FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the quarterly period ended August 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the transition period from [____________] to [____________]
Commission File Number 1-7832
PIER 1 IMPORTS, INC.
(Exact name of registrant as specified in its charter)
Delaware 75-1729843
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
301 Commerce Street, Suite 600, Fort Worth, Texas 76102
(Address of principal executive offices including zip code)
(817) 878-8000
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for shorter period that the Registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes [ X ]. No [ ].
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Shares outstanding as of October 3, 1996
- ----------------------------- ----------------------------------------
Common Stock, $1.00 par value 45,072,115
<PAGE>
PART I
------
Item 1. Financial Statements.
--------------------
PIER 1 IMPORTS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
Aug. 31, Aug. 26, Aug. 31, Aug. 26,
1996 1995 1996 1995
-------- -------- -------- --------
Net sales $231,050 $199,456 $436,342 $376,271
Operating costs and expenses:
Cost of sales (including
buying and store occupancy) 141,057 124,698 264,652 232,375
Selling, general and
administrative expenses 62,581 51,736 123,127 103,794
Depreciation and amortization 4,898 4,215 9,673 8,338
-------- -------- -------- --------
208,536 180,649 397,452 344,507
-------- -------- -------- --------
Operating income 22,514 18,807 38,890 31,764
Nonoperating (income) and expense:
Interest income (83) (251) (1,744) (596)
Interest expense 3,559 3,222 7,812 6,494
Trading losses -- 602 -- 16,558
Provision for Sunbelt Nursery
Group, Inc. defaults -- -- -- 14,000
-------- -------- -------- --------
3,476 3,573 6,068 36,456
-------- -------- -------- --------
Income (loss) before
income taxes 19,038 15,234 32,822 (4,692)
Provision for income taxes 7,618 6,334 13,129 4,743
-------- -------- -------- --------
Net income (loss) $ 11,420 $ 8,900 $ 19,693 ($ 9,435)
======== ======== ======== ========
Net income (loss) per share:
Primary $.26 $.22 $.47 ($.24)
======== ======== ======== ========
Fully diluted $.26 $.21 $.45 ($.24)
======== ======== ======== ========
Average shares outstanding during
period, including common stock
equivalents:
Primary 43,543 39,634 41,848 39,731
======== ======== ======== ========
Fully diluted 45,913 45,134 45,796 45,249
======== ======== ======== ========
The accompanying notes are an integral part of these financial statements.
<PAGE>
PIER 1 IMPORTS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands except share data)
(Unaudited)
August 31, March 2,
1996 1996
---------- ----------
ASSETS
Current assets:
Cash, including temporary investments of $1,173 and
$1,588, respectively $ 15,548 $ 13,534
Accounts receivable, net 92,737 77,735
Inventories 235,824 223,166
Other current assets 37,020 33,078
-------- --------
Total current assets 381,129 347,513
Properties, net 157,675 144,627
Other assets 34,069 38,956
-------- --------
$572,873 $531,096
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable and current portion of long-term debt $ 21,172 $ 4,454
Accounts payable and accrued liabilities 102,773 96,246
-------- --------
Total current liabilities 123,945 100,700
Long-term debt 115,100 180,100
Other non-current liabilities 24,622 22,373
Stockholders' equity:
Common stock, $1.00 par, 200,000,000 shares authorized,
45,361,000 and 39,877,000 issued, respectively 45,361 39,877
Paid-in capital 168,605 110,899
Retained earnings 97,929 81,633
Cumulative currency translation adjustments (1,048) (1,072)
Less - 106,000 and 303,000 common shares in treasury,
at cost, respectively (924) (2,545)
Less - subscriptions receivable and unearned
compensation (717) (869)
-------- --------
309,206 227,923
-------- --------
$572,873 $531,096
======== ========
The accompanying notes are an integral part of these financial statements.
