Share-Based Compensation

12 Months Ended

Jun. 30, 2022

Share-Based Payment Arrangement, Noncash Expense [Abstract]

Share-Based Compensation Plans

The Company has awards outstanding from two share-based compensation plans (the 2013 Long-Term Incentive Plan and the 2021 Long-Term Incentive Plan). The 2021 Long-Term Incentive Plan was approved at the annual meeting of the shareholders on January 27, 2022. The 2021 Plan permits the grant of any or all of the following types of awards to grantees: stock options, including non-qualified options and ISOs; SARs; restricted stock ("RSA"); deferred stock and restricted stock units ("RSU"); performance units ("PU") and performance shares; dividend equivalents; and other stock-based awards. Eligible grantees include employees, officers, non-employee consultants and non-employee directors of the Company and its affiliates. Awards are currently only being granted under the 2021 Long-Term Incentive Plan. As of June 30, 2022, there were 1,606,475 shares available for future grant under the 2021 Long-Term Incentive Plan. All of the Company’s share-based compensation plans are shareholder approved, and it is the Company’s belief that such awards align the interests of its employees and directors with those of its shareholders. An RSA is common stock that is subject to risk of forfeiture or other restrictions that lapse upon satisfaction of specified conditions. An RSU represents the right to receive shares of common stock in the future with the right to future delivery of the shares subject to risk of forfeiture or other restrictions that lapse upon satisfaction of specified conditions. A PU represents the right to receive shares of common stock in the future contingent on performance against predetermined objectives over a specified performance period.

The Company accounts for its share-based compensation awards in accordance with ASC 718, Stock Compensation, which requires all share-based compensation to be recognized in the income statement based on fair value and applies to all awards granted, modified, canceled or repurchased after the effective date. Total share-based compensation included as a component of selling, general and administrative expenses in our Consolidated Income Statements was as follows:


	Fiscal Year Ended June 30,
	2022		2021		2020
	(in thousands)
Share-based compensation related to:
Equity classified stock options	$	1,848	$	1,332	$	508
Equity classified restricted stock	9,815		6,707		4,970
Total share-based compensation	$	11,663	$	8,039	$	5,478

Stock Options

The Company did not grant stock options during the fiscal year ended June 30, 2022 or June 30, 2020. The Company granted stock options for 640,782 shares during the fiscal year ended June 30, 2021 that vest annually over 3 years and have a 10-year contractual life. These options were granted with an exercise price that is no less than 100% of the fair market value of the underlying shares on the date of the grant.

The fair value of each option (for purposes of calculation of share-based compensation) was estimated on the date of grant using the Black-Scholes-Merton option pricing formula that uses assumptions determined at the date of grant. Use of this option pricing model requires the input of subjective assumptions. These assumptions include estimating the length of time employees will retain their vested stock options before exercising them ("expected term"), the estimated volatility of the Company's common stock price over the expected term ("expected volatility") and the number of options that will ultimately not complete their vesting requirements ("forfeitures"). Changes in the subjective assumptions can materially affect the estimate of the fair value of share-based compensation and, consequently, the related amount recognized in the Consolidated Income Statements.

The Company used the following weighted-average assumptions for the options granted in fiscal year ended June 30, 2021:


			Fiscal Year Ended June 30,
			2021
Expected term			5 years
Expected volatility			42.78%
Risk-free interest rate			0.36%
Dividend yield			0.00%
Weighted-average fair value per option			$9.01

The weighted-average expected term of the options represents the period of time the options are expected to be outstanding based on historical trends and behaviors of certain groups and individuals receiving these awards. The expected volatility is predominantly based on the historical volatility of our common stock for a period approximating the expected term. The risk-free interest rate reflects the interest rate at grant date on zero-coupon United States governmental bonds that have a remaining life similar to the expected option term. The dividend yield assumption was based on the Company's dividend payment history and management's expectations of future dividend payments.

