Pier 1 Imports Inc. (PIR, Financial) filed Quarterly Report for the period ended 2009-05-30.
Pier 1 Imports Inc. consists of a chain of retail stores operating under the names `Pier 1 Imports` and `The Pier` selling a wide variety of furniture decorative home furnishings dining and kitchen goods accessories and other specialty items for the home. Additionally the company through certain subsidiaries operates stores in the United Kingdom under the name `The Pier.` The company supplies merchandise and licenses the Pier 1 name to Sears Mexico and Sears Puerto Rico. Pier 1 Imports Inc. has a market cap of $179.5 million; its shares were traded at around $1.92 with and P/S ratio of 0.1.
Nonoperating income and expense During the first quarter of fiscal 2010, a foreign subsidiary of the Company purchased $78.9 million of the Companys outstanding 6.375% convertible senior notes due 2036 at a purchase price of $27.4 million, including accrued interest. As a result of this transaction, the Company reduced the principal amount of its outstanding convertible debt by $78.9 million on a consolidated basis. The Company recognized a gain of $47.8 million in connection with this transaction. As discussed in new accounting pronouncements below, the Company adopted Financial Accounting Standards Board (FASB) Staff Position (FSP) APB 14-1 under which it reduced the carrying value of its outstanding convertible senior notes as of the end of the quarter by a net $1.3 million.
Net Income (Loss) Net income for the first quarter of fiscal 2010 was $29.3 million, or $0.32 per share, compared to a loss of $32.8 million, or $0.37 per share, for the first quarter of fiscal 2009. Inventory Inventory levels at the end of the first quarter of fiscal 2010 were $294.2 million, down $22.1 million or 7.0%, from inventory levels at the end of fiscal 2009 and were in line with the Companys plan for the fiscal year. At the end of the first quarter of fiscal 2010, inventory per retail square foot was $35 compared to $37 at fiscal 2009 year end. The Company continues to focus on managing inventory levels and closely monitoring merchandise purchases to keep inventory in line with consumer demand. Total
Liquidity and Capital Resources The Company ended the first quarter of fiscal 2010 with $135.8 million in cash and temporary investments compared to $155.8 million at the end of fiscal 2009. Operating activities in the first quarter of fiscal 2010 provided $6.1 million of cash, primarily as a result of the Companys net income, a decrease in inventory, and the collection of a $10.0 million settlement related to a foreign lawsuit. These cash inflows were partially offset by the repurchase of a portion of the Companys 6.375% convertible senior notes due 2036 for $27.4 million, including interest, which resulted in the non-cash gain of $47.8 million.
During the first three months of fiscal 2010, investing activities provided $0.5 million compared to using $1.4 million during the same period last year. Proceeds from the sale of restricted investments used primarily for the payment of defined benefit obligations provided $3.3 million, partially offset by contributions of $3.1 million to purchase similar restricted investments. Proceeds from the disposition of properties provided $0.7 million. Capital expenditures were $0.4 million in fiscal 2010 compared to $1.9 million in fiscal 2009. Capital expenditures for fiscal 2010 are expected to be approximately $7.0 million.
Working capital requirements are expected to be funded from cash from operations, available cash balances, cash surrender value of life insurance policies not restricted as to use, and if required, borrowings against lines of credit. The Companys bank facilities at the end of the first quarter of fiscal 2010 included a $325 million credit facility, which was secured by the Companys eligible merchandise inventory and third-party credit card receivables. As of May 30, 2009, the Company had no outstanding cash borrowings and had utilized $100.7 million in letters of credit and bankers acceptances. Should the availability under this facility be less than $32.5 million, the Company will be required to comply with a fixed charge coverage ratio as stated in the agreement. The Company does not anticipate falling below this minimum availability in the foreseeable future. As of May 30, 2009, the Companys calculated borrowing base was $194.3 million. After excluding the required minimum of $32.5 million and the $100.7 million in utilized letters of credit and bankers accep
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Pier 1 Imports Inc. consists of a chain of retail stores operating under the names `Pier 1 Imports` and `The Pier` selling a wide variety of furniture decorative home furnishings dining and kitchen goods accessories and other specialty items for the home. Additionally the company through certain subsidiaries operates stores in the United Kingdom under the name `The Pier.` The company supplies merchandise and licenses the Pier 1 name to Sears Mexico and Sears Puerto Rico. Pier 1 Imports Inc. has a market cap of $179.5 million; its shares were traded at around $1.92 with and P/S ratio of 0.1.