<PAGE>
PIER 1 IMPORTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months Ended
August 31, August 26,
1996 1995
---------- ----------
Cash flow from operating activities:
Net income (loss) $19,693 ($ 9,435)
Adjustments to reconcile to net cash provided by
(used in) operating activities:
Depreciation and amortization 9,673 8,338
Deferred taxes and other 1,984 2,331
Investment gain (1,607) --
Provision for Sunbelt Nursery Group, Inc. defaults -- 14,000
Changes in cash from:
Inventories (8,036) (24,518)
Accounts receivable and other current assets (18,122) (11,710)
Accounts payable and accrued expenses 7,124 10,319
Store-closing reserve -- (4,920)
Other assets, liabilities and other, net 957 (89)
Net cash provided by (used in) operating ------- -------
activities 11,666 (15,684)
------- -------
Cash flow from investing activities:
Capital expenditures (21,199) (7,879)
Proceeds from disposition of properties 235 237
Reserve for Sunbelt Nursery Group, Inc. defaults (1,023) --
Proceeds (payments) from investments 4,665 (5,163)
------- -------
Net cash used in investing activities (17,322) (12,805)
------- -------
Cash flow from financing activities:
Cash dividends (3,397) (2,390)
Repayments of long-term debt (2,500) (14,750)
Net borrowings under line of credit agreements 11,853 15,000
Proceeds (payments) from sales (purchases) of
capital stock, treasury stock, and other, net 1,714 (1,858)
Net cash provided by (used in) financing ------- -------
activities 7,670 (3,998)
------- -------
Change in cash and cash equivalents 2,014 (32,487)
Cash and cash equivalents at beginning of period 13,534 50,566
------- -------
Cash and cash equivalents at end of period $15,548 $18,079
======= =======
The accompanying notes are an integral part of these financial statements.
<PAGE><TABLE>
PIER 1 IMPORTS, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED AUGUST 31, 1996
(In thousands)
(Unaudited)
<CAPTION>
Cumulative Subscriptions
Currency Receivable Total
Common Paid-in Retained Translation Treasury and Unearned Stockholders'
Stock Capital Earnings Adjustments Stock Compensation Equity
------- -------- -------- ----------- --------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, March 2, 1996 $39,877 $110,899 $81,633 ($1,072) ($2,545) ($869) $227,923
Purchase of treasury stock (142) (142)
Restricted stock grant and amortization 152 152
Stock purchase plan, exercise of stock
options and other 591 1,763 2,354
Currency translation adjustments 24 24
Cash dividends ($.08 per share) (3,397) (3,397)
Conversion of 6 7/8% convertible debt 5,484 57,115 62,599
Net income 19,693 19,693
------- -------- ------- ------- ------- ----- --------
Balance, August 31, 1996 $45,361 $168,605 $97,929 ($1,048) ($ 924) ($717) $309,206
======= ======== ======= ======= ======= ===== ========
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
</TABLE>
<PAGE>
PIER 1 IMPORTS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED AUGUST 31, 1996
AND AUGUST 26, 1995
(Unaudited)
The accompanying unaudited financial statements should be read in
conjunction with the Form 10-K for the year ended March 2, 1996. All
adjustments that are, in the opinion of management, necessary for a fair
statement of the financial position as of August 31, 1996, and the results of
operations and cash flows for the interim periods ended August 31, 1996 and
August 26, 1995 have been made and consist only of normal recurring
adjustments, except for the net trading losses and the provision for Sunbelt
Nursery Group, Inc. defaults recorded for the six months ended August 26,
1995. The results of operations for the three and six months ended August
31, 1996 and August 26, 1995 are not indicative of results to be expected for
the fiscal year because of, among other things, seasonality factors in the
retail business.
Note 1 - Net income (loss) per share
Primary net income (loss) per share was determined by dividing net
income (loss) by applicable average shares outstanding. Fully diluted net
income (loss) per share amounts are similarly computed, but include the
effect, when dilutive, of the Company's potentially dilutive securities. To
determine fully diluted net income (loss), interest and debt issue costs, net
of any applicable taxes, have been added back to net income (loss) to reflect
assumed conversions. The computation of fully diluted net income (loss) per
share for the six months ended August 26, 1995 was antidilutive; therefore,
the amounts reported for primary and fully diluted net income (loss) per
share are the same.
Primary average shares include common shares outstanding and common
stock equivalents attributable to outstanding stock options. In addition to
common and common equivalent shares, fully diluted average shares include
common shares that would be issuable upon conversion of the Company's
convertible securities.
