Pier 1 2014 Annual Report Download - page 53

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
market prices through regular payroll deductions. Each employee may contribute up to 20% of the eligible portions of
compensation, and non-employee directors may contribute up to 100% of their director compensation. The Company
contributes an amount equal to 25% of the participant’s contributions. Company contributions to the plan were $492,000,
$431,000 and $342,000 in fiscal years 2014, 2013 and 2012, respectively.
Preferred Stock — As of March 1, 2014, 20,000,000 shares of preferred stock were available for future issuance.
Dividends — The Company paid cash dividends of $21,697,000 and $17,989,000 in fiscal years 2014 and 2013, respectively.
The Company did not pay any cash dividends in fiscal year 2012. On April 3, 2014, subsequent to year end, the Company’s
Board of Directors declared a $0.06 per share quarterly cash dividend on the Company’s outstanding shares of common stock.
The $0.06 quarterly cash dividend will be paid on May 7, 2014 to shareholders of record on April 23, 2014.
Shares reserved for future issuances — As of March 1, 2014, the Company had approximately 6,495,864 shares of
common stock reserved for future issuances under the stock plans. This amount includes stock options outstanding, director
deferred stock units and shares available for future grant.
Share repurchase plan — The following table summarizes the Company’s total share repurchases during fiscal 2014, 2013
and 2012:
Shares Purchased
Date Program
Announced Authorized
Amount Date
Completed Fiscal Year
2014 Fiscal Year
2013 Fiscal Year
2012
Weighted
Average
Cost
Remaining
Available as of
March 1, 2014
Apr. 7, 2011 $100,000,000 Sep. 6, 2011 9,498,650 $10.53 $
Oct. 14, 2011 100,000,000 Dec. 14, 2012 5,822,142 17.18
Dec. 13, 2012 100,000,000 Sep. 30, 2013 4,525,805 22.10
Oct. 18, 2013 200,000,000 (1) 5,262,452 19.74 96,108,022
(1) Subsequent to fiscal 2014 year end, on April 10, 2014, the Company completed the program.
During fiscal 2014, the Company repurchased shares for a total cost of $203,892,000, and of that amount $11,608,000 were
settled in March of fiscal 2015. Amounts repurchased but settled subsequent to year end are considered non-cash financing
activities and are excluded from the Consolidated Statements of Cash Flows. Subsequent to year end, under the October 2013
$200,000,000 program, the Company utilized a total of $96,108,000 to repurchase 5,071,812 shares of the Company’s
common stock at a weighted average price per share of $18.95 and as of April 10, 2014, the October 2013 $200,000,000
program was completed. Subsequent to year end, on April 10, 2014, the Company announced a new $200,000,000 common
stock share repurchase program, and as of April 25, 2014, the entire amount remained available for repurchase.
NOTE 7 — PRIVATE-LABEL CARD INFORMATION
During the third quarter of fiscal 2012, the Company entered into a private-label credit card plan agreement (“Agreement”) with a
subsidiary of Alliance Data Systems Corporation (“ADS”). This agreement replaced the Company’s previous agreement with
Chase Bank USA, N.A. (“Chase”), which is described below. The transfer of ownership to ADS of the private-label credit
accounts issued under the Company’s previous private-label credit card program agreement was completed in the first quarter of
fiscal 2013. The Agreement had an initial term of seven years that was automatically extended to a term of ten years when certain
performance targets were achieved during fiscal 2014 and now expires in fiscal 2022. Under the terms of the Agreement, the
Company receives payments based on the Pier 1 rewards revolving credit card sales and certain other credit and account
related matters. These amounts are recognized as a component of net sales.
During fiscal 2007, the Company sold its proprietary credit card operations to Chase. The sale was comprised of the Company’s
proprietary credit card receivables, certain charged-off accounts, and the common stock of Pier 1 National Bank. The Company
received cash proceeds for the majority of the sales price and was entitled to receive additional proceeds of $10,750,000, plus
any accrued interest, over the life of a long-term program agreement. The Company received no payments related to this
agreement in fiscal 2014, 2013 or 2012. The net deferred gain associated with the original program agreement with Chase was
recognized in nonoperating income. The Company recognized $1,126,000 and $10,880,000 related to this deferred gain in
fiscal 2013 and 2012, respectively. In addition, the Company and Chase entered into a private-label credit card program
agreement with an original term of ten years. Under this agreement, the Company continued to support the card through
marketing programs and received additional payments over the life of the agreement for transaction level incentives, marketing
support and other program terms.
PIER 1 IMPORTS, INC. 2014 Form 10-K 49