Pier 1 Imports 10-Q 9 Jul 14 2015 Q1 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	3 Months Ended
	31-May-14	Jul. 03, 2014
Document Information [Line Items]	'	'
Document Type	'10-Q	'
Amendment Flag	'false	'
Document Period End Date	31-May-14	'
Document Fiscal Year Focus	'2015	'
Document Fiscal Period Focus	'Q1	'
Trading Symbol	'PIR	'
Entity Registrant Name	'PIER 1 IMPORTS INC/DE	'
Entity Central Index Key	'0000278130	'
Current Fiscal Year End Date	'--02-28	'
Entity Filer Category	'Large Accelerated Filer	'
Entity Common Stock, Shares Outstanding	'	93,422,506

Consolidated_Statements_of_Ope

Consolidated Statements of Operations (USD $)	3 Months Ended
In Thousands, except Per Share data, unless otherwise specified	31-May-14	Jun. 01, 2013
Net sales	$419,059	$394,853
Cost of sales	251,345	227,256
Gross profit	167,714	167,597
Selling, general and administrative expenses	131,466	125,470
Depreciation and amortization	10,418	8,912
Operating income	25,830	33,215
Nonoperating (income) and expenses:	'	'
Interest, investment income and other	-275	-352
Interest expense	2,001	749
Nonoperating Income (Expense)	1,726	397
Income before income taxes	24,104	32,818
Income tax provision	9,049	12,471
Net income	$15,055	$20,347
Earnings per share:	'	'
Basic	$0.16	$0.19
Diluted	$0.16	$0.19
Dividends declared per share:	$0.06	$0.05
Average shares outstanding during period:	'	'
Basic	94,656	105,989
Diluted	95,925	107,790

Consolidated_Statements_of_Com

Consolidated Statements of Comprehensive Income (USD $)	3 Months Ended
In Thousands, unless otherwise specified	31-May-14	Jun. 01, 2013
Net income	$15,055	$20,347
Other comprehensive income (loss)	'	'
Foreign currency translation adjustments	820	-450
Pension adjustments	461	465
Other comprehensive income	1,281	15
Comprehensive income, net of tax	$16,336	$20,362

Consolidated_Balance_Sheets

Consolidated Balance Sheets (USD $)	31-May-14	Mar. 01, 2014	Jun. 01, 2013
In Thousands, unless otherwise specified
Current assets:	'	'	'
Cash and cash equivalents, including temporary investments of $185,245, $121,446 and $202,316, respectively	$220,607	$126,695	$241,898
Accounts receivable, net	21,824	24,614	20,418
Inventories	417,643	377,650	383,321
Prepaid expenses and other current assets	51,519	47,547	50,453
Total current assets	711,593	576,506	696,090
Properties, net of accumulated depreciation of $426,459, $424,246 and $486,839, respectively	187,804	183,352	154,026
Other noncurrent assets	46,276	43,765	45,830
Assets, Total	945,673	803,623	895,946
Current liabilities:	'	'	'
Accounts payable	133,476	84,238	108,977
Gift cards and other deferred revenue	60,553	57,428	53,206
Accrued income taxes payable	7,013	14,025	17,963
Current portion of long-term debt	1,500	'	'
Other accrued liabilities	103,420	110,278	97,353
Total current liabilities	305,962	265,969	277,499
Long-term debt	206,026	9,500	9,500
Other noncurrent liabilities	78,541	78,722	64,870
Commitments and contingencies	'	'	'
Shareholders' equity:	'	'	'
Common stock, $0.001 par, 500,000,000 shares authorized, 125,232,000 issued	125	125	125
Paid-in capital	223,704	235,637	223,666
Retained earnings	669,551	660,040	589,280
Cumulative other comprehensive loss	-4,833	-6,114	-4,813
Less - 31,360,000, 26,517,000 and 18,174,000 common shares in treasury, at cost, respectively	-533,403	-440,256	-264,181
Stockholders' Equity Attributable to Parent, Total	355,144	449,432	544,077
Liabilities and Equity, Total	$945,673	$803,623	$895,946

