Pier 1 2009 Annual Report Download - page 32

decrease in home office management bonus, stock option expense and home office payroll expense.
Severance, outplacement and other costs decreased $1.7 million primarily as a result of expenses
incurred in the prior year related to larger reductions in work force compared to a slightly smaller
reduction in the current year. Other selling, general and administrative expenses that do not typically
vary with sales decreased $2.0 million primarily as a result of the Company’s continued initiative to
manage and control expenses. These decreases were partially offset by $1.7 million in expenses related
to the Company’s withdrawn proposal to acquire all of the outstanding common stock shares of Cost
Plus, Inc. and a $2.2 million gain recorded on the sale of fixed assets in fiscal 2008.
Depreciation and amortization for fiscal 2009 was $30.6 million, representing a decrease of
approximately $9.2 million from last year’s depreciation and amortization expense of $39.8 million. This
decrease was primarily the result of the sale of the home office building and related assets during fiscal
2009, lower net book values on certain store-level long-lived assets because of impairment charges
taken during and since the end of fiscal 2008, certain assets becoming fully depreciated, store closures,
and reduced capital spending in recent years.
In fiscal 2009, the Company recorded an operating loss of $120.6 million compared to
$88.1 million for fiscal 2008.
The Company continues to provide a valuation allowance against all deferred tax assets. As a
result, the Company did not record a federal tax benefit on its operating loss and only minimal state
and foreign tax provisions were recorded on results for fiscal 2009. Net deferred tax assets of
$181.0 million were fully reserved at year end through the valuation allowance. The Company has tax
loss carryforwards of approximately $276.0 million. These loss carryforwards, with expirations beginning
in fiscal year 2027, can be utilized to offset future income for U.S. federal tax purposes.
Net Loss
Net loss in fiscal 2009 was $129.3 million, or $1.45 per share, compared to $96.0 million, or $1.09
per share for fiscal 2008.
FISCAL YEARS ENDED MARCH 1, 2008 AND MARCH 3, 2007
Net Sales
Net sales consisted almost entirely of sales to retail customers, net of discounts and returns, but
also included delivery revenues and wholesale sales and royalties. Sales by retail concept during fiscal
years 2008, 2007 and 2006 were as follows (in thousands):
2008 2007 2006
Stores ............................. $1,486,147 $1,590,854 $1,753,927
Direct to consumer .................... 8,366 18,943 15,345
Other(1) ............................ 17,319 13,419 7,429
Net sales .......................... $1,511,832 $1,623,216 $1,776,701
(1) Other sales consisted primarily of wholesale sales and royalties received from franchise
stores, Grupo Sanborns, S.A. de C.V., and other third parties.
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