Exhibit 99.1
Pier 1 Imports Reports Fourth Quarter and Fiscal Year 2004 Earnings
FORT WORTH, Texas--(BUSINESS WIRE)--April 1, 2004--Pier 1 Imports, Inc.
(NYSE:PIR) today reported for its fiscal fourth quarter ended February 28, 2004,
diluted earnings per share of $0.53 per share, including an after-tax charge of
$1.6 million, or $0.02 per diluted share, attributable to a California labor
litigation settlement and related legal costs. Excluding this charge, fourth
quarter earnings per diluted share would have been $0.55 per share, compared to
$0.57 per share in the year-ago quarter. Reported net income for the fourth
fiscal quarter was $48,309,000, a decrease of 10.6% from last year's
$54,032,000. Sales for the fourth quarter amounted to $555,256,000, an increase
of 6.6% over last year's $521,035,000. Comparable store sales for the fourth
quarter declined 2.7% from the year-ago period.
Fiscal year 2004 diluted earnings per share for the twelve-month period
ended February 28, 2004, amounted to $1.29 per share, including the $0.02 per
diluted share after-tax litigation settlement charge recorded in the fourth
quarter. Excluding this charge, the fiscal year diluted earnings per share would
have been $1.31 per share, versus $1.36 per diluted share last year. Reported
net income for fiscal year 2004 was $118,001,000, compared to last year's net
income of $129,386,000. Sales for the fiscal year were $1,868,243,000, up 6.5%
over last year's $1,754,867,000. Fiscal year 2004 comparable store sales
declined 2.2% from the prior year.
Marvin J. Girouard, the Company's Chairman and Chief Executive Officer,
said, "Fiscal year 2004 was a challenging year for the Company. We achieved
record sales of almost $1.9 billion. However, comp store sales declined by 2.2%
after eleven consecutive years of comparable store sales gains. Despite the
disappointing comp store sales results last year, the Company generated strong
operational cash flow, opened 120 new Pier 1 stores, paid increased cash
dividends, repurchased Pier 1 common stock, and ended the fiscal year with cash
and cash equivalent investments of $225 million.
"We began fiscal 2005 on February 29, 2004 and our new TV advertising
campaign featuring design expert Thom Filicia launched three weeks ago. New
marketing and key operational initiatives are being implemented this year to
improve store execution, increase customer traffic and improve sales
consistency, while improving profitability. Looking ahead, we believe there is
opportunity for continued growth in the United States and Canada based on recent
real estate studies, population and demographic trends.
"We continue to project comp store sales for March in the range of +2% to
+4%, in-line with previous guidance. We are encouraged by increased traffic and
conversions in stores, and project first quarter comps also to be in a range of
+2% to +4%. Based on current sales projections, diluted earnings per share for
the first quarter are expected to be in a range of $0.21 to $0.24 per share,
compared to $0.21 per diluted share in the year-ago quarter. For fiscal year
2005, diluted earnings per share are planned in a range of $1.44 to $1.52 per
share."
The Company will host a conference call to discuss fiscal 2004 fourth
quarter and year-end earnings at 10:00 a.m. Central Time today. A web cast is
available on our website at www.pier1.com linking through to the "Investor
Relations" page and the "Events" page, or you can dial into the conference at
706-643-0435, ID number 5456008. The teleconference will be held in a
"listen-only" mode for all participants other than the Company's current
sell-side analysts and buy-side investors. The replay will be available at about
12:00 pm (Central) for 24 hours and replay access can be dialed at 800-642-1687
or if international dial 706-645-9291 and reference the conference ID number
5456008.
Any forward-looking projections or statements made in this press release
should be considered in conjunction with the cautionary statements contained in
the Company's most recently filed Form 10-Q for fiscal year 2004. Management's
expectations and assumptions regarding planned store openings, financing of
Company obligations from operations and other future results are subject to
risks, uncertainties and other factors that could cause actual results to differ
materially from the anticipated results or other expectations expressed in the
forward-looking statements. Risks and uncertainties that may affect Company
operations and performance include, among others, the effects of terrorist
attacks or other acts of war, conflicts or war involving the United States or
its allies or trading partners, labor strikes, weather conditions that may
affect sales, volatility of fuel and utility costs, the general strength of the
economy and levels of consumer spending, consumer confidence, the availability
of new sites for expansion along with sufficient labor to facilitate growth, the
strength of new home construction and sales of existing homes, the availability
and proper functioning of technology and communications systems supporting the
Company's key business processes, the ability of the Company to import
merchandise from foreign countries without significantly restrictive tariffs,
duties or quotas and the ability of the Company to source, ship and deliver
items from foreign countries to its U.S. distribution centers at reasonable
prices and rates and in a timely fashion. The Company assumes no obligation to
update or revise its forward-looking statements even if experience or future
changes make it clear that any projected results expressed or implied will not
be realized.
Pier 1 Imports, Inc. is North America's largest specialty retailer of
imported decorative home furnishings and gifts with Pier 1 Imports(R) stores in
50 states, Puerto Rico, Canada, and Mexico; The Pier(R) stores in the United
Kingdom; and Cargokids(R).
Pier 1 Imports, Inc.
