Pier 1 Imports 10-Q 6 Jan 16 2016 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Nov. 28, 2015	Dec. 31, 2015
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Nov. 28, 2015
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q3
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		83,668,036

Consolidated Statements of Oper

Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Nov. 28, 2015	Nov. 29, 2014	Nov. 28, 2015	Nov. 29, 2014
Income Statement [Abstract]
Net sales	$ 472,547	$ 484,501	$ 1,334,507	$ 1,322,182
Cost of sales	294,054	279,588	841,819	786,918
Gross profit	178,493	204,913	492,688	535,264
Selling, general and administrative expenses	146,054	160,820	413,158	427,103
Depreciation and amortization	12,782	12,323	37,930	34,032
Operating income	19,657	31,770	41,600	74,129
Nonoperating (income) and expenses:
Interest, investment income and other	(288)	(254)	(461)	(891)
Interest expense	3,105	3,054	9,204	7,216
Nonoperating (income) and expenses	2,817	2,800	8,743	6,325
Income before income taxes	16,840	28,970	32,857	67,804
Income tax provision	5,921	11,110	11,898	25,731
Net income	$ 10,919	$ 17,860	$ 20,959	$ 42,073
Earnings per share:
Basic	$ 0.13	$ 0.20	$ 0.24	$ 0.46
Diluted	0.13	0.20	0.24	0.45
Dividends declared per share:	$ 0.07	$ 0.06	$ 0.21	$ 0.18
Average shares outstanding during period:
Basic	83,877	89,741	86,070	91,967
Diluted	84,170	90,635	86,636	93,030

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Nov. 28, 2015	Nov. 29, 2014	Nov. 28, 2015	Nov. 29, 2014
Statement of Comprehensive Income [Abstract]
Net income	$ 10,919	$ 17,860	$ 20,959	$ 42,073
Other comprehensive income (loss)
Foreign currency translation adjustments	(264)	(1,964)	(2,466)	(1,375)
Pension adjustments	410	461	1,230	1,382
Other comprehensive income (loss)	146	(1,503)	(1,236)	7
Comprehensive income, net of tax	$ 11,065	$ 16,357	$ 19,723	$ 42,080

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Nov. 28, 2015	Feb. 28, 2015	Nov. 29, 2014
Current assets:
Cash and cash equivalents, including temporary investments of $42,338, $69,572 and $26,737, respectively	$ 48,565	$ 100,064	$ 33,044
Accounts receivable, net	40,812	29,405	45,002
Inventories	503,003	478,843	535,532
Prepaid expenses and other current assets	34,667	45,851	53,183
Total current assets	627,047	654,163	666,761
Properties, net of accumulated depreciation of $472,099, $446,237 and $448,357, respectively	211,599	214,048	208,722
Other noncurrent assets	41,571	41,993	45,900
Assets, Total	880,217	910,204	921,383
Current liabilities:
Accounts payable	100,814	102,762	119,336
Gift cards and other deferred revenue	62,679	63,002	61,284
Borrowings under revolving line of credit	35,000		12,000
Accrued income taxes payable	4,016	13,505	6,242
Current portion of long-term debt	2,000	2,000	2,000
Other accrued liabilities	118,843	107,544	121,143
Total current liabilities	323,352	288,813	322,005
Long-term debt	203,464	204,746	205,173
Other noncurrent liabilities	$ 81,962	$ 79,378	$ 77,106
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	208,447	222,438	219,828
Retained earnings	716,542	713,575	685,769
Cumulative other comprehensive loss	(11,221)	(9,985)	(6,107)
Less - 41,466,000, 35,320,000 and 34,833,000 common shares in treasury, at cost, respectively	(642,454)	(588,886)	(582,516)
Stockholders' Equity Attributable to Parent, Total	271,439	337,267	317,099
Liabilities and Equity, Total	$ 880,217	$ 910,204	$ 921,383

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Nov. 28, 2015	Feb. 28, 2015	Nov. 29, 2014
Statement of Financial Position [Abstract]
Cash and cash equivalents, temporary investments	$ 42,338	$ 69,572	$ 26,737
Properties, accumulated depreciation	$ 472,099	$ 446,237	$ 448,357
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	41,466,000	35,320,000	34,833,000

