Pier 1 Imports 10-Q 8 Jul 15 2016 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	May. 30, 2015	Jul. 02, 2015
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	May 30, 2015
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q1
Trading Symbol	PIR
Entity Registrant Name	PIER 1 IMPORTS INC/DE
Entity Central Index Key	278,130
Current Fiscal Year End Date	--02-27
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		36,856,539

Consolidated Statements of Oper

Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	May. 30, 2015	May. 31, 2014
Net sales	$ 432,004	$ 419,059
Cost of sales	267,327	251,345
Gross profit	164,677	167,714
Selling, general and administrative expenses	138,725	131,466
Depreciation and amortization	12,394	10,418
Operating income	13,558	25,830
Nonoperating (income) and expenses:
Interest, investment income and other	(279)	(275)
Interest expense	3,008	2,001
Nonoperating (income) and expenses	2,729	1,726
Income before income taxes	10,829	24,104
Income tax provision	3,955	9,049
Net income	$ 6,874	$ 15,055
Earnings per share:
Basic	$ 0.08	$ 0.16
Diluted	0.08	0.16
Dividends declared per share:	$ 0.07	$ 0.06
Average shares outstanding during period:
Basic	88,295	94,656
Diluted	89,021	95,925

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended
	May. 30, 2015	May. 31, 2014
Net income	$ 6,874	$ 15,055
Other comprehensive income
Foreign currency translation adjustments	169	820
Pension adjustments	410	461
Other comprehensive income	579	1,281
Comprehensive income, net of tax	$ 7,453	$ 16,336

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	May. 30, 2015	Feb. 28, 2015	May. 31, 2014
Current assets:
Cash and cash equivalents, including temporary investments of $65,940, $69,572 and $185,245, respectively	$ 97,029	$ 100,064	$ 220,607
Accounts receivable, net	25,938	29,405	21,824
Inventories	501,662	478,843	417,643
Prepaid expenses and other current assets	47,947	45,851	51,519
Total current assets	672,576	654,163	711,593
Properties, net of accumulated depreciation of $454,345, $446,237 and $426,459, respectively	209,912	214,048	187,804
Other noncurrent assets	41,924	41,993	46,276
Assets, Total	924,412	910,204	945,673
Current liabilities:
Accounts payable	130,219	102,762	133,476
Gift cards and other deferred revenue	65,165	63,002	60,553
Accrued income taxes payable	5,704	13,505	7,013
Current portion of long-term debt	2,000	2,000	1,500
Other accrued liabilities	113,503	107,544	103,420
Total current liabilities	316,591	288,813	305,962
Long-term debt	204,319	204,746	206,026
Other noncurrent liabilities	$ 80,311	$ 79,378	$ 78,541
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	207,120	222,438	223,704
Retained earnings	714,277	713,575	669,551
Cumulative other comprehensive loss	(9,406)	(9,985)	(4,833)
Less - 35,682,000, 35,320,000 and 31,360,000 common shares in treasury, at cost, respectively	(588,925)	(588,886)	(533,403)
Stockholders' Equity Attributable to Parent, Total	323,191	337,267	355,144
Liabilities and Equity, Total	$ 924,412	$ 910,204	$ 945,673

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	May. 30, 2015	Feb. 28, 2015	May. 31, 2014
Cash and cash equivalents, temporary investments	$ 65,940	$ 69,572	$ 185,245
Properties, accumulated depreciation	$ 454,345	$ 446,237	$ 426,459
Common stock, par value	$ 0.001	$ 0.001	$ 0.001
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	35,682,000	35,320,000	31,360,000

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	May. 30, 2015	May. 31, 2014
Cash flows from operating activities:
Net income	$ 6,874	$ 15,055
Adjustments to reconcile to net cash provided by operating activities:
Depreciation and amortization	13,454	11,000
Stock-based compensation expense	2,246	3,232
Deferred compensation, net	1,522	1,467
Deferred income taxes	524	2,748
Excess tax benefit from stock-based awards	(518)	(279)
Amortization of deferred gains	(893)	(893)
Other	798	506
Changes in cash from:
Inventories	(22,819)	(39,993)
Prepaid expenses and other assets	1,975	(3,157)
Accounts payable and other liabilities	32,972	56,432
Accrued income taxes payable, net of payments	(7,796)	(7,377)
Net cash provided by operating activities	28,339	38,741
Cash flows from investing activities:
Capital expenditures	(9,389)	(15,325)
Proceeds from disposition of properties	13	33
Proceeds from sale of restricted investments	678	494
Purchase of restricted investments	(797)	(823)
Net cash used in investing activities	(9,495)	(15,621)
Cash flows from financing activities:
Cash dividends	(6,172)	(5,544)
Purchases of treasury stock	(16,136)	(117,404)
Proceeds from stock options exercised, stock purchase plan and other, net	411	(1,194)
Excess tax benefit from stock-based awards	518	279
Issuance of long-term debt, net of discount		198,000
Repayments of long-term debt	(500)	0
Debt issuance costs		(3,345)
Net cash provided by (used in) financing activities	(21,879)	70,792
Change in cash and cash equivalents	(3,035)	93,912
Cash and cash equivalents at beginning of period	100,064	126,695
Cash and cash equivalents at end of period	$ 97,029	$ 220,607

