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Note 9 - Stock Transactions and Stock-based Compensation

12 Months Ended

Mar. 31, 2025

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

Note 9. Stock Transactions and Stock-Based Compensation

(dollars and shares in thousands, except per share values)

Stock-Based Compensation

We issue shares in the form of stock options, RSUs and PSUs to employees and non-employee directors pursuant to the 2021 Equity Plan, and we have awards outstanding under the 2014 Equity Plan. The 2021 Equity Plan, as amended, authorizes the issuance of 660 shares of common stock to eligible participants, and there were 186 shares available for future grants under the plan as of March 31, 2025. Under the 2014 Equity Plan, 1,100 shares of common stock were authorized and reserved for eligible participants, all of which have been issued and 43 of which remain outstanding as of March 31, 2025.

Stock-based compensation expense recognized in the Consolidated Financial Statements was as follows:

		Year Ended March 31,
		2025				2024				2023
Stock-based compensation expense		$	13,142			$	11,936			$	12,538
Amount of income tax (benefit) recognized in earnings			2,068				2,718				(1,169	)
Stock-based compensation expense, net of tax		$	15,210			$	14,654			$	11,369

Time-Based Restricted Stock Units (RSUs)

RSU activity under the 2021 Equity Plan was as follows (shares and dollars in thousands, except per-share data):

		*Time-Based Restricted Stock Units*
		*Number of Shares*				*Weighted- Average Grant Date Fair Value per Share*				*Weighted- Average Remaining Contractual Life (Years)*				*Aggregate Intrinsic Value*
Nonvested at March 31, 2024			76			$	157.83				1.0			$	8,325
Awards granted			117				94.30
Awards forfeited			(11	)			120.39
Awards distributed			(37	)			169.12								3,928
Nonvested as of March 31, 2025			145			$	106.54				1.0			$	17,197
Expected to vest			130			$	107.29				1.1			$	15,466

For the years ended March 31, 2024 and 2023, the weighted average fair values per RSU granted were $133.30 and $187.21, respectively. Unrecognized stock-based compensation expense for RSUs that we have determined are probable of vesting was $8,116 as of March 31, 2025 and is expected to be recognized over a weighted average period of 1.9 years. The total fair value of RSUs vested was $6,173, $5,881, and $6,751 during the years ended March 31, 2025, 2024 and 2023, respectively. The total intrinsic value of time-based RSUs distributed during the years ended March 31, 2024 and March 31, 2023 was $3,658 and $5,004, respectively.

Performance-Based Restricted Stock Units (PSUs)

We grant performance-based RSUs to certain key employees. Vesting of the awards is contingent upon meeting certain service conditions, as well as meeting certain performance and/or market conditions.

PSU activity under the 2021 Equity Plan was as follows (shares and dollars in thousands, except per-share data):

		*Performance-Based Restricted Stock Units*
		*Number of Shares*				*Weighted- Average Grant Date Fair Value per Share*				*Weighted- Average Remaining Contractual Life (Years)*				*Aggregate Intrinsic Value*
Nonvested at March 31, 2024			56			$	240.96				2.6			$	6,142
Awards granted			42				102.57
Awards forfeited			(1	)			112.24
Awards distributed			(12	)			302.06								1,306
Nonvested as of March 31, 2025			85			$	166.31				1.6			$	10,101
Expected to vest			81			$	168.98				1.7			$	9,654

For the years ended March 31, 2024 and 2023, the average fair value per PSU granted was $132.29 and $182.14, respectively. Unrecognized stock-based compensation expense for PSUs that we have determined probable of vesting was $5,346 as of March 31, 2025 and is expected to be recognized over a weighted average period of 1.9 years. Total fair value of PSUs vested was $3,492, $0 and $1,926 during the years ended March 31, 2025, 2024 and 2023, respectively. There were no PSUs vested or distributed during the fiscal year 2024, and the total intrinsic value of PSUs distributed during the year ended March 31, 2023 was $1,776.

