Exhibit 99.1
Pier 1 Imports Reports Fourth Quarter and Fiscal Year 2005 Earnings
FORT WORTH, Texas--(BUSINESS WIRE)--April 7, 2005--Pier 1 Imports,
Inc. (NYSE:PIR) today reported diluted earnings per share of $0.21 for
the fourth quarter ended February 26, 2005, including a non-recurring,
after-tax charge of $3.9 million, or $0.05 per diluted share, due to
the cumulative correction of certain lease-related expenses for free
rent periods on leases entered into from fiscal years 1996 to 2004.
Free rent periods for store operating leases begin when the Company
takes possession of the property and continue until rent payments
begin, usually at the store opening date. This cumulative adjustment
will have no effect on historical or future net cash flows or the
timing of payments under the related leases. Excluding the lease
accounting adjustment, fourth quarter earnings per diluted share would
have been $0.26. Reported net income for the fourth fiscal quarter was
$18,799,000, compared to last year's net income of $48,309,000. Sales
for the fourth quarter were $525,826,000, a 5.3% decrease from last
year's $555,256,000, and comparable store sales declined 10.7% for the
period.
Fiscal year 2005 diluted earnings per share for the twelve-month
period ended February 26, 2005, amounted to $0.68, including the
non-recurring, after-tax cumulative charge for a lease accounting
adjustment recorded in the fourth quarter. Excluding this lease
accounting adjustment, the fiscal year diluted earnings per share
would have been $0.72 per share, versus $1.29 per diluted share last
year. Reported net income for fiscal year 2005 was $60,457,000,
compared to last year's $118,001,000. Sales for the fiscal year were
$1,897,853,000, up 1.6% over last year's $1,868,243,000. Fiscal year
2005 comparable store sales declined 5.8% from the prior year.
Marvin J. Girouard, the Company's Chairman and Chief Executive
Officer, said, "Fiscal year 2005 was a challenging year for Pier 1.
Although net income declined, we believe that critical investments
were made in longer-term strategies with major changes in
merchandising, marketing and store operations. Despite negative
comparable store sales in fiscal 2005, the Company generated $142
million of cash from operations, ending the fiscal year with cash and
cash equivalents of $189 million. We returned $93 million of excess
cash to shareholders through cash dividends of $35 million and $58
million, representing 3.2 million shares of Company stock repurchased
during the year. Currently, there is $111 million remaining in the
Board-authorized repurchase program."
The Company will host a conference call to discuss fiscal 2005
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 4453535. 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 p.m.
(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 4453535.
This press release includes non-GAAP diluted earnings per share
information due to the exclusion of the cumulative lease accounting
adjustment charge recorded during the fourth quarter of fiscal year
2005. We believe that these non-GAAP financial measures provide
meaningful supplemental information for investors regarding the
performance of our business operations, and facilitate comparisons to
our historical operating results and to our guidance for fiscal year
2006. See the last page of this release for the reconciliation of the
non-GAAP financial measures.
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 2005. Management's expectations and assumptions
regarding planned store openings, financing of Company obligations
from operations, results from its new marketing, merchandising and
store operations strategies, 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 primarily in the United Kingdom; and Pier 1 kids(R) and
Cargokids(R) stores.
(Financial Tables Follow)
Pier 1 Imports, Inc.
--------------------
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except per share amounts)
(unaudited)
Three Months Ended Twelve Months Ended
Feb. 26, Feb. 28, Feb. 26, Feb. 28,
2005 2004 2005 2004
----------- --------- ----------- -----------
Net sales $525,826 $555,256 $1,897,853 $1,868,243
Operating costs and
expenses:
Cost of sales
(including buying and
store occupancy) 330,660 319,043 1,170,588 1,086,623
Selling, general and
administrative
expenses 148,940 147,036 573,213 544,536
Depreciation and
amortization 16,252 13,363 58,290 50,927
----------- --------- ----------- -----------
495,852 479,442 1,802,091 1,682,086
----------- --------- ----------- -----------
Operating income 29,974 75,814 95,762 186,157
Nonoperating (income) and
expenses:
Interest and
investment income (1,519) (1,228) (2,723) (2,851)
Interest expense 846 348 1,644 1,692
----------- --------- ----------- -----------
(673) (880) (1,079) (1,159)
----------- --------- ----------- -----------
Income before
income taxes 30,647 76,694 96,841 187,316
Provision for income
taxes 11,848 28,385 36,384 69,315
----------- --------- ----------- -----------
Net income $18,799 $48,309 $60,457 $118,001
=========== ========= =========== ===========
Earnings per share:
Basic $0.22 $0.55 $0.69 $1.32
=========== ========= =========== ===========
Diluted $0.21 $0.53 $0.68 $1.29
=========== ========= =========== ===========
Average shares
outstanding during
period:
Basic 86,454 88,617 87,037 89,294
=========== ========= =========== ===========
Diluted 87,965 91,089 88,838 91,624
=========== ========= =========== ===========
Pier 1 Imports, Inc.
