Stockholders' Equity (Notes)

3 Months Ended

Oct. 31, 2021

Stockholders' Equity Note [Abstract]

Stockholders' Equity

Stockholders' Equity

Incentive Stock Plans

The Company has an incentive stock plan under which the Board of Directors may grant nonqualified stock options to purchase shares of Class A Nonvoting Common Stock, restricted stock units ("RSUs"), performance-based restricted stock units ("PRSUs"), or restricted and unrestricted shares of Class A Nonvoting Common Stock to employees and non-employee directors. Certain awards may be subject to pre-established performance goals. The majority of the Company’s annual share-based awards are granted in the first quarter of the fiscal year.

Total stock-based compensation expense recognized during the three months ended October 31, 2021 and 2020 was $4,129 and $3,574, respectively. The total income tax benefit recognized in the condensed consolidated statements of income was $199 and $274 during the three months ended October 31, 2021 and 2020, respectively. As of October 31, 2021, total unrecognized compensation cost related to share-based awards was $12,919 pre-tax, net of estimated forfeitures, which the Company expects to recognize over a weighted-average period of 1.7 years.

Stock Options

The stock options issued under the plan have an exercise price equal to the fair market value of the underlying stock at the date of grant and generally vest ratably over three years, with one-third becoming exercisable one year after the grant date and one-third additional in each of the succeeding two years. Options issued under the plan, referred to herein as “time-based” options, generally expire ten years from the date of grant.

The Company has estimated the fair value of its time-based option awards granted during the three months ended October 31, 2021 and 2020, using the Black-Scholes option valuation model. The weighted-average assumptions used in the Black-Scholes valuation model are reflected in the following table:

	Three months ended October 31,
Black-Scholes Option Valuation Assumptions	2021		2020
Expected term (in years)	6.14		6.21
Expected volatility	29.98	%	30.71	%
Expected dividend yield	2.29	%	2.49	%
Risk-free interest rate	0.96	%	0.38	%

The following is a summary of stock option activity for the three months ended October 31, 2021:

Time-Based Options	Options Outstanding	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at July 31, 2021	1,474,068	$	38.45
New grants	241,297	49.79
Exercised	(14,652)	29.30
Forfeited or expired	—	—
Outstanding at October 31, 2021	1,700,713	$	40.14	6.8	$	19,961
Exercisable at October 31, 2021	1,189,747	$	37.30	5.8	$	17,317

The total fair value of stock options vested during the three months ended October 31, 2021 and 2020 was $2,446 and $2,371, respectively. The weighted-average grant date fair value of options granted during the three months ended October 31, 2021 and 2020 was $11.29 and $8.65, respectively. The total intrinsic value of stock options exercised during the three months ended October 31, 2021 and 2020, based upon the average market price at the time of exercise during the period, was $319 and $373, respectively.

The cash received from the exercise of stock options during the three months ended October 31, 2021 and 2020 was $151 and $160, respectively. The tax benefit from the exercise of stock options during the three months ended October 31, 2021 and 2020 was $80 and $93, respectively.

RSUs

RSUs issued under the plan have a grant date fair value equal to the fair market value of the underlying stock at the date of grant and generally vest ratably over three years, with one-third vesting one year after the grant date and one-third additional in each of the succeeding two years.

The following is a summary of RSU activity for the three months ended October 31, 2021:

	Number of Shares	Weighted Average Grant Date Fair Value
Non-vested RSUs as of July 31, 2021	156,466	$	45.40
Granted	60,876	49.85
Vested	(67,116)	45.49
Forfeited	—	—
Non-vested RSUs as of October 31, 2021	150,226	$	47.17

The RSUs granted during the three months ended October 31, 2020 had a weighted-average grant date fair value of $39.92. The total fair value of RSUs vested during three months ended October 31, 2021 and 2020 was $3,380 and $2,572, respectively.

PRSUs

PRSUs are contingent on the achievement of predetermined market and performance targets. The PRSUs granted under the plan vest at the end of a three-year performance period provided the specified market and performance targets are met. For the PRSUs granted during the three months ended October 31, 2021, the vesting criteria for 50% of the grant is based upon the Company's total shareholder return ("TSR") relative to the S&P 600 SmallCap Industrials Index over a three-year performance period, and the vesting criteria for the other 50% of the grant is based upon Company revenue targets. All other previously granted non-vested PRSUs vest based upon the Company's TSR relative to the S&P 600 SmallCap Industrials Index.

The following is a summary of PRSU activity for the three months ended October 31, 2021:

	Number of Shares	Weighted Average Grant Date Fair Value
Non-vested PRSUs as of July 31, 2021	119,281	$	61.05
Granted (1)	76,743	61.76
Vested (1)	(76,885)	50.70
Forfeited	—	—
Non-vested PRSUs as of October 31, 2021	119,139	$	65.18

(1) Includes 44,350 shares granted and vested during the three months ended October 31, 2021, resulting from the payout of PRSUs granted in fiscal year 2019 due to achievement of performance metrics exceeding the target payout.

The PRSUs granted during the three months ended October 31, 2020 had a weighted-average grant date fair value of $60.73. The total fair value of PRSUs vested during three months ended October 31, 2021 and 2020 was $4,098 and $3,272, respectively.