Exhibit 99.1
Pier 1 Imports Reports Third Quarter Financial Results
FORT WORTH, Texas--(BUSINESS WIRE)--Dec. 15, 2005--Pier 1 Imports,
Inc. (NYSE:PIR) today reported a loss per share of $0.08 for the third
quarter ended November 26, 2005, compared to diluted earnings per
share of $0.22 in the year-ago period. The Company's net loss was
$7,181,000, compared to last year's net income of $19,475,000. Sales
for the third quarter were $476,243,000, a 2.4% decline from last
year's $487,729,000, and comparable store sales declined 6.5%.
For the nine months ended November 26, 2005, the loss per share
amounted to $0.34, compared to diluted earnings per share of $0.47 in
the year-ago period. The Company's net loss for the nine months was
$29,828,000, compared to last year's income of $41,658,000. Sales for
the nine-month period amounted to $1,320,544,000, down 3.8% from
$1,372,027,000 for the year-ago period, and comparable store sales
declined 8.7%.
Marvin J. Girouard, the Company's Chairman and Chief Executive
Officer, said, "Although we are disappointed by overall third quarter
results, the national distribution of two Pier 1 catalogs this fall
improved traffic trends over that period. In addition, we believe
catalogs can create a positive brand image for Pier 1 merchandise and
have a longer impact on customers than newspaper circulars. Also
during the quarter, we increased expenditures on marketing and store
payroll over last year to help reinforce the Pier 1 brand, attract
customers into stores and continue to provide excellent customer
service.
"Our earlier projections for low single-digit positive comp store
sales in December now do not look achievable due to unpredictable
sales trends since the Thanksgiving weekend and the heavy promotional
environment. We expect to see a late holiday shopping period this
month and estimate that over half of December's sales are still ahead
of us. Comp store sales for the month are now projected to be in the
negative mid-single digit range, unless the second half of the month
is significantly better than current trends. During today's conference
call, we will provide an update on our initiatives to turn the
business around in calendar 2006; however we will not provide
financial guidance for the quarter based on continued near-term
unpredictability in the business.
"Looking ahead into early spring, we eagerly anticipate the
arrival of new Pier 1 merchandise collections. These unique, more
modern designs will offer customers new merchandise with simple, clean
silhouettes, while maintaining Pier 1's unique brand position that
represents relevant designs, better quality and our value proposition.
In addition, we will improve the in-store experience with enhanced
visual displays and continued SKU reductions. This allows a clear
presentation of individual items in room settings, similar to what
will be shown in Pier 1 catalogs, magazines and television advertising
in 2006."
The Company will host a conference call to discuss fiscal 2006
third quarter 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 1-800-498-7872 or if international dial
1-706-643-0435 and the conference ID number is 4487710. 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 4487710.
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 quarterly
report on Form 10-Q. 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 49 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 Nine Months Ended
Nov. 26, Nov. 27, Nov. 26, Nov. 27,
2005 2004 2005 2004
--------- --------- ----------- -----------
Net sales $476,243 $487,729 $1,320,544 $1,372,027
Operating costs and
expenses:
Cost of sales (including
buying and store
occupancy costs) 302,875 296,651 868,552 839,928
Selling, general and
administrative expenses 162,310 145,766 449,993 424,273
Depreciation and
amortization 14,747 14,520 44,177 42,038
--------- --------- ----------- -----------
479,932 456,937 1,362,722 1,306,239
--------- --------- ----------- -----------
Operating income (loss) (3,689) 30,792 (42,178) 65,788
Nonoperating (income) and
expenses:
Interest and investment
income (472) (384) (2,248) (1,204)
Interest expense 891 249 1,673 798
--------- --------- ----------- -----------
419 (135) (575) (406)
--------- --------- ----------- -----------
Income (loss) before
income taxes (4,108) 30,927 (41,603) 66,194
Provision (benefit) for
income taxes 3,073 11,452 (11,775) 24,536
--------- --------- ----------- -----------
Net income (loss) $(7,181) $19,475 $(29,828) $41,658
========= ========= =========== ===========
Earnings (loss) per share:
Basic ($0.08) $0.23 ($0.34) $0.48
========= ========= =========== ===========
Diluted ($0.08) $0.22 ($0.34) $0.47
========= ========= =========== ===========
Average shares outstanding
during period:
Basic 86,747 86,155 86,544 87,232
========= ========= =========== ===========
Diluted 86,747 87,845 86,544 89,129
========= ========= =========== ===========
Pier 1 Imports, Inc.
