Exhibit 99.1
Pier 1 Imports Reports Fiscal 2007 First Quarter Results
FORT WORTH, Texas--(BUSINESS WIRE)--June 15, 2006--Pier 1 Imports,
Inc. (NYSE:PIR) today announced a net loss from continuing operations
of $22,765,000, or $0.26 per share, for the first quarter ended May
27, 2006. The Company reported a net loss of $23,172,000 or $0.27 per
share for the first quarter, which included an after-tax loss from
discontinued operations of $407,000 or $0.01 per share. Total sales
declined 3.6% for the first fiscal quarter to $376,092,000, from
$390,314,000 in the year-ago quarter, and comparable store sales
declined 6.6%. The results of The Pier Retail Group Limited ("The
Pier"), the Company's subsidiary based in the United Kingdom, have
been classified as discontinued operations for all periods presented
in the Company's consolidated financial statements; this subsidiary
was sold on March 20, 2006. Attached is a supplemental schedule
presenting last year's quarterly and annual results reclassified for
discontinued operations.
Fiscal 2007 first quarter results are based on the following:
-- Merchandise margins improved to 53.8% from 53.2% in the
year-ago quarter.
-- Store occupancy costs increased $5.1 million and de-leveraged
to 20.0% of sales in the first quarter versus 17.9% for the
year-ago quarter.
-- Selling, general and administrative costs were 39.2% of sales
compared to 35.9% of sales in the first quarter last year.
Payroll costs de-leveraged during the quarter versus last
year, and marketing costs were 8.0% of sales, which was even
with the year-ago period. Other SG&A costs in the first
quarter included $2.0 million of non-cash impairment charges
recognized on store assets.
Marvin J. Girouard, the Company's Chairman and Chief Executive
Officer, said, "In mid-March, we launched our brand repositioning
campaign featuring Pier 1's unique Modern Craftsman merchandise, which
included new advertising and new in-store visuals intended to mirror
Pier 1's catalogs. During the first quarter, customer traffic remained
weak. We recognize that it will take time to attract new customers and
inform our existing customers of the significant changes in our
merchandise assortment.
"As of May 27, 2006, inventories were $357 million, down 12.5%
from the year-ago period. Cash at the end of the first quarter was
$235 million. We are carefully managing the balance sheet in order to
maintain flexibility and liquidity to operate the business
efficiently, while working to increase sales with the appropriate
inventory levels in stores.
"Pier 1's Summer Sale and Clearance event begins in late June and
is primarily supported by TV ads and in-store promotions. We will
launch our newest merchandise collection called 'Loft 21' in mid-July.
It features lifestyle furniture and accessories exclusively available
at Pier 1. To support this merchandise introduction, we plan to
distribute 9 million copies of our latest catalog. We continue to see
better merchandise margins this quarter compared to last year, but
expect June comp store sales to be in the negative low- to mid-teens
range compared to last year, when sales were driven by heavier
promotions."
The Company will host a conference call to discuss fiscal 2007
first quarter results at 10:00 a.m. Central Time today. A webcast 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 706-643-0435, ID 4639617. 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.
The Company will hold its annual shareholders' meeting at 10:00
a.m. Central Time on June 22, 2006, in the Trinity Room of the Fort
Worth Club, Fort Worth, Texas.
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 report on
Form 10-K. 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,
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 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 otherwise 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 and
Pier 1 kids(R) stores in the United States.
Pier 1 Imports, Inc.
--------------------
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except per share amounts)
(unaudited)
Three Months Ended
May 27, May 28,
2006 2005
--------- ---------
Net sales $376,092 $390,314
Operating costs and expenses:
Cost of sales (including buying and store
occupancy costs) 248,840 252,829
Selling, general and administrative expenses 147,583 140,189
Depreciation and amortization 13,624 13,954
--------- ---------
410,047 406,972
--------- ---------
Operating loss (33,955) (16,658)
Nonoperating (income) and expenses:
Interest and investment income (2,913) (1,122)
Interest expense 3,451 365
--------- ---------
538 (757)
--------- ---------
Loss from continuing operations before income
taxes (34,493) (15,901)
Income tax benefit (11,728) (7,445)
--------- ---------
Loss from continuing operations (22,765) (8,456)
Discontinued operations:
Loss from discontinued operations (638) (4,006)
Income tax benefit (231) -
--------- ---------
Loss from discontinued operations (407) (4,006)
Net loss $(23,172) $(12,462)
========= =========
Loss per share from continuing operations:
Basic ($0.26) ($0.10)
========= =========
Diluted ($0.26) ($0.10)
========= =========
Loss per share from discontinued operations:
Basic ($0.01) ($0.04)
========= =========
Diluted ($0.01) ($0.04)
========= =========
Loss per share:
Basic ($0.27) ($0.14)
========= =========
Diluted ($0.27) ($0.14)
========= =========
Average shares outstanding during period:
Basic 87,095 86,391
========= =========
Diluted 87,095 86,391
========= =========
Pier 1 Imports, Inc.