--------------------
COMPARATIVE OPERATING RESULTS
FOR THE THREE AND TWELVE MONTHS ENDED
FEBRUARY 28, 2004 AND MARCH 1, 2003
(in thousands except per share amounts)
Three Months Ended Twelve Months Ended
February 28, March 1, February 28, March 1,
2004 2003 2004 2003
------------ --------- ------------ ------------
Net Sales $555,256 $521,035 $1,868,243 $1,754,867
============ ========= ============ ============
Net Income $48,309 $54,032 $118,001 $129,386
============ ========= ============ ============
Earnings Per Share:
Basic $0.55 $0.59 $1.32 $1.39
============ ========= ============ ============
Diluted $0.53 $0.57 $1.29 $1.36
============ ========= ============ ============
Pier 1 Imports, Inc.
--------------------
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except per share amounts)
(unaudited)
Three Months Ended Twelve Months Ended
February 28, March 1, February 28, March 1,
2004 2003 2004 2003
----------- --------- ------------- -----------
Net sales $555,256 $521,035 $1,868,243 $1,754,867
Operating costs and
expenses:
Cost of sales
(including buying
and store occupancy) 319,043 288,312 1,086,623 1,001,462
Selling, general and
administrative
expenses 147,036 135,218 544,536 502,319
Depreciation and
amortization 13,363 12,067 50,927 46,432
----------- --------- ------------- -----------
479,442 435,597 1,682,086 1,550,213
----------- --------- ------------- -----------
Operating income 75,814 85,438 186,157 204,654
Nonoperating (income)
and expenses:
Interest and
investment income (1,228) (884) (2,851) (3,047)
Interest expense 348 558 1,692 2,327
----------- --------- ------------- -----------
(880) (326) (1,159) (720)
----------- --------- ------------- -----------
Income before income taxes 76,694 85,764 187,316 205,374
Provision for income
taxes 28,385 31,732 69,315 75,988
----------- --------- ------------- -----------
Net income $48,309 $54,032 $118,001 $129,386
=========== ========= ============= ===========
Earnings per share:
Basic $0.55 $0.59 $1.32 $1.39
=========== ========= ============= ===========
Diluted $0.53 $0.57 $1.29 $1.36
=========== ========= ============= ===========
Average shares
outstanding during period:
Basic 88,617 92,210 89,294 92,871
=========== ========= ============= ===========
Diluted 91,089 94,327 91,624 95,305
=========== ========= ============= ===========
Pier 1 Imports, Inc.
--------------------
CONSOLIDATED BALANCE SHEETS
(in thousands except per share amounts)
(unaudited)
February 28, March 1,
2004 2003
------------- ---------
ASSETS
Current assets:
Cash, including temporary investments of
$208,984 and $225,882, respectively $225,101 $242,114
Beneficial interest in securitized
receivables 44,331 40,538
Other accounts receivable, net 14,226 11,420
Inventories 373,870 333,350
Prepaid expenses and other current assets 40,623 36,179
------------- ---------
Total current assets 698,151 663,601
Properties, net 290,420 254,503
Other assets 63,602 54,632
------------- ---------
$1,052,173 $972,736
============= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable $- $393
Accounts payable 100,640 76,742
Gift cards, gift certificates and
merchandise credits outstanding 46,118 37,924
Accrued income taxes payable 25,982 25,798
Other accrued liabilities 107,148 102,732
------------- ---------
Total current liabilities 279,888 243,589
Long-term debt 19,000 25,000
Other noncurrent liabilities 69,654 60,211
Shareholders' equity:
Common stock, $1.00 par, 500,000,000 shares
authorized, 100,779,000 issued 100,779 100,779
Paid-in capital 145,384 144,247
Retained earnings 630,997 539,776
Cumulative other comprehensive income (loss) 1,667 (2,210)
Less -- 12,473,000 and 10,045,000 common
shares in treasury, at cost, respectively (195,196) (138,656)
------------- ---------
683,631 643,936
------------- ---------
$1,052,173 $972,736
============= =========
Pier 1 Imports, Inc.
--------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
February 28, March 1,
2004 2003
------------ -----------
Cash flow from operating activities:
Net income $118,001 $129,386
Adjustments to reconcile to net cash
provided by
operating activities:
Depreciation and amortization 64,606 57,934
Loss on disposal of fixed assets 143 980
Deferred compensation 8,264 5,043
Lease termination expense 3,258 395
Deferred taxes 184 18,748
Tax benefit from options exercised by
employees 4,897 6,867
Other 4,935 949
Changes in cash from:
Inventories (40,520) (57,917)
Other accounts receivable, prepaid
expenses and other current assets (16,927) (14,362)
Accounts payable and accrued expenses 32,678 33,364
Accrued income taxes payable 184 (3,940)
Other noncurrent assets (2,027) (759)
------------ -----------
Net cash provided by operating
activities 177,676 176,688
------------ -----------
Cash flow from investing activities:
Capital expenditures (121,190) (99,042)
Proceeds from disposition of properties 34,450 6,330
Net change in restricted cash (8,752) (500)
Beneficial interest in securitized
receivables (5,143) 4,082
------------ -----------
Net cash used in investing
activities (100,635) (89,130)
------------ -----------
Cash flow from financing activities:
Cash dividends (26,780) (19,520)
Purchases of treasury stock (76,009) (78,474)
Proceeds from stock options exercised,
stock purchase plan and other, net 15,125 17,305
Repayments of long-term debt and notes
payable (6,390) (364)
------------ -----------
Net cash used in financing activities (94,054) (81,053)
------------ -----------
Change in cash and cash equivalents (17,013) 6,505
Cash and cash equivalents at beginning of
period 242,114 235,609
------------ -----------
Cash and cash equivalents at end of period $225,101 $242,114
============ ===========
CONTACT: Pier 1 Imports, Inc., Fort Worth
Cary Turner, 817-252-8400