A summary of activity under our stock option plans is presented below:


	Fiscal Year Ended June 30, 2022
	Options	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life	Aggregate Intrinsic Value
Outstanding, beginning of year	1,235,569	$	31.84
Granted during the period	—	—
Exercised during the period	(78,126)	29.47
Canceled, forfeited, or expired during the period	(34,344)	24.50
Outstanding, end of year	1,123,099	32.23		5.77	$	3,343,205
Vested and expected to vest at June 30, 2022	1,119,804	32.26		5.76	$	3,320,639
Exercisable, end of year	738,461	$	35.92	4.40	$	—

The aggregate intrinsic value was calculated using the market price of the Company's stock on June 30, 2022, and the exercise price for only those options that have an exercise price that is less than the market price of our stock. This amount will change as the market price per share changes. The aggregate intrinsic value of options exercised during the fiscal years ended June 30, 2022, 2021 and 2020 was $0.6 million, less than $0.1 million and $0.2 million, respectively.

A summary of the status of the Company’s shares subject to unvested options is presented below:


	Fiscal Year Ended June 30, 2022
	Options	Weighted Average Exercise Price		Weighted Average Grant Date Fair Value
Unvested, beginning of year	633,582	$	25.10	$	9.02
Granted	—	—		—
Vested	(214,600)	25.11		9.03
Canceled or forfeited	(34,344)	24.50		8.31
Unvested, end of year	384,638	$	25.16	$	9.08

As of June 30, 2022, there was approximately $2.4 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the plans in the form of stock options. This cost is expected to be recognized over a weighted-average period of 0.88 years. The total fair value of options vested during the fiscal years ended June 30, 2022, 2021 and 2020 is $1.9 million, $0.3 million and $0.7 million, respectively. The following table summarizes information about stock options outstanding and exercisable as of June 30, 2022:


	Options Outstanding				Options Exercisable
Range of Exercise Prices	Shares Outstanding	Weighted Average Remaining Contractual Life	Weighted Average Exercise Price		Number Exercisable	Weighted Average Exercise Price


$22.27 - $26.38	418,853	8.38	24.52		128,480	24.55
$26.38 - $30.49	142,825	8.40	27.14		48,560	27.14
$30.49 - $34.60	73,303	5.46	34.06		73,303	34.06
$34.60 - $38.71	208,669	3.84	37.71		208,669	37.71
$38.71 - $42.82	279,449	2.02	41.82		279,449	41.83
	1,123,099	5.77	$	32.23	738,461	$	35.92

The Company issues shares to satisfy the exercise of options.

Restricted Stock

Grants of Restricted Shares

During the fiscal year ended June 30, 2022, the Company granted 381,204 shares of restricted stock to employees and non-employee directors, all of which were issued in the form of RSUs:


	Fiscal Year Ended June 30, 2022
	Shares granted	Date granted	Grant date fair value		Vesting period
Employees
Certain employees based on performance	255,438	August 27, 2021	$	36.05	Annually over 4 years
Certain employees based on performance	36,927	August 27, 2021	$	36.05	Annually over 3 years
Certain employees based on performance	36,931	August 27, 2021	$	41.26	Annually over 3 years
Certain employees based upon hire	8,671	September 1, 2021	$	34.60	Annually over 4 years
Certain employees based on performance	3,041	December 1, 2021	$	30.46	Annually over 4 years
Certain employees based on performance	3,020	March 1, 2022	$	35.51	Annually over 4 years
Certain employees based on performance	1,294	June 1, 2022	$	38.73	Annually over 4 years
Certain employees based on hire	2,582	June 1, 2022	$	38.73	Annually over 4 years

Non-Employee Directors
Certain Directors	33,300	August 27, 2021	$	36.05	6 months

A summary of the status of the Company’s outstanding restricted stock is presented below:


	Fiscal Year Ended June 30, 2022
	Shares	Weighted-Average Grant Date Fair Value
Outstanding, beginning of year	537,983	$	27.99
Granted during the period	381,204	36.47

Vested during the period	(237,943)	30.54
Cancelled, forfeited, or expired during the period	(41,902)	28.93
Outstanding, end of year	639,342	$	32.04

As of June 30, 2022, there was approximately $15.3 million of unrecognized compensation cost related to unvested restricted stock awards and restricted stock units granted, which is expected to be recognized over a weighted-average period of 1.28 years. The Company withheld 77,989 shares for income taxes during the fiscal year ended June 30, 2022.