Consolidated_Balance_Sheets_Pa

Consolidated Balance Sheets (Parenthetical) (USD $)	31-May-14	Mar. 01, 2014	Jun. 01, 2013
In Thousands, except Share data, unless otherwise specified
Cash and cash equivalents, temporary investments	$185,245	$121,446	$202,316
Properties, accumulated depreciation	$426,459	$424,246	$486,839
Common stock, par value	$0.00	$0.00	$0.00
Common stock, shares authorized	500,000,000	500,000,000	500,000,000
Common stock, shares issued	125,232,000	125,232,000	125,232,000
Treasury stock, shares	31,360,000	26,517,000	18,174,000

Consolidated_Statements_of_Cas

Consolidated Statements of Cash Flows (USD $)	3 Months Ended
In Thousands, unless otherwise specified	31-May-14	Jun. 01, 2013
Cash flow from operating activities:	'	'
Net income	$15,055	$20,347
Adjustments to reconcile to net cash provided by operating activities:	'	'
Depreciation and amortization	12,031	10,679
Stock-based compensation expense	3,232	4,054
Deferred compensation	1,467	2,237
Deferred income taxes	2,748	1,987
Amortization of deferred gains	-893	-729
Other	227	-1,358
Changes in cash from:	'	'
Inventories	-39,993	-27,268
Proprietary credit card receivables	-264	-888
Prepaid expenses and other assets	-3,924	-19
Accounts payable and accrued expenses	44,824	37,282
Accrued income taxes payable, net of payments	-7,377	-7,286
Net cash provided by operating activities	27,133	39,038
Cash flow from investing activities:	'	'
Capital expenditures	-15,325	-14,070
Proceeds from disposition of properties	33	2,542
Proceeds from sale of restricted investments	494	356
Purchase of restricted investments	-823	-1,551
Net cash used in investing activities	-15,621	-12,723
Cash flow from financing activities:	'	'
Cash dividends	-5,544	-5,273
Purchases of treasury stock	-105,796	-16,992
Stock options exercised, stock purchase plan and other, net	-915	6,317
Issuance of long-term debt, net of discount	198,000	'
Debt issuance costs	-3,345	-25
Net cash provided by (used in) financing activities	82,400	-15,973
Change in cash and cash equivalents	93,912	10,342
Cash and cash equivalents at beginning of period	126,695	231,556
Cash and cash equivalents at end of period	$220,607	$241,898

Consolidated_Statement_of_Shar

Consolidated Statement of Shareholders' Equity (USD $)	Total	Common Stock	Paid-in Capital	Retained Earnings	Cumulative Other Comprehensive Income (Loss)	Treasury Stock
Beginning Balance at Mar. 01, 2014	$449,432,000	$125,000	$235,637,000	$660,040,000	($6,114,000)	($440,256,000)
Beginning Balance (in shares) at Mar. 01, 2014	'	98,715,000	'	'	'	'
Net income	15,055,000	'	'	15,055,000	'	'
Other comprehensive income	1,281,000	'	'	'	1,281,000	'
Purchases of treasury stock	-107,397,000	'	'	'	'	-107,397,000
Purchases of treasury stock (in shares)	-5,701,812	-5,701,812	'	'	'	'
Stock-based compensation (in shares)	'	880,000	'	'	'	'
Stock-based compensation	3,232,000	'	-11,550,000	'	'	14,782,000
Exercise of stock options, stock purchase plan, and other (in shares)	'	-21,000	'	'	'	'
Exercise of stock options, stock purchase plan, and other	-915,000	'	-383,000	'	'	-532,000
Cash dividends ($0.06 per share)	-5,544,000	'	'	-5,544,000	'	'
Ending Balance at May. 31, 2014	$355,144,000	$125,000	$223,704,000	$669,551,000	($4,833,000)	($533,403,000)
Ending Balance (in shares) at May. 31, 2014	'	93,872,000	'	'	'	'

Consolidated_Statement_of_Shar1

Consolidated Statement of Shareholders' Equity (Parenthetical) (USD $)	3 Months Ended
	31-May-14
Cash dividends, per share	$0.06

