Business Segment Information

6 Months Ended

Aug. 29, 2014

Segment Reporting [Abstract]

Business Segment Information

Note 18 – Business Segment Information

The Corporation has North American Social Expression Products, International Social Expression Products, Retail Operations, AG Interactive and non-reportable segments. The North American Social Expression Products and International Social Expression Products segments primarily design, manufacture and sell greeting cards and other related products through various channels of distribution with mass merchandising as the primary channel. At August 29, 2014, the Retail Operations segment operated 402 card and gift retail stores in the United Kingdom. The stores sell products purchased from the International Social Expression Products segment as well as products purchased from other vendors. AG Interactive distributes social expression products, including electronic greetings and a broad range of graphics and digital services and products, through a variety of electronic channels, including Web sites, Internet portals and electronic mobile devices. The Corporation’s non-reportable operating segment primarily includes licensing activities and the design, manufacture and sale of display fixtures. The display fixtures business was sold on the last day of the quarter ended August 29, 2014. See Note 4 for further information.

	Three Months Ended						Six Months Ended
(In thousands)	August 29, 2014			August 30, 2013			August 29, 2014			August 30, 2013
Total Revenue:
North American Social Expression Products	$	276,990		$	261,694		$	606,047		$	589,981
International Social Expression Products		68,451			63,372			143,490			134,173
Intersegment items		(11,234	)		(8,737	)		(21,299	)		(19,829	)
Net		57,217			54,635			122,191			114,344
Retail Operations		69,741			62,732			148,905			137,450
AG Interactive		14,445			14,504			28,944			29,204
Non-reportable segment		14,032			26,856			29,922			46,745
	$	432,425		$	420,421		$	936,009		$	917,724
	Three Months Ended						Six Months Ended
(In thousands)	August 29, 2014			August 30, 2013			August 29, 2014			August 30, 2013
Segment Earnings (Loss):
North American Social Expression Products	$	27,830		$	35,045		$	97,194		$	101,392
International Social Expression Products		(6	)		2,195			3,756			4,739
Intersegment items		570			(1,511	)		(1,740	)		(3,725	)
Net		564			684			2,016			1,014
Retail Operations		(14,563	)		(8,984	)		(18,603	)		(12,436	)
AG Interactive		5,964			3,165			11,376			6,478
Non-reportable segment		(1,306	)		10,059			2,709			17,441
Unallocated
Interest expense		(9,255	)		(5,433	)		(18,249	)		(9,745	)
Profit-sharing plan expense		(1,389	)		(484	)		(5,468	)		(4,465	)
Stock-based compensation expense		—			(11,121	)		—			(13,596	)
Corporate overhead expense		26,662			(17,249	)		18,968			(27,855	)
		16,018			(34,287	)		(4,749	)		(55,661	)
	$	34,507		$	5,682		$	89,943		$	58,228

For the three and six month periods ended August 30, 2013, stock-based compensation in the table above includes non-cash stock-based compensation prior to the Merger and the impact of the settlement of stock options and the cancellation or modification of outstanding restricted stock units and performance shares concurrent with the Merger, a portion of which was non-cash. There is no stock-based compensation subsequent to the Merger as these plans were converted into cash compensation plans at the time of the Merger.

“Corporate overhead expense” includes costs associated with corporate operations including, among other costs, senior management, corporate finance, legal, and insurance programs.

During the current year second quarter, the Corporation sold its current world headquarters location and incurred a non-cash loss on disposal of $15.5 million, of which $13.3 million was recorded within the North American Social Expression Products segment and $2.2 million was recorded in “Corporate overhead expense”. See Note 4 for further information

For both the three and six month periods ended August 29, 2014, “Corporate overhead expense” included the gain on sale of AGI In-Store of $38.8 million. See Note 4 for further information.

For the three and six month periods ended August 30, 2013, “Corporate overhead expense” included non-recurring Merger-related transaction costs of approximately $12.6 million and $17.2 million, respectively.

For both the three and six month periods ended August 30, 2013, “Corporate overhead expense” included a gain totaling $3.3 million related to a cash distribution on its minority investment in the common stock of Party City.

Termination Benefits

Termination benefits are primarily considered part of an ongoing benefit arrangement, accounted for in accordance with ASC Topic 712, “Compensation – Nonretirement Postemployment Benefits,” and are recorded when payment of the benefits is probable and can be reasonably estimated.

The balance of the severance accrual was $3.5 million, $4.0 million and $2.9 million at August 29, 2014, February 28, 2014 and August 30, 2013, respectively. The payments expected within the next twelve months are included in “Accrued liabilities” while the remaining payments beyond the next twelve months are included in “Other liabilities” on the Consolidated Statement of Financial Position.