 4,611 | 4,546 | |
Total assets | $ 300,983 | 280,293 | $ 300,983 | 280,293 | 287,088 | |
Colombia [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Number of stores | warehouse | 7 | 7 | ||||
Segment Reporting Information | ||||||
Revenues | $ 91,616 | 66,405 | $ 175,177 | 134,864 | ||
Depreciation and amortization | 2,299 | 1,487 | 4,520 | 3,111 | ||
Operating income/(loss) | 1,142 | (1,698) | 2,260 | (2,032) | ||
Net income/(loss) | 364 | (2,195) | 541 | (3,106) | ||
Capital expenditures, net | 1,045 | 5,721 | 1,518 | 8,996 | ||
Long-lived assets (other than deferred tax assets) | 134,833 | 104,860 | 134,833 | 104,860 | 137,599 | |
Total assets | 190,847 | 150,322 | 190,847 | 150,322 | $ 193,425 | |
Intersegment [Member] | ||||||
Segment Reporting Information | ||||||
Revenues | [1] | (271,556) | (246,367) | (590,926) | (562,426) | |
Intersegment [Member] | United States Operations [Member] | ||||||
Segment Reporting Information | ||||||
Revenues | (270,369) | (245,041) | (588,031) | (559,662) | ||
Intersegment [Member] | Caribbean Operations [Member] | ||||||
Segment Reporting Information | ||||||
Revenues | (1,175) | (1,326) | (2,873) | (2,764) | ||
Intersegment [Member] | Colombia [Member] | ||||||
Segment Reporting Information | ||||||
Revenues | (12) | (22) | ||||
Reconciling Items [Member] | ||||||
Segment Reporting Information | ||||||
Operating income/(loss) | [1] | (14,910) | (17,987) | (30,759) | (33,136) | |
Net income/(loss) | [1] | $ (14,910) | $ (17,987) | $ (30,759) | $ (33,136) | |
[1] | The reconciling items reflect the amount eliminated on consolidation of intersegment transactions. |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) $ in Millions | Mar. 31, 2017USD ($)item | Jun. 30, 2017USD ($) | May 31, 2017USD ($) |
Trinidad Subsidiary [Member] | Subsequent Event [Member] | Citibank N.A. [Member] | |||
Subsequent Event [Line Items] | |||
Maximum borrowing capacity | $ 12 | ||
Number of payments | item | 8 | ||
LIBOR measurement period | 90 days | ||
Debt instrument, Basis spread on variable rate | 3.00% | ||
Colombia Subsidiary [Member] | Scenario, Forecast [Member] | |||
Subsequent Event [Line Items] | |||
Forward exchange contract settlement amount | $ 6 | $ 6 |