Earnings_per_share

Earnings per share	3 Months Ended
	31-May-14
Earnings per share	'
	NOTE 1 – EARNINGS PER SHARE
	Basic earnings per share amounts were determined by dividing net income by the weighted average number of common shares outstanding for the period. Diluted earnings per share amounts were similarly computed, but included the dilutive effect of the Company’s weighted average number of stock options outstanding and shares of unvested restricted stock. A total of 30,000 and 7,000 outstanding stock options and shares of unvested restricted stock were excluded from the computation of earnings per share as of May 31, 2014 and June 1, 2013, respectively, as the effect would be antidilutive. Earnings per share for the three months ended May 31, 2014 and June 1, 2013, were calculated as follows (in thousands except per share amounts):
		Three Months Ended
		May 31,		June 1,
		2014		2013
	Net income, basic and diluted	$	15,055	$	20,347
	Weighted average shares outstanding during period:
	Basic		94,656		105,989
	Effect of dilutive stock options		817		1,151
	Effect of dilutive restricted stock		452		650
	Diluted		95,925		107,790
	Earnings per share:
	Basic	$	0.16	$	0.19
	Diluted	$	0.16	$	0.19

Matters_Concerning_Shareholder

Matters Concerning Shareholders' Equity	3 Months Ended
	31-May-14
Matters Concerning Shareholders' Equity	'
	NOTE 2 – MATTERS CONCERNING SHAREHOLDERS’ EQUITY
	Restricted stock compensation - For the three months ended May 31, 2014 and June 1, 2013, the Company recorded compensation expense for restricted stock of $3,200,000 and $4,016,000, respectively. As of May 31, 2014, there was approximately $22,263,000 of total unrecognized compensation expense related to unvested restricted stock that may be recognized over a weighted average period of 2.0 years if certain performance targets are achieved.
	During the first quarter of fiscal 2015, the Company awarded 511,572 shares of restricted stock. Approximately 160,000 of the shares granted are service-based and will vest ratably over a three-year service period. Approximately 133,000 shares are performance-based and will vest ratably over a three-year period if the Company achieves certain performance targets as determined by the Compensation Committee of the Board of Directors for fiscal years 2015, 2016 and 2017. Approximately 55,000 shares are performance-based with a market condition and will vest following the end of fiscal 2017 if certain total shareholder return targets are achieved relative to a peer group. The remaining shares are performance-based and will vest following the end of fiscal 2017 if the Company achieves a total sales performance goal and an e-Commerce sales as a percentage of total sales performance goal. All of the service-based and a portion of the performance-based shares awarded during the first quarter of fiscal 2015 have a grant date fair value of $17.78 determined based on the closing stock price on the grant date, and the Company began expensing these shares during the current quarter. A grant date fair value for the remaining performance-based shares will be established at a future date when performance targets are set for fiscal years 2016 and 2017, and the Company will begin expensing these shares during the respective quarter in which such determinations are made. The performance-based shares that may vest based on a market condition have a fair value of $9.04 determined using a lattice valuation model in accordance with accounting guidelines, and the Company began expensing these shares during the current quarter. The Company also began expensing performance-based shares that were awarded to employees in previous fiscal years, including the Company’s chief executive officer, during the first quarter of fiscal 2015 when the targets for the performance metrics were established.
	Share repurchase program – During the first three months of fiscal 2015, the Company repurchased 5,701,812 shares of its common stock at a weighted average cost of $18.84 per share for a total cost of $107,397,000. Of this amount the Company utilized $96,108,000 to repurchase 5,071,812 shares of the Company’s common stock at a weighted average cost of $18.95 under the $200,000,000 October 2013 share repurchase program, which completed the program. The remaining $11,289,000 was utilized to repurchase 630,000 shares of the Company’s common stock at a weighted average cost of $17.92 under the $200,000,000 April 2014 share repurchase program. Of the $107,397,000 in total repurchases in fiscal 2015, $1,601,000 were settled in June of fiscal 2015. Amounts repurchased but settled subsequent to quarter end are considered non-cash financing activities and are excluded from the Consolidated Statements of Cash Flows. Subsequent to quarter end, through July 3, 2014, the Company utilized a total of $18,604,000 to repurchase 1,152,000 shares of the Company’s common stock under the April 2014 program at a weighted average cost of $16.15 and $170,107,000 remained available for further repurchases under that program.

