Stockholders' Equity

9 Months Ended

Oct. 31, 2020

Stockholders’ Equity

Share Repurchase Program

On June 26, 2012, the Company’s Board of Directors authorized a program to repurchase, from time-to-time and as market and business conditions warrant, up to $500 million of the Company’s common stock. Repurchases under the program may be made on the open market or in privately negotiated transactions, pursuant to Rule 10b5-1 trading plans or other available means. There is no minimum or maximum number of shares to be repurchased under the program, which may be discontinued at any time, without prior notice. There were 4,000,000 shares repurchased at an aggregate cost of $38.8 million under the program during the nine months ended October 31, 2020. The shares were repurchased during the three months ended August 1, 2020. During the nine months ended November 2, 2019, the Company repurchased 16,412,609 shares under the program at an aggregate cost of $280.5 million, which is inclusive of the shares repurchased under the accelerated share repurchase agreement (the “ASR Contract”) as described below. The Company repurchased 10,264,052 shares at an aggregate cost of $201.5 million during the three months ended May 4, 2019, 749,252 shares at an aggregate cost of $11.0 million during the three months ended August 3, 2019 and an additional 5,399,305 shares at an aggregate cost of $68.0 million during the three months ended November 2, 2019. As of October 31, 2020, the Company had remaining authority under the program to purchase $47.8 million of its common stock.

On April 26, 2019, pursuant to existing stock repurchase authorizations, the Company entered into an ASR Contract with JPMorgan Chase Bank, National Association (in such capacity, the “ASR Counterparty”), to repurchase an aggregate of $170 million of the Company’s common stock. Under the ASR Contract, the Company made an initial payment of $170 million to the ASR Counterparty and received an initial delivery of approximately 5.2 million shares of common stock, which represented approximately $102 million (or 60%) of the ASR Contract. The Company received a final delivery of an additional 5.4 million shares, or $68 million, under its ASR Contract during the third quarter of fiscal 2020. The final share amount was determined based on the daily volume-weighted average price since the effective date of the ASR Contract, less the applicable contractual discount. When combined with the 5.2 million upfront shares received at the inception of the ASR in April 2019, the Company repurchased approximately 10.6 million of its shares under the ASR at an average repurchase price of $16.09 per share. All shares were repurchased in accordance with the Company’s publicly announced ASR program, which was completed during the third quarter of fiscal 2020. The shares delivered under the ASR Contract reduced the Company’s outstanding shares and its weighted average number of common shares outstanding for purposes of calculating basic and diluted earnings per share.

Dividends

The following table sets forth the cash dividend declared per share for the three and nine months ended October 31, 2020 and November 2, 2019:


	Three Months Ended				Nine Months Ended
	Oct 31, 2020		Nov 2, 2019		Oct 31, 2020		Nov 2, 2019
Cash dividend declared per share	$	0.1125	$	0.1125	$	0.1125	$	0.4500

During the first quarter of fiscal 2021, the Company announced that its Board of Directors had deferred the decision with respect to the payment of its quarterly cash dividend. The Board of Directors decided to continue to postpone its decision with respect to the payment of its quarterly cash dividend during the second quarter of fiscal 2021 in order to preserve the Company’s cash position and provide continued financial flexibility in light of the uncertainties related to the COVID-19 pandemic. The Company announced that it

would resume paying its quarterly cash dividend of $0.1125 per share beginning in the third quarter of fiscal 2021, but decided to not declare any cash dividends for the first and second quarters of fiscal 2021.

During the first quarter of fiscal 2020, the Company announced that its Board of Directors reduced the future quarterly cash dividends that may be paid to holders of the Company’s common stock, when, and if any such dividend is declared by the Company’s Board of Directors, from $0.225 per share to $0.1125 per share to redeploy capital and return incremental value to shareholders through share repurchases.

For each of the periods presented, dividends paid also included the impact from vesting of restricted stock units that are considered non-participating securities and are only entitled to dividend payments once the respective awards vest.

Decisions on whether, when and in what amounts to continue making any future dividend distributions will remain at all times entirely at the discretion of the Company’s Board of Directors, which reserves the right to change or terminate the Company’s dividend practices at any time and for any reason without prior notice. The payment of cash dividends in the future will be based upon a number of business, legal and other considerations, including the Company’s cash flow from operations, capital expenditures, debt service and covenant requirements, cash paid for income taxes, earnings, share repurchases, economic conditions and U.S. and global liquidity.

