Pier 1 Imports 10-Q 7 Oct 15 2016 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Aug. 29, 2015	Oct. 02, 2015
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Aug. 29, 2015
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q2
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		86,704,816

Consolidated Statements of Oper

Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 29, 2015	Aug. 30, 2014	Aug. 29, 2015	Aug. 30, 2014
Income Statement [Abstract]
Net sales	$ 429,956	$ 418,622	$ 861,960	$ 837,681
Cost of sales	280,438	255,985	547,765	507,330
Gross profit	149,518	162,637	314,195	330,351
Selling, general and administrative expenses	128,379	134,817	267,104	266,283
Depreciation and amortization	12,754	11,291	25,148	21,709
Operating income	8,385	16,529	21,943	42,359
Nonoperating (income) and expenses:
Interest, investment income and other	106	(362)	(173)	(637)
Interest expense	3,091	2,161	6,099	4,162
Nonoperating (income) and expenses	3,197	1,799	5,926	3,525
Income before income taxes	5,188	14,730	16,017	38,834
Income tax provision	2,022	5,572	5,977	14,621
Net income	$ 3,166	$ 9,158	$ 10,040	$ 24,213
Earnings per share:
Basic	$ 0.04	$ 0.10	$ 0.12	$ 0.26
Diluted	0.04	0.10	0.11	0.26
Dividends declared per share:	$ 0.07	$ 0.06	$ 0.14	$ 0.12
Average shares outstanding during period:
Basic	86,038	91,503	87,167	93,080
Diluted	86,717	92,531	87,869	94,228

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 29, 2015	Aug. 30, 2014	Aug. 29, 2015	Aug. 30, 2014
Statement of Comprehensive Income [Abstract]
Net income	$ 3,166	$ 9,158	$ 10,040	$ 24,213
Other comprehensive income (loss)
Foreign currency translation adjustments	(2,371)	(231)	(2,202)	589
Pension adjustments	410	460	820	921
Other comprehensive income (loss)	(1,961)	229	(1,382)	1,510
Comprehensive income, net of tax	$ 1,205	$ 9,387	$ 8,658	$ 25,723

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Aug. 29, 2015	Feb. 28, 2015	Aug. 30, 2014
Current assets:
Cash and cash equivalents, including temporary investments of $36,979, $69,572 and $38,227, respectively	$ 41,114	$ 100,064	$ 42,584
Accounts receivable, net	25,583	29,405	24,526
Inventories	533,614	478,843	513,752
Prepaid expenses and other current assets	35,936	45,851	54,557
Total current assets	636,247	654,163	635,419
Properties, net of accumulated depreciation of $463,835, $446,237 and $437,883, respectively	212,048	214,048	203,104
Other noncurrent assets	41,931	41,993	46,786
Assets, Total	890,226	910,204	885,309
Current liabilities:
Accounts payable	89,707	102,762	115,820
Gift cards and other deferred revenue	60,356	63,002	57,746
Borrowings under revolving line of credit	60,000
Accrued income taxes payable	995	13,505	1,642
Current portion of long-term debt	2,000	2,000	2,000
Other accrued liabilities	105,021	107,544	98,634
Total current liabilities	318,079	288,813	275,842
Long-term debt	203,892	204,746	205,599
Other noncurrent liabilities	$ 80,028	$ 79,378	$ 77,070
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	206,823	222,438	220,132
Retained earnings	711,460	713,575	673,267
Cumulative other comprehensive loss	(11,367)	(9,985)	(4,604)
Less - 38,185,000, 35,320,000 and 33,218,000 common shares in treasury, at cost, respectively	(618,814)	(588,886)	(562,122)
Stockholders' Equity Attributable to Parent, Total	288,227	337,267	326,798
Liabilities and Equity, Total	$ 890,226	$ 910,204	$ 885,309

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Aug. 29, 2015	Feb. 28, 2015	Aug. 30, 2014
Statement of Financial Position [Abstract]
Cash and cash equivalents, temporary investments	$ 36,979	$ 69,572	$ 38,227
Properties, accumulated depreciation	$ 463,835	$ 446,237	$ 437,883
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	38,185,000	35,320,000	33,218,000

