Exhibit 99.1
Pier 1 Imports Reports Fiscal 2006 Second Quarter Results
FORT WORTH, Texas--(BUSINESS WIRE)--Sept. 15, 2005--Pier 1
Imports, Inc. (NYSE:PIR) today reported a net loss of $10,185,000, or
$0.12 per share, for the second quarter ended August 27, 2005. Total
sales declined 3.0% for the second fiscal quarter to $438,592,000,
from $452,271,000 in the year-ago quarter, and comparable store sales
declined 7.7%. For the first six months of fiscal 2006, the Company's
net loss was $22,647,000, or $0.26 per share, compared to diluted
earnings per share of $0.25 for the year-ago period. Year-to-date
sales amounted to $844,301,000, down 4.5% from $884,298,000 in the
year-ago period, and comparable store sales declined 9.8%.
The Company is not providing quarterly earnings guidance at this
time based on near-term unpredictability in the business influenced by
the slow response to Pier 1's new merchandising and marketing
initiatives, as well as the macro environment. During today's
conference call, an update will be given on the progress made on the
numerous initiatives and the Company will provide comparable store
sales estimates for the third quarter.
Marvin J. Girouard, Pier 1's Chairman and Chief Executive Officer,
noted, "The Company's second quarter performance continued to be
challenged by a slow response from customers to our new merchandising
and marketing initiatives. We responded by conservatively managing the
business through cost containments, reducing store openings and taking
heavy promotional discounts and markdowns to move slower selling
merchandise to make room for new arrivals.
"Although our results so far this year have been below our
expectations, we believe that through recent customer research and
feedback, the Company is moving in the right direction by making
immediate changes planned to positively impact the fall and holiday
selling seasons. We will try new advertising media to increase store
traffic in the near-term, with an emphasis on catalog and new TV
commercials that will begin airing in October. We also believe that
when customers ultimately do come back into our stores, they will
discover the new visual look and be excited by the new fall and
holiday product offerings arriving each week.
"Additionally, Pier 1's first-ever national fall catalog was
mailed last week to over 3 million households, and we have a Pier 1
holiday catalog being sent to a broader group of consumers in early
November. Catalogs provide customers an excellent way to see Pier 1
merchandise in a residential setting, visualizing the way it will look
in their own homes. The lifestyle photography in the fall catalog
showcases the unique style, design and value of Pier 1's merchandise.
We know that customers use catalogs to formulate decorating ideas and
to plan social gatherings for special occasions, and believe that
catalogs will stay in customers' homes longer than other print media
and direct mail pieces."
Mr. Girouard continued, "Although we have found that our recent
initiatives in merchandising and marketing have taken longer to
connect with customers than we expected, we remain committed to
continuing to make changes in all aspects of the business in order to
improve sales and profitability. We also believe that as the holidays
get closer, customers will visit Pier 1 stores more often with more
'needs' rather than 'wants' as they purchase gifts for friends and
family, decorate their homes and plan for parties and entertaining
during the important holiday season."
The Company will host a conference call to discuss fiscal 2006
second quarter results at 10:00 a.m. Central Time today. A web cast is
available on our web site at www.pier1.com linking through to the
"Investor Relations" page and the "Events" page, or you can dial into
the conference at 1-800-498-7872 or for international callers dial
1-706-643-0435, ID 4487710. The teleconference will be held in a
"listen-only" mode for all participants other than the Company's
current sell-side and buy-side investment professionals.
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 2006. 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 or natural
disasters 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 Ireland; and Pier 1 kids(R)
stores.
Pier 1 Imports, Inc.
--------------------
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except per share amounts)
(unaudited)
Three Months Ended Six Months Ended
August 27, August 28, August 27, August 28,
2005 2004 2005 2004
----------- ---------- ---------- ----------
Net sales $438,592 $452,271 $844,301 $884,298
Operating costs and
expenses:
Cost of sales (including
buying and store
occupancy costs) 300,624 283,232 565,677 543,277
Selling, general and
administrative expenses 140,985 138,604 287,683 278,507
Depreciation and
amortization 14,803 13,980 29,430 27,518
----------- ---------- ---------- ----------
456,412 435,816 882,790 849,302
----------- ---------- ---------- ----------
Operating income(loss) (17,820) 16,455 (38,489) 34,996
Nonoperating (income) and
expenses:
Interest and investment
income (646) (351) (1,776) (820)
Interest expense 414 197 782 549
----------- ---------- ---------- ----------
(232) (154) (994) (271)
----------- ---------- ---------- ----------
Income (loss) before
income taxes (17,588) 16,609 (37,495) 35,267
Provision (benefit) for
income taxes (7,403) 6,163 (14,848) 13,084
----------- ---------- ---------- ----------
Net income (loss) ($10,185) $10,446 ($22,647) $22,183
=========== ========== ========== ==========
Earnings per share:
Basic ($0.12) $0.12 ($0.26) $0.25
=========== ========== ========== ==========
Diluted ($0.12) $0.12 ($0.26) $0.25
=========== ========== ========== ==========
Average shares outstanding
during period:
Basic 86,495 87,326 86,443 87,770
=========== ========== ========== ==========
Diluted 86,495 89,027 86,443 89,772
=========== ========== ========== ==========
Pier 1 Imports, Inc.
