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Note K - Stock-based Compensation Plans
 12 Months Ended
Apr. 30, 2019
Notes to Financial Statements  
Share-based Payment Arrangement [Text Block]
K – Stock-Based Compensation Plans
 
The Company has stock-based compensation plans available to grant non-qualified stock options, incentive stock options and restricted stock to employees, directors and certain advisors of the Company. The current stock-based compensation plans are the Amended and Restated Stock Option Plan and the Amended and Restated Stock Incentive Plan. The Company recorded total stock-based compensation expense for all plans of
$3.7
million (
$2.8
million after tax effects),
$1.6
million (
$1.1
million after tax effects) and
$1.3
million (
$811,000
after tax effects) for the years ended
April 30, 2019,
2018
and
2017,
respectively. Tax benefits were recognized for these costs at the Company’s overall effective tax rate
.
 
Stock Options
 
The Company has options outstanding under the Amended and Restated Stock Option Plan. The shareholders of the Company approved the Amended and Restated Stock Option Plan (the “Option Plan”) on
August 5, 2015,
which extended the term of the Stock Option Plan to
June 10, 2025
and increased the number of shares of common stock reserved for issuance under the plan by an additional
300,000
shares to
1,800,000
shares. On
August 29, 2018,
the shareholders of the Company approved an amendment to the Stock Option Plan, which increased the number of shares of common stock reserved for issuance under the plan by an additional
200,000
shares to
2,000,000
shares. The Option Plan provides for the grant of options to purchase shares of the Company’s common stock to employees, directors and certain advisors of the Company at a price
not
less than the fair market value of the stock on the date of grant and for periods
not
to exceed
ten
years. Options granted under the Company’s stock option plans expire in the calendar years
2019
through
2028.
 
    Option Plan
Minimum exercise price as a percentage of fair market value at date of grant  
100%
Last expiration date for outstanding options  
May 8, 2028
Shares available for grant at April 30, 2019  
298,500
 
The aggregate intrinsic value of outstanding options at
April 30, 2019
and
2018
was
$29.9
million and
$10.4
million, respectively.
 
The fair value of options granted is estimated on the date of grant using the Black-Scholes option pricing model based on the assumptions in the table below.
 
    April 30, 2019   April 30, 2018   April 30, 2017
Expected terms (years)  
5.5
  
5.5
  
5.5
Risk-free interest rate  
2.79%
  
1.81%
  
1.47%
Volatility  
36%
  
36%
  
36%
Dividend yield  
-
  
-
  
-
 
The expected term of the options is based on evaluations of historical and expected future employee exercise behavior. The risk-free interest rate is based on the U.S. Treasury rates at the date of grant with maturity dates approximately equal to the expected life at the grant date. Volatility is based on historical volatility of the Company’s common stock. The Company has
not
historically issued dividends and does
not
expect to do so in the foreseeable future.
 
There were
145,000
options granted during fiscal
2019.
The grant-date fair value of all options granted during fiscal
2019,
2018
and
2017
was
$3.0
million,
$336,000
and
$461,000,
respectively. The options were granted at fair market value on date of grant. Generally, options vest after
three
to
five
years, except for options issued to directors which are immediately vested at date of grant.
 
The following is an aggregate summary of the activity in the Company’s stock option plans from
April 30, 2016
to
April 30, 2019:
 
    Number
of
Options		   Exercise
Price
per Share		   Proceeds
on
Exercise		   Weighted Average
Exercise Price per
Share
            (in thousands)    
Outstanding at April 30, 2016    
1,278,250
    
 
 
 
   $
39,081
     $
30.57
  
Granted    
45,000
    
$26.42
to
$34.09
    
1,301
      
28.90
  
Exercised    
(264,500
 )  
$11.90
to
$28.13
    
(4,739
 )    
17.92
  
Cancelled    
(30,250
 )  
$41.86
to
$53.02
    
(1,559
 )    
51.55
  
Outstanding at April 30, 2017    
1,028,500
    
 
 
 
   $
34,084
     $
33.51
  
Granted    
25,000
    
$37.30
 
    
933
      
37.30
  
Exercised    
(323,000
 )  
$11.90
to
$37.94
    
(6,692
 )    
20.72
  
Expired    
(15,000
 )  
$44.52
to
$51.81
    
(710
 )    
47.26
  
Cancelled    
(20,000
 )  
$41.86
to
$53.02
    
(932
 )    
46.61
  
Outstanding at April 30, 2018    
695,500
    
 
 
 
   $
26,683
     $
30.50
  
Granted    
145,000
    
$53.30
to
$54.85
    
7,915
      
54.58
  
Exercised    
(275,000
 )  
$18.86
to
$53.30
    
(8,511
 )    
30.95
  
Outstanding at April 30, 2019    
565,500
    
 
 
 
   $
26,087
     $
46.13
  
 
Stock option compensation expense on a pre-tax basis was
$2.7
million (
$2.0
million after tax effects),
$1.2
million (
$773,000
after tax effects) and
$1.2
million (
$728,000
after tax effects) for the years ended
April 30, 2019,
2018
and
2017,
respectively. As of
April 30, 2019,
the Company had approximately
$3.0
million of total unrecognized compensation cost related to unvested options that are expected to vest. These options have a weighted-average remaining vesting period of
1.9
years.
 
