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Note 5 - Stock-Based Compensation
 6 Months Ended
Sep. 30, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

Note 5 - Stock-Based Compensation


Amounts recognized in the condensed consolidated financial statements related to stock-based compensation are as follows (in thousands, except per share data):


   

Three Months Ended

September 30,

   

Six Months Ended

September 30,

 
   

2014

   

2013

   

2014

   

2013

 

Total cost of stock-based compensation charged against income before income taxes

  $ 237     $ 208     $ 516     $ 357  

Amount of income tax benefit recognized in earnings

    84       71       182       130  

Amount charged against net income

  $ 153     $ 137       334       227  

Impact on net income per common share:

                               

Basic

  $ 0.04     $ 0.04     $ 0.10     $ 0.07  

Diluted

    0.04       0.04     $ 0.09       0.06  

Stock-based compensation expense is included in cost of revenues, selling, and general and administrative expense in the accompanying condensed consolidated statements of income.


The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model (“Black-Scholes”). We use historical data to estimate the expected price volatility, the expected stock option life and expected forfeiture rate. The risk-free interest rate is based on the United States Treasury yield curve in effect at the time of grant for the estimated life of the stock option. The dividend yield is calculated based upon the dividend payments made during the prior four quarters as a percent of the average stock price for that period.


The following is a summary of stock option activity for the six months ended September 30, 2014:


   

Number of
Shares

   

Weighted-

Average Exercise Price per Share

   

Weighted-

Average

Remaining Contractual

Term

   

Aggregate

Intrinsic Value (000s)

 

Outstanding at March 31, 2014

    398,172     $ 38.75       4.4     $ 20,505  

Stock options granted

    145,400       89.11       7.5          

Stock options forfeited

    (25,916 )     64.09                  

Stock options expired

    --       --                  

Stock options exercised

    (36,198 )     29.25                  

Outstanding at September 30, 2014

    481,458       53.23       5.0       6,595  
                                 

Exercisable at September 30, 2014

    200,640       31.41       3.3       5,291  

The total intrinsic value of stock options exercised was $1,516,000 and $1,710,000 for the six months ended September 30, 2014 and 2013, respectively.


A summary of the status of our unvested stock option shares as of September 30, 2014 is as follows:


   

Number of
Shares

   

Weighted-Average
Grant-Date
Fair Value

 

Unvested at March 31, 2014

    257,347     $ 11.86  

Stock options granted

    145,400       24.23  

Stock options forfeited

    (25,916 )     17.15  

Stock options vested

    (96,013 )     10.04  

Unvested at September 30, 2014

    280,818       18.32  

As of September 30, 2014, there was $3,772,000 of total unrecognized compensation expense related to unvested stock options.


On August 8, 2014 we adopted The Mesa Laboratories, Inc. 2014 Equity Plan (the “2014 Plan”), which was subsequently approved by our shareholders on October 2, 2014 at our 2014 Annual Meeting of Shareholders. The purpose of the 2014 Plan is to promote the success and enhance the value of the Company by linking the personal interests of our employees, officers and directors to those of our shareholders by providing such persons with an incentive for outstanding performance. A total of 1,100,000 shares of common stock were reserved for issuance under the 2014 Plan and are subject to terms as set by the Compensation Committee of the Board of Directors at the time of grant. As a result of the approval of the 2014 Plan by our shareholders, no further awards will be made under the 2006 Plan and it will remain in effect only as long as awards previously made thereunder remain outstanding.