Stockholders' Equity

6 Months Ended

May 31, 2014

Stockholders' Equity

Stockholders' Equity

9. Stockholders’ Equity

Per Share Results

Basic and diluted per share results were based on the following:

	For the Three Months Ended,						For the Six Months Ended,
	May 31, 2014			June 1, 2013			May 31, 2014			June 1, 2013
(Loss) income from continuing operations for computation of basic and diluted per share results, net of tax	$	(225	)	$	(394	)	$	(1,323	)	$	1,290
Income (loss) from discontinued operations for computation of basic and diluted per share results, net of tax	390			282			118			(92		)
Net income (loss)	$	165		$	(112	)	$	(1,205	)	$	1,198
Weighted average shares outstanding for computation of basic per share results	5,147,000			5,142,000			5,147,000			5,141,000
Incremental shares from assumed exercise of Griffin stock options (a)	—			—			—			6,000
Adjusted weighted average shares for computation of diluted per share results	5,147,000			5,142,000			5,147,000			5,147,000

(a) Incremental shares from the assumed exercise of Griffin stock options are not included in periods where the inclusion of such shares would be anti-dilutive.  Such assessment is based on income (loss) from continuing operations when net income includes discontinued operations.  The incremental shares from the assumed exercise of stock options in the three month and six month periods ended May 31, 2014 would have been 12,000 and 13,000, respectively.  The incremental shares from the assumed exercise of stock options in the three months ended June 1, 2013 would have been 8,000. 

Griffin Stock Option Plan

Stock options are granted by Griffin under the Griffin Land & Nurseries, Inc. 2009 Stock Option Plan (the “2009 Stock Option Plan”).  Options granted under the 2009 Stock Option Plan may be either incentive stock options or non-qualified stock options issued at fair market value on the date approved by Griffin’s Compensation Committee. Vesting of all of Griffin’s previously issued stock options is solely based upon service requirements and does not contain market or performance conditions.  Stock options issued will expire ten years from the grant date.  In accordance with the 2009 Stock Option Plan, stock options issued to non-employee directors upon their initial election to the board of directors are fully exercisable immediately upon the date of the option grant. Stock options issued to non-employee directors upon their reelection to the board of directors vest on the second anniversary from the date of grant. Stock options issued to employees vest in equal installments on the third, fourth and fifth anniversaries from the date of grant. None of the stock options outstanding at May 31, 2014 may be exercised as stock appreciation rights.

The following options were granted by Griffin under the 2009 Stock Option Plan to non-employee directors upon their re-election to Griffin’s Board of Directors:

	For the Six Months Ended,
	May 31, 2014			June 1, 2013
	Number of Shares	Fair Value per Option at Grant Date		Number of Shares	Fair Value per Option at Grant Date
Non-employee directors	8,532	$	12.42	8,112	$	12.94

The fair values of all options granted were estimated as of the grant date using the Black-Scholes option-pricing model.  Assumptions used in determining the fair value of the stock options granted in the 2014 and 2013 six month periods were as follows:

	For the Six Months Ended,
	May 31, 2014			June 1, 2013
Expected volatility	38.9		%	40.3		%
Risk free interest rate	2.16		%	1.33		%
Expected option term (in years)	8.5			8.5
Annual dividend yield	$	0.20		$	0.20

Activity under the Griffin Stock Option Plan is summarized as follows:

	For the Six Months Ended,
	May 31, 2014				June 1, 2013
	Number of Shares		Weighted Avg. Exercise Price		Number of Shares		Weighted Avg. Exercise Price
Outstanding at beginning of period	239,677		$	30.35	243,841		$	29.88
Granted	8,532		$	28.12	8,112		$	29.58
Exercised	(3,208	)	$	24.94	(6,776	)	$	11.81
Forfeited	(23,000	)	$	30.27	—
Outstanding at end of period	222,001		$	30.35	245,177		$	30.37

Range of Exercise Prices	Outstanding at May 31, 2014	Weighted Avg. Exercise Price		Weighted Avg. Remaining Contractual Life (in years)	Total Intrinsic Value
$23.00-$28.00	18,068	$	25.45	6.5	$	48
$28.00-$32.00	120,858	$	28.90	6.0	$	—
$32.00-$39.00	83,075	$	33.52	4.4	$	—
	222,001	$	30.35	5.4	$	48

Number of option holders at May 31, 2014 14

Compensation expense and related tax benefits for stock options were as follows:

	For the Three Months Ended,				For the Six Months Ended,
	May 31, 2014		June 1, 2013		May 31, 2014			June 1, 2013
Compensation expense - continuing operations	$	60	$	130	$	213		$	236
Compensation expense - discontinued operations	—		22		(130		)	31
Net compensation expense	$	60	$	152	$	83		$	267
Related tax benefit - continuing operations	$	16	$	28	$	40		$	57

