Exhibit 99.1
Pier 1 Imports, Inc. Reports First Quarter Financial Results
FORT WORTH, Texas--(BUSINESS WIRE)--June 21, 2007--Pier 1 Imports,
Inc. (NYSE:PIR) today announced a net loss from continuing operations
of $56,378,000, or $0.64 per share, for the first quarter ended June
2, 2007. Total sales declined 5.2% for the first fiscal quarter to
$356,375,000 from $376,092,000 in the year-ago quarter, and comparable
store sales declined 5.4%.
First Quarter Operating Results
During the first quarter, merchandise margins declined to 45.5% as
a direct result of the Company's aggressive liquidation of modern
craftsman merchandise. Excluding the estimated impact of the
aggressive markdown strategy, merchandise margins for the quarter
would have approximated 52.2% compared to 53.8% last year. Store
occupancy costs remained flat compared to the year ago quarter.
Selling, general and administrative expenses declined $15.5 million
from the year ago period, and were 37.1% of sales compared to 39.2% of
sales last year. The primary drivers of the decrease in costs were
savings of approximately $9 million in marketing expense, $6 million
in store payroll, and $4 million in other general administrative costs
when compared to the same period last year. These cost savings were
partially offset by one-time and unusual charges of $3.5 million
related to severance and outplacement costs incurred with the
Company's previously announced reduction in force. Excluding the
impact on merchandise margins and the one-time charge discussed above,
management believes the pre-tax loss for the first quarter would have
been more in line with the pre-tax loss for the year ago period.
Return to Profitability
Alex W. Smith, the Company's President and Chief Executive
Officer, said, "Earlier this year, we outlined six key business
priorities aimed at returning Pier 1 Imports to profitability and
beyond. As planned, our results for the first quarter reflect the
impact of charges that are a direct result of the speed with which we
are executing our strategy. I look forward to today's conference call
and updating you on our progress."
Conference Call Information
The Company will host a conference call to discuss the 2008 first
quarter results at 10:00 a.m. Central Time today. A web cast is
available on the Company's 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 1054295. 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 1-800-642-1687 or if
international dial 1-706-645-9291 and reference the conference ID
number 1054295.
Financial Disclosure Advisory
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 annual
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 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 appropriate sites for
locating stores and distribution centers, availability of a qualified
labor force and management, 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. Refer to the
Company's most recent SEC filings for discussion of these and other
risks and uncertainties that may affect the Company's operations and
performance. 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 and
Pier 1 Kids(R) stores in the United States. Information about the
Company is available on www.pier1.com.
Pier 1 Imports, Inc.
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CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except per share amounts)
(unaudited)
Three Months Ended
June 2, May 27,
2007 2006
--------- ---------
Net sales $356,375 $376,092
Operating costs and expenses:
Cost of sales (including buying and store
occupancy costs) 269,197 248,840
Selling, general and administrative expenses 132,124 147,583
Depreciation and amortization 10,558 13,624
--------- ---------
411,879 410,047
--------- ---------
Operating loss (55,504) (33,955)
Nonoperating (income) and expenses:
Interest and investment income (2,932) (2,913)
Interest expense 3,957 3,451
Other Income (248) -
--------- ---------
777 538
--------- ---------
Loss from continuing operations before income
taxes (56,281) (34,493)
Income tax provision (benefit) 97 (11,728)
--------- ---------
Loss from continuing operations (56,378) (22,765)
Discontinued operations:
Loss from discontinued operations before income
taxes - (638)
Income tax benefit - (231)
--------- ---------
Loss from discontinued operations - (407)
Net loss $(56,378) $(23,172)
========= =========
Loss per share from continuing operations:
Basic and diluted ($0.64) ($0.26)
========= =========
Loss per share from discontinued operations:
Basic and diluted - ($0.01)
========= =========
Loss per share:
Basic and diluted ($0.64) ($0.27)
========= =========
Average shares outstanding during period:
Basic and diluted 87,797 87,095
========= =========
Pier 1 Imports, Inc.