LongTerm_Debt_and_Available_Cr

Long-Term Debt and Available Credit	3 Months Ended
	31-May-14
Long-Term Debt and Available Credit	'
	NOTE 3 – LONG-TERM DEBT AND AVAILABLE CREDIT
	The Company completed a second amendment to its secured revolving credit facility (“Revolving Credit Facility”) on April 30, 2014, in order to allow additional borrowings under a new senior secured term loan facility (the “Term Loan Facility”) that closed on the same day. Substantially all other material terms and conditions applicable under the Revolving Credit Facility remain unchanged. The Revolving Credit Facility is secured primarily by merchandise inventory and third-party credit card receivables and certain related assets on a first priority basis and, following the incurrence of the Term Loan Facility indebtedness discussed below, is secured on a second lien basis by substantially all other assets of certain of the Company’s subsidiaries, subject to certain exceptions. Credit extensions under the Revolving Credit Facility are limited to the lesser of $350,000,000 or the amount of the calculated borrowing base, which was $326,834,000 as of May 31, 2014. Under the Revolving Credit Facility the Company had no cash borrowings and approximately $43,633,000 in letters of credit and bankers’ acceptances outstanding, with $283,201,000 remaining available for cash borrowings, all as of May 31, 2014.
	The Company entered into the Term Loan Facility on April 30, 2014. The Term Loan Facility matures on April 30, 2021, and is secured by a second lien on all assets subject to a first lien under the Revolving Credit Facility and a first lien on substantially all other assets of certain of the Company’s subsidiaries, subject to certain exceptions. The Term Loan Facility provides for incremental facilities, subject to certain conditions, including the meeting of certain leverage ratio requirements as defined therein, to the extent such amounts exceed an incremental $200,000,000. At the Company’s option, borrowings under the Term Loan Facility will bear interest, payable quarterly or, if earlier, at the end of each interest period, at either (a) the LIBOR rate (as defined in the Term Loan Facility) subject to a 1% floor plus 350 basis points per year or (b) the base rate (as defined in the Term Loan Facility) subject to a 2% floor plus 250 basis points per year. The proceeds of the loan were used for general corporate purposes, including working capital needs and capital expenditures, and share repurchases and dividends permitted under the Term Loan Facility. As of May 31, 2014, the Company had $200,000,000 outstanding under the Term Loan Facility with a carrying value of $198,026,000 net of any unamortized discounts. The Term Loan Facility is subject to quarterly amortization of principal equal to 0.25% of the original aggregate principal amount of the loans, with the balance due at final maturity. The Company is subject to an annual excess cash flow repayment requirement, as defined in the Term Loan Facility, beginning with the fiscal year ending February 2015. At the Company’s option, and subject to the requirements and provisions of the Term Loan Facility, the Company can prepay the Term Loan Facility at any time prior to twelve months after closing subject to a 1% penalty in certain cases, and without penalty thereafter. The fair value of the Term Loan Facility was approximately $200,000,000 as of May 31, 2014 using Level 2 inputs.
	The Term Loan Facility includes restrictions on the Company’s ability to, among other things, incur or guarantee additional indebtedness, pay dividends on, or redeem or repurchase shares of the Company’s capital stock, make certain acquisitions or investments, materially change the business of the Company, incur or permit to exist certain liens, enter into transactions with affiliates or sell the Company’s assets to, or merge or consolidate with or into, another company, in each case subject to certain exceptions. The Term Loan Facility does not require the Company to comply with any financial maintenance covenants, but contains certain customary representations and warranties, affirmative covenants and provisions relating to events of default.

