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Equity
 6 Months Ended
Jan. 31, 2025
Equity:  
Equity

Note 13—Equity

 

Dividend Payments

 

In the six months ended January 31, 2025, the Company paid aggregate cash dividends of $0.10 per share on the Company’s Class A and Class B common stock. In the six months ended January 31, 2025, the Company paid aggregate cash dividends of $2.5 million. In March 2025, the Company’s Board of Directors increased the Company’s quarterly cash dividend on the Company’s Class A and Class B common stock to $0.06 per share from $0.05 per share.

 

Stock Repurchases

 

The Company has an existing stock repurchase program authorized by its Board of Directors for the repurchase of shares of the Company’s Class B common stock. In January 2016, the Board of Directors authorized the repurchase of up to 8.0 million shares in the aggregate. In the six months ended January 31, 2025, the Company repurchased 217,052 shares of its Class B common stock for an aggregate purchase price of $9.9 million. In the six months ended January 31, 2024, the Company repurchased 135,261 shares of its Class B common stock for an aggregate purchase price of $3.2 million. At January 31, 2025, 4.2 million shares remained available for repurchase under the stock repurchase program.

 

In the six months ended January 31, 2025 and 2024, the Company paid $1.5 million and $15,000, respectively, to repurchase 32,022 and 654 shares, respectively, of the Company’s Class B common stock that were tendered by employees of the Company to satisfy the employees’ tax withholding obligations in connection with the lapsing of restrictions on restricted stock and shares issued for bonus payments. Such shares were repurchased by the Company based on their fair market value as of the close of business on the trading day immediately prior to the vesting date.

 

Amended and Restated Employment Agreement with Abilio (“Bill”) Pereira

 

On December 21, 2023, the Company entered into an Amended and Restated Employment Agreement with Bill Pereira, the Company’s President and Chief Operating Officer. The agreement provides for, among other things, certain equity grants and a contingent bonus subject to the completion of certain financial milestones as set forth in the agreement. In fiscal 2024, two of these milestones were achieved, for which the Company issued to Mr. Pereira 39,155 shares of its Class B common stock in the third quarter of fiscal 2024 with an issue date value of $1.5 million. In October 2024, the Company issued to Mr. Pereira 39,155 shares of its Class B common stock with an issue date value of $1.8 million in connection with the achievement of one of these milestones.

 

Exchange of NRS Shares for Shares of the Company’s Class B Common Stock

 

In January 2024, three management employees of NRS exchanged shares of NRS’ Class B common stock that they held for shares of the Company’s Class B common stock with an equal value. The NRS shares in the exchange represented an aggregate of 1.25% of NRS’ outstanding shares (1.21% on a fully diluted basis), which were exchanged for an aggregate of 192,433 shares of the Company’s Class B common stock. The Company accounted for the exchange as an equity transaction and recorded a decrease in “Noncontrolling interests” and an increase in “Additional paid-in capital” of $0.1 million, based on the carrying amount of the 1.25% noncontrolling interest in NRS.

   

Restricted net2phone 2.0 Common Stock Repurchased from Employees

 

In January 2024, the restrictions lapsed on the 0.5 million restricted shares of net2phone 2.0 Class B common stock that were granted in December 2020 to each of Howard S. Jonas and Shmuel Jonas, the Company’s Chief Executive Officer. In addition, in January 2024, Bill Pereira was granted 50,000 shares of net2phone 2.0 Class B common stock in connection with the agreement described above. The Company repurchased a portion of these shares representing an aggregate of 4.5% of the outstanding shares of net2phone 2.0 with an aggregate fair value of $3.6 million to satisfy the grantees’ tax withholding obligations in connection with the lapsing of restrictions on restricted stock or the grant of shares. The fair value per share of the net2phone 2.0 Class B common stock was based on a valuation of the business enterprise using a market approach and income approach. The Company recorded an increase in “Noncontrolling interests” of $53,000 and a decrease in “Additional paid-in capital” of $3.61 million for the purchase of the shares.

 

Deferred Stock Units Equity Incentive Program

 

On November 30, 2022, the Company adopted an equity incentive program (under its 2015 Stock Option and Incentive Plan) in the form of grants of deferred stock units (“DSUs”) that, upon vesting, entitled the grantees to receive shares of the Company’s Class B common stock. The number of shares issuable on each vesting date varied between 50% to 200% of the number of DSUs that vested on that vesting date, depending on the market price for the underlying Class B common stock on the vesting date relative to the base price approved by the Compensation Committee of the Company’s Board of Directors of $25.45 per share (which was based on the market price at the time of the initial grants under this program). On February 25, 2025, in accordance with the program and based on certain elections made by grantees, the Company issued 276,960 shares of its Class B common stock for vested DSUs, which was the final vesting date under this program.