Consolidated Statement of Share

Consolidated Statement of Shareholders' Equity - 3 months ended May. 30, 2015 - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Paid-in Capital	Retained Earnings	Cumulative Other Comprehensive Income (Loss)	Treasury Stock
Beginning Balance (in shares) at Feb. 28, 2015		89,912
Beginning Balance at Feb. 28, 2015	$ 337,267	$ 125	$ 222,438	$ 713,575	$ (9,985)	$ (588,886)
Net income	6,874			6,874
Other comprehensive income	579				579
Purchases of treasury stock (in shares)		(1,349)
Purchases of treasury stock	(17,630)					(17,630)
Stock-based compensation expense (in shares)		958
Stock-based compensation expense	2,246		(14,754)			17,000
Exercise of stock options, stock purchase plan, and other (in shares)		29
Exercise of stock options, stock purchase plan, and other	27		(564)			591
Cash dividends ($0.07 per share)	(6,172)			(6,172)
Ending Balance (in shares) at May. 30, 2015		89,550
Ending Balance at May. 30, 2015	$ 323,191	$ 125	$ 207,120	$ 714,277	$ (9,406)	$ (588,925)

Consolidated Statement of Shar8

Consolidated Statement of Shareholders' Equity (Parenthetical)	3 Months Ended
	May. 30, 2015$ / shares
Cash dividends, per share	$ 0.07

Earnings Per Share

Earnings Per Share	3 Months Ended
	May. 30, 2015
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, and have included the effect, if dilutive, of the Company’s weighted average number of stock options outstanding and shares of unvested restricted stock. Outstanding stock options totaling 206,698 and 30,000 were excluded from the computation of diluted earnings per share for the three months ended May 30, 2015 and May 31, 2014, respectively, as the effect would be antidilutive. Earnings per share were calculated as follows (in thousands except per share amounts): Three Months Ended May 30, May 31, 2015 2014 Net income $ 6,874 $ 15,055 Weighted average shares outstanding: Basic 88,295 94,656 Effect of dilutive stock options 569 817 Effect of dilutive restricted stock 157 452 Diluted 89,021 95,925 Earnings per share: Basic $ 0.08 $ 0.16 Diluted $ 0.08 $ 0.16

Matters Concerning Shareholders

Matters Concerning Shareholders' Equity	3 Months Ended
	May. 30, 2015
Matters Concerning Shareholders' Equity	NOTE 2 – MATTERS CONCERNING SHAREHOLDERS’ EQUITY Restricted stock compensation During the first quarter of fiscal 2016, the Company awarded 903,155 shares of restricted stock. Approximately 308,000 of the shares granted are service-based and will vest ratably over a three-year service period. The service-based shares awarded have a grant date fair value of $14.04, which was determined based on the closing stock price at the time of the grant. The Company began expensing these shares during the first quarter. Approximately 531,000 shares are performance based and may vest following the end of fiscal 2018 if the Company achieves certain performance targets as determined by the Compensation Committee of the Board of Directors. These performance-based shares have a grant date fair value of $13.06, which was determined based on the closing stock price at the time of the grant. The remaining shares are performance-based shares and may vest based on a market condition. These shares may vest following the end of fiscal 2018 if certain annual equivalent returns of total shareholder return targets are achieved in comparison to a peer group. During the first quarter of fiscal 2016, the Company began expensing the performance-based shares awarded during the quarter when the performance metrics were established. 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 2016 when the targets for the performance metrics were established. Share repurchase program 2015 Stock Incentive Plan

Long-Term Debt and Available Cr

Long-Term Debt and Available Credit	3 Months Ended
	May. 30, 2015
Long-Term Debt and Available Credit	NOTE 3 – LONG-TERM DEBT AND AVAILABLE CREDIT Revolving Credit Facility Term Loan Facility The fair value of the Term Loan Facility was approximately $193,500,000 as of May 30, 2015, which was measured using the quoted market price. The Term Loan Facility was classified as Level 2 based on the frequency and volume of trading for which the price was readily available. Level 2 inputs include quoted prices in active markets for similar assets or liabilities; quoted prices for identical or similar assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability.