Accumulated Other Comprehensive Income (Loss)

The changes in accumulated other comprehensive income (loss), net of related income taxes, for the three and nine months ended October 31, 2020 and November 2, 2019 are as follows (in thousands):


	Three Months Ended Oct 31, 2020
	Foreign Currency Translation Adjustment		Derivative Financial Instruments Designated as Cash Flow Hedges		Defined Benefit Plans		Total
Balance at August 1, 2020	$	(121,119)	$	(1,499)	$	(8,991)	$	(131,609)
Gains (losses) arising during the period	(2,209)		1,286		(2)		(925)
Reclassification to net earnings for (gains) losses realized	—		(1,553)		74		(1,479)
Net other comprehensive income (loss)	(2,209)		(267)		72		(2,404)
Balance at October 31, 2020	$	(123,328)	$	(1,766)	$	(8,919)	$	(134,013)


	Nine Months Ended Oct 31, 2020
	Foreign Currency Translation Adjustment		Derivative Financial Instruments Designated as Cash Flow Hedges		Defined Benefit Plans		Total
Balance at February 1, 2020	$	(137,289)	$	6,300	$	(8,921)	$	(139,910)
Gains (losses) arising during the period	13,961		(2,546)		(214)		11,201
Reclassification to net loss for (gains) losses realized	—		(5,520)		216		(5,304)
Net other comprehensive income (loss)	13,961		(8,066)		2		5,897
Balance at October 31, 2020	$	(123,328)	$	(1,766)	$	(8,919)	$	(134,013)


	Three Months Ended Nov 2, 2019
	Foreign Currency Translation Adjustment		Derivative Financial Instruments Designated as Cash Flow Hedges		Defined Benefit Plans		Total
Balance at August 3, 2019	$	(136,764)	$	9,069	$	(9,507)	$	(137,202)

Gains arising during the period	2,941		776		13		3,730
Reclassification to net earnings for (gains) losses realized	—		(2,527)		90		(2,437)
Net other comprehensive income (loss)	2,941		(1,751)		103		1,293
Balance at November 2, 2019	$	(133,823)	$	7,318	$	(9,404)	$	(135,909)


	Nine Months Ended Nov 2, 2019
	Foreign Currency Translation Adjustment		Derivative Financial Instruments Designated as Cash Flow Hedges		Defined Benefit Plans		Total
Balance at February 2, 2019	$	(119,546)	$	2,999	$	(9,632)	$	(126,179)
Cumulative adjustment reclassified from retained earnings due to adoption of new accounting guidance1	—		1,981		—		1,981
Gains (losses) arising during the period	(14,277)		6,618		(42)		(7,701)
Reclassification to net earnings for (gains) losses realized	—		(4,280)		270		(4,010)
Net other comprehensive income (loss)	(14,277)		2,338		228		(11,711)
Balance at November 2, 2019	$	(133,823)	$	7,318	$	(9,404)	$	(135,909)

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Notes:

1During the first quarter of fiscal 2020, the Company adopted new authoritative guidance which eliminated the requirement to separately measure and report ineffectiveness for instruments that qualify for hedge accounting and generally requires that the entire change in the fair value of such instruments ultimately be presented in the same line as the respective hedge item. As a result, there is no interest component recognized for the ineffective portion of instruments that qualify for hedge accounting, but rather all changes in the fair value of such instruments are included in other comprehensive income (loss). Upon adoption of this guidance, the Company reclassified approximately $2.0 million in gains from retained earnings to accumulated other comprehensive loss related to the previously recorded interest component on outstanding instruments that qualified for hedge accounting.

Details on reclassifications out of accumulated other comprehensive income (loss) to net earnings (loss) during the three and nine months ended October 31, 2020 and November 2, 2019 are as follows (in thousands):


	Three Months Ended				Nine Months Ended				Location of (Gain) Loss Reclassified from Accumulated OCI into Earnings (Loss)
	Oct 31, 2020		Nov 2, 2019		Oct 31, 2020		Nov 2, 2019



Derivative financial instruments designated as cash flow hedges:
Foreign exchange currency contracts	$	(1,804)	$	(2,826)	$	(6,299)	$	(4,813)	Cost of product sales

Interest rate swap	67		(28)		112		(118)		Interest expense
Less income tax effect	184		327		667		651		Income tax expense (benefit)
	(1,553)		(2,527)		(5,520)		(4,280)




Defined benefit plans:
Net actuarial loss amortization	101		112		294		334		Other income (expense)
Prior service credit amortization	(17)		(10)		(49)		(29)		Other income (expense)
Less income tax effect	(10)		(12)		(29)		(35)		Income tax expense (benefit)
	74		90		216		270
Total reclassifications during the period	$	(1,479)	$	(2,437)	$	(5,304)	$	(4,010)