Pier 1 Imports, Inc. (NYSE:PIR) today issued the following statement in
response to the recent report from S&P Global Ratings (“S&P”):
We want to clarify and confirm Pier 1’s liquidity position, as described
during the Company’s earnings call on April 17, 2019. Pier 1 has
developed an action plan that the Company believes will provide
sufficient liquidity to implement the strategic initiatives that are
part of its new fiscal 2020 plan.
The Company is not in default under any of its debt agreements, and
those agreements do not contain any financial performance covenants. The
term loan that S&P says Pier 1 ‘could face challenges in refinancing’ is
not due for two years. As of March 2, 2019 — the end of fiscal 2019 —
Pier 1 had $55 million of cash and short-term investments, $191 million
outstanding under its term loan, $50 million of borrowings under its
FILO tranche and an undrawn revolving credit facility.
We have acknowledged the execution issues under the prior management’s
“New Day” plan and have since put in place a capable senior leadership
team to develop and implement a new fiscal 2020 plan to reset and
rebuild our business. Our plan takes into consideration that it will
take time for a recovery of topline sales and is instead designed to
drive benefits of approximately $100-$110 million from both cost
reductions and gross margin improvement in the current fiscal year. This
includes approximately $70-$80 million of selling, general and
administrative expense savings opportunity for fiscal 2020, reflecting
an expected annual run-rate of approximately $95-$105 million. After
reinvesting in the business, the Company believes it will be positioned
to recapture approximately $30-$40 million of net income and $45-$55
million of EBITDA in fiscal year 2020.
While Pier 1 regularly engages with all of its stakeholders, the Company
is not currently contemplating nor discussing any debt exchange. We
remain confident our fiscal 2020 action plan will create the runway to
return Pier 1 to long-term health and sustainable financial performance.
Financial Disclosure Advisory
Except for historical information contained herein, the statements in
this press release or otherwise made by our management in connection
with the subject matter of this press release are forward-looking
statements (as such term is defined in the Private Securities Litigation
Reform Act of 1995) and involve risks and uncertainties and are subject
to change based on various important factors. This press release
includes forward-looking statements that are based on management’s
current estimates or expectations of future events or future results.
These statements are not historical in nature and can generally be
identified by such words as “believe,” “expect,” “estimate,”
“anticipate,” “plan,” “may,” “will,” “intend” and similar expressions.
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. These risks and uncertainties include, but are
not limited to: the impact of the organizational redesign of the
Company’s corporate workforce; the impact of initiatives implemented in
connection with the Company’s multi-year “New Day” strategic plan,
particularly with respect to changes in the initiatives supporting the
New Day plan and actions intended to return the Company to profitable
growth; the impact of initiatives connected with the appointment of the
Company's interim chief executive officer; fiscal 2020 action plans and
expense reduction initiatives; the results of the evaluation of
strategic alternatives and the terms, value and timing of any
transaction resulting from that process, or the failure of any such
transaction to occur; the effectiveness of the Company’s marketing
campaigns, merchandising and promotional strategies and customer
databases; consumer spending patterns; inventory levels and values; the
Company's ability to increase cash flows to support its operating
activities; the effectiveness of the Company's relationships with, and
operations of, its key suppliers; the Company’s ability to implement
planned cost control measures and reductions in capital expenditures;
risks related to U.S. import policy, particularly with regard to the
impact of tariffs on goods imported from China and strategies undertaken
to mitigate such impact; changes in foreign currency values relative to
the U.S. dollar; the Company's ability to identify a successor chief
executive officer and chief financial officer and retain its senior
management team; and the Company's ability to comply with the continued
listing criteria of the NYSE, and risks arising from the potential
suspension of trading of the Company's common stock on that exchange.
These and other factors that could cause results to differ materially
from those described in the forward-looking statements contained in this
press release can be found in the Company’s Annual Report on Form 10-K,
its Quarterly Report on Form 10-Q for the quarterly period ended
December 1, 2018 and in other filings with the SEC. 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. Undue reliance should not be placed on forward-looking
statements, which are only current as of the date they are made. The
Company assumes no obligation to update or revise its forward-looking
statements, except as may be required by applicable law.
About Pier 1
Founded with a single store in 1962, Pier 1 is a leading omnichannel
retailer of unique home décor and accessories. The company’s products
are available through more than 970 Pier 1 stores in the U.S. and Canada
and online at pier1.com. For more information or to find the nearest
store, please visit pier1.com.
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