Defined Benefit Plans

Defined Benefit Plans	3 Months Ended
	May. 30, 2015
Defined Benefit Plans	NOTE 4 – DEFINED BENEFIT PLANS The Company maintains supplemental retirement plans for certain of its executive officers. These 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. The plans are not funded and thus have no plan assets. 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 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 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 30, May 31, 2015 2014 Components of net periodic benefit cost: Service cost $ 367 $ 351 Interest cost 158 206 Amortization of unrecognized prior service cost 15 102 Amortization of net actuarial loss 349 332 Net periodic benefit cost $ 889 $ 991

Earnings Per Share (Tables)

Earnings Per Share (Tables)	3 Months Ended
	May. 30, 2015
Calculation of Earnings Per Share	Earnings per share were calculated as follows (in thousands except per share amounts): Three Months Ended May 30, May 31, 2015 2014 Net income $ 6,874 $ 15,055 Weighted average shares outstanding: Basic 88,295 94,656 Effect of dilutive stock options 569 817 Effect of dilutive restricted stock 157 452 Diluted 89,021 95,925 Earnings per share: Basic $ 0.08 $ 0.16 Diluted $ 0.08 $ 0.16

Defined Benefit Plans (Tables)

Defined Benefit Plans (Tables)	3 Months Ended
	May. 30, 2015
Components of Net Periodic Benefit Cost	The components of net periodic benefit cost 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 30, May 31, 2015 2014 Components of net periodic benefit cost: Service cost $ 367 $ 351 Interest cost 158 206 Amortization of unrecognized prior service cost 15 102 Amortization of net actuarial loss 349 332 Net periodic benefit cost $ 889 $ 991

Earnings Per Share - Additional

Earnings Per Share - Additional Information (Detail) - shares	3 Months Ended
	May. 30, 2015	May. 31, 2014
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Outstanding stock options excluded from computation of diluted earnings per share	206,698	30,000

Calculation of Earnings Per Sha

Calculation of Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	May. 30, 2015	May. 31, 2014
Earnings Per Share Disclosure [Line Items]
Net income	$ 6,874	$ 15,055
Basic	88,295	94,656
Diluted	89,021	95,925
Basic	$ 0.08	$ 0.16
Diluted	$ 0.08	$ 0.16
Employee Stock Option
Earnings Per Share Disclosure [Line Items]
Effect of dilutive stock	569	817
Restricted Stock Awards
Earnings Per Share Disclosure [Line Items]
Effect of dilutive stock	157	452

Matters Concerning Shareholde17

Matters Concerning Shareholders' Equity - Additional Information (Detail) - USD ($)	Jul. 02, 2015	Jun. 30, 2015	May. 30, 2015	May. 31, 2014
Share Based Compensation Arrangements and Share Repurchase Plan [Line Items]
Cost of shares repurchased			$ 17,630,000
Share Repurchase Program April 2014
Share Based Compensation Arrangements and Share Repurchase Plan [Line Items]
Common stock repurchased under Share repurchase plan			1,349,200
Weighted average cost			$ 13.07
Amount remained for repurchase			$ 104,546,000
Authorized amount for share repurchase			200,000,000
Share Repurchase Program April 2014 | Subsequent Event
Share Based Compensation Arrangements and Share Repurchase Plan [Line Items]
Common stock repurchased under Share repurchase plan	1,200,000
Weighted average cost	$ 12.29
Amount remained for repurchase	$ 89,800,000
Cost of shares repurchased	$ 14,746,000	$ 1,494,000
Restricted Stock Awards
Share Based Compensation Arrangements and Share Repurchase Plan [Line Items]
Recorded stock-based compensation expense			2,220,000	$ 3,200,000
Total unrecognized compensation expense related to unvested stock option awards			$ 27,136,000
Weighted average period for recognizing unrecognized compensation expense, in years			2 years 1 month 6 days
Shares awarded			903,155
Service-Based Awards
Share Based Compensation Arrangements and Share Repurchase Plan [Line Items]
Shares awarded			308,000
Vesting period, years			3 years
Weighted average grant date fair value			$ 14.04
Performance-Based Awards
Share Based Compensation Arrangements and Share Repurchase Plan [Line Items]
Shares awarded			531,000
Weighted average grant date fair value			$ 13.06

Long-Term Debt and Available 18

Long-Term Debt and Available Credit - Additional Information (Detail) - USD ($)	3 Months Ended
	May. 30, 2015	Feb. 28, 2015	May. 31, 2014
Fair Value, Inputs, Level 2
Debt Instrument [Line Items]
Fair value of term loan facility	$ 193,500,000
Term Loan Facility
Debt Instrument [Line Items]
Borrowings outstanding	$ 198,500,000	$ 199,000,000	$ 200,000,000
Term loan facility, maturity date	Apr. 30, 2021
Amount of notes payable	$ 196,819,000	$ 197,246,000	$ 198,026,000
Revolving credit facility
Debt Instrument [Line Items]
Credit facility, maximum borrowing capacity	350,000,000
Credit facility accordion feature	100,000,000
Credit facility borrowing base	396,106,000
Borrowings outstanding	0
Remaining borrowing	307,949,000
Letters of Credit And Bankers' Acceptances
Debt Instrument [Line Items]
Borrowings outstanding	$ 42,051,000

Components of Net Periodic Bene

Components of Net Periodic Benefit Costs (Detail) - USD ($) $ in Thousands	3 Months Ended
	May. 30, 2015	May. 31, 2014
Components of net periodic benefit cost:
Service cost	$ 367	$ 351
Interest cost	158	206
Amortization of unrecognized prior service cost	15	102
Amortization of net actuarial loss	349	332
Net periodic benefit cost	$ 889	$ 991