Pier 1 2013 Annual Report Download - page 32

During fiscal 2012, the Company’s investing activities used $62.1 million, compared to $13.7 million
during fiscal 2011, primarily as a result of increased capital expenditures during fiscal 2012. Capital expenditures
were $62.3 million in fiscal 2012, and consisted primarily of $33.8 million for new and existing stores. The
majority of the remaining capital expenditures were for information systems enhancements.
Cash Flows from Financing Activities
Financing activities for fiscal 2013 used $97.9 million, primarily related to the Company using
$100.0 million to repurchase the Company’s common stock and paying quarterly cash dividends of $0.04 per
share per quarter for the first three quarters and $0.05 per share for the fourth quarter of fiscal 2013, totaling
$18.0 million. The cash outflows were partially offset by the receipt of $20.1 million in proceeds related
primarily to employee stock option exercises and the Company’s employee stock purchase plan.
For fiscal 2012, financing activities used $93.8 million, compared to $21.1 million in fiscal 2011. The
increased utilization of cash for financing activities during fiscal 2012 primarily related to the Company using
$100.0 million to repurchase shares of the Company’s common stock and $3.1 million in debt issuance costs for
an amendment to the Company’s secured credit facility. The cash outflows were offset by the receipt of $9.3
million in proceeds related primarily to employee stock option exercises and the Company’s employee stock
purchase plan.
Secured Credit Facility
The Company has a $300 million credit facility with a $100 million accordion feature. This facility
matures in April 2016 and is secured by the Company’s eligible merchandise and third-party credit card
receivables. As of March 2, 2013, the Company had no outstanding borrowings under this facility and had
approximately $41.5 million in letters of credit and bankers acceptances outstanding. The calculated borrowing
base was $300 million, of which approximately $258.5 million remained available for additional borrowings. At
the end of fiscal 2013, the Company was in compliance with all required covenants stated in the agreement.
The Company’s secured credit facility may limit certain investments and, in some instances, limit
payment of cash dividends and repurchases of the Company’s common stock. The Company will not be
restricted from paying certain dividends unless credit extensions on the line result in availability over a specified
period of time that is projected to be less than 20% of the lesser of either $300 million or the calculated
borrowing base, subject to the Company meeting a fixed charge coverage requirement when availability over the
same specified period of time is projected to be less than 50% of the lesser of either $300 million or the
calculated borrowing base. See Note 4 to the Notes to Consolidated Financial Statements for further discussion of
the Company’s secured credit facility.
Share Repurchase Program
During fiscal 2013, the Company repurchased approximately 5.3% of the Company’s common stock
outstanding under the share repurchase program approved by the Board in October 2011. A total of
5,822,142 shares of its common stock were repurchased at a weighted average cost of $17.18 per share for a total
cost of $100.0 million. On December 13, 2012, the Company’s Board of Directors announced a new
$100 million share repurchase program. As of March 2, 2013, no shares had been repurchased under the new
program and $100 million remained available for share repurchase. The timing of the repurchases will depend on
several factors including, among others, prevailing market conditions and prices.
During fiscal 2012, the Company repurchased approximately 8% of the Company’s common stock
outstanding under a Board approved share repurchase program. A total of 9,498,650 shares of its common stock
were repurchased at a weighted average cost of $10.53 per share for a total cost of $100.0 million.
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