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Pier 1 Imports, Inc. Reports Second Quarter Financial Results

Management’s expectations and assumptions regarding 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 included in this press release. Any forward-looking projections or statements should be considered in conjunction with the cautionary statements and risks contained in the Company’s Annual Report on Form 10-K. Refer to the Company’s most recent SEC filings for any updates concerning 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 the original global importer of imported decorative home furnishings and gifts. Information about the Company is available on www.pier1.com.

           

Pier 1 Imports, Inc.

 
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except per share amounts)
(unaudited)
 
Three Months Ended
August 25, % of August 27, % of
  2012   Sales   2011   Sales
 
Net sales $ 367,615 100.0 % $ 339,552 100.0 %
 
Cost of sales   216,066   58.8 %   205,031   60.4 %
 
Gross Profit 151,549 41.2 % 134,521 39.6 %
 
Selling, general and administrative expenses 112,021 30.5 % 105,752 31.1 %
Depreciation and amortization   7,214   1.9 %   5,035   1.5 %
 
Operating income 32,314 8.8 % 23,734 7.0 %
 
Nonoperating (income) and expenses:
Interest, investment income and other (443 ) (2,573 )
Interest (income) expense   (2,107 )     714    
  (2,550 ) -0.7 %   (1,859 ) -0.5 %
 
Income before income taxes 34,864 9.5 % 25,593 7.5 %
Income tax provision   8,633   2.4 %   8,955   2.6 %
 
Net income $ 26,231   7.1 % $ 16,638   4.9 %
 
Earnings per share:
Basic $ 0.25   $ 0.14  
 
Diluted $ 0.24   $ 0.14  
 
Dividends declared per share: $ 0.04   $ 0.00  
 
Average shares outstanding during period:
Basic   105,786     115,288  
 
Diluted   107,447     117,085  
 

           

Pier 1 Imports, Inc.

 

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands except per share amounts)

(unaudited)

 
Six Months Ended
August 25,   % of August 27, % of
  2012   Sales   2011   Sales
 
Net sales $ 728,734 100.0 % $ 674,155 100.0 %
 
Cost of sales   426,911   58.6 %   405,567   60.2 %
 
Gross Profit 301,823 41.4 % 268,588 39.8 %
 
Selling, general and administrative expenses 228,351 31.3 % 214,902 31.9 %
Depreciation and amortization   13,745   1.9 %   10,066   1.5 %
 
Operating income 59,727 8.2 % 43,620 6.5 %
 
Nonoperating (income) and expenses:
Interest, investment income and other (1,871 ) (5,202 )
Interest (income) expense   (1,293 )     1,539    
  (3,164 ) -0.4 %   (3,663 ) -0.6 %
 
Income before income taxes 62,891 8.6 % 47,283 7.0 %
Income tax provision   18,835   2.6 %   16,546   2.4 %
 
Net income $ 44,056   6.0 % $ 30,737   4.6 %
 
Earnings per share:
Basic $ 0.41   $ 0.26  
 
Diluted $ 0.40   $ 0.26  
 
Dividends declared per share: $ 0.08   $ 0.00  
 
Average shares outstanding during period:
Basic   107,192     116,294  
 
Diluted   109,154     118,270  
 

 

Pier 1 Imports, Inc.

         
CONSOLIDATED BALANCE SHEETS
(in thousands except share amounts)
(unaudited)
 
 
August 25, February 25, August 27,
2012 2012 2011
ASSETS
 
Current assets:
Cash and cash equivalents, including temporary investments
of $75,536, $248,624 and $151,000, respectively $ 115,138 $ 287,868 $ 190,805
Accounts receivable, net 21,736 16,282 14,093
Inventories 420,801 322,482 370,668
Prepaid expenses and other current assets   24,799     23,682     20,507  
Total current assets 582,474 650,314 596,073
 
Properties, net 125,659 103,640 73,882
Other noncurrent assets   71,714     69,409     30,237  
$ 779,847   $ 823,363   $ 700,192  
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
Current liabilities:
Accounts payable $ 91,430 $ 63,827 $ 79,076
Gift cards and other deferred revenue 48,544 53,123 66,024
Accrued income taxes payable 10,859 16,759 6,920
Other accrued liabilities   98,882     111,679     101,238  
Total current liabilities 249,715 245,388 253,258
 
Long-term debt 9,500 9,500 9,500
Other noncurrent liabilities 60,647 74,832 72,805
 
Shareholders' equity:
Common stock, $0.001 par, 500,000,000 shares authorized,
125,232,000 issued 125 125 125
Paid-in capital 229,002 231,919 229,683
Retained earnings 498,248 462,751 324,550
Cumulative other comprehensive loss (3,687 ) (4,473 ) (431 )
Less -- 19,244,000, 15,512,000 and 14,828,000
common shares in treasury, at cost, respectively   (263,703 )   (196,679 )   (189,298 )
  459,985     493,643     364,629  
$ 779,847   $ 823,363   $ 700,192  
 

       

Pier 1 Imports, Inc.

 
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
 
Six Months Ended
 
August 25, August 27,
2012   2011
 
Cash flow from operating activities:
Net income $ 44,056 $ 30,737
Adjustments to reconcile to net cash (used in) provided by
operating activities:
Depreciation and amortization 17,649 16,569
Stock-based compensation expense 5,989 3,340
Deferred compensation 3,312 3,046
Amortization of credit card deferred revenue (2,843 ) (9,226 )
Amortization of deferred gains (2,618 ) (6,248 )
Change in reserve for uncertain tax positions (7,352 ) 386
Other (1,807 ) 579
Changes in cash from:
Inventories (98,319 ) (58,898 )
Proprietary credit card receivables (2,130 ) 330
Prepaid expenses and other assets (6,680 ) (1,804 )
Accounts payable and accrued expenses 11,476 9,952
Accrued income taxes payable, net of payments   (9,546 )   6,688  
Net cash used in operating activities   (48,813 )   (4,549 )
 
Cash flow from investing activities:
Capital expenditures (37,858 ) (21,255 )
Proceeds from disposition of properties 38 1,331
Proceeds from sale of restricted investments 1,176 311
Purchase of restricted investments   (2,784 )   (822 )
Net cash used in investing activities   (39,428 )   (20,435 )
 
Cash flow from financing activities:
Cash dividends (8,559 ) -
Purchases of treasury stock (79,281 ) (89,254 )
Proceeds from stock options exercised,
stock purchase plan and other, net 3,351 6,601
Debt issuance costs   -     (3,029 )
Net cash used in financing activities   (84,489 )   (85,682 )
 
Change in cash and cash equivalents (172,730 ) (110,666 )
 
Cash and cash equivalents at beginning of period   287,868     301,471  
Cash and cash equivalents at end of period $ 115,138   $ 190,805  




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