Stock-Based Compensation

12 Months Ended

Jan. 31, 2022

Share-based Payment Arrangement [Abstract]

Stock Based Compensation

Stock-Based Compensation

Stock Incentive Plans

The Company's two stock plans are the 2019 Employee Stock Incentive Plan (the “2019 Plan”) and the 2011 Employee Incentive Stock Plan (the “2011 Plan”).

Under the 2019 Plan, the Company may grant an aggregate of 1,000,000 shares to its employees in the form of restricted stock units and non-employee directors in the form of restricted stock awards. Restricted stock units and awards granted under the 2019 Plan are expensed ratably over the vesting period of the awards. The Company determines the fair value of its restricted stock units or awards and related compensation expense as the difference between the market value of the units or awards on the date of grant less the exercise price of the units or awards granted. During fiscal year 2022, the Company granted 68,870 awards to non-employee directors, vested 140,295 shares according to their terms and forfeited 0 shares under the 2019 Plan. As of January 31, 2022, there were approximately 628,435 shares available for future issuance under the 2019 Plan.

Under the 2011 Plan, the Company may grant an aggregate of 2,000,000 shares to its employees in the form of restricted stock units and non-employee directors in the form of restricted stock awards. Restricted stock units and awards granted under the 2011 Plan are expensed ratably over the vesting period of the awards. The Company determines the fair value of its restricted stock units or awards and related compensation expense as the difference between the market value of the units or awards on the date of grant less the exercise price of the units or awards granted. During fiscal year 2022, the Company granted 0 restricted awards to non-employee directors and 0 units to its employees; vested 0 stock awards and 119,200 units according to their terms and forfeited 0 stock units under the 2011 Plan. As of January 31, 2022, there were approximately 12,892 shares available for future issuance under the 2011 Plan.

During fiscal year 2022, stock-based compensation expense related to restricted stock units and awards recognized in cost of goods sold and selling, general and administrative expenses was $219,000 and $794,000, respectively. During fiscal year 2021, stock-based compensation expense related to restricted stock units and/or awards recognized in cost of goods sold and selling, general and administrative expenses was $257,000 and $755,000, respectively.

Accounting for the Plans

A summary of the Company’s restricted stock unit awards activity, and related information for the following years ended January 31, is as follows: 

	2022			2021
	Restricted stock units	Weighted- Average Exercise Price		Restricted stock units	Weighted- Average Exercise Price
Outstanding at beginning of year	611,495	$	4.26	740,985	$	4.54
Granted	68,870	3.63		94,695	2.64
Exercised	(259,495)	3.55		(224,185)	2.60
Forfeited	—	—		—	—
Outstanding at end of year	420,870	4.37		611,495	4.26
Weighted-average fair value of restricted stock units granted during the year		3.63			2.64

The aggregate fair value of restricted stock awards vested during fiscal years 2022 and 2021 was $921,207 and $582,881, respectively. The Company recognized compensation expense, net of forfeitures, for the restricted stock awards of $1,013,000 and $1,012,000 for fiscal 2022 and 2021, respectively. The Company records forfeitures as incurred.

The weighted-average grant-date fair value of restricted stock awards is the quoted market price of the Company’s common stock on the date of grant, as shown in the table above. The weighted-average grant-date fair value of restricted stock awards granted in fiscal 2022 and 2021 was $3.63 per share and $2.64 per share, respectively.

As of January 31, 2022, there was $1.2 million of total unrecognized compensation expense related to restricted stock awards. That expense is expected to be recognized over a weighted-average period of 2.90 years.

To satisfy employee minimum statutory tax withholding requirements for restricted stock awards that vest, the Company withholds and retires a portion of the vesting common shares, unless an employee elects to pay cash. In fiscal 2022 and 2021, the Company withheld 50,289 and 54,402 common shares, respectively, with a total value of approximately $176,000 and $156,000, respectively. These amounts are presented as a cash outflow from financing activities in the accompanying consolidated statement of cash flows.