STOCK-BASED COMPENSATION

12 Months Ended

Jan. 31, 2024

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation Plans

The Company has one stock-based compensation plan, the Amended and Restated Titan Machinery Inc. 2014 Equity Incentive Plan (the "2014 Equity Incentive Plan"), to provide incentive compensation to participants for services that have been or will be performed for continuing as employees or members of the Board of Directors of the Company. Under the 2014 Equity Incentive Plan, which has been approved by the stockholders of the Company, the Company may grant stock-based awards for up to a maximum number of shares of common stock set forth in the 2014 Equity Incentive Plan under specified forms of equity award types. Shares issued for stock-based awards consist of authorized but unissued shares. During the year ended January 31, 2021, the 2014 Equity Incentive Plan was amended to increase the shares available for equity awards from 1,650,000 shares to 2,200,000 shares. As of January 31, 2024, the Company had 390,479 shares authorized and available for future equity awards under the 2014 Equity Incentive Plan.

Compensation cost arising from stock-based compensation and charged to operations was $3.3 million, $3.3 million and $2.8 million for the years ended January 31, 2024, 2023 and 2022, respectively. The related income tax benefit (net) was $1.1 million, $1.3 million and $1.3 million for the years ended January 31, 2024, 2023 and 2022, respectively.

Restricted Stock Awards ("RSAs")

The Company grants RSAs as part of its long-term incentive compensation to employees and members of the Board of Directors of the Company. The fair value of these awards is determined based on the closing market price of the Company's stock on the date of grant. The RSAs primarily vest over a period of approximately four years for employees and over one year for members of the Board of Directors. The Company recognizes compensation expense ratably over the vesting period of the award. The restricted common stock underlying these awards are deemed issued and outstanding upon grant and carry the same voting and dividend rights of unrestricted outstanding common stock; provided, however, any dividends paid shall be subject to a right of forfeiture until the underlying rule of forfeiture of the RSA has lapsed.

The following table summarizes RSA activity for the year ended January 31, 2024:


	Shares	Weighted Average Grant Date Fair Value
	(in thousands)
Nonvested at January 31, 2023	280	$	22.84
Granted	201	26.48
Forfeited	(22)	26.34
Vested	(123)	20.93
Nonvested at January 31, 2024	336	$	25.48

The weighted-average grant date fair value of RSAs granted was $26.48, $27.06 and $34.24 during the years ended January 31, 2024, 2023 and 2022, respectively. The total fair value of RSAs vested was $3.7 million, $4.6 million and $5.0 million during the years ended January 31, 2024, 2023 and 2022, respectively. As of January 31, 2024, there was $6.3 million of unrecognized compensation cost related to nonvested RSAs that is expected to be recognized over a weighted-average period of 2.3 years.

Restricted Stock Units ("RSUs")

The Company grants RSUs as part of its long-term incentive compensation to certain employees of the Company in our European operations. The fair value of these awards is determined based on the closing market price of the Company's common stock on the date of grant. The RSUs primarily vest over a period of approximately four years. The Company recognizes compensation expense ratably over the vesting period of the award. The common stock underlying these awards are not deemed issued or outstanding upon grant, and do not carry any voting or dividend rights.

The following table summarizes RSU activity for the year ended January 31, 2024:


	Shares	Weighted Average Grant Date Fair Value
	(in thousands)
Nonvested at January 31, 2023	12	$	21.24
Granted	4	26.47


Vested	(5)	18.62
Nonvested at January 31, 2024	11	$	24.17

The weighted-average grant date fair value of RSUs granted was $26.47, $26.23, and $34.59 for the fiscal years ended January 31, 2024, 2023, and 2022, respectively. As of January 31, 2024, there was $0.2 million of unrecognized compensation cost related to nonvested RSUs that is expected to be recognized over a weighted-average period of two years.

Long-Term Cash Incentive Awards

The Company grants long-term cash incentive awards as part of its long-term incentive compensation to certain international employees of the Company. The awards vest over a period of approximately four years and entitle the award recipient to a cash payment on the vesting date equal to the number of vested shares multiplied by the stock price of the Company on the date of vesting. These awards are liability-classified share-based payment awards in which fair value of the award is remeasured at each period until the liability is settled. Fair value of these awards is determined based on the closing price of the Company's stock as of the end of each reporting period. Changes in the fair value of the liability are recognized as compensation cost over the requisite service period. The percentage of the fair value that is accrued as compensation cost at the end of each period is equal to the percentage of the requisite service that has been rendered at that date.

The following table summarizes activity for long-term cash incentive awards for the year ended January 31, 2024:


	Shares	Weighted Average Grant Date Fair Value
	(in thousands)
Nonvested at January 31, 2023	31	$	21.06
Granted	19	26.40

Forfeited	(1)	23.49
Vested	(13)	18.52
Nonvested at January 31, 2024	36	$	24.73

The weighted-average grant date fair value of long-term cash incentive awards granted was $26.40 during the year ended January 31, 2024. As of January 31, 2024, based on the Company's stock price on that day, there was $0.5 million of unrecognized compensation cost related to nonvested awards that is expected to be recognized over a weighted-average period of 1.2 years.