XML 31 R20.htm IDEA: XBRL DOCUMENT

Note 13 - Stock-based Compensation

6 Months Ended

Sep. 26, 2021

Share-based Payment Arrangement [Text Block]

Note 13 – Stock-based Compensation

The Company has three incentive stock plans, the 2006 Omnibus Incentive Plan (the “2006 Plan”), the 2014 Omnibus Equity Compensation Plan (the “2014 Plan”) and the 2021 Incentive Plan (the “2021 Plan”). As a result of the approval of the 2014 Plan by the Company’s stockholders at the Company’s 2014 annual meeting and the 2021 Plan by the Company’s stockholders at the Company’s 2021 annual meeting, grants may no longer be issued under either the 2006 Plan or the 2014 Plan. At September 26, 2021, 1,159,835 shares of the Company’s common stock were available for future issuance under the 2021 Plan, which may be issued from authorized and unissued shares of the Company’s common stock or treasury shares. The Company recorded stock-based compensation expense of $208,000 and $100,000 during the three-month periods ended September 26, 2021 and September 27, 2020, respectively, and $340,000 and $186,000 during the six-month periods ended September 26, 2021 and September 27, 2020, respectively. The Company records the compensation expense associated with stock-based awards granted to individuals in the same expense classifications as the cash compensation paid to those same individuals. No stock-based compensation costs were capitalized as part of the cost of an asset as of September 26, 2021.

Stock Options: The following table represents stock option activity for the six-month periods ended September 26, 2021 and September 27, 2020:

	Six-Month Periods Ended
	September 26, 2021					September 27, 2020
	Weighted-					Weighted-
	Average		Number of			Average		Number of
	Exercise		Options			Exercise		Options
	Price		Outstanding			Price		Outstanding
Outstanding at Beginning of Period	$	6.84		567,500		$	6.86		517,500
Granted		7.98		158,000			4.92		110,000
Exercised		4.96		(50,000	)		-		-
Forfeited		4.92		(5,000	)		-		-
Outstanding at End of Period		7.26		670,500			6.52		627,500
Exercisable at End of Period		7.30		387,500			7.15		455,000

As of September 26, 2021, the intrinsic value of the outstanding and exercisable stock options was $429,000 and $292,000, respectively. The intrinsic value of the stock options exercised during the three and six months ended September 26, 2021 was $49,000 and $138,000, respectively.

The Company did not receive any cash from the exercise of stock options during either of the three or six-month periods ended September 26, 2021. Upon the exercise of stock options, participants may choose to surrender to the Company those shares from the option exercise necessary to satisfy the exercise amount and their income tax withholding obligations that arise from the option exercise. The effect on the cash flow of the Company from these “cashless” option exercises is that the Company remits cash on behalf of the participant to satisfy his or her income tax withholding obligations. The Company used cash to remit the required income tax withholding amounts from “cashless” option exercises of $14,000 and $48,000 during the three and six-month periods ended September 26, 2021, respectively. There were no stock options exercised during either of the three or six-month periods ended September 27, 2020.

Stock-based compensation is calculated according to FASB ASC Topic 718, Compensation – Stock Compensation, which requires stock-based compensation to be accounted for using a fair-value-based measurement. To determine the estimated fair value of stock options granted, the Company uses the Black-Scholes-Merton valuation formula, which is a closed-form model that uses an equation to estimate fair value. The following table sets forth the assumptions used to determine the fair value of the non-qualified stock options that were awarded to certain employees during the six months ended September 26, 2021 and September 27, 2020, which options vest over a two-year period, assuming continued service.