Net income (loss) per share for the three- and six-months ended August
31, 1996 and August 26, 1995 are calculated as follows:
<PAGE>
Three Months Ended Six Months Ended
Aug. 31, Aug. 26, Aug. 31, Aug. 26,
1996 1995 1996 1995
-------- -------- -------- --------
(in thousands except per share amounts)
Net income (loss) $11,420 $8,900 $19,693 ($9,435)
Assumed conversion of 6 7/8%
subordinated notes:
Plus interest and debt issue
costs, net of tax 291 683 970 1,366
------- ------ ------- ------
Fully diluted net income (loss) $11,711 $9,583 $20,663 ($8,069)
======= ====== ======= ======
Average shares outstanding during
period, including common stock
equivalents:
Primary 43,543 39,634 41,848 39,731
Plus assumed exercise of stock
options 17 9 26 27
Plus assumed conversion of
6 7/8% subordinated notes
to common stock 2,353 5,491 3,922 5,491
------ ------ ------ ------
Fully diluted 45,913 45,134 45,796 45,249
====== ====== ====== ======
Net income (loss) per share:
Primary $.26 $.22 $.47 ($.24)
==== ==== ==== ====
Fully diluted $.26 $.21 $.45 ($.24)
==== ==== ==== ====
Note 2 - Supplemental cash flow information
During the second quarter of fiscal 1997, the Company issued 5,483,823
shares of common stock upon the conversion of $62,681,000 principal amount of
6 7/8% convertible subordinated notes.
Note 3 - Subsequent event - Issuance of long-term debt and extraordinary loss
In September 1996, the Company completed a public offering of $75
million aggregate principal amount of 5 3/4% convertible subordinated notes
due 2003. In October 1996, the underwriter's overallotment option was
exercised bringing the total amount of the offering to $86.25 million.
Interest on the notes will be payable semi-annually on April 1 and October 1
of each year, commencing April 1, 1997. The notes are convertible at any
time prior to maturity, unless previously redeemed or repurchased, into
shares of common stock of the Company at a conversion price of $18.50 per
share. The Company may redeem the notes, in whole or in part, on or after
October 1, 1999.
The Company intends to utilize the net proceeds from the public offering
to retire $17.5 million of 11 1/2% subordinated debentures due 2003 and $25
million of 11% senior notes due 2001. The balance of the net proceeds will
be used to repay $37.7 million outstanding under the Company's bank revolving
credit facility, which bears interest at a floating rate, currently 6.44% per
annum. The Company will be required to pay an estimated $2.9 million in
redemption and other fees to retire the 11 1/2% subordinated debentures and
the 11% senior notes and will record an estimated extraordinary loss of $3.2
million, after tax, during the third quarter of fiscal 1997 for the early
retirement of debt.
<PAGE>
PART I
------
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Results of Operations
Pier 1 Imports, Inc. ("the Company") recorded net sales of $231.1
million and $436.3 million for the second quarter and first six months of
fiscal 1997, increases of 15.8% and 16.0% over the second quarter and first
six months of fiscal 1996, respectively. Same-store sales for the second
quarter of fiscal 1997 grew 10.0% over the comparable period of fiscal 1996,
primarily due to the increased customer traffic resulting from the national
television advertising campaign implemented during the second quarter of
fiscal 1996, the continued focus on company-wide customer service programs
and the Company's store remodel and remerchandising programs which have
improved the layout and design of approximately 38 stores since the second
quarter of last fiscal year. Same-store sales increased 10.4% for the first
half of fiscal 1997 compared to the first half of fiscal 1996. Hard goods
sales, such as furniture and decorative accessories, increased 15.8% during
the second quarter of fiscal 1997 compared to the second quarter of fiscal
1996, while soft goods sales of apparel, jewelry and accessories declined
24.6% during the second quarter of fiscal 1997 compared to the second quarter
of fiscal 1996. Hard goods and soft goods sales contributed approximately
94.0% and 6.0%, respectively, of total merchandise sales for the second
quarter of fiscal 1997. The Company continues to de-emphasize apparel in
stores and management expects to completely discontinue soft goods in all
Pier 1 stores by the end of the first quarter of fiscal 1998. Sales on the
Company's proprietary credit card totaled $116.1 million, or 26.6% of total
sales, during the first six months of fiscal 1997 versus proprietary credit
card sales of $92.7 million, or 24.6% of total sales, for the first six
months of fiscal 1996. The Company opened 22 new North American stores and
closed seven stores during the first six months of fiscal 1997, bringing the
North American store count to 677 at the end of the fiscal 1997 second
quarter compared to 647 at the end of the fiscal 1996 second quarter. Stores
worldwide, including North America, Puerto Rico and international operations
in the United Kingdom, Mexico and Japan, aggregated 707 at the end of the
fiscal 1997 second quarter.