As of May 31, 2014, the unrecognized compensation expense related to nonvested stock options that will be recognized during future periods is as follows:

Balance of Fiscal 2014	$	125
Fiscal 2015	$	153
Fiscal 2016	$	33

Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss, net of tax, is comprised of the following:

	Unrealized gain			Unrealized gain			Actuarial gain
	(loss) on cash			(loss) on investment			on postretirement
	flow hedges			in Centaur Media			benefits program			Total
Balance November 30, 2013	$	(1,401	)	$	648		$	304		$	(449	)
Other comprehensive (loss) income before reclassfications	(332		)	327			—			(5		)
Amounts reclassified	317			(204		)	(304		)	(191		)
Net activity for other comprehensive loss	(15		)	123			(304		)	(196		)
Balance May 31, 2014	$	(1,416	)	$	771		$	—		$	(645	)

	Unrealized gain			Unrealized gain			Actuarial gain
	(loss) on cash			(loss) on investment			on postretirement
	flow hedges			in Centaur Media			benefits program		Total
Balance December 1, 2012	$	(2,011	)	$	1,054		$	236	$	(721	)
Other comprehensive income (loss) before reclassifications	267			(672		)	—		(405		)
Amounts reclassified	230			(332		)	—		(102		)
Net activity for other comprehensive loss	497			(1,004		)	—		(507		)
Balance June 1, 2013	$	(1,514	)	$	50		$	236	$	(1,228	)

The components of other comprehensive income (loss) are as follows:

	For the Three Months Ended,
	May 31, 2014									June 1, 2013
	Pre-Tax			Tax (Expense) Benefit			Net-of-Tax			Pre-Tax			Tax (Expense) Benefit			Net-of-Tax
Reclassifications included in net income (loss):
Termination of postretirement benefits program ($283 net of tax to discontinued operations, $21 net of tax to general and administrative expense)	$	(485	)	$	181		$	(304	)	$	—		$	—		$	—
Loss on cash flow hedges (interest expense)	253			(93		)	160			191			(71		)	120
Total reclassifications included in net income (loss)	(232		)	88			(144		)	191			(71		)	120
Mark to market adjustment on Centaur Media for an increase (decrease) in the foreign currency exchange rate	1			(1		)	—			20			(7		)	13
Mark to market adjustment on Centaur Media for a decrease in fair value	(327		)	115			(212		)	(995		)	349			(646		)
(Decrease) increase in fair value adjustments on Griffin’s cash flow hedges	(349		)	128			(221		)	293			(109		)	184
Total change in other comprehensive (loss) income	(675		)	242			(433		)	(682		)	233			(449		)
Other comprehensive (loss) income	$	(907	)	$	330		$	(577	)	$	(491	)	$	162		$	(329	)

	For the Six Months Ended,
	May 31, 2014									June 1, 2013
	Pre-Tax			Tax (Expense) Benefit			Net-of-Tax			Pre-Tax			Tax (Expense) Benefit			Net-of-Tax
Reclassifications included in net income (loss):
Realized gain on sale of Centaur Media (gain on sale)	$	(321	)	$	117		$	(204	)	$	(509	)	$	177		$	(332	)
Termination of postretirement benefits program ($283 net of tax to discontinued operations, $21 net of tax to general and administrative expense)	(485		)	181			(304		)	—			—			—
Loss on cash flow hedges (interest expense)	503			(186		)	317			366			(136		)	230
Total reclassifications included in net income (loss)	(303		)	112			(191		)	(143		)	41			(102		)
Mark to market adjustment on Centaur Media for an increase (decrease) in the foreign currency exchange rate	62			(22		)	40			(223		)	78			(145		)
Mark to market adjustment on Centaur Media for an increase (decrease) in fair value	441			(154		)	287			(811		)	284			(527		)
(Decrease) increase in fair value adjustments on Griffin’s cash flow hedges	(526		)	194			(332		)	424			(157		)	267
Total change in other comprehensive (loss) income	(23		)	18			(5		)	(610		)	205			(405		)
Other comprehensive (loss) income	$	(326	)	$	130		$	(196	)	$	(753	)	$	246		$	(507	)

Cash Dividend

Griffin did not declare a cash dividend in the 2014 or 2013 six month periods.  During the 2014 first quarter, Griffin paid $1,029 for the cash dividend declared in the 2013 fourth quarter.  During the 2013 first quarter, Griffin paid $1,028 for the cash dividend declared in the fourth quarter of fiscal 2012.