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Nov. 28, 2015	Nov. 29, 2014
Cash flows from operating activities:
Net income	$ 20,959	$ 42,073
Adjustments to reconcile to net cash provided by (used in) operating activities:
Depreciation and amortization	41,416	36,024
Stock-based compensation expense	4,561	5,870
Deferred compensation, net	4,406	4,416
Deferred income taxes	2,033	2,370
Excess tax benefit from stock-based awards	(585)	(3,157)
Amortization of deferred gains	(1,638)	(2,681)
Other	998	366
Changes in cash from:
Inventories	(24,160)	(157,882)
Prepaid expenses and other assets	(289)	(28,373)
Accounts payable and other liabilities	3,580	60,084
Accrued income taxes payable, net of payments	(9,417)	(5,319)
Net cash provided by (used in) operating activities	41,864	(46,209)
Cash flows from investing activities:
Capital expenditures	(39,559)	(61,531)
Proceeds from disposition of properties	16	37
Proceeds from sale of restricted investments	8,601	1,232
Purchase of restricted investments	(8,515)	(2,314)
Net cash used in investing activities	(39,457)	(62,576)
Cash flows from financing activities:
Cash dividends	(17,992)	(16,344)
Purchases of treasury stock	(72,384)	(178,289)
Proceeds from stock options exercised, stock purchase plan and other, net	2,385	731
Excess tax benefit from stock-based awards	585	3,157
Issuance of long-term debt, net of discount		198,000
Repayments of long-term debt	(1,500)	(500)
Debt issuance costs		(3,621)
Borrowings under revolving line of credit	63,000	60,000
Repayments of borrowings under revolving line of credit	(28,000)	(48,000)
Net cash (used in) provided by financing activities	(53,906)	15,134
Change in cash and cash equivalents	(51,499)	(93,651)
Cash and cash equivalents at beginning of period	100,064	126,695
Cash and cash equivalents at end of period	$ 48,565	$ 33,044

Consolidated Statement of Share

Consolidated Statement of Shareholders' Equity - 9 months ended Nov. 28, 2015 - USD ($) shares in Thousands, $ in Thousands	Total	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	20,959			20,959
Other comprehensive loss	(1,236)				(1,236)
Purchases of treasury stock	(73,932)					(73,932)
Purchases of treasury stock (in shares)		(7,303)
Stock-based compensation expense (in shares)		953
Stock-based compensation expense	4,561		(12,356)			16,917
Exercise of stock options, stock purchase plan, and other (in shares)		204
Exercise of stock options, stock purchase plan, and other	1,812		(1,635)			3,447
Cash dividends ($0.21 per share)	(17,992)			(17,992)
Ending Balance at Nov. 28, 2015	$ 271,439	$ 125	$ 208,447	$ 716,542	$ (11,221)	$ (642,454)
Ending Balance, Common Stock at Nov. 28, 2015		83,766

Consolidated Statement of Shar8

Consolidated Statement of Shareholders' Equity (Parenthetical)	9 Months Ended
	Nov. 28, 2015$ / shares
Statement of Stockholders' Equity [Abstract]
Cash dividends, per share	$ 0.21

Earnings Per Share

Earnings Per Share	9 Months Ended
	Nov. 28, 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 include 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 67,000 and 135,000 were excluded from the computation of diluted earnings per share for the three and nine months ended November 28, 2015, respectively, as the effect would be antidilutive. Outstanding stock options totaling 233,000 and 139,000 were excluded from the computation of diluted earnings per share for the three and nine months ended November 29, 2014, respectively, as the effect would be antidilutive. Earnings per share were calculated as follows (in thousands except per share amounts): Three Months Ended Nine Months Ended November 28, November 29, November 28, November 29, 2015 2014 2015 2014 Net income $ 10,919 $ 17,860 $ 20,959 $ 42,073 Weighted average shares outstanding: Basic 83,877 89,741 86,070 91,967 Effect of dilutive stock options 193 598 421 709 Effect of dilutive restricted stock 100 296 145 354 Diluted 84,170 90,635 86,636 93,030 Earnings per share: Basic $ 0.13 $ 0.20 $ 0.24 $ 0.46 Diluted $ 0.13 $ 0.20 $ 0.24 $ 0.45