Gross profit, after related buying and store occupancy costs, expressed
as a percentage of sales, increased 1.4% to 38.9% for the second quarter of
fiscal 1997 and increased 1.1% to 39.3% for the first six months of fiscal
1997 compared to the same periods of fiscal 1996. These increases are
partially the result of stronger merchandise margins on hard goods, offset
slightly by a weakening of merchandise margins for soft goods due to
clearance and promotional discounts. Fiscal 1997 second quarter gross profit
includes approximately $1.1 million in duty refunds owed the Company as a
result of retroactive legislation passed in August 1996. Store occupancy
costs, as a percentage of sales, improved 1.1% to 13.4% for the second
quarter of fiscal 1997 and improved 1.3% to 13.7% for the first six months of
fiscal 1997 versus the same periods a year ago, primarily due to higher sales
leveraging relatively fixed rates on store leases coupled with the Company's
purchase (in the fourth quarter of fiscal 1996) of the remaining 90% interest
in a limited partnership which owns 33 Pier 1 stores previously leased to the
Company, which eliminated base rent expenses for those stores.
Selling, general and administrative expenses, including marketing, as a
percentage of sales, increased 1.2% to 27.1% for the second quarter of fiscal
1997 and increased 0.6% to 28.2% for the first half of fiscal 1997 compared
to the same periods of fiscal 1996. In total dollars, selling, general and
administrative expenses increased $10.8 million for the second quarter of
fiscal 1997 and increased $19.3 million for the first six months of fiscal
1997 versus the comparable periods of fiscal 1996. The increase in these
expenses for the first six months of fiscal 1997 was primarily due to a $10.3
million increase in payroll expenses, which remained relatively flat as a
percentage of sales, a $3.5 million increase in marketing expenses due to the
national television advertising campaign that started in July 1995 and a $4.9
million increase in other operating expenses resulting from the increase in
the number of net new stores opened since the end of the second quarter of
fiscal 1996 coupled with increased costs associated with selling supplies and
the timing of mid-year inventory counts. Other selling, general and
administrative expenses increased by $2.7 million, which included $0.9
million in expenses related to the investigation of trading losses incurred
in prior years and discussed further below. The increase in expenses was
partially offset by a $2.1 million decrease in net proprietary credit card
costs resulting from an increase in finance charge income and a decrease in
bad debt expense.
Operating income increased $3.7 million, or 19.7%, to $22.5 million
during the second quarter of fiscal 1997 from $18.8 million in the second
quarter of fiscal 1996. For the first six months of fiscal 1997, operating
income increased $7.1 million, or 22.4%, to $38.9 million compared to $31.8
million for the same period a year ago.
Net interest expense increased $0.5 million during the second quarter of
fiscal 1997 and $0.2 million during the first six months of fiscal 1997
versus the same periods of fiscal 1996. This increase resulted from higher
interest rates on floating rate debt plus additional interest expense on the
$40 million debt used in the December 1995 acquisition of the remaining 90%
interest in a limited partnership which owns 33 Pier 1 stores. These
increases were offset partially by the redemption of the 6 7/8% convertible
subordinated notes in the second quarter of fiscal 1997 and higher investment
income earned on the investment in Whiffletree Partners, L.P. ("Whiffletree")
in the first quarter of fiscal 1997.
In late December 1995, the Company was made aware of losses of $19.3
million resulting from trading activities in a discretionary account. As a
result of the investigations of the trading losses, the Company recorded
$16.5 million and $2.8 million of the net trading losses in fiscal 1996 and
fiscal 1995, respectively, with $16.0 million and $0.6 million of the net
trading losses recorded in the first and second quarters of fiscal 1996,
respectively. The Company has not recorded any tax benefit on these losses
since the realization of such benefit is not considered likely based on the
information available at this time. The Company and a Special Committee of
the Board of Directors investigated the matter and found no evidence to
suggest that the Company's net losses from these trading activities will
exceed the $19.3 million recorded in fiscal years 1996 and 1995.
In April 1995, Sunbelt Nursery Group, Inc. ("Sunbelt") defaulted on 13
nursery store sublease agreements with the Company comprising $22.8 million
of non-revolving store development financing, and the Company terminated the
subleases. At the same time, Sunbelt defaulted on three nursery store lease
agreements guaranteed by the Company; however, such defaults were
subsequently cured. During the first quarter of fiscal 1996, the Company
recorded a pre-tax charge of $14 million which represented the estimated cost
to disengage from its financial support of Sunbelt. The charge reflects the
Company's estimated losses resulting from the lease termination costs
associated with the 13 nursery store subleases and other related costs. The
Company is not aware of any defaults on these leases; however, Sunbelt has
notified the Company that it is in default of certain provisions of the loan
agreement for its bank debt. As of September 1996, three nursery store
properties had been sold at costs consistent with the Company's estimates to
record the charge. The Company believes that it is reasonably possible that
a change in this estimate could occur in the near term; however, no further
charge is warranted at this time.
