Good day, everyone and welcome to PriceSmart Inc. Earnings Release Conference Call for the Third Quarter of Fiscal Year 2015, the Six and Nine Month Period Ending on May 31, 2015. All participants are currently in a listen-only mode. After remarks from Jose Luis Laparte, PriceSmart’s President and Chief Executive Officer and John Heffner, PriceSmart’s Executive Vice President and Chief Financial Officer, you will be given an opportunity to ask questions as time permits. [Operator Instructions] As a reminder, this conference is being recorded on Friday, July 10, 2015. A digital replay of this call will be available through July 31, 2015 by dialing 888-203-1112 for domestic callers or 719-457-0820 for international callers. The pass code is 1552252. I would now like to turn the conference over to John Heffner. Please go ahead, sir.

Thank you and welcome to our earnings call for the third quarter of fiscal year 2015. We will be discussing the information that we provided in our earnings press release, which we released yesterday, July 9, 2015, which also included our announcement of June sales. We also released our 10-Q yesterday. You can find the press release in the 10-Q filing on our website, www.pricesmart.com. Please note that statements made during this call may contain forward-looking statements concerning the company’s anticipated future plans, revenues and related matters. These forward-looking statements include, but are not limited to statements containing the words expect, believe, will, may, should, estimate and similar expressions. These statements are subject to risks and uncertainties that could cause actual results to differ materially, including the risks detailed in the company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2014, filed with the Securities and Exchange Commission on October 30, 2014. We assume no obligation and expressly disclaim any duty to update any forward-looking statement to reflect the occurrence of events or circumstances, which may arise after the date of this call. Now, I will turn this over to Jose Luis Laparte, PriceSmart’s President and Chief Executive Officer.

Thank you, John. Good morning and thank you for joining us today. I will take a few minutes to talk about our business results for the quarter and then John Heffner will speak to a few other financial items from our release yesterday. Net warehouse sales in the quarter were $675 million, a 13% growth compared to prior year. The growth was driven by a 12.5% increase in transactions and a 0.4% increase in average ticket. Currency devaluations in Colombia, the highest impact, as well as Honduras, Jamaica and the Dominican Republic, resulted in a lower average ticket in those markets compared to a year ago when compared to U.S. dollars. Earnings per share for the third quarter of fiscal year 2015 were $0.70 per share, the same as the year ago quarter. The devaluation of the Colombian peso again negatively impacted our overall consolidated results, but not to the same degree as in the first two quarters. We have estimated that year-on-year negative impact of our Colombia operations to our consolidated results was approximately $0.07 per share in this quarter. Last quarter, that impact was approximately $0.16 per share. Comparable sales growth was 4.1% for the 13 weeks ended May 31, 2015, showing an improvement in comp sales compared to Q1 at 2% and Q2 at 1.4%. From a total sales perspective, Central America had a 9% sales growth in the period. Panama continues to post double digit growth with strong economic conditions in that market. Honduras also had a double digit increase in total sales, with one additional club this period and Nicaragua had double digit comparable growth. Costa Rica has rebounded from the effects of the currency devaluation they experienced a year ago and had its strongest sales quarter in the past year. In our Caribbean region,…

Thank you, Jose Luis. Let me highlight a few brief additional items with respect to our financial results for the third quarter based upon our release yesterday. Warehouse gross profit margins in the period were 14.3% of net warehouse sales, a reduction of 47 basis points from the same period last year. The lower margins in Colombia primarily related to actions we continue to take to reduce the impact of higher prices on important merchandise to our members, accounted for 43 basis points of that reduction. Within Colombia alone, the year-on-year reduction was over 300 basis points. We will continue our efforts to lower our costs and set aggressive margins to provide our members in Colombia value on the merchandise we offer during this period of currency volatility. Warehouse operating expenses as a percent of sales increased 5 basis points with a higher cost structure in Colombia compared to other more mature markets. Excluding Colombia, operating expenses as a percent of warehouse sales improved 24 basis points, with a lower price of oil helping to reduce utility rates in many of our markets. On our last call, we spoke at length about the P&L charge that occurs when a devaluing currency lead to substantial level of U.S. dollar liabilities as was the case in quarters one and two. I am happy to report that the efforts taken by the company to provide the necessary financing and remove the U.S. dollar exposure resulted in a minimal foreign currency loss in Colombia in the quarter. We continued to execute that plan as we enter Q4. Compared to a year ago however, there was a $462,000 negative impact to the Colombia operations related to foreign currency loss because in Q3 of fiscal year 2014, there was a $471,000 gain. We did have some…

Thank you. [Operator Instructions] And we will take our question from Dave King with ROTH Capital Partners.

Thanks. Good morning guys.

Good morning Dave.

Yes, first off, on the – some of your efforts to offset the price increases to your members in Colombia, obviously following the currency devaluation, etcetera, I guess how are you guys thinking about merchandise margins, I think Jose Luis, you commented on a little bit and you are comfortable taking lower margins there, any thought on sort of the trajectory of that going forward, do you think you can absorb lowering that any further, at what point do you start needing to actually raise prices more on those customers in order to offset? And then I sort of have a follow-up to that, but I will step back for now.