Matters Concerning Shareholders

Matters Concerning Shareholders' Equity	9 Months Ended
	Nov. 28, 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 –

Long-Term Debt and Available Cr

Long-Term Debt and Available Credit	9 Months Ended
	Nov. 28, 2015
Debt Disclosure [Abstract]
Long-Term Debt and Available Credit	NOTE 3 – LONG-TERM DEBT AND AVAILABLE CREDIT Revolving Credit Facility – At the Company’s option, borrowings bear interest, payable quarterly or, if earlier, at the end of each interest period, at either (a) the LIBOR rate plus a spread varying from 125 to 175 basis points per year, depending on the amount then borrowed under the Revolving Credit Facility, or (b) the prime rate (as defined in the Revolving Credit Facility) plus a spread varying from 25 to 75 basis points per year, depending on the amount then borrowed under the Revolving Credit Facility. Term Loan Facility – The fair value of the Term Loan Facility was approximately $186,638,000 as of November 28, 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	9 Months Ended
	Nov. 28, 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 Nine Months Ended November 28, November 29, November 28, November 29, Components of net periodic benefit cost: Service cost $ 367 $ 351 $ 1,101 $ 1,052 Interest cost 158 206 475 617 Amortization of unrecognized prior service cost 15 102 45 307 Amortization of net actuarial loss 349 332 1,046 997 Net periodic benefit cost $ 889 $ 991 $ 2,667 $ 2,973

New Accounting Pronouncements

New Accounting Pronouncements	9 Months Ended
	Nov. 28, 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 (Topic 606): Deferral of the Effective Date.” In November 2015, the Financial Accounting Standards Board issued Accounting Standards Update 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes.”

Earnings Per Share (Tables)

Earnings Per Share (Tables)	9 Months Ended
	Nov. 28, 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 Nine Months Ended November 28, November 29, November 28, November 29, 2015 2014 2015 2014 Net income $ 10,919 $ 17,860 $ 20,959 $ 42,073 Weighted average shares outstanding: Basic 83,877 89,741 86,070 91,967 Effect of dilutive stock options 193 598 421 709 Effect of dilutive restricted stock 100 296 145 354 Diluted 84,170 90,635 86,636 93,030 Earnings per share: Basic $ 0.13 $ 0.20 $ 0.24 $ 0.46 Diluted $ 0.13 $ 0.20 $ 0.24 $ 0.45

Defined Benefit Plans (Tables)

Defined Benefit Plans (Tables)	9 Months Ended
	Nov. 28, 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 Nine Months Ended November 28, November 29, November 28, November 29, Components of net periodic benefit cost: Service cost $ 367 $ 351 $ 1,101 $ 1,052 Interest cost 158 206 475 617 Amortization of unrecognized prior service cost 15 102 45 307 Amortization of net actuarial loss 349 332 1,046 997 Net periodic benefit cost $ 889 $ 991 $ 2,667 $ 2,973

Earnings Per Share - Additional

Earnings Per Share - Additional Information (Detail) - shares	3 Months Ended		9 Months Ended
	Nov. 28, 2015	Nov. 29, 2014	Nov. 28, 2015	Nov. 29, 2014
Earnings Per Share [Abstract]
Outstanding stock options excluded from computation of diluted earnings per share	67,000	233,000	135,000	139,000

Calculation of Earnings Per Sha

Calculation of Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Nov. 28, 2015	Nov. 29, 2014	Nov. 28, 2015	Nov. 29, 2014
Earnings Per Share Disclosure [Line Items]
Net income	$ 10,919	$ 17,860	$ 20,959	$ 42,073
Basic	83,877	89,741	86,070	91,967
Diluted	84,170	90,635	86,636	93,030
Basic	$ 0.13	$ 0.20	$ 0.24	$ 0.46
Diluted	$ 0.13	$ 0.20	$ 0.24	$ 0.45
Employee Stock Option
Earnings Per Share Disclosure [Line Items]
Effect of dilutive stock	193	598	421	709
Restricted Stock Awards
Earnings Per Share Disclosure [Line Items]
Effect of dilutive stock	100	296	145	354