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Aug. 29, 2015	Aug. 30, 2014
Cash flows from operating activities:
Net income	$ 10,040	$ 24,213
Adjustments to reconcile to net cash used in operating activities:
Depreciation and amortization	27,495	22,922
Stock-based compensation expense	3,405	5,500
Deferred compensation, net	2,909	2,973
Deferred income taxes	27	958
Excess tax benefit from stock-based awards	(558)	(1,962)
Amortization of deferred gains	(1,370)	(1,787)
Other	311	944
Changes in cash from:
Inventories	(54,771)	(136,102)
Prepaid expenses and other assets	13,668	(9,135)
Accounts payable and other liabilities	(21,037)	31,991
Accrued income taxes payable, net of payments	(12,465)	(11,084)
Net cash used in operating activities	(32,346)	(70,569)
Cash flows from investing activities:
Capital expenditures	(26,065)	(42,570)
Proceeds from disposition of properties	16	36
Proceeds from sale of restricted investments	8,615	1,037
Purchase of restricted investments	(8,177)	(1,791)
Net cash used in investing activities	(25,611)	(43,288)
Cash flows from financing activities:
Cash dividends	(12,155)	(10,986)
Purchases of treasury stock	(50,000)	(155,375)
Proceeds from stock options exercised, stock purchase plan and other, net	1,604	(271)
Excess tax benefit from stock-based awards	558	1,962
Issuance of long-term debt, net of discount		198,000
Repayments of long-term debt	(1,000)
Debt issuance costs		(3,584)
Borrowings under revolving line of credit	63,000
Repayments of borrowings under revolving line of credit	(3,000)
Net cash (used in) provided by financing activities	(993)	29,746
Change in cash and cash equivalents	(58,950)	(84,111)
Cash and cash equivalents at beginning of period	100,064	126,695
Cash and cash equivalents at end of period	$ 41,114	$ 42,584

Consolidated Statement of Share

Consolidated Statement of Shareholders' Equity - 6 months ended Aug. 29, 2015 - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock Outstanding	Common Stock	Paid-in Capital	Retained Earnings	Cumulative Other Comprehensive Loss	Treasury Stock
Beginning Balance at Feb. 28, 2015	$ 337,267		$ 125	$ 222,438	$ 713,575	$ (9,985)	$ (588,886)
Beginning Balance, Common Stock at Feb. 28, 2015		89,912
Net income	10,040				10,040
Other comprehensive loss	(1,382)					(1,382)
Purchases of treasury stock (in shares)		(4,003)
Purchases of treasury stock	(50,000)						(50,000)
Stock-based compensation expense (in shares)		1,009
Stock-based compensation expense	3,405			(14,426)			17,831
Exercise of stock options, stock purchase plan, and other (in shares)		129
Exercise of stock options, stock purchase plan, and other	1,052			(1,189)			2,241
Cash dividends ($0.14 per share)	(12,155)				(12,155)
Ending Balance at Aug. 29, 2015	$ 288,227		$ 125	$ 206,823	$ 711,460	$ (11,367)	$ (618,814)
Ending Balance, Common Stock at Aug. 29, 2015		87,047

Consolidated Statement of Shar8

Consolidated Statement of Shareholders' Equity (Parenthetical)	6 Months Ended
	Aug. 29, 2015$ / shares
Statement of Stockholders' Equity [Abstract]
Cash dividends, per share	$ 0.14

Earnings Per Share

Earnings Per Share	6 Months Ended
	Aug. 29, 2015
Earnings Per Share [Abstract]
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 132,000 and 169,000 were excluded from the computation of diluted earnings per share for the three and six months ended August 29, 2015, respectively, as the effect would be antidilutive. Outstanding stock options totaling 154,000 and 92,000 were excluded from the computation of diluted earnings per share for the three and six months ended August 30, 2014, respectively, as the effect would be antidilutive. Earnings per share were calculated as follows (in thousands except per share amounts): Three Months Ended Six Months Ended August 29, August 30, August 29, August 30, 2015 2014 2015 2014 Net income $ 3,166 $ 9,158 $ 10,040 $ 24,213 Weighted average shares outstanding: Basic 86,038 91,503 87,167 93,080 Effect of dilutive stock options 500 713 534 765 Effect of dilutive restricted stock 179 315 168 383 Diluted 86,717 92,531 87,869 94,228 Earnings per share: Basic $ 0.04 $ 0.10 $ 0.12 $ 0.26 Diluted $ 0.04 $ 0.10 $ 0.11 $ 0.26