The Company's effective income tax rate for fiscal 1997 is estimated at
40% compared to 40% recorded during the first half of fiscal 1996, exclusive
of the aforementioned trading losses.
Net income for the second quarter of fiscal 1997 aggregated $11.4
million or $.26 per share on a fully diluted basis compared to net income of
$8.9 million or $.21 per share on a fully diluted basis for the second
quarter of fiscal 1996. Net income for the first six months of fiscal 1997
aggregated $19.7 million or $.45 per share on a fully diluted basis compared
to net income before special charges of $15.7 million or $.38 per share on a
fully diluted basis for the first six months of fiscal 1996. Special charges
for the first six months of fiscal 1996 included the $16.6 million in trading
losses and the $14.0 million provision for Sunbelt defaults.
Liquidity and Capital Resources
Cash, including temporary investments, increased $2.0 million to $15.5
million at the end of the second quarter of fiscal 1997 from $13.5 million at
fiscal 1996 year-end. The increase in cash during the second quarter of
fiscal 1997 was primarily due to cash flow from operations of $11.7 million,
net borrowings under line of credit agreements of $11.8 million and the net
proceeds from the liquidation of the Whiffletree investment of $4.7 million,
offset partially by capital expenditures of $21.2 million, cash dividend
payments of $3.4 million, repayments of long-term debt of $2.5 million and
payments on the reserve for Sunbelt defaults of $1.0 million. Other
investing and financing activities provided cash flow of $1.9 million. Cash
flow from operations improved $27.4 million during the first six months of
fiscal 1997 over the same period of fiscal 1996 primarily due to higher net
income and other non-cash related items of $31.4 million for fiscal 1997
compared to $15.2 million for fiscal 1996, which included $16.6 million of
net trading losses.
Working capital requirements will continue to be provided by cash from
operations and a three-year, $65 million competitive advance and revolving
credit facility, of which $25 million was available at the end of the second
quarter of fiscal 1997, and other short-term (12 month) bank facilities
aggregating $140.5 million, $37.0 million of which was available at the end
of the second quarter of fiscal 1997. The short-term bank facilities consist
of $15 million of committed lines of credit and $125.5 million of uncommitted
lines. The Company's current ratio was 3.1 to 1 at the end of the second
quarter of fiscal 1997 compared to 3.5 to 1 at fiscal 1996 year-end and 3.0
to 1 at the end of the second quarter of fiscal 1996. The Company's minimum
operating lease commitments remaining for fiscal 1997 are $48 million, and
the present value of total existing minimum operating lease commitments is
$359 million.
In September 1996, the Company completed a public offering of $75
million aggregate principal amount of 5 3/4% convertible subordinated notes
due 2003. In October 1996, the underwriter's overallotment option was
exercised bringing the total amount of the offering to $86.25 million.
Interest on the notes will be payable semi-annually on April 1 and October 1
of each year, commencing April 1, 1997. The notes are convertible at any
time prior to maturity, unless previously redeemed or repurchased, into
shares of common stock of the Company at a conversion price of $18.50 per
share. The Company may redeem the notes, in whole or in part, on or after
October 1, 1999. Proceeds from the public offering are being used to retire
high cost, long-term debt and repay $37.7 million outstanding under the
Company's bank revolving credit facility.
In August 1996, the Company announced its intention to arrange a
securitization of its proprietary credit card receivables through a private
placement of trust certificates representing interests in the proprietary
credit card receivables. If the transaction is completed, the Company would
receive cash proceeds of approximately $70 million and would use the proceeds
to retire any debt outstanding under the Company's bank revolving credit
facility and provide funds for working capital and other general corporate
purposes.
The Company called its $62.8 million outstanding principal amount of
6 7/8% convertible subordinated notes due April 1, 2002 for redemption on
July 12, 1996. The notes were convertible into common stock of the Company
at any time prior to the close of business on July 10, 1996, at a conversion
price of $11.43 per share. Prior to redemption, $62,681,000 of the notes
were converted into 5,483,823 shares of the Company's common stock and
$69,000 of the notes were redeemed for cash.