During the year ended March 31, 2025, the Compensation Committee of the Board of Directors created a plan to award 41 PSUs at target (“the FY25 PSUs”) to eligible employees. Of the 41 PSUs granted, 23 PSUs have a grant date fair value of $89.82 and are subject to service and company financial performance conditions. The financial performance measurement period is from April 1, 2024 through March 31, 2027. The remaining 18 PSUs have a grant date fair value of $119.54 and are subject to service and market conditions, with the market performance period measured from June 18, 2024 through June 18, 2027. The service period for all of the FY25 PSUs is from June 18, 2024 through June 18, 2027. The quantity of shares that will be earned based upon either company financial performance or market performance will range from 0% to 200% of the targeted number of shares; if the defined minimum targets are not met, no shares will vest. As of March 31, 2025, based on actual performance during the partial performance period, a performance adjustment to change the awards expected to vest was not deemed necessary for the FY25 PSUs.

In October 2021, the Compensation Committee of the Board of Directors granted a special long-term equity award consisting of performance stock units subject to both performance and service conditions to our Chief Executive Officer. Based on actual achievement of the performance metrics as of the performance period ended March 31, 2024, 35 shares are expected to vest and be distributed, of which 12 were distributed in fiscal year 2025. The remaining 23 shares will vest in equal installments on each of October 27, 2025 and October 27, 2026.

Stock Options

We used the Black-Scholes option-pricing model to estimate the fair value of stock option awards granted. There were no options granted during the year ended March 31, 2025. The weighted average assumptions utilized in the model in prior years were as follows:

		Year Ended March 31,
		2024				2023
Weighted-average value at grant date		$	130.07			$	185.60
Expected life (years)			3.52				3.52
Expected dividend yield			0.07	%			0.07	%
Volatility			37.82	%			37.29	%
Risk-free interest rate			4.16	%			3.55	%

Using the assumptions in the tables above, the weighted-average Black-Scholes fair value per share at grant date for the years ended March 31, 2024 and 2023 were $42.76 and $58.94, respectively. The fair values are before the estimated effect of forfeitures, which reduces the amount of expense recorded in our Consolidated Statements of Operations.

Stock option activity under the 2021 Equity Plan and 2014 Equity Plan as of March 31, 2025, and changes for the years then ended, are presented below (shares and dollars in thousands, except per-share data):

		*Stock Options*
		*Shares Subject to Options*				*Weighted- Average Exercise Price per Share*				*Weighted-Average Remaining Contractual Life (Years)*				*Aggregate Intrinsic Value*
Outstanding as of March 31, 2024			194			$	181.89				3.2			$	26
Awards granted			-				-
Awards forfeited or expired			(17	)			155.06
Awards exercised or distributed			(22	)			123.17								24
Outstanding as of March 31, 2025			155			$	192.92				2.7			$	52
Exercisable awards as of March, 31, 2025			112			$	211.36				2.2			$	18
Exercisable awards and awards expected to vest, March 31, 2025			153			$	193.71				2.7			$	49

The total intrinsic value of stock options exercised during the years ended March 31, 2024 and March 31, 2023 was $24, and $6,902, respectively. Unrecognized stock-based compensation expense for stock options expected to vest as of March 31, 2025 was $917 and is expected to be recognized over a weighted average period of 1.1 years. The total fair value of options vested was $2,168, $2,749, and $2,763 during the years ended March 31, 2025, 2024 and 2023, respectively.

In November 2005, our Board of Directors approved a program to repurchase up to 300 shares of our outstanding common stock. Under the program, shares of common stock may be purchased from time to time in the open market at prevailing prices or in negotiated transactions off the market. Shares of common stock repurchased will be cancelled and repurchases of shares of common stock will be funded through existing cash reserves. There were no repurchases of our shares of common stock under this plan during the years ended March 31, 2025, 2024 or 2023. As of March 31, 2025, we have repurchased 162 shares under this plan.

Under applicable law, Colorado corporations are not permitted to retain treasury stock. The price paid for repurchased shares is allocated between common stock and retained earnings based on management’s estimate of the original sales price of the underlying shares.