Matters Concerning Shareholders

Matters Concerning Shareholders' Equity	6 Months Ended
	Aug. 29, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Matters Concerning Shareholders' Equity	NOTE 2 – MATTERS CONCERNING SHAREHOLDERS’ EQUITY Restricted stock compensation – Share repurchase program – 2015 Stock Incentive Plan –

Long-Term Debt and Available Cr

Long-Term Debt and Available Credit	6 Months Ended
	Aug. 29, 2015
Debt Disclosure [Abstract]
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 $191,813,000 as of August 29, 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	6 Months Ended
	Aug. 29, 2015
Compensation and Retirement Disclosure [Abstract]
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 Six Months Ended August 29, August 30, August 29, August 30, 2015 2014 2015 2014 Components of net periodic benefit cost: Service cost $ 367 $ 350 $ 734 $ 701 Interest cost 159 205 317 411 Amortization of unrecognized prior service cost 15 103 30 205 Amortization of net actuarial loss 348 333 697 665 Net periodic benefit cost $ 889 $ 991 $ 1,778 $ 1,982

New Accounting Pronouncements

New Accounting Pronouncements	6 Months Ended
	Aug. 29, 2015
Accounting Changes and Error Corrections [Abstract]
New Accounting Pronouncements	NOTE 5 – NEW ACCOUNTING PRONOUNCEMENTS In July 2015, the Financial Accounting Standards Board issued Accounting Standards Update 2015-11, “Inventory (Topic 330): Simplifying the Measurement of Inventory.” In August 2015, the Financial Accounting Standards Board issued Accounting Standards Update 2015-14, “Revenue from Contracts with Customers: Deferral of the Effective Date.”

Earnings Per Share (Tables)

Earnings Per Share (Tables)	6 Months Ended
	Aug. 29, 2015
Earnings Per Share [Abstract]
Calculation of Earnings Per Share	Earnings per share were calculated as follows (in thousands except per share amounts): Three Months Ended Six Months Ended August 29, August 30, August 29, August 30, 2015 2014 2015 2014 Net income $ 3,166 $ 9,158 $ 10,040 $ 24,213 Weighted average shares outstanding: Basic 86,038 91,503 87,167 93,080 Effect of dilutive stock options 500 713 534 765 Effect of dilutive restricted stock 179 315 168 383 Diluted 86,717 92,531 87,869 94,228 Earnings per share: Basic $ 0.04 $ 0.10 $ 0.12 $ 0.26 Diluted $ 0.04 $ 0.10 $ 0.11 $ 0.26

Defined Benefit Plans (Tables)

Defined Benefit Plans (Tables)	6 Months Ended
	Aug. 29, 2015
Compensation and Retirement Disclosure [Abstract]
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 Six Months Ended August 29, August 30, August 29, August 30, 2015 2014 2015 2014 Components of net periodic benefit cost: Service cost $ 367 $ 350 $ 734 $ 701 Interest cost 159 205 317 411 Amortization of unrecognized prior service cost 15 103 30 205 Amortization of net actuarial loss 348 333 697 665 Net periodic benefit cost $ 889 $ 991 $ 1,778 $ 1,982

Earnings Per Share - Additional

Earnings Per Share - Additional Information (Detail) - shares	3 Months Ended		6 Months Ended
	Aug. 29, 2015	Aug. 30, 2014	Aug. 29, 2015	Aug. 30, 2014
Earnings Per Share [Abstract]
Outstanding stock options excluded from computation of diluted earnings per share	132,000	154,000	169,000	92,000

