Stock-Based Compensation (Tables)

9 Months Ended

Apr. 30, 2013

Stock-Based Compensation

Schedule of the income statement components of stock-based compensation expense recognized in the Consolidated Statements of Income

	Three Months Ended						Nine Months Ended
	April 30,						April 30,
	2013			2012			2013			2012
Cost of sales	$	41,000		$	51,000		$	133,000		$	141,000
Operating expenses:
Selling	69,000			109,000			250,000			300,000
General and administrative	802,000			533,000			2,396,000			2,545,000
Research and development	7,000			13,000			27,000			33,000
Total operating expenses	878,000			655,000			2,673,000			2,878,000
Stock-based compensation before income taxes	919,000			706,000			2,806,000			3,019,000
Income tax benefits	(332,000		)	(247,000		)	(1,008,000		)	(1,073,000		)
Total stock-based compensation expense, net of tax	$	587,000		$	459,000		$	1,798,000		$	1,946,000
Decrease in earnings per common share due to stock-based compensation:
Basic	$	0.02		$	0.02		$	0.07		$	0.07
Diluted	$	0.02		$	0.02		$	0.07		$	0.07

Summary of nonvested stock award activity

	Number of Shares		Weighted Average Fair Value
Nonvested stock awards at July 31, 2012	472,005		$	13.73
Granted	132,692		25.60
Canceled	(8,830	)	17.23
Vested	(181,435	)	13.06
Nonvested stock awards at April 30, 2013	414,432		$	17.75

Weighted-average assumptions used to estimate fair value of stock options granted using the Black-Scholes option valuation model

Weighted-Average Black-Scholes Option Valuation Assumptions	Nine Months Ended April 30, 2013
Dividend yield	0.37	%
Expected volatility (1)	0.509
Risk-free interest rate (2)	0.67	%
Expected lives (in years) (3)	5.00

(1) Volatility was based on historical closing prices of our common stock.

(2) The U.S. Treasury rate on the expected life at the date of grant.

(3) Based on historical exercise behavior.

Summary of stock option activity

	Number of Shares		Weighted Average Exercise Price
Outstanding at July 31, 2012	548,823		$	9.86
Granted	35,000		25.56
Canceled	(6,000	)	12.61
Exercised	(209,266	)	9.80
Outstanding at April 30, 2013	368,557		$	11.34
Exercisable at July 31, 2012	364,110		$	9.43
Exercisable at April 30, 2013	333,557		$	9.85