--------------------
CONSOLIDATED BALANCE SHEETS
(in thousands except share amounts)
(unaudited)
May 27, February 25, May 28,
2006 2006 2005
----------- ------------ -----------
ASSETS
Current assets:
Cash and cash equivalents,
including temporary
investments of $224,326,
$238,463 and $95,145,
respectively $235,187 $246,115 $105,661
Beneficial interest in
securitized receivables 46,695 50,000 35,992
Other accounts receivable, net 17,718 13,916 13,260
Inventories 357,260 368,978 408,311
Income tax receivable 30,593 18,011 16,377
Assets held for sale - 32,359 37,806
Prepaid expenses and other
current assets 42,353 45,544 40,218
----------- ------------ -----------
Total current assets 729,806 774,923 657,625
Properties, net 294,290 298,922 317,925
Other noncurrent assets 95,358 96,016 76,416
----------- ------------ -----------
$1,119,454 $1,169,861 $1,051,966
=========== ============ ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $97,978 $105,916 $107,878
Gift cards and other deferred
revenue 62,639 63,835 58,248
Accrued income taxes payable 4,141 4,763 4,591
Liabilities related to assets
held for sale - 16,841 16,040
Other accrued liabilities 102,911 97,493 102,030
----------- ------------ -----------
Total current liabilities 267,669 288,848 288,787
Long-term debt 184,000 184,000 19,000
Other noncurrent liabilities 109,038 107,031 104,199
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 129,357 132,075 141,615
Retained earnings 550,329 582,221 635,614
Cumulative other comprehensive
loss (2,432) (583) (2,283)
Less -- 13,577,000, 13,761,000
and 14,596,000 common shares
in treasury, at cost,
respectively (219,286) (222,254) (235,745)
Less unearned compensation - (2,256) -
----------- ------------ -----------
558,747 589,982 639,980
----------- ------------ -----------
$1,119,454 $1,169,861 $1,051,966
=========== ============ ===========
Pier 1 Imports, Inc.
--------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Three Months Ended
May 27, May 28,
2006 2005
--------- ---------
Cash flow from operating activities:
Net loss $(23,172) $(12,462)
Adjustments to reconcile to net cash used in
operating activities:
Depreciation and amortization 16,133 18,478
Loss on impairment of fixed assets 1,965 -
Stock-based compensation expense 610 -
Deferred compensation 2,134 1,901
Lease termination expense 485 156
Sale of receivables in exchange for
beneficial interest in securitized
receivables (7,658) (17,878)
Other (2,172) 169
Changes in cash from:
Inventories 12,560 (40,750)
Other accounts receivable, prepaid expenses
and other current assets (5,309) (7,422)
Income tax receivable (12,486) (16,377)
Accounts payable and accrued expenses (4,794) 5,472
Accrued income taxes payable (759) (7,132)
Other noncurrent assets 300 7
--------- ---------
Net cash used in operating activities (22,163) (75,838)
--------- ---------
Cash flow from investing activities:
Capital expenditures (11,611) (13,972)
Proceeds from disposition of properties 45 19
Proceeds from sale of discontinued operations
(net of $3,397 cash included in sale of
discontinued operations) 11,601 -
Collections of principal on beneficial interest
in securitized receivables 13,371 17,576
Contribution to securitization collateral
account (2,408) -
--------- ---------
Net cash provided by investing activities 10,998 3,623
--------- ---------
Cash flow from financing activities:
Cash dividends (8,720) (8,616)
Purchases of treasury stock - (4,047)
Proceeds from stock options exercised,
stock purchase plan and other, net 1,800 1,458
Excess tax benefits from stock-based
compensation 96 -
Debt issuance costs (39) -
--------- ---------
Net cash used in financing activities (6,863) (11,205)
--------- ---------
Change in cash and cash equivalents (18,028) (83,420)
Cash and cash equivalents at beginning of period 253,215 189,081
(including cash held for sale of $7,100 and --------- ---------
$3,358, respectively)
Cash and cash equivalents at end of period $235,187 $105,661
========= =========
Pier 1 Imports, Inc.