Defined_benefit_plans

Defined benefit plans	3 Months Ended
	31-May-14
Defined benefit plans	'
	NOTE 4 – DEFINED BENEFIT PLANS
	The Company maintains supplemental retirement plans (the “Plans”) for certain of its executive officers. The Plans provide that upon death, disability, reaching retirement age or certain termination events, a participant will receive benefits based on highest compensation, years of service and years of plan participation. Benefit costs are determined using actuarial cost methods to estimate the total benefits ultimately payable to executive officers and this cost is allocated to the respective service periods.
	The Plans are not funded and thus have no plan assets. The actuarial assumptions used to calculate benefit costs are reviewed annually, or in the event of a material change in the Plans or participation in the Plans. The components of net periodic benefit cost for the three months ended May 31, 2014 and June 1, 2013, are shown in the table below (in thousands). The amortization of amounts related to unrecognized prior service cost and net actuarial loss was reclassified out of other comprehensive income as a component of net periodic benefit cost.
		Three Months Ended
		May 31,		June 1,
		2014		2013
	Components of net periodic benefit cost:
	Service cost	$	351	$	364
	Interest cost		206		192
	Amortization of unrecognized prior service cost		102		102
	Amortization of net actuarial loss		332		348
	Net periodic benefit cost	$	991	$	1,006

New_accounting_pronouncement

New accounting pronouncement	3 Months Ended
	31-May-14
New accounting pronouncement	'
	NOTE 5 – NEW ACCOUNTING PRONOUNCEMENTS
	In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update 2014-09, “Revenue from Contracts with Customers,” which creates a new Topic, Accounting Standards Codification Topic 606. The standard is principle-based and provides a five-step model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. This standard is effective for the Company beginning in fiscal 2018 and allows for either full retrospective adoption or modified retrospective adoption. The Company is currently evaluating the impact of the adoption of Topic 606 on its financial statements.
	In June 2014, the Financial Accounting Standards Board issued Accounting Standards Update 2014-12, “Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period.” The standard states that a performance target in a share-based payment that affects vesting and that could be achieved after the requisite service period should be accounted for as a performance condition. This standard is effective for the Company beginning in fiscal 2017 and early adoption is permitted. The Company is currently evaluating the impact of the adoption of this guidance on its financial statements.

Earnings_per_share_Tables

Earnings per share (Tables)	3 Months Ended
	31-May-14
Calculation of Earning Per Share	'
	Earnings per share for the three months ended May 31, 2014 and June 1, 2013, were calculated as follows (in thousands except per share amounts):
		Three Months Ended
		May 31,		June 1,
		2014		2013
	Net income, basic and diluted	$	15,055	$	20,347
	Weighted average shares outstanding during period:
	Basic		94,656		105,989
	Effect of dilutive stock options		817		1,151
	Effect of dilutive restricted stock		452		650
	Diluted		95,925		107,790
	Earnings per share:
	Basic	$	0.16	$	0.19
	Diluted	$	0.16	$	0.19

Defined_benefit_plans_Tables

Defined benefit plans (Tables)	3 Months Ended
	31-May-14
Components of Net Periodic Benefit Cost	'
	The amortization of amounts related to unrecognized prior service cost and net actuarial loss was reclassified out of other comprehensive income as a component of net periodic benefit cost.
		Three Months Ended
		May 31,		June 1,
		2014		2013
	Components of net periodic benefit cost:
	Service cost	$	351	$	364
	Interest cost		206		192
	Amortization of unrecognized prior service cost		102		102
	Amortization of net actuarial loss		332		348
	Net periodic benefit cost	$	991	$	1,006

Earnings_Per_Share_Additional_

Earnings Per Share - Additional Information (Detail)	3 Months Ended
	31-May-14	Jun. 01, 2013
Earnings Per Share Disclosure [Line Items]	'	'
Outstanding stock options and shares of unvested restricted stock excluded from computation of earnings per share	30,000	7,000

Calculation_of_Earnings_Per_Sh

Calculation of Earnings Per Share (Detail) (USD $)	3 Months Ended
In Thousands, except Per Share data, unless otherwise specified	31-May-14	Jun. 01, 2013
Earnings Per Share Disclosure [Line Items]	'	'
Net Income, basic and diluted	$15,055	$20,347
Basic	94,656	105,989
Diluted	95,925	107,790
Basic	$0.16	$0.19
Diluted	$0.16	$0.19
Employee Stock Option	'	'
Earnings Per Share Disclosure [Line Items]	'	'
Effect of dilutive stock	817	1,151
Restricted Stock Awards	'	'
Earnings Per Share Disclosure [Line Items]	'	'
Effect of dilutive stock	452	650