--------------------
CONSOLIDATED BALANCE SHEETS
(in thousands except share amounts)
(unaudited)
November 26, February 26, November 27,
2005 2005 2004
------------ ------------ ------------
ASSETS
Current assets:
Cash and cash equivalents,
including temporary
investments of $6,545,
$178,289 and $79,711,
respectively $21,291 $189,081 $94,672
Trading securities - auction
rate securities - - 25,000
Beneficial interest in
securitized receivables 59,567 35,690 52,717
Other accounts receivable, net 32,252 11,744 24,594
Inventories 455,283 380,730 396,972
Income tax benefit 22,810 - -
Prepaid expenses and other
current assets 43,224 43,445 44,002
------------ ------------ ------------
Total current assets 634,427 660,690 637,957
Properties, net 327,811 337,630 323,043
Other noncurrent assets 79,062 77,429 62,157
------------ ------------ ------------
$1,041,300 $1,075,749 $1,023,157
============ ============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable $9,500 $- $-
Accounts payable 106,166 113,502 102,241
Gift cards and other
deferred revenue 58,014 61,347 55,070
Accrued income taxes payable 3,892 11,866 8,441
Other accrued liabilities 120,039 102,294 103,494
------------ ------------ ------------
Total current liabilities 297,611 289,009 269,246
Long-term debt 19,000 19,000 19,000
Other noncurrent liabilities 113,724 103,371 75,475
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 138,863 141,850 142,887
Retained earnings 600,892 656,692 646,528
Cumulative other
comprehensive (loss) income (2,147) (1,426) 4,742
Less -- 13,919,000,
14,459,000 and 14,612,000
common shares in treasury,
at cost, respectively (224,804) (233,526) (235,500)
Less unearned compensation (2,618) - -
------------ ------------ ------------
610,965 664,369 659,436
------------ ------------ ------------
$1,041,300 $1,075,749 $1,023,157
============ ============ ============
Pier 1 Imports, Inc.
--------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Nine Months Ended
November 26, November 27,
2005 2004
------------ -------------
Cash flow from operating activities:
Net income (loss) $(29,829) $41,658
Adjustments to reconcile to net cash used
in operating activities:
Depreciation and amortization 58,433 54,625
Loss on disposal of fixed assets 1,324 604
Deferred compensation 7,181 5,784
Lease termination expense 2,148 1,851
Tax benefit from options exercised
by employees 748 2,675
Other 707 1,786
Changes in cash from:
Trading securities - auction rate
securities - (25,000)
Inventories (74,553) (23,102)
Other accounts receivable, prepaid
expenses and other current assets (31,377) (19,169)
Income taxes benefit (22,819) -
Accounts payable and accrued expenses 7,799 4,506
Income taxes payable (7,974) (17,541)
Other noncurrent assets (1,094) 548
------------ -------------
Net cash (used in) provided by
operating activities (89,306) 29,225
------------ -------------
Cash flow from investing activities:
Capital expenditures (40,180) (80,519)
Proceeds from disposition of properties 1,369 951
Beneficial interest in securitized
receivables (23,877) (8,386)
------------ -------------
Net cash used in investing
activities (62,688) (87,954)
------------ -------------
Cash flow from financing activities:
Cash dividends (25,972) (26,127)
Purchases of treasury stock (4,047) (54,281)
Proceeds from stock options exercised,
stock purchase plan and other, net 4,723 8,708
Notes payable borrowings 86,500 -
Repayments of notes payable (77,000) -
------------ -------------
Net cash used in financing
activities (15,796) (71,700)
------------ -------------
Change in cash and cash equivalents (167,790) (130,429)
Cash and cash equivalents at beginning of
period 189,081 225,101
------------ -------------
Cash and cash equivalents at end of period $21,291 $94,672
============ =============
CONTACT: Pier 1 Imports, Inc., Fort Worth
Cary Turner, 817-252-8400