Highlight of Business Operations:
Expenses that tend to fluctuate with sales and number of stores, such as store payroll, marketing, store supplies and equipment rental decreased $2.3 million. Store payroll decreased $1.9 million primarily as a result of a decrease in the total number of stores and a planned reduction in full time staff hours compared to the prior year. Marketing expenditures were $13.1 million, an increase of $0.4 million compared to the same quarter last year, primarily as a result of an increase in television advertising offset by a decrease in brochures, catalogues and newspaper inserts. Marketing expenses for the first quarter were 4.7% as a percentage of sales. The Company expects marketing expense for the full fiscal year to be comparable to last years expense and should be approximately $60.0 million. Other variable expenses, primarily supplies and equipment rental, decreased $0.9 million when compared to the same period last year.Nonoperating income and expense During the first quarter of fiscal 2010, a foreign subsidiary of the Company purchased $78.9 million of the Companys outstanding 6.375% convertible senior notes due 2036 at a purchase price of $27.4 million, including accrued interest. As a result of this transaction, the Company reduced the principal amount of its outstanding convertible debt by $78.9 million on a consolidated basis. The Company recognized a gain of $47.8 million in connection with this transaction. As discussed in new accounting pronouncements below, the Company adopted Financial Accounting Standards Board (FASB) Staff Position (FSP) APB 14-1 under which it reduced the carrying value of its outstanding convertible senior notes as of the end of the quarter by a net $1.3 million.
Net Income (Loss) Net income for the first quarter of fiscal 2010 was $29.3 million, or $0.32 per share, compared to a loss of $32.8 million, or $0.37 per share, for the first quarter of fiscal 2009. Inventory Inventory levels at the end of the first quarter of fiscal 2010 were $294.2 million, down $22.1 million or 7.0%, from inventory levels at the end of fiscal 2009 and were in line with the Companys plan for the fiscal year. At the end of the first quarter of fiscal 2010, inventory per retail square foot was $35 compared to $37 at fiscal 2009 year end. The Company continues to focus on managing inventory levels and closely monitoring merchandise purchases to keep inventory in line with consumer demand. Total
Liquidity and Capital Resources The Company ended the first quarter of fiscal 2010 with $135.8 million in cash and temporary investments compared to $155.8 million at the end of fiscal 2009. Operating activities in the first quarter of fiscal 2010 provided $6.1 million of cash, primarily as a result of the Companys net income, a decrease in inventory, and the collection of a $10.0 million settlement related to a foreign lawsuit. These cash inflows were partially offset by the repurchase of a portion of the Companys 6.375% convertible senior notes due 2036 for $27.4 million, including interest, which resulted in the non-cash gain of $47.8 million.
During the first three months of fiscal 2010, investing activities provided $0.5 million compared to using $1.4 million during the same period last year. Proceeds from the sale of restricted investments used primarily for the payment of defined benefit obligations provided $3.3 million, partially offset by contributions of $3.1 million to purchase similar restricted investments. Proceeds from the disposition of properties provided $0.7 million. Capital expenditures were $0.4 million in fiscal 2010 compared to $1.9 million in fiscal 2009. Capital expenditures for fiscal 2010 are expected to be approximately $7.0 million.
Working capital requirements are expected to be funded from cash from operations, available cash balances, cash surrender value of life insurance policies not restricted as to use, and if required, borrowings against lines of credit. The Companys bank facilities at the end of the first quarter of fiscal 2010 included a $325 million credit facility, which was secured by the Companys eligible merchandise inventory and third-party credit card receivables. As of May 30, 2009, the Company had no outstanding cash borrowings and had utilized $100.7 million in letters of credit and bankers acceptances. Should the availability under this facility be less than $32.5 million, the Company will be required to comply with a fixed charge coverage ratio as stated in the agreement. The Company does not anticipate falling below this minimum availability in the foreseeable future. As of May 30, 2009, the Companys calculated borrowing base was $194.3 million. After excluding the required minimum of $32.5 million and the $100.7 million in utilized letters of credit and bankers accep
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