Matters_Concerning_Shareholder1

Matters Concerning Shareholders' Equity - Additional Information (Detail) (USD $)	3 Months Ended		1 Months Ended	3 Months Ended		0 Months Ended	3 Months Ended
	31-May-14	Jun. 01, 2013	Jun. 30, 2014	31-May-14	31-May-14	Jul. 03, 2014	31-May-14	Jun. 01, 2013	31-May-14	31-May-14	31-May-14
			Subsequent Event	October 2013 Share Repurchase Program	April 2014 Share Repurchase Program	April 2014 Share Repurchase Program	Restricted Stock Awards	Restricted Stock Awards	Service-Based Awards	Performance-Based Awards	Performance And Market Based Awards
						Subsequent Event
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]	'	'	'	'	'	'	'	'	'	'	'
Recorded stock-based compensation expense	'	'	'	'	'	'	$3,200,000	$4,016,000	'	'	'
Total unrecognized compensation expense related to unvested stock option awards	'	'	'	'	'	'	22,263,000	'	'	'	'
Weighted average period for recognizing unrecognized compensation expense, in years	'	'	'	'	'	'	'2 years	'	'	'	'
Shares awarded	'	'	'	'	'	'	511,572	'	160,000	133,000	55,000
Vesting period, years	'	'	'	'	'	'	'	'	'3 years	'3 years	'
Weighted average grant date fair value	$17.78	'	'	'	'	'	'	'	'	'	$9.04
Common stock repurchased under Share repurchase plan	5,701,812	'	'	5,071,812	630,000	1,152,000	'	'	'	'	'
Weighted average cost	$18.84	'	'	$18.95	$17.92	$16.15	'	'	'	'	'
Cost of shares repurchased	107,397,000	'	'	96,108,000	11,289,000	18,604,000	'	'	'	'	'
Share repurchase program, amount of common stock	'	'	'	200,000,000	200,000,000	'	'	'	'	'	'
Payment for repurchased shares	105,796,000	16,992,000	1,601,000	'	'	'	'	'	'	'	'
Amount remained for repurchase	'	'	'	'	'	$170,107,000	'	'	'	'	'

LongTerm_Debt_and_Available_Cr1

Long-Term Debt and Available Credit - Additional Information (Detail) (USD $)	3 Months Ended
	31-May-14
Term Loan Facility	'
Debt Instrument [Line Items]	'
Borrowings outstanding	$200,000,000
Term loan facility, maturity date	30-Apr-21
Amount of notes payable	198,026,000
Term loan facility, quarterly amortization of principal amount of loans	0.25%
Prepayment penalty rate	1.00%
Term Loan Facility | Level 2 Inputs	'
Debt Instrument [Line Items]	'
Fair value of term loan facility	200,000,000
Term Loan Facility | LIBOR	'
Debt Instrument [Line Items]	'
Interest floor rate	1.00%
Basis points	3.50%
Term Loan Facility | Base Rate	'
Debt Instrument [Line Items]	'
Interest floor rate	2.00%
Basis points	2.50%
Revolving credit facility	'
Debt Instrument [Line Items]	'
Maximum borrowings under credit facility	350,000,000
Credit facility borrowing base	326,834,000
Borrowings outstanding	0
Remaining borrowing	283,201,000
Letters Of Credit And Bankers' Acceptances	'
Debt Instrument [Line Items]	'
Borrowings outstanding	$43,633,000

Components_of_Net_Periodic_Ben

Components of Net Periodic Benefit Costs (Detail) (USD $)	3 Months Ended
In Thousands, unless otherwise specified	31-May-14	Jun. 01, 2013
Components of net periodic benefit cost:	'	'
Service cost	$351	$364
Interest cost	206	192
Amortization of unrecognized prior service cost	102	102
Amortization of net actuarial loss	332	348
Net periodic benefit cost	$991	$1,006