The Company had the following options exercised for the periods indicated. The impact of these cash receipts is included in financing activities in the accompanying Consolidated Statements of Cash Flows
.
 
    Years Ended April 30,
(Dollars in thousands)   2019   2018   2017
             
Options Exercised    
275,000
      
323,000
      
264,500
  
Cash Received from Options Exercised   $
5,663
     $
2,832
     $
2,609
  
Intrinsic Value of Options Exercised   $
10,817
     $
8,381
     $
6,439
  
 
During the year ended
April 30, 2019,
there were
108,750
options exercised through net settlements in accordance with plan provisions, wherein the shares issued were reduced by
48,380
shares to satisfy the exercise price and applicable withholding taxes to acquire
60,370
shares.
 
As of
April 30, 2019,
there were
137,000
vested and exercisable stock options outstanding with an aggregate intrinsic value of
$8.5
million and a weighted average remaining contractual life of
3.5
years and a weighted average exercise price of
$36.78.
 
As of
April 30, 2019,
there were
61,000
performance-based stock options outstanding that were previously
not
expected to vest. Based on expectations as of
April 30, 2019,
the Company now expects these options to vest in
April
of
2020.
The Company has therefore recognized
$823,000
in stock compensation in the
fourth
quarter of fiscal
2019
in order to recognize the compensation expense that was previously
not
being expensed.
 
Stock Incentive Plan
 
On
August 5, 2015,
the shareholders of the Company approved the Amended and Restated Stock Incentive Plan (the “Stock Incentive Plan”), which extended the term of the Stock Incentive Plan to
June 10, 2025.
On
August 29, 2018,
the shareholders of the Company approved an amendment to the Company’s Stock Incentive Plan that increased the number of shares of common stock that
may
be issued under the Stock Incentive Plan from
350,000
to
450,000.
For shares issued under the Stock Incentive Plan, the associated compensation expense is generally recognized equally over the vesting periods established at the award date and is subject to the employee’s continued employment by the Company.
 
The following is a summary of the activity in the Company’s Stock Incentive Plan:
 
    Number
of
Shares		   Weighted Average
Grant Date
Fair Value
         
Unvested shares at April 30, 2016    
9,500
     $
52.10
  
Shares granted    
10,000
      
39.14
  
Shares vested    
-
      
-
  
Shares cancelled    
(2,500
 )    
49.51
  
Unvested shares at April 30, 2017    
17,000
     $
44.86
  
Shares granted    
166,500
      
45.86
  
Shares vested    
-
      
-
  
Shares cancelled    
(4,500
 )    
38.28
  
Unvested shares at April 30, 2018    
179,000
     $
45.96
  
Shares granted    
3,000
      
53.30
  
Shares vested    
-
      
-
  
Shares cancelled    
(1,500
 )    
36.38
  
                 
Unvested shares at April 30, 2019    
180,500
     $
46.16
  
 
The fair value at vesting for awards under the stock incentive plan was
$8.3
million,
$8.2
million and
$763,000
in fiscal
2019,
2018
and
2017,
respectively.
 
During the fiscal year
2019,
3,000
restricted shares were granted with a fair value of
$53.30
per share. During the fiscal year
2018,
132,000
restricted shares were granted with a fair value of
$48.70
per share and
34,500
shares were granted with a fair value of
$35.00
per share. During the fiscal year
2017,
10,000
restricted shares were granted with a fair value of
$39.14
per share. A total of
105,527
shares remain available for award at
April 30, 2019.
 
The Company recorded compensation cost of
$1.0
million (
$760,000
after tax effects),
$430,000
(
$288,000
after tax effects) and
$107,000
(
$67,000
after tax effects) related to the Stock Incentive Plan during the years ended
April 30, 2019,
2018
and
2017,
respectively. As of
April 30, 2019,
the Company had
$6.7
million of total unrecognized compensation cost related to unvested awards granted under the Stock Incentive Plan, which the Company expects to recognize over a weighted-average remaining period of
7.2
years.