6. Stockholders’ Equity

Per Share Results

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


	For the Three Months Ended
	Feb. 28, 2018		Feb. 28, 2017
Net loss	$	(1,723)	$	(939)

Weighted average shares outstanding for computation of basic per share results		5,001,000		5,040,000
Incremental shares from assumed exercise of Griffin stock options (a)		—		—
Adjusted weighted average shares for computation of diluted per share results		5,001,000		5,040,000

(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. The incremental shares from the assumed exercise of stock options for the 2018 first quarter and 2017 first quarter would have been 39,000 and 23,000, 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 an exercise price not less than fair market value on the date approved by Griffin’s Compensation Committee. Vesting of all of Griffin's stock options is solely based upon service requirements and does not contain market or performance conditions.

Stock options issued 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 February 28, 2018 may be exercised as stock appreciation rights.

There were no options granted by Griffin in the 2018 first quarter. The following options were granted by Griffin under the 2009 Stock Option Plan to Griffin employees:


	For the Three Months Ended
	Feb. 28, 2018			Feb. 28, 2017
		Fair Value per			Fair Value per
	Number of	Option at		Number of	Option at
	Shares	Grant Date		Shares	Grant Date
Employees	-	$	-	5,000	$	11.13

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 were as follows:


	For the Three Months Ended
	Feb. 28, 2018	Feb. 28, 2017
Expected volatility	—	32.7	%
Risk free interest rates	—	2.1	%
Expected option term (in years)	—	7.5
Annual dividend yield	—	0.9	%


Number of option holders at February 28, 2018		30

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

For all periods presented, the forfeiture rate for directors was 0%, forfeiture rates for executives ranged from 17.9% to 22.6% and forfeiture rates for employees ranged from 38.3% to 41.1%. These rates were utilized based on the historical activity of the grantees.

As of February 28, 2018, the unrecognized compensation expense related to nonvested stock options that will be recognized during future periods is as follows:


Balance of Fiscal 2018	$	250
Fiscal 2019	$	234
Fiscal 2020	$	112
Fiscal 2021	$	34

A summary of the activity under the 2009 Griffin Stock Option Plan is as follows:


	For the Three Months Ended
	February 28, 2018			February 28, 2017
			Weighted			Weighted
			Avg.			Avg.
	Number of		Exercise	Number of		Exercise
	Shares		Price	Shares		Price
Outstanding at beginning of period	333,762	$	29.22	324,546	$	29.23
Granted	—	$	—	5,000	$	30.81
Exercised	(5,471)	$	34.04	—	$	—
Forfeited	(19,779)	$	33.95	—	$	—
Outstanding at end of period	308,512	$	28.83	329,546	$	29.25


				Weighted Avg.
				Remaining
Range of Exercise Prices for	Outstanding at	Weighted Avg.		Contractual Life	Total Intrinsic
Vested and Nonvested Options	February 28, 2018	Exercise Price		(in years)	Value
$23.00 - $28.00	124,293	$	26.67	7.7	$	1,205
$28.00 - $32.00	128,248	$	29.07	3.8		935
$32.00 - $39.00	55,971	$	33.11	1.0		182
	308,512	$	28.83	4.9	$	2,322

Accumulated Other Comprehensive Income (Loss)

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


	For the Three Months Ended Feb. 28, 2018
			Unrealized gain
	Unrealized gain on		on investment in
	cash flow hedges		Centaur Media		Total
Balance November 30, 2017	$	(284)	$	—	$	(284)
Other comprehensive income before reclassifications		1,949		—		1,949
Amounts reclassified		192		—		192
Adoption of ASU 2018-02 - reclassification to retained earnings		(36)		—		(36)
Net activity for other comprehensive income		2,105		—		2,105
Balance February 28, 2018	$	1,821	$	—	$	1,821


	For the Three Months Ended Feb. 28, 2017
			Unrealized gain
	Unrealized loss on		on investment in
	cash flow hedges		Centaur Media		Total
Balance November 30, 2016	$	(1,062)	$	13	$	(1,049)
Other comprehensive income before reclassifications		204		127		331
Amounts reclassified		209		—		209
Net activity for other comprehensive loss		413		127		540
Balance February 28, 2017	$	(649)	$	140	$	(509)

The components of other comprehensive income are as follows:


	For the Three Months Ended
	February 28, 2018						February 28, 2017
			Tax						Tax
			(Expense)		Net-of				(Expense)		Net-of
	Pre-Tax		Benefit		Tax		Pre-Tax		Benefit		Tax
Reclassifications included in net loss:
Loss on cash flow hedges (interest expense)	$	244	$	(52)	$	192	$	339	$	(130)	$	209
Total reclassifications included in net loss		244		(52)		192		339		(130)		209

Increase in fair value adjustments on Griffin’s cash flow hedges		2,502		(553)		1,949		332		(128)		204
Mark to market adjustment on Centaur Media for a decrease in the foreign currency exchange rate		—		—		—		(12)		4		(8)
Mark to market adjustment on Centaur Media for an increase in fair value		—		—		—		207		(72)		135
Total change in other comprehensive income		2,502		(553)		1,949		527		(196)		331

Other comprehensive income	$	2,746	$	(605)	$	2,141	$	866	$	(326)	$	540

Stock Repurchases

In the 2018 first quarter, Griffin received 5,000 shares of its common stock from an employee as consideration for the exercise price in connection with his exercise of an option to acquire 5,471 shares of Griffin’s common stock under Griffin’s 2009 Stock Option Plan. The shares received were recorded as treasury stock, which resulted in an increase in treasury stock of $186.

In fiscal 2016, Griffin’s Board of Directors authorized a stock repurchase program whereby Griffin could repurchase up to $5,000 of its outstanding common stock over a twelve month period in privately negotiated transactions. The stock repurchase program expired on May 10, 2017. In the 2017 first quarter, Griffin repurchased 47,173 shares of its outstanding common stock for $1,474, including the repurchase of 28,000 shares for $880 on February 27, 2017 which was paid for subsequent to February 28, 2017.

Cash Dividend

Griffin did not declare a cash dividend in the 2018 or 2017 first quarters. During the 2018 first quarter, Griffin paid $2,000 for the cash dividend declared in the 2017 fourth quarter. During the 2017 first quarter, Griffin paid $1,514 for the cash dividend declared in the 2016 fourth quarter.

For the Three Months Ended

Feb. 28, 2018

Feb. 28, 2017

Compensation expense

Related tax benefit