--------------------
CONSOLIDATED BALANCE SHEETS
(in thousands except per share amounts)
(unaudited)
August 27, February 26, August 28,
2005 2005 2004
----------- ------------ -----------
ASSETS
Current assets:
Cash and cash equivalents,
including temporary
investments of $31,346,
$178,289 and $65,939,
respectively $40,585 $189,081 $74,720
Trading securities - auction
rate securities - - 25,000
Beneficial interest in
securitized receivables 41,966 35,690 51,226
Other accounts receivable, net 16,437 11,744 15,481
Inventories 489,372 380,730 413,273
Prepaid expenses and other
current assets 71,789 43,445 41,028
----------- ------------ -----------
Total current assets 660,149 660,690 620,728
Properties, net 332,430 337,630 317,030
Other noncurrent assets 77,288 77,429 62,961
----------- ------------ -----------
$1,069,867 $1,075,749 $1,000,719
=========== ============ ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable $20,000 $- $-
Accounts payable 121,149 113,502 109,229
Gift cards and other deferred
revenue 57,037 61,347 54,796
Accrued income taxes payable 3,267 11,866 129
Other accrued liabilities 113,639 102,294 95,195
----------- ------------ -----------
Total current liabilities 315,092 289,009 259,349
Long-term debt 19,000 19,000 19,000
Other noncurrent liabilities 110,278 103,371 73,905
Shareholders' equity:
Common stock, $1.00 par,
500,000,000 shares authorized,
100,779,000 issued 100,779 100,779 100,779
Paid-in capital 139,552 141,850 145,253
Retained earnings 616,758 656,692 635,657
Cumulative other comprehensive
(loss) income (1,940) (1,426) 944
Less -- 14,041,000, 14,459,000
and 14,616,000 common shares
in treasury, at cost,
respectively (226,784) (233,526) (234,168)
Less unearned compensation (2,868) - -
----------- ------------ -----------
625,497 664,369 648,465
----------- ------------ -----------
$1,069,867 $1,075,749 $1,000,719
=========== ============ ===========
Pier 1 Imports, Inc.
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CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Six Months Ended
August 27, August 28,
2005 2004
------------ ----------
Cash flow from operating activities:
Net income (loss) $(22,647) $22,183
Adjustments to reconcile to net cash used
in operating activities:
Depreciation and amortization 37,882 35,753
Loss on disposal of fixed assets 1,378 350
Deferred compensation 4,692 3,896
Lease termination expense 1,522 1,319
Tax benefit from options exercised by
employees 784 350
Other 217 (372)
Changes in cash from:
Trading securities - auction rate
securities - (25,000)
Inventories (108,642) (39,403)
Other accounts receivable, prepaid
expenses and other current assets (14,863) (7,898)
Accounts payable and accrued expenses 15,144 5,127
Accrued income taxes (32,891) (25,853)
Other noncurrent assets (144) (174)
------------ ----------
Net cash used in operating
activities (117,568) (29,722)
------------ ----------
Cash flow from investing activities:
Capital expenditures (28,048) (56,839)
Proceeds from disposition of properties 179 150
Beneficial interest in securitized
receivables (6,276) (6,895)
------------ ----------
Net cash used in investing
activities (34,145) (63,584)
------------ ----------
Cash flow from financing activities:
Cash dividends (17,287) (17,523)
Purchases of treasury stock (4,047) (43,037)
Proceeds from stock options exercised,
stock purchase plan and other, net 4,551 3,485
Notes payable borrowings 23,000 -
Repayments of notes payable (3,000) -
------------ ----------
Net cash provided by (used in)
financing activities 3,217 (57,075)
------------ ----------
Change in cash and cash equivalents (148,496) (150,381)
Cash and cash equivalents at beginning of
period 189,081 225,101
------------ ----------
Cash and cash equivalents at end of period $40,585 $74,720
============ ==========
CONTACT: Pier 1 Imports, Inc., Fort Worth
Cary Turner, 817-252-8400