	Six-Month Periods Ended
	September 26, 2021			September 27, 2020
Number of options issued		158,000			110,000
Grant date	June 9, 2021			June 10, 2020
Dividend yield		4.00	%		6.50	%
Expected volatility		35.00	%		30.00	%
Risk free interest rate		0.530	%		0.275	%
Contractual term (years)		10.00			10.00
Expected term (years)		4.00			4.00
Forfeiture rate		5.00	%		5.00	%
Exercise price (grant-date closing price) per option	$	7.98		$	4.92
Fair value per option	$	1.61		$	0.56

During the three-month periods ended September 26, 2021 and September 27, 2020, the Company classified its compensation expense associated with stock options within the accompanying unaudited condensed consolidated statements of income as follows (in thousands):

	Three-Month Period Ended September 26, 2021						Three-Month Period Ended September 27, 2020
	Cost of		Marketing &				Cost of		Marketing &
	Products		Administrative		Total		Products		Administrative		Total
Options Granted in Fiscal Year	Sold		Expenses		Expense		Sold		Expenses		Expense
2020	$	-	$	-	$	-	$	2	$	3	$	5
2021		3		7		10		4		4		8
2022		9		28		37		-		-		-

Total stock option compensation	$	12	$	35	$	47	$	6	$	7	$	13

During the six-month periods ended September 26, 2021 and September 27, 2020, the Company classified its compensation expense associated with stock options within the accompanying unaudited condensed consolidated statements of income as follows (in thousands):

	Six-Month Period Ended September 26, 2021						Six-Month Period Ended September 27, 2020
	Cost of		Marketing &				Cost of		Marketing &
	Products		Administrative		Total		Products		Administrative		Total
Options Granted in Fiscal Year	Sold		Expenses		Expense		Sold		Expenses		Expense
2019	$	-	$	-	$	-	$	3	$	3	$	6
2020		3		4		7		5		8		13
2021		7		23		30		4		5		9
2022		11		32		43		-		-		-

Total stock option compensation	$	21	$	59	$	80	$	12	$	16	$	28

As of September 26, 2021, total unrecognized stock option compensation expense amounted to $303,000, which will be recognized as the underlying stock options vest over a weighted-average period of 15.0 months. The amount of future stock option compensation expense could be affected by any future stock option grants and by the separation from the Company of any individual who has received stock options that are unvested as of such individual’s separation date.

Non-vested Stock Granted to Directors: The following shares of non-vested stock were granted to the Company’s directors:

Number of Shares	Fair Value per Share		Grant Date	Vesting Period (Years)
40,165	$	7.47	August 11, 2021	One
41,452		5.79	August 12, 2020	Two
46,512		5.16	August 14, 2019	Two
28,000		5.43	August 8, 2018	Two

These shares vest over the periods indicated, assuming continued service. The fair value of the non-vested stock granted to the Company’s directors was based on the closing price of the Company’s common stock on the date of each grant. In August 2021 and August 2020, 43,984 and 37,256 shares that had been granted to the Company’s directors vested, having an aggregate value of $327,000 and $179,000, respectively.

Non-vested Stock Granted to Employees: The following shares of non-vested stock were granted to certain of the Company’s employees:

Number of Shares	Fair Value per Share		Grant Date	Vesting Date
25,000	$	5.86	January 18, 2019	January 18, 2021
20,000		4.92	June 10, 2020	June 10, 2022
10,000		7.60	February 22, 2021	February 22, 2023
25,000		7.98	June 9, 2021	June 9, 2022

During the three and six-month periods ended September 26, 2021 and September 27, 2020, the Company recorded compensation expense associated with stock grants, which is included in marketing and administrative expenses in the accompanying unaudited condensed consolidated statements of income, as follows (in thousands):

	Three-Month Periods Ended				Six-Month Periods Ended
Stock Granted in Fiscal Year	September 26, 2021		September 27, 2020		September 26, 2021		September 27, 2020
2019	$	-	$	25	$	-	$	62
2020		10		30		40		60
2021		52		32		104		36
2022		99		-		116		-

Total stock grant compensation	$	161	$	87	$	260	$	158

As of September 26, 2021, total unrecognized compensation expense related to the Company’s non-vested stock grants amounted to $570,000, which will be recognized over the respective vesting terms associated with each block of non-vested stock indicated above, such grants having an aggregate weighted-average vesting term of 10.2 months. The amount of future compensation expense related to the Company’s non-vested stock grants could be affected by any future non-vested stock grants and by the separation from the Company of any individual who has non-vested stock grants as of such individual’s separation date.