Matters Concerning Shareholde18

Matters Concerning Shareholders' Equity - Additional Information (Detail) - USD ($)	Dec. 31, 2015	Nov. 29, 2015	Nov. 28, 2015	Nov. 29, 2014	Nov. 28, 2015	Nov. 29, 2014	Feb. 28, 2015
Share Based Compensation Arrangements and Share Repurchase Plan [Line Items]
Cost of shares repurchased					$ 73,932,000
Share Repurchase Program April 2014
Share Based Compensation Arrangements and Share Repurchase Plan [Line Items]
Common stock repurchased under Share repurchase plan					7,303,198
Weighted average cost					$ 10.12
Amount remained for repurchase			$ 48,244,000		$ 48,244,000
Cost of shares repurchased					73,932,000
Share Repurchase Program April 2014 | Subsequent Event
Share Based Compensation Arrangements and Share Repurchase Plan [Line Items]
Common stock repurchased under Share repurchase plan	157,737
Weighted average cost	$ 6.77
Amount remained for repurchase	$ 47,176,000
Cost of shares repurchased	$ 1,068,000	$ 1,548,000
Restricted Stock Awards
Share Based Compensation Arrangements and Share Repurchase Plan [Line Items]
Recorded stock-based compensation expense			1,135,000	$ 349,000	4,494,000	$ 5,799,000
Total unrecognized compensation expense related to unvested stock option awards			24,357,000		$ 24,357,000
Weighted average period for recognizing unrecognized compensation expense, in years					1 year 8 months 12 days
Performance Shares
Share Based Compensation Arrangements and Share Repurchase Plan [Line Items]
Share-based compensation expense, adjustments			$ 1,500,000				$ 650,000

Long-Term Debt and Available 19

Long-Term Debt and Available Credit - Additional Information (Detail) - USD ($)	9 Months Ended
	Nov. 28, 2015	Feb. 28, 2015	Nov. 29, 2014
Debt Instrument [Line Items]
Borrowings outstanding	$ 35,000,000		$ 12,000,000
Fair Value, Inputs, Level 2
Debt Instrument [Line Items]
Fair value of term loan facility	$ 186,638,000
Term Loan Facility
Debt Instrument [Line Items]
Term loan facility, maturity date	Apr. 30, 2021
Term loan outstanding amount	$ 197,500,000	$ 199,000,000	199,500,000
Carrying values of term loan amount, net of unamortized discount	195,964,000	$ 197,246,000	$ 197,673,000
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	473,059,000
Borrowings outstanding	35,000,000
Remaining borrowing	$ 277,794,000
Weighted average cost of borrowings under revolving line of credit	1.50%
Revolving Credit Facility | LIBOR | Minimum
Debt Instrument [Line Items]
Basis points	1.25%
Revolving Credit Facility | LIBOR | Maximum
Debt Instrument [Line Items]
Basis points	1.75%
Revolving Credit Facility | Prime Rate | Minimum
Debt Instrument [Line Items]
Basis points	0.25%
Revolving Credit Facility | Prime Rate | Maximum
Debt Instrument [Line Items]
Basis points	0.75%
Letters of Credit And Bankers' Acceptances
Debt Instrument [Line Items]
Borrowings outstanding	$ 37,206,000

Components of Net Periodic Bene

Components of Net Periodic Benefit Cost (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Nov. 28, 2015	Nov. 29, 2014	Nov. 28, 2015	Nov. 29, 2014
Components of net periodic benefit cost:
Service cost	$ 367	$ 351	$ 1,101	$ 1,052
Interest cost	158	206	475	617
Amortization of unrecognized prior service cost	15	102	45	307
Amortization of net actuarial loss	349	332	1,046	997
Net periodic benefit cost	$ 889	$ 991	$ 2,667	$ 2,973