Stock-Based Compensation

9 Months Ended

Dec. 31, 2021

Note 6: Stock-Based Compensation

The Company’s stock-based incentive programs consist of the following: (1) a long-term incentive plan (“LTIP”) for officers and other executives that consists of stock awards, stock options, and performance-based stock awards granted for retention and performance, (2) a discretionary equity program for other management and key employees, and (3) stock awards for non-employee directors.

The Company calculates compensation expense based upon the fair value of the instruments at the time of grant and subsequently recognizes expense ratably over the respective vesting periods of the stock-based awards. The Company recognized stock-based compensation expense of $1.1 million and $2.1 million for the three months ended December 31, 2021 and 2020, respectively. The Company recognized stock-based compensation expense of $4.7 million and $4.2 million for the nine months ended December 31, 2021 and 2020, respectively.

The fair value of stock-based compensation awards granted during the nine months ended December 31, 2021 and 2020 were as follows:

	Nine months ended December 31,
	2021				2020
	Shares		Fair Value Per Award		Shares		Fair Value Per Award
Stock options		0.2	$	8.79		0.4	$	3.46
Restricted stock awards		0.3	$	14.96		0.6	$	8.34
Unrestricted stock awards		0.1	$	15.93		0.2	$	5.21

In lieu of performance-based stock awards, the Company granted performance cash awards to the LTIP participants during the first nine months of fiscal 2022. The performance metrics for the cash awards are based upon a target three-year average cash flow return on invested capital and a target three-year average growth in consolidated net earnings before interest, taxes, depreciation, amortization, and certain other adjustments (“Adjusted EBITDA”) at the end of the three-year performance period ending March 31, 2024.

The Company used the following assumptions in determining fair value for stock options:

	Nine months ended December 31,
	2021			2020
Expected life of awards in years		6.1			6.1
Risk-free interest rate		1.1	%		0.4	%
Expected volatility of the Company’s stock		56.5	%		54.1	%
Expected dividend yield on the Company’s stock		0.0	%		0.0	%

As of December 31, 2021, unrecognized compensation expense related to non-vested stock-based compensation awards, which will be amortized over the remaining service periods, was as follows:

	Unrecognized Compensation Expense		Weighted-Average Remaining Service Period in Years
Stock options	$	2.4		2.9
Restricted stock awards		7.2		2.5
Performance stock awards		0.1		0.3
Total	$	9.7		2.6