Pier 1 Comments on S&P Global Ratings Report
April 25 2019 - 5:10PM
Business Wire
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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version on businesswire.com: https://www.businesswire.com/news/home/20190425005994/en/
Christine GreanyThe Blueshirt Group(858)
523-1732christine@blueshirtgroup.com
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