Yes. Dave, we definitely believe it’s the right thing to do in Colombia for the long-term, and I think it’s going to be probably another year before we can review raising our margins in that market. We believe it’s the right thing to do. The impact on the whole economy as a result of the devaluation we have seen it with other retailers suffering in same-store sales and it’s quite a competitive environment. So, we think it’s the right thing to do and we probably will be on that – I went into say that probably for a few quarters we will stay with that strategy as a company.

Okay, that helps. And then I guess it looked to me that U.S. goods in terms of the amount you are importing into Colombia at this point are now down to 57%, which I think was down actually a little bit from the prior quarter, which could be timing, but maybe it also has something to do with some of the strategies you outlined, Jose Luis in terms of trying to do more private label. I guess what sort of the thought there in terms of how low that can go or I guess what’s sort of an optimal level of U.S. imports or how much do you hope to have locally sourced in the Colombia market over the near term sort of how are you guys thinking about that?

Yes, the way we view Colombia, Dave, we are definitely seeing our – what we bring to the market, a lot of what we bring to the market is imports. So, we are definitely not going to be changing our focus on imports. Obviously, we are more careful on the price points, we are more careful on the cost of shipping imports to that market. And in the meantime, obviously, as I highlighted, we are really looking at – given the size of Colombia, which is a big country that produces a lot of goods over there, we have found very good opportunities on developing items, and I will give you one example. We develop a local toilet paper – a toilet paper, which is under our private brand. We used to bring it from the U.S. and the quality is pretty much the same quality that we have in the one in the U.S., but we were able to deliver a better value to our members. So, we are looking at doing things like that, that at the end, will result in – will be consistent with our values as far as providing good quality on private label or good quality on any goods we sell and at the same time reducing cost for our members and be more competitive. And obviously, there is so much we can do with the currency devaluation. So, that’s a good way to fight that devaluation in the meantime. But at the end of the day, we believe that and we keep trying to bring exciting items. And we are just using other ways to either ship them better, either use the Free Trade Agreements that are in place and you get the benefits from European Union or you get them from Chile. So, every singly way we can find ways to keep saving money for our members. We are passing them on. And we will continue with that strategy there.

Okay, that helps. And then lastly for me for now, in terms of Panama, so obviously, it’s only been open for 14 days, 14 days now or so or something like that. It sounds like it opened to a pretty good strength based on your comments, I think Jose Luis. I guess, can you comment just on that in terms of the impact in terms of how that opened versus I wouldn’t expect that it would be necessarily be as strong as some of the Colombia openings just given what we know there. But just generally speaking, how would you characterize it versus some of the other markets here? And then in terms of it might be too early, what’s – what are you sort of thinking in terms of the magnitude of potential impact to the comps going forward? Thanks.

Okay. Yes, we definitely – we are happy with what we have seen even in these 14 days. It’s a good start. The opening day was very busy. The first week, it was tremendously busy, a lot of new sign-ups which is a good sign. So, I think we found something interesting in this area of Panama City or the west of Panama. First of all, it’s a growing region. We have seen that in the past. Every time we go to Panama from that region, you see all the traffic coming from – that’s kind of a dormitory city for Panama City, dormitory area for Panama City. So, we knew – based on our database, we knew we have quite a few members that were shoppers in other – in two locations, El Dorado and Vía Brasil. What we have found in these first 15 days is basically that the cannibalization we are going to see is a little higher in the club of El Dorado probably more than what we expected, which is not bad because that club needed some help and also in Vía Brasil, a little higher than what we planned. So, those two effects we think are positive, because it will help obviously our clubs get more and more space for – the existing clubs get more space for the parking lot and inside the club. And at the end, the final result is also the fact that we have more business where we have found more new members signing up in that area. So, we are pretty excited. It’s especially exceeding a little bit our initial projections, but that’s always a good thing to have in place now.

Great. Thanks for the color and good luck for rest of the fiscal year.

Thank you, Dave.

[Operator Instructions] We will go next to Patricio Danziger with RWC.

Hi, thank you for your questions. I just was wondering if you can comment on your debt in what currency denominated?

Yes, I will take that one. We have various currencies. We tend to borrow in local currency and sometimes, we will borrow in U.S. dollars and then we will have a swap that will convert it to local currency. And so it’s – what we have done in the last – over the last year is we have got a fair amount of that. So, we have really reduced any exposure we have on the debt side to change with an exchange rate in the currencies in which we borrow.

I see. Thank you very much. I am also seeing that when I compare your financial debt, the last quarter versus the same quarter of last year in U.S. dollars, it went up like 10%, but the interest expense went up a lot more than 10%, could you explain this?

Sure, sure. There is a – in accounting, you can – we can capitalize with interest if it’s associated with a significant construction activity. And last year at this time, we had significant construction activity. So interest we were incurring, we capitalize it to the projects that were associated with that. And I think in our 10-Q, we actually breakout those pieces, so you can see what the gross interest expense is and then the capitalized interest and there was the net interest expense that flows through the P&L.

Okay, thank you very much for the answers.

Thank you, Patricio.

Thank you, Patricio.

And with no further questions in the queue, I would like to turn the conference back over to John Heffner for any additional or closing remarks.

Well, thank you, Dana. I have no closing remarks. I would just say that this ends our call and thank you all for participating with us today.

Thank you.

Again, that does conclude today’s presentation. We thank you for your participation.