PIER 1 IMPORTS INC/DE - 10-Q filing on 2015-07-08

Matters Concerning Shareholders' Equity	3 Months Ended
May. 30, 2015
Matters Concerning Shareholders' Equity	NOTE 2 – MATTERS CONCERNING SHAREHOLDERS’ EQUITY Restricted stock compensation – For the three months ended May 30, 2015 and May 31, 2014, the Company recorded compensation expense related to restricted stock of $2,220,000 and $3,200,000, respectively. As of May 30, 2015, there was approximately $27,136,000 of total unrecognized compensation expense related to unvested restricted stock that may be recognized over a weighted average period of 2.1 years if certain performance targets are achieved. During the first quarter of fiscal 2016, the Company awarded 903,155 shares of restricted stock. Approximately 308,000 of the shares granted are service-based and will vest ratably over a three-year service period. The service-based shares awarded have a grant date fair value of $14.04, which was determined based on the closing stock price at the time of the grant. The Company began expensing these shares during the first quarter. Approximately 531,000 shares are performance based and may vest following the end of fiscal 2018 if the Company achieves certain performance targets as determined by the Compensation Committee of the Board of Directors. These performance-based shares have a grant date fair value of $13.06, which was determined based on the closing stock price at the time of the grant. The remaining shares are performance-based shares and may vest based on a market condition. These shares may vest following the end of fiscal 2018 if certain annual equivalent returns of total shareholder return targets are achieved in comparison to a peer group. During the first quarter of fiscal 2016, the Company began expensing the performance-based shares awarded during the quarter when the performance metrics were established. The Company also began expensing performance-based shares that were awarded to employees in previous fiscal years, including the Company’s chief executive officer, during the first quarter of fiscal 2016 when the targets for the performance metrics were established. Share repurchase program – During the first quarter of fiscal 2016, the Company repurchased 1,349,200 shares of the Company’s common stock at a weighted average cost of $13.07 per share for a total cost of $17,630,000, and $104,546,000 remained available for further share repurchases under the Company’s board-approved $200,000,000 April 2014 program. Of the $17,630,000 in total share repurchases in the first quarter of fiscal 2016, $1,494,000 were settled in June of fiscal 2016. Shares repurchased during the period but settled subsequent to the period end are considered non-cash financing activities and are excluded from the Consolidated Statements of Cash Flows. Subsequent to quarter end, through July 2, 2015, the Company utilized a total of $14,746,000 to repurchase 1,200,000 shares of the Company’s common stock under the April 2014 program at a weighted average cost of $12.29. As of July 2, 2015, $89,800,000 remained available for further share repurchases of common stock under the program. 2015 Stock Incentive Plan – At the 2015 annual meeting of shareholders of the Company held subsequent to quarter end on June 25, 2015, the Company’s shareholders approved the Pier 1 Imports, Inc. 2015 Stock Incentive Plan (“2015 Plan”), which was previously approved by the Company’s Board of Directors on April 2, 2015, subject to shareholder approval. The 2015 Plan is intended to replace the Pier 1 Imports, Inc. 2006 Stock Incentive Plan (“2006 Plan”). Upon shareholder approval, the 2015 Plan became effective as of June 25, 2015 and no new awards will be made under the 2006 Plan.

Matters Concerning Shareholders' Equity

3 Months Ended

May. 30, 2015

NOTE 2 – MATTERS CONCERNING SHAREHOLDERS’ EQUITY

Restricted stock compensation – For the three months ended May 30, 2015 and May 31, 2014, the Company recorded compensation expense related to restricted stock of $2,220,000 and $3,200,000, respectively. As of May 30, 2015, there was approximately $27,136,000 of total unrecognized compensation expense related to unvested restricted stock that may be recognized over a weighted average period of 2.1 years if certain performance targets are achieved.

During the first quarter of fiscal 2016, the Company awarded 903,155 shares of restricted stock. Approximately 308,000 of the shares granted are service-based and will vest ratably over a three-year service period. The service-based shares awarded have a grant date fair value of $14.04, which was determined based on the closing stock price at the time of the grant. The Company began expensing these shares during the first quarter. Approximately 531,000 shares are performance based and may vest following the end of fiscal 2018 if the Company achieves certain performance targets as determined by the Compensation Committee of the Board of Directors. These performance-based shares have a grant date fair value of $13.06, which was determined based on the closing stock price at the time of the grant. The remaining shares are performance-based shares and may vest based on a market condition. These shares may vest following the end of fiscal 2018 if certain annual equivalent returns of total shareholder return targets are achieved in comparison to a peer group. During the first quarter of fiscal 2016, the Company began expensing the performance-based shares awarded during the quarter when the performance metrics were established. The Company also began expensing performance-based shares that were awarded to employees in previous fiscal years, including the Company’s chief executive officer, during the first quarter of fiscal 2016 when the targets for the performance metrics were established.

Share repurchase program – During the first quarter of fiscal 2016, the Company repurchased 1,349,200 shares of the Company’s common stock at a weighted average cost of $13.07 per share for a total cost of $17,630,000, and $104,546,000 remained available for further share repurchases under the Company’s board-approved $200,000,000 April 2014 program. Of the $17,630,000 in total share repurchases in the first quarter of fiscal 2016, $1,494,000 were settled in June of fiscal 2016. Shares repurchased during the period but settled subsequent to the period end are considered non-cash financing activities and are excluded from the Consolidated Statements of Cash Flows. Subsequent to quarter end, through July 2, 2015, the Company utilized a total of $14,746,000 to repurchase 1,200,000 shares of the Company’s common stock under the April 2014 program at a weighted average cost of $12.29. As of July 2, 2015, $89,800,000 remained available for further share repurchases of common stock under the program.

2015 Stock Incentive Plan – At the 2015 annual meeting of shareholders of the Company held subsequent to quarter end on June 25, 2015, the Company’s shareholders approved the Pier 1 Imports, Inc. 2015 Stock Incentive Plan (“2015 Plan”), which was previously approved by the Company’s Board of Directors on April 2, 2015, subject to shareholder approval. The 2015 Plan is intended to replace the Pier 1 Imports, Inc. 2006 Stock Incentive Plan (“2006 Plan”). Upon shareholder approval, the 2015 Plan became effective as of June 25, 2015 and no new awards will be made under the 2006 Plan.