XML 43 R11.htm IDEA: XBRL DOCUMENT v3.20.1
Stock-Based Compensation
 9 Months Ended
Apr. 30, 2020
Share-based Payment Arrangement [Abstract]  
Stock-Based Compensation Stock-Based Compensation
2016 Equity Incentive Plan
 
At April 30, 2020, 414,835 nonvested restricted stock awards were outstanding under the 2016 plan. No options were outstanding under the 2016 plan. At April 30, 2020, 535,192 shares were collectively available for issuance pursuant to restricted stock and other stock awards, stock options and stock appreciation rights.
 
2006 Equity Incentive Plan
 
The 2006 plan was terminated on January 7, 2016 in conjunction with the adoption of the 2016 plan. At April 30, 2020, options to purchase 15,000 shares of common stock were outstanding under the 2006 plan. No additional awards will be granted under this plan.

The following table shows the components of stock-based compensation expense recognized in the condensed consolidated statements of income:
 Three Months Ended April 30,Nine Months Ended April 30,
 2020201920202019
Cost of sales  $328  $245  $978  $769  
Operating expenses:              
Selling  657  538  1,802  1,684  
General and administrative  1,931  4,874  5,764  9,249  
Research and development  111  65  299  183  
Total operating expenses  2,699  5,477  7,865  11,116  
Stock-based compensation expense  $3,027  $5,722  $8,843  $11,885  

At April 30, 2020, total unrecognized stock-based compensation expense related to total nonvested stock options and restricted stock awards was $21,355 with a remaining weighted average period of 15 months over which such expense is expected to be recognized.
We determined the fair value of our market-based restricted stock awards using a Monte Carlo simulation on the date of grant using the following assumptions:
Nine Months Ended April 30,
20202019
Volatility of common stock30.73 %27.54 %
Average volatility of peer companies36.28 %36.55 %
Average correlation coefficient of peer companies24.63 %27.18 %
Risk-free interest rate1.49 %2.93 %

A summary of nonvested stock award activity for the nine months ended April 30, 2020 follows:
 Number of
Time-based Awards		Number of Performance-based AwardsNumber of Market-based AwardsNumber of
Total
Awards		Weighted Average
Fair Value
Nonvested stock awards at July 31, 2019234,864  40,210  32,079  307,153  $88.99  
Granted212,391  —  47,967  260,358  $73.50  
Vested(1)
(100,184) (8,909) (3,462) (112,555) $89.28  
Forfeited(25,716) (1,850) (12,555) (40,121) $82.89  
Nonvested stock awards at April 30, 2020321,355  29,451  64,029  414,835  $79.69  
_______________________________________________
(1)The aggregate fair value of all nonvested stock awards which vested was approximately $10,049.

A summary of stock option activity for the nine months ended April 30, 2020 follows:
 Number of sharesWeighted Average Exercise PriceWeighted Average Contractual Life Remaining (Years)Aggregate Intrinsic Value
Outstanding at July 31, 201940,000  $43.70  
Exercised(25,000) $36.70  
Outstanding at April 30, 202015,000  $55.36  0.45$—  
Exercisable at 4/30/2020 (out of the money)15,000  $55.36  0.45$—  

During the nine months ended April 30, 2020, 25,000 options were exercised, with an aggregate fair value of approximately $1,067. At April 30, 2020, all outstanding options were vested.

Excess tax benefits arise when the ultimate tax effect of the deduction for tax purposes is greater than the income tax benefit on stock-based compensation. For the nine months ended April 30, 2020, income tax deductions of $2,022 were generated, of which $2,581 were recorded as a reduction in income tax expense over the equity awards’ vesting period and the remaining excess tax expense of $559 was recorded as an increase in income tax expense. For the nine months ended April 30, 2019, income tax deductions of $2,465 were generated, of which $1,902 were recorded as a reduction in income tax expense over the equity awards’ vesting period and the remaining excess tax benefit of $563 was recorded as a reduction in income tax expense.