Calculation of Earnings Per Sha

Calculation of Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 29, 2015	Aug. 30, 2014	Aug. 29, 2015	Aug. 30, 2014
Earnings Per Share Disclosure [Line Items]
Net income	$ 3,166	$ 9,158	$ 10,040	$ 24,213
Basic	86,038	91,503	87,167	93,080
Diluted	86,717	92,531	87,869	94,228
Basic	$ 0.04	$ 0.10	$ 0.12	$ 0.26
Diluted	$ 0.04	$ 0.10	$ 0.11	$ 0.26
Employee Stock Option
Earnings Per Share Disclosure [Line Items]
Effect of dilutive stock	500	713	534	765
Restricted Stock Awards
Earnings Per Share Disclosure [Line Items]
Effect of dilutive stock	179	315	168	383

Matters Concerning Shareholde18

Matters Concerning Shareholders' Equity - Additional Information (Detail) - USD ($)	Oct. 02, 2015	Aug. 29, 2015	Aug. 30, 2014	Aug. 29, 2015	Aug. 30, 2014	Feb. 28, 2015
Share Based Compensation Arrangements and Share Repurchase Plan [Line Items]
Cost of shares repurchased				$ 50,000,000
Subsequent Event
Share Based Compensation Arrangements and Share Repurchase Plan [Line Items]
Cost of shares repurchased	$ 2,621,000
Share Repurchase Program April 2014
Share Based Compensation Arrangements and Share Repurchase Plan [Line Items]
Common stock repurchased under Share repurchase plan				4,003,198
Weighted average cost				$ 12.49
Amount remained for repurchase		$ 72,176,000		$ 72,176,000
Authorized amount for share repurchase		200,000,000		200,000,000
Cost of shares repurchased				50,000,000
Share Repurchase Program April 2014 | Subsequent Event
Share Based Compensation Arrangements and Share Repurchase Plan [Line Items]
Common stock repurchased under Share repurchase plan	375,000
Weighted average cost	$ 6.99
Amount remained for repurchase	$ 69,555,000
Restricted Stock Awards
Share Based Compensation Arrangements and Share Repurchase Plan [Line Items]
Recorded stock-based compensation expense		1,139,000	$ 2,250,000	3,359,000	$ 5,450,000
Total unrecognized compensation expense related to unvested stock option awards		26,237,000		$ 26,237,000
Weighted average period for recognizing unrecognized compensation expense, in years				2 years
Performance Shares
Share Based Compensation Arrangements and Share Repurchase Plan [Line Items]
Share-based compensation expense, adjustments		$ 1,000,000				$ 650,000

Long-Term Debt and Available 19

Long-Term Debt and Available Credit - Additional Information (Detail) - USD ($)	6 Months Ended
	Aug. 29, 2015	Feb. 28, 2015	Aug. 30, 2014
Debt Instrument [Line Items]
Borrowings outstanding	$ 60,000,000
Weighted average cost of borrowings under revolving line of credit	1.50%
Fair Value, Inputs, Level 2
Debt Instrument [Line Items]
Fair value of term loan facility	$ 191,813,000
Term Loan Facility
Debt Instrument [Line Items]
Borrowings outstanding	$ 198,000,000	$ 199,000,000	$ 200,000,000
Term loan facility, maturity date	Apr. 30, 2021
Amount of notes payable	$ 196,392,000	$ 197,246,000	$ 198,099,000
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	436,085,000
Borrowings outstanding	60,000,000
Remaining borrowing	249,044,000
Letters of Credit And Bankers' Acceptances
Debt Instrument [Line Items]
Borrowings outstanding	$ 40,956,000

Components of Net Periodic Bene

Components of Net Periodic Benefit Cost (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 29, 2015	Aug. 30, 2014	Aug. 29, 2015	Aug. 30, 2014
Components of net periodic benefit cost:
Service cost	$ 367	$ 350	$ 734	$ 701
Interest cost	159	205	317	411
Amortization of unrecognized prior service cost	15	103	30	205
Amortization of net actuarial loss	348	333	697	665
Net periodic benefit cost	$ 889	$ 991	$ 1,778	$ 1,982