Stockholders' Equity

12 Months Ended

Oct. 31, 2020

Stockholders' Equity Note [Abstract]

Stockholders’ Equity

Series A Junior Participating Preferred Stock

The Company has 20,000 shares of preferred stock authorized as Series A Junior Participating Preferred Stock at $0.01 par value (the “Series A Stock”). No shares are issued or outstanding.

Stock-based compensation

The Company has a stock-based compensation plan (the “Stock Plan”) that allows for the grant of common stock of the Company to members of management, key executives and non-employee directors. The fair value of such awards is based on the fair value of the Company's stock on the date of grant and all are classified as equity awards. The Stock Plan has 281,225 remaining shares available to be issued as of October 31, 2020.

Performance Awards

Certain restricted stock grants are made to management each December under the Stock Plan based on the achievement of certain annual financial performance and other criteria achieved during the previous fiscal year (“Performance Awards”). The performance grants are based on a percentage of the employee’s base salary divided by the stock price on the grant date once the performance criteria has been met, and generally vest over a two-year period as service is provided. During December 2020 and 2019, there were no Performance Awards of restricted stock granted for fiscal year 2020 or 2019 performance because the financial performance and other criteria were not met.

20. Stockholders’ Equity (continued)

Stock-based compensation (continued)

Executive Awards

Certain restricted stock grants are made to key executives under the Stock Plan (“Executive Awards”). These grants generally vest over a three to five-year period as service is provided. During December 2020, subsequent to fiscal year 2020, the Company granted 95,000 shares of common stock with a per share price of $15.26 to key executives under the Stock Plan. The related compensation expense of approximately $1,450,000 will be recognized equally over the next three years as the shares vest.

Director Awards

The Company issues shares of common stock to non-employee directors under the Stock Plan on an annual basis that vest upon grant (“Director Awards”).

A summary of the Performance, Executive, and Director awards granted under the Stock Plan during fiscal years 2020, 2019 and 2018, and the weighted average grant price is as follows:


	Year Ended October 31,
	2020			2019			2018
	Number of Shares	Weighted-Average Grant Price		Number of Shares	Weighted-Average Grant Price		Number of Shares	Weighted-Average Grant Price
Performance Awards	—	$	—	40,095	$	18.74	41,291	$	22.86
Executive Awards	95,000	$	18.87	90,000	$	19.84	90,000	$	22.19
Director Awards	17,841	$	20.05	15,642	$	21.65	14,033	$	22.00
Total	112,841	$	19.06	145,737	$	19.73	145,324	$	22.36

The Company recognized $2,044,000, $1,791,000 and $1,368,000 of stock-based compensation in fiscal years 2020, 2019 and 2018, respectively, of which substantially all of the expense has been included in selling, general and administrative expenses for all years presented. Forfeitures are accounted for in the period that the forfeiture occurs. The income tax benefit recognized in the income statement for stock-based compensation arrangements was $400,000, $324,000 and $328,000 for fiscal years 2020, 2019 and 2018, respectively. The total fair value of shares vested during the years ended October 31, 2020, 2019 and 2018 was $2,365,000, $1,788,000 and $1,238,000 respectively. The Company has unrecognized stock-based compensation expense of $2,589,000 as of October 31, 2020, which is expected to be recognized over the next three years as the shares vest. All unvested shares are expected to vest.

During fiscal years 2020, 2019 and 2018, respectively, members of management exchanged 11,314, 36,627 and 24,252 shares of common stock with fair values of $213,000, $606,000 and $570,000, at the dates of the exchanges, for the payment of payroll taxes associated with the vesting of shares under the Company’s stock-based compensation programs. Additionally, in fiscal year 2018, the Company repurchased 15,330 shares from a retired member of management for $86,000 per the terms of a discontinued stock plan.

A summary of the status of the Company’s nonvested shares as of October 31, 2020, and changes during the year ended October 31, 2020, is presented below.


	Number of Shares	Weighted-Average Grant Price
Nonvested at October 31, 2019	171,106	$	20.64
Vested	(117,646)	$	20.20

Granted	95,000	$	18.87
Nonvested at October 31, 2020	148,460	$	19.85

20. Stockholders’ Equity (continued)

Treasury Stock

Share Repurchase Program

On March 12, 2020, the Board of Directors of the Company approved a share repurchase program authorizing the Company to repurchase up to $10,000,000 of its outstanding shares of common stock through March 2021. Under the share repurchase program, purchases of shares of common stock may be made from time to time in the open market or in privately negotiated transactions. The share repurchase program may be modified, suspended or discontinued at any time and does not commit the Company to repurchase shares of its common stock. During fiscal year 2020, the Company repurchased 250,977 shares under the share repurchase program for approximately $3,493,000. As of October 31, 2020, the remaining authorization under this program is approximately $6,507,000.

Dividend

On December 15, 2020, the Company declared a $0.075 per share dividend payable on January 15, 2021, in the aggregate amount of $1,324,000 to common shareholders of record as of December 28, 2020.