During the first six months of fiscal 1997, approximately $1.0 million
was expended and charged against the Company's previously established reserve
to disengage financial support of Sunbelt. Cash requirements to fund this
reserve will be funded through working capital and operations. As of
September 1996, three of the 13 nursery store properties have been sold at
costs consistent with the Company's previously recorded reserve. The Company
guarantees other Sunbelt store lease commitments aggregating $3.8 million
with a present value of approximately $3.2 million at the fiscal 1997 second
quarter-end. The Company is not aware of any defaults on these leases;
however, Sunbelt has notified the Company that it is in default of certain
provisions of the loan agreement for its bank debt. The Company believes
that it is reasonably possible that a change in this estimate could occur in
the near term; however, no further charge is warranted at this time.
During the third quarter of fiscal 1997, the Company repurchased 300,000
shares of its common stock in open market transactions under a Board of
Directors approved program for approximately $4.8 million.
During the first six months of fiscal 1997, the Company paid cash
dividends aggregating $.08 per share and subsequently declared a cash
dividend of $.04 per share payable on November 19, 1996 to shareholders of
record on November 5, 1996. The Company currently expects to continue cash
dividends in fiscal 1997, but intends to retain most of its future earnings
for expansion of the Company's business.
<PAGE>
PART II
-------
Item 4. Submission of Matters to a Vote of Security Holders.
---------------------------------------------------
The Annual Meeting of Shareholders of the Company was held June
27, 1996 for the purposes of electing seven (7) Directors to hold
office until the next Annual Meeting of Shareholders, to vote upon a
proposal to amend the 1989 Employee Stock Option Plan, to vote upon
a stockholder proposal to request the Company to retain an
investment banker and to vote upon a stockholder proposal to
recommend adoption of confidential voting.
Director Election
-----------------
Director FOR WITHHELD
-------- --- --------
Clark A. Johnson 33,053,878 336,092
Marvin J. Girouard 33,087,833 302,137
Martin L. Berman 33,074,823 315,147
Craig C. Gordon 33,169,311 220,659
James M. Hoak, Jr. 33,085,009 304,961
Sally F. McKenzie 33,156,339 233,631
Charles R. Scott 33,039,244 350,726
Proposal to Amend the 1989 Employee Stock Option Plan
-----------------------------------------------------
FOR AGAINST ABSTAINED BROKER NON-VOTES
--- ------- --------- ----------------
23,260,740 5,130,194 248,318 4,749,492
Stockholder Proposal to Request the Company to Retain an Investment
Banker
-------------------------------------------------------------------
FOR AGAINST ABSTAINED BROKER NON-VOTES
--- ------- --------- ----------------
2,986,275 23,907,470 1,283,384 5,213,366
Stockholder Proposal to Recommend Adoption of Confidential Voting
-----------------------------------------------------------------
FOR AGAINST ABSTAINED BROKER NON-VOTES
--- ------- --------- ----------------
11,759,370 14,584,970 643,634 6,401,996
Item 6. Exhibits and Reports on Form 8-K.
--------------------------------
(a) Exhibits See Exhibit Index.
(b) Reports on Form 8-K None.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PIER 1 IMPORTS, INC.
Date: October 15, 1996 By: /s/ Clark A. Johnson
---------------- ----------------------------------------
Clark A. Johnson, Chairman of the Board
and Chief Executive Officer
(Principal Executive Officer)
Date: October 15, 1996 By: /s/ Stephen F. Mangum
---------------- ----------------------------------------
Stephen F. Mangum, Senior Vice President
and Chief Financial Officer
(Principal Financial Officer and
Principal Accounting Officer)
<PAGE>
EXHIBIT INDEX
Exhibit
No. Description
- ------- -----------
27 Financial Data Schedule for Six-Month Period Ended August 31,
1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S CONSOLIDATED STATEMENT OF OPERATIONS AND BALANCE SHEET AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-01-1997
<PERIOD-END> AUG-31-1996
<CASH> 15,548
<SECURITIES> 0
<RECEIVABLES> 96,380
<ALLOWANCES> 3,643
<INVENTORY> 235,824
<CURRENT-ASSETS> 381,129
<PP&E> 292,803
<DEPRECIATION> 135,128
<TOTAL-ASSETS> 572,873
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<BONDS> 115,100
<COMMON> 45,361
0
0
<OTHER-SE> 263,845
<TOTAL-LIABILITY-AND-EQUITY> 572,873
<SALES> 436,342
<TOTAL-REVENUES> 436,342
<CGS> 264,652
<TOTAL-COSTS> 264,652
<OTHER-EXPENSES> 9,673
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,812
<INCOME-PRETAX> 32,822
<INCOME-TAX> 13,129
<INCOME-CONTINUING> 19,693
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 19,693
<EPS-PRIMARY> .26
<EPS-DILUTED> .26
</TABLE>