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CONSOLIDATED BALANCE SHEETS
(in thousands except share amounts)
(unaudited)
June 2, March 3, May 27,
2007 2007 2006
--------- --------- -----------
ASSETS
Current assets:
Cash and cash equivalents,
including temporary investments of
$145,547, $160,721 and $224,326,
respectively $152,026 $167,178 $235,187
Beneficial interest in securitized
receivables - - 46,695
Other accounts receivable, net 20,709 21,437 17,718
Inventories 334,114 360,063 357,260
Income tax receivable 32,843 34,966 30,593
Prepaid expenses and other current
assets 50,829 50,324 42,353
--------- --------- -----------
Total current assets 590,521 633,968 729,806
Properties, net 227,104 239,548 294,290
Other noncurrent assets 43,513 42,954 95,358
--------- --------- -----------
$861,138 $916,470 $1,119,454
========= ========= ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $96,714 $95,609 $97,978
Gift cards and other deferred
revenue 67,448 66,130 62,639
Accrued income taxes payable 4,977 3,305 4,141
Other accrued liabilities 120,985 119,541 102,911
--------- --------- -----------
Total current liabilities 290,124 284,585 267,669
Long-term debt 184,000 184,000 184,000
Other noncurrent liabilities 83,618 86,768 109,038
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 125,586 130,416 129,357
Retained earnings 275,727 337,178 550,329
Cumulative other comprehensive
income (loss) 2,987 2,408 (2,432)
Less -- 12,487,000, 12,981,000 and
13,577,000 common shares in
treasury, at cost, respectively (201,683) (209,664) (219,286)
303,396 361,117 558,747
--------- --------- -----------
$861,138 $916,470 $1,119,454
========= ========= ===========
Pier 1 Imports, Inc.
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CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Three Months Ended
June 2, May 27,
2007 2006
--------- ---------
Cash flow from operating activities:
Net loss $(56,378) $(23,172)
Adjustments to reconcile to net cash used in
operating activities:
Depreciation and amortization 13,577 16,133
(Gain) loss on disposal of fixed assets (1,060) 72
Loss on impairment of fixed and long-lived
assets 2,181 1,965
Stock-based compensation expense 2,155 610
Deferred compensation 412 2,700
Lease termination expense 1,262 485
Other 138 (2,244)
Changes in cash from:
Sale of receivables in exchange for beneficial
interest in securitized receivables - (7,658)
Inventories 25,949 12,560
Other accounts receivable, prepaid expenses and
other current assets (1,639) (5,309)
Income tax receivable - (12,486)
Accounts payable and accrued expenses (2,548) (5,319)
Accrued income taxes payable 415 (759)
Other noncurrent assets 163 300
Other noncurrent liabilities (314) (41)
--------- ---------
Net cash used in operating activities (15,687) (22,163)
--------- ---------
Cash flow from investing activities:
Capital expenditures (769) (11,611)
Proceeds from disposition of properties 1,587 45
Proceeds from sale of discontinued operations - 11,601
Purchase of restricted investments (300) -
Collections of principal on beneficial interest
in securitized receivables - 10,963
Net cash provided by investing activities 518 10,998
--------- ---------
Cash flow from financing activities:
Cash dividends - (8,720)
Proceeds from stock options exercised, stock
purchase plan and other, net 996 1,896
Debt issuance costs (979) (39)
--------- ---------
Net cash provided by (used in) financing
activities 17 (6,863)
--------- ---------
Change in cash and cash equivalents (15,152) (18,028)
Cash and cash equivalents at beginning of period
(including cash held for sale of $0 and $7,100,
respectively) 167,178 253,215
--------- ---------
Cash and cash equivalents at end of period $152,026 $235,187
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CONTACT: Pier 1 Imports, Inc., Fort Worth
Cary Turner, 817-252-8400