--------------------
FISCAL 2006 QUARTERLY RESULTS
Reclassified for Discontinued Operations
(in thousands except per share amounts)
(unaudited)
Three Months Ended
---------------------
5/28/2005 8/27/2005
---------- ----------
Net sales $390,314 $423,675
Gross profit 137,485 135,102
Operating costs and expenses:
Cost of sales (including buying and store
occupancy costs) 252,829 288,573
Selling, general and administrative expenses 140,189 134,964
Depreciation and amortization 13,954 14,140
---------- ----------
406,972 437,677
---------- ----------
Operating loss (16,658) (14,002)
Nonoperating (income) and expenses:
Interest and investment income (1,122) (640)
Interest expense 365 414
---------- ----------
(757) (226)
---------- ----------
Loss from continuing operations before income
taxes (15,901) (13,776)
Provision (benefit) for income taxes (7,445) (7,403)
---------- ----------
Loss from continuing operations (8,456) (6,373)
Discontinued operations:
Loss from discontinued operations before
income taxes (4,006) (3,812)
Income tax benefit - -
---------- ----------
Loss from discontinued operations (4,006) (3,812)
Net loss ($12,462) ($10,185)
========== ==========
Loss per share from continuing operations:
- ------------------------------------------
Basic $(0.10) $(0.07)
========== ==========
Diluted $(0.10) $(0.07)
========== ==========
Loss per share from discontinued operations:
- --------------------------------------------
Basic $(0.04) $(0.05)
========== ==========
Diluted $(0.04) $(0.05)
========== ==========
Loss per share:
- ---------------
Basic $(0.14) $(0.12)
========== ==========
Diluted $(0.14) $(0.12)
========== ==========
Average shares outstanding during period:
- -----------------------------------------
Basic 86,391 86,495
========== ==========
Diluted 86,391 86,495
========== ==========
Three Months Ended Year
---------------------- Ended
11/26/2005 2/25/2006 2/25/2006
----------- ---------- -----------
Net sales $456,690 $506,022 $1,776,701
Gross profit 167,316 161,787 601,690
Operating costs and expenses:
Cost of sales (including buying
and store occupancy costs) 289,374 344,235 1,175,011
Selling, general and
administrative expenses 155,430 157,690 588,273
Depreciation and amortization 14,050 14,085 56,229
----------- ---------- -----------
458,854 516,010 1,819,513
----------- ---------- -----------
Operating loss (2,164) (9,988) (42,812)
Nonoperating (income) and expenses:
Interest and investment income (464) (1,284) (3,510)
Interest expense 884 947 2,610
----------- ---------- -----------
420 (337) (900)
----------- ---------- -----------
Loss from continuing operations
before income taxes (2,584) (9,651) (41,912)
Provision (benefit) for income
taxes 3,073 (2,666) (14,441)
----------- ---------- -----------
Loss from continuing operations (5,657) (6,985) (27,471)
Discontinued operations:
Loss from discontinued operations
before income taxes (1,524) (8,241) (17,583)
Income tax benefit - (5,250) (5,250)
----------- ---------- -----------
Loss from discontinued operations (1,524) (2,991) (12,333)
Net loss ($7,181) ($9,976) ($39,804)
=========== ========== ===========
Loss per share from continuing
operations:
- ------------------------------
Basic $(0.06) $(0.08) $(0.32)
=========== ========== ===========
Diluted $(0.06) $(0.08) $(0.32)
=========== ========== ===========
Loss per share from discontinued
operations:
- ---------------------------------
Basic $(0.02) $(0.03) $(0.14)
=========== ========== ===========
Diluted $(0.02) $(0.03) $(0.14)
=========== ========== ===========
Loss per share:
- ---------------
Basic $(0.08) $(0.11) $(0.46)
=========== ========== ===========
Diluted $(0.08) (0.11) $(0.46)
=========== ========== ===========
Average shares outstanding during
period:
- ---------------------------------
Basic 86,747 86,883 86,629
=========== ========== ===========
Diluted 86,747 86,883 86,629
=========== ========== ===========
CONTACT: Pier 1 Imports, Inc., Fort Worth
Cary Turner, 817-252-8400