Stockholders' Equity

12 Months Ended

Jan. 31, 2012

Stockholders' Equity [Abstract]

STOCKHOLDERS' EQUITY

NOTE H — STOCKHOLDERS’ EQUITY

Public Offering

On December 21, 2009, the Company completed a public offering of 1,700,000 shares of common stock at a public offering price of $19.50 per share. The Company received net proceeds of $30.9 million from this offering after payment of the underwriting discount and expenses of the offering. On December 30, 2009, the Company received additional net proceeds of $3.8 million in connection with the sale of 207,010 shares of common stock pursuant to the exercise of the underwriters’ overallotment option.

Share Repurchase Program

In September 2011, the Company’s board of directors authorized a program to repurchase up to two million shares of its common stock. The timing and actual number of shares repurchased will depend upon a number of factors, including market conditions and prevailing stock prices. Share repurchases may take place on the open market, in privately negotiated transactions or by other means, and would be made in accordance with applicable securities laws. Pursuant to the share repurchase program, during fiscal 2012, the Company repurchased 125,000 shares of its common stock for an aggregate purchase price of approximately $2.9 million. Repurchased shares are accounted for as treasury stock at cost and will be held in treasury for future use.

Stock Plans

As of January 31, 2012, the Company has 1,409,079 shares available for grant under its stock plans. The plans provide for the grant of equity and cash awards, including stock options, restricted stock awards and other stock unit awards to directors, officers and employees. It is the Company’s policy to grant stock options at prices not less than the fair market value on the date of the grant. Option terms, vesting and exercise periods vary, except that the term of an option may not exceed ten years. Restricted stock unit awards vest over a three to five year period and generally include a price vesting market condition in addition to the time vesting condition.

Stock Options

Information regarding all stock options for fiscal 2012, 2011 and 2010 is as follows:

	2012					2011					2010
	Shares			Weighted Average Exercise Price		Shares			Weighted Average Exercise Price		Shares			Weighted Average Exercise Price
Stock options outstanding at beginning of year		514,190		$	14.54		817,050		$	11.23		1,003,750		$	10.33
Exercised		(60,668	)	$	10.21		(339,010	)	$	8.23		(189,250	)	$	6.28
Granted		40,000		$	27.13		38,000		$	29.59		18,000		$	11.10
Cancelled or forfeited		(75,800	)	$	13.35		(1,850	)	$	18.40		(15,450	)	$	12.87
Stock options outstanding at end of year		417,722		$	16.59		514,190		$	14.54		817,050		$	11.23
Exercisable		245,556		$	14.18		260,990		$	12.32		471,950		$	8.82

The following table summarizes information about stock options outstanding:

Range of Exercise Prices	Number Outstanding  as of January 31, 2012		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Number Exercisable  as of January 31, 2012		Weighted Average Exercise Price
$ 3.00 - $ 8.00		59,857		1.56	$	5.45		59,857	$	5.45
$ 8.01 - $ 12.00		47,000		5.53	$	10.34		16,200	$	9.38
$ 12.01 - $ 16.00		87,100		6.13	$	14.03		51,500	$	13.88
$ 16.01 - $ 40.00		223,765		6.39	$	21.88		117,999	$	19.40
		417,722						245,556

The fair value of stock options was estimated using the Black-Scholes option-pricing model. This model requires the input of subjective assumptions that will usually have a significant impact on the fair value estimate. The following table summarizes the weighted average assumptions used in the Black-Scholes option pricing model for grants in fiscal 2012, 2011 and 2010, respectively:

	2012	2011	2010
Expected stock price volatility	68.5%	64.1%	56.5%
Expected lives of options
Directors and officers	7 years	7 years	7 years
Employees	6 years	6 years	n/a
Risk-free interest rate	1.2%	2.3% - 3.4%	3.5%
Expected dividend yield	0%	0%	0%

The weighted average volatility for the current period was developed using historical volatility for periods equal to the expected term of the options.

The risk-free interest rate was developed using the U.S. Treasury yield curve for periods equal to the expected term of the options on the grant date. An increase in the risk-free interest rate will increase stock compensation expense.

The dividend yield is a ratio that estimates the expected dividend payments to shareholders. The Company has not declared a cash dividend and has estimated dividend yield at 0%.

The expected term of stock option grants was developed after considering vesting schedules, life of the option, and historical experience. An increase in the expected holding period will increase stock compensation expense.

The Company is required to recognize stock-based compensation based on the number of awards that are ultimately expected to vest. As a result, for most awards, recognized stock compensation was reduced for estimated forfeitures prior to vesting primarily based on an historical annual forfeiture rate. Estimated forfeitures will be reassessed in subsequent periods and may change based on new facts and circumstances.

The weighted average remaining term for stock options outstanding was 5.6 years at January 31, 2012. The aggregate intrinsic value at January 31, 2012 was $3.0 million for stock options outstanding and $2.2 million for stock options exercisable. The intrinsic value for stock options is calculated based on the exercise price of the underlying awards and the market price of our common stock as of January 31, 2012, the reporting date.

Proceeds received from the exercise of stock options were approximately $620,000 and $2.8 million during the years ended January 31, 2012 and 2011, respectively. The intrinsic value of stock options exercised was $1.4 million and $6.8 million for the years ended January 31, 2012 and 2011, respectively. A portion of this amount is currently deductible for tax purposes.

The Company recognized approximately $798,000 and $987,000 in compensation expense for the years ended January 31, 2012 and 2011, respectively, related to equity option award grants. As of January 31, 2012, approximately $1.3 million related to unrecognized stock compensation related to unvested option awards (net of estimated forfeitures) is expected to be recognized through the year ending January 31, 2017.

The weighted average fair value at date of grant for options granted during fiscal 2012, 2011 and 2010 was $12.97, $18.01 and $6.67 per option, respectively.

Restricted Stock

	Awards Outstanding			Weighted Average Grant Date Fair Value
Unvested as of January 31, 2010		522,250		$	8.08
Granted		286,050		$	21.28
Vested		(149,418	)	$	7.87
Unvested as of January 31, 2011		658,882		$	13.86
Granted		437,850		$	30.80
Vested		(162,332	)	$	9.16
Canceled		(8,500	)	$	24.03
Unvested as of January 31, 2012		925,900		$	22.60

The Company recognized $4.4 million and $2.5 million in compensation expense for the years ended January 31, 2012 and 2011, respectively, related to restricted stock grants. At January 31, 2012 and 2011, unrecognized costs related to the restricted stock units totaled approximately $16.0 million and $7.0 million, respectively.

Stock Warrants

In connection with its private placement in July 2006, the Company issued five year warrants to purchase an aggregate of up to 375,000 shares of its Common Stock at an exercise price of $11.00 per share, subject to adjustment upon the occurrence of specified events, including customary weighted average price anti-dilution adjustments. These warrants were exercised on December 30, 2010. As a result, the Company received proceeds of $4.1 million.