Stockholders' Equity

9 Months Ended

Aug. 31, 2015

Stockholders' Equity

Stockholders' Equity

7.Stockholders’ Equity

Per Share Results

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

	For the Three Months Ended,					For the Nine Months Ended,
	Aug. 31, 2015		Aug. 31, 2014			Aug. 31, 2015		Aug. 31, 2014
Income (loss) from continuing operations for computation of basic and diluted per share results, net of tax	$	1,203	$	(198	)	$	261	$	(1,521	)
Income from discontinued operations for computation of basic and diluted per share results, net of tax	—		26			—		144
Net income (loss)	$	1,203	$	(172	)	$	261	$	(1,377	)
Weighted average shares outstanding for computation of basic per share results	5,153,000		5,150,000			5,151,000		5,148,000
Incremental shares from assumed exercise of Griffin stock options (a)	23,000		—			21,000		—
Adjusted weighted average shares for computation of diluted per share results	5,176,000		5,150,000			5,172,000		5,148,000

(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 for the three months and nine months ended August 31, 2014 would have been 3,000 and 12,000, respectively.

Griffin Stock Option Plan

Stock options are granted by Griffin under the Griffin Industrial Realty, 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 re-election 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 August 31, 2015 may be exercised as stock appreciation rights.

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

	For the Nine Months Ended,
	August 31, 2015			August 31, 2014
	Number of Shares	Fair Value per Option at Grant Date		Number of Shares	Fair Value per Option at Grant Date
Non-employee directors	8,282	$	14.39	8,532	$	12.42

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 2015 and 2014 nine month periods were as follows:

	For the Nine Months Ended,
	August 31, 2015		August 31, 2014
Expected volatility	40.8	%	38.9	%
Risk free interest rate	2.0	%	2.2	%
Expected option term (in years)	8.5		8.5
Annual dividend yield	0.7	%	0.7	%

Activity under the 2009 Stock Option Plan is summarized as follows:

	For the Nine Months Ended,
	August 31, 2015				August 31, 2014
	Number of Shares		Weighted Avg. Exercise Price		Number of Shares		Weighted Avg. Exercise Price
Outstanding at beginning of period	222,001		$	30.35	239,677		$	30.35
Granted	8,282			31.38	8,532			28.12
Exercised	(3,134	)		25.53	(3,208	)		24.94
Forfeited	(1,422	)		28.12	(23,000	)		30.27
Outstanding at end of period	225,727		$	30.47	222,001		$	30.35

Range of Exercise Prices	Outstanding at August 31, 2015	Weighted Avg. Exercise Price		Weighted Avg. Remaining Contractual Life (in years)	Total Intrinsic Value
$23.00-$28.00	14,934	$	25.43	6.4	$	91
$28.00-$32.00	127,718		29.07	5.6		310
$32.00-$39.00	83,075		33.52	3.1		—
	225,727	$	30.47	4.8	$	401

Number of option holders at August 31, 2015 15 

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

	For the Three Months Ended,				For the Nine Months Ended,
	Aug. 31, 2015		Aug. 31, 2014		Aug. 31, 2015		Aug. 31, 2014
Compensation expense - continuing operations	$	30	$	63	$	192	$	276
Compensation benefit - discontinued operations	—		—		—		(130		)
Net compensation expense	$	30	$	63	$	192	$	146
Related tax benefit - continuing operations	$	8	$	19	$	49	$	59
Related tax expense - discontinued operations	—		—		—		(15		)
Net related tax benefit	$	8	$	19	$	49	$	44

As of August 31, 2015, the unrecognized compensation expense related to nonvested stock options that will be recognized during future periods is as follows:

Balance of Fiscal 2015	$	38
Fiscal 2016	$	75
Fiscal 2017	$	19

Accumulated Other Comprehensive Loss

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

	For the Nine Months Ended August 31, 2015
				Unrealized gain
	Unrealized loss on			on investment in
	cash flow hedges			Centaur Media		Total
Balance November 30, 2014	$	(1,464	)	$	629	$	(835	)
Other comprehensive (loss) income before reclassfications	(512		)	414		(98		)
Amounts reclassified	557			—		557
Net activity for other comprehensive loss	45			414		459
Balance August 31, 2015	$	(1,419	)	$	1,043	$	(376	)

	For the Nine Months Ended August 31, 2014
				Unrealized gain			Actuarial gain
	Unrealized loss on			on investment in			on postretirement
	cash flow hedges			Centaur Media			benefits program			Total
Balance November 30, 2013	$	(1,401	)	$	648		$	304		$	(449	)
Other comprehensive (loss) income before reclassifications	(390		)	180			—			(210		)
Amounts reclassified	475			(204		)	(304		)	(33		)
Net activity for other comprehensive loss	85			(24		)	(304		)	(243		)
Balance August 31, 2014	$	(1,316	)	$	624		$	—		$	(692	)

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

	For the Three Months Ended,
	August 31, 2015									August 31, 2014
	Pre-Tax			Tax (Expense) Benefit			Net-of-Tax			Pre-Tax			Tax (Expense) Benefit			Net-of-Tax
Reclassifications included in net income (loss):
Loss on cash flow hedges (interest expense)	$	300		$	(111	)	$	189		$	252		$	(94	)	$	158
Total reclassifications included in net income (loss)	300			(111		)	189			252			(94		)	158
Mark to market adjustment on Centaur Media for an increase (decrease) in the foreign currency exchange rate	10			(4		)	6			(17		)	6			(11		)
Mark to market adjustment on Centaur Media for an increase (decrease) in fair value	179			(62		)	117			(209		)	73			(136		)
Decrease in fair value adjustments on Griffin’s cash flow hedges	(85		)	31			(54		)	(93		)	35			(58		)
Total other changes in other comprehensive income (loss)	104			(35		)	69			(319		)	114			(205		)
Other comprehensive income (loss)	$	404		$	(146	)	$	258		$	(67	)	$	20		$	(47	)

	For the Nine Months Ended,
	August 31, 2015									August 31, 2014
	Pre-Tax			Tax (Expense) Benefit			Net-of-Tax			Pre-Tax			Tax (Expense) Benefit			Net-of-Tax
Reclassifications included in net income (loss):
Loss on cash flow hedges (interest expense)	$	884		$	(327	)	$	557		$	755		$	(280	)	$	475
Termination of postretirement benefits program ($283, net of tax, to discontinued operations, $21, net of tax, to general and administrative expense)	—			—			—			(485		)	181			(304		)
Realized gain on sale of Centaur Media (gain on sale)	—			—			—			(321		)	117			(204		)
Total reclassifications included in net income (loss)	884			(327		)	557			(51		)	18			(33		)
Mark to market adjustment on Centaur Media for a (decrease) increase in the foreign currency exchange rate	(39		)	13			(26		)	45			(16		)	29
Mark to market adjustment on Centaur Media for an increase in fair value	677			(237		)	440			232			(81		)	151
Decrease in fair value adjustments on Griffin’s cash flow hedges	(812		)	300			(512		)	(619		)	229			(390		)
Total change in other comprehensive income (loss)	(174		)	76			(98		)	(342		)	132			(210		)
Other comprehensive income (loss)	$	710		$	(251	)	$	459		$	(393	)	$	150		$	(243	)

Cash Dividend

Griffin did not declare a cash dividend in the 2015 or 2014 nine month periods. During the 2015 first quarter, Griffin paid $1,030 for the cash dividend declared in the 2014 fourth quarter. During the 2014 first quarter, Griffin paid $1,029 for the cash dividend declared in the 2013 fourth quarter.