--------------------
CONSOLIDATED BALANCE SHEETS
(in thousands except per share amounts)
(unaudited)
February 26, February 28,
2005 2004
------------ -------------
ASSETS
Current assets:
Cash and cash equivalents, including
temporary investments of $178,289 and
$208,984, respectively $189,081 $225,101
Beneficial interest in securitized
receivables 35,690 44,331
Other accounts receivable, net 11,744 14,226
Inventories 380,730 373,870
Prepaid expenses and other current
assets 43,445 40,623
------------ -------------
Total current assets 660,690 698,151
Properties, net 337,630 290,420
Other noncurrent assets 77,429 63,602
------------ -------------
$1,075,749 $1,052,173
============ =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $113,502 $100,640
Gift cards and other deferred revenue 61,347 59,385
Accrued income taxes payable 11,866 25,982
Other accrued liabilities 102,294 93,881
------------ -------------
Total current liabilities 289,009 279,888
Long-term debt 19,000 19,000
Other noncurrent liabilities 103,371 69,654
Shareholders' equity:
Common stock, $1.00 par, 500,000,000
shares authorized, 100,779,000 issued 100,779 100,779
Paid-in capital 141,850 145,384
Retained earnings 656,692 630,997
Cumulative other comprehensive (loss)
income (1,426) 1,667
Less -- 14,459,000 and 12,473,000
common shares in treasury, at cost,
respectively (233,526) (195,196)
------------ -------------
664,369 683,631
------------ -------------
$1,075,749 $1,052,173
============ =============
Pier 1 Imports, Inc.
--------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
February 26, February 28,
2005 2004
------------ -------------
Cash flow from operating activities:
Net income $60,457 $118,001
Adjustments to reconcile to net cash
provided by operating activities:
Depreciation and amortization 75,624 64,606
Loss on disposal of fixed assets 1,056 143
Deferred compensation 7,710 6,573
Lease termination expense 2,243 3,258
Deferred income taxes 2,035 184
Tax benefit from options exercised
by employees 3,668 4,897
Other 7,279 4,894
Changes in cash from:
Inventories (6,860) (40,520)
Other accounts receivable, prepaid
expenses and other current assets (11,302) (16,927)
Accounts payable and accrued
expenses 14,071 34,410
Accrued income taxes payable (14,116) 184
Other noncurrent assets 336 (2,027)
------------ -------------
Net cash provided by operating
activities 142,201 177,676
------------ -------------
Cash flow from investing activities:
Capital expenditures (99,239) (121,190)
Proceeds from disposition of properties 3,852 34,450
Net change in restricted cash (10,807) (8,752)
Beneficial interest in securitized
receivables 8,641 (5,143)
------------ -------------
Net cash used in investing
activities (97,553) (100,635)
------------ -------------
Cash flow from financing activities:
Cash dividends (34,762) (26,780)
Purchases of treasury stock (58,210) (76,009)
Proceeds from stock options exercised,
stock purchase plan and other, net 12,304 15,125
Repayments of long-term debt and notes
payable - (6,390)
------------ -------------
Net cash used in financing
activities (80,668) (94,054)
------------ -------------
Change in cash and cash equivalents (36,020) (17,013)
Cash and cash equivalents at beginning of
period 225,101 242,114
------------ -------------
Cash and cash equivalents at end of period $189,081 $225,101
============ =============
Pier 1 Imports, Inc.
--------------------
RECONCILIATION OF NON-GAAP DILUTED EARNINGS PER SHARE
(unaudited)
Periods Ended February 26, 2005
Three Months Twelve Months
------------ -------------
Reported Diluted Earnings per Share $0.21 $0.68
Impact of Lease Accounting
Adjustment (1) 0.05 0.04
--------- ---------
Non-GAAP Diluted Earnings per Share $0.26 $0.72
========= =========
(1) The per share amounts of the lease accounting adjustment are
different for the quarter and year-to-date periods because of
differences in the weighted average number of diluted shares
outstanding for the two periods.
CONTACT: Pier 1 Imports, Inc., Fort Worth
Cary Turner, 817-252-8400