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Note K - Stock-based Compensation Plans | 12 Months Ended
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Apr. 30, 2020
Notes to Financial Statements |
Share-based Payment Arrangement [Text Block] | K – Stock-Based Compensation Plans The Company has stock-based compensation plans available to grant non-qualified stock options, incentive stock options and restricted stock to employees, directors and certain advisors of the Company. The current stock-based compensation plans are the Amended and Restated Stock Option Plan and the Amended and Restated Stock Incentive Plan. The Company recorded total stock-based compensation expense for all plans of $4.7 million ( $3.6 million after tax effects), $3.7 million ( $2.8 million after tax effects) and $1.6 million ( $1.1 million after tax effects) for the years ended April 30, 2020, 2019 and 2018, respectively. Tax benefits were recognized for these costs at the Company’s overall effective tax rate . Stock Option Plan The Company has options outstanding under the Amended and Restated Stock Option Plan. The shareholders of the Company approved the Amended and Restated Stock Option Plan (the “Stock Option Plan”) on August 5, 2015, which extended the term of the Stock Option Plan to June 10, 2025 and increased the number of shares of common stock reserved for issuance under the plan by an additional 300,000 shares to 1,800,000 shares. On August 29, 2018, the shareholders of the Company approved an amendment to the Stock Option Plan, which increased the number of shares of common stock reserved for issuance under the plan by an additional 200,000 shares to 2,000,000 shares. The Stock Option Plan provides for the grant of options to purchase shares of the Company’s common stock to employees, directors and certain advisors of the Company at a price not less than the fair market value of the stock on the date of grant and for periods not to exceed ten years. Options granted under the Company’s stock option plans expire in the calendar years 2022 through 2029.
|  |  | Option Plan
Minimum exercise price as a percentage of fair market value at date of grant |  |  | 100%
Last expiration date for outstanding options |  |  | December 30, 2029
Shares available for grant at April 30, 2020 |  |  | 75,000
The aggregate intrinsic value of outstