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Note 13 - Stock Based Compensation

12 Months Ended

Jun. 30, 2024

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

Note 13. Stock Based Compensation

The Plan is administered by the Compensation Committee or such other Board committee (or the entire Board) as may be designated by the Board.

The amounts of stock-based compensation expense recognized within operating income (1) in the periods presented are as follows:

		*Years Ended*
		*June 30, 2024*				*July 2, 2023*				*July 3, 2022*
		(in thousands)

Stock options		$	4,422			$	2,536			$	(41	)
Restricted stock awards			6,266				5,798				7,988
Total			10,688				8,334				7,947
Deferred income tax benefit			2,571				2,042				1,943
Stock-based compensation expense, net		$	8,117			$	6,292			$	6,004

(1)

Stock-based compensation expense has not been allocated between business segments, but is reflected as part of Corporate overhead (See Note 15 - Business Segments for details).

Stock-based compensation expense is recorded within the following line items of operating expenses:

		*Years Ended*
		*June 30, 2024*				*July 2, 2023*				*July 3, 2022*
		(in thousands)

Marketing and sales		$	4,916			$	3,818			$	3,414
Technology and development			855				698				319
General and administrative			4,917				3,818				4,214
Total		$	10,688			$	8,334			$	7,947

Stock Options

The weighted average fair value of stock options on the date of grant, and the assumptions used to estimate the fair value of the stock options using the Black-Scholes option valuation model, were as follows:

		*Years ended*
		*June 30, 2024*				*July 2, 2023*				*July 3, 2022 (1)*

Weighted average fair value of options granted		$	6.09			$	5.13				n/a
Expected volatility			56	%			52	%			n/a
Expected life (in years)			7.0				7.5				n/a
Risk-free interest rate		3.9		%			4.3	%			n/a
Expected dividend yield		0.0		%			0.0	%			n/a

(1) No options were granted during the fiscal year ended July 3, 2022.

The expected volatility of the option is determined using historical volatilities based on historical stock prices. The Company estimated the expected life of options granted based upon the historical weighted average. The risk-free interest rate is determined using the yield available for zero-coupon U.S. government issues with a remaining term equal to the expected life of the option. The Company has never paid a dividend, and as such the dividend yield is 0.0%.

The following table summarizes stock option activity during the year ended June 30, 2024:

										*Weighted*
						*Weighted*				*Average*
						*Average*				*Remaining*				*Aggregate*
						*Exercise*				*Contractual*				*Intrinsic*
		*Options*				*Price*				*Term*				*Value*
										(in years)				(in thousands)
Outstanding beginning of period			2,285,608			$	8.59
Granted			1,000,000			$	10.13
Exercised			(38,240	)		$	8.59
Forfeited/Expired			(61,831	)		$	8.59
Outstanding end of period			3,185,537			$	9.07				8.34			$	2,033

Exercisable at June 30, 2024			707,806			$	8.59				7.80			$	658

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on the last trading day of Fiscal 2024 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on June 30, 2024. This amount changes based on the fair market value of the Company’s stock. The total intrinsic value of options exercised during the years ended June 30, 2024, July 2, 2023, July 3, 2022, were$0.1 million, $0.0 million, and $9.2 million, respectively.

The following table summarizes information about stock options outstanding at June 30, 2024:

				*Options Outstanding*											*Options Exercisable*
								*Weighted‑*
								*Average*			*Weighted‑*								*Weighted‑*
								*Remaining*			*Average*								*Average*
				*Options*				*Contractual Life*			*Exercise*				*Options*				*Exercise*
*Exercise Price*				*Outstanding*				*(years)*			*Price*				*Exercisable*				*Price*

$	8.59				2,185,537			7.8			$	8.59				707,806			$	8.59
$	10.13				1,000,000			9.5			$	10.13				-			$	-
					3,185,537			8.3			$	9.07				707,806			$	8.59

As of June 30, 2024, the total future compensation cost related to non-vested options not yet recognized in the statement of operations was $10.6 million and the weighted average period over which these awards are expected to be recognized was 2.6 years.

Restricted Stock

The Company grants shares of Common Stock to its employees that are subject to restrictions on transfer and risk of forfeiture until fulfillment of applicable service conditions and, in certain cases, holding periods (Restricted Stock).

The following table summarizes the activity of non-vested restricted stock during the year ended June 30, 2024:

						*Weighted*
						*Average*
						*Grant Date*
		*Shares*				*Fair Value*

Non-vested – beginning of period			1,231,634			$	15.01
Granted			1,396,457			$	10.02
Vested			(480,708	)		$	15.22
Forfeited			(442,934	)		$	10.26
Non-vested - end of period			1,704,449			$	12.09

The fair value of non-vested shares is determined based on the closing stock price on the grant date. As of June 30, 2024, there was $13.9 million of total unrecognized compensation cost related to non-vested, restricted, stock-based compensation to be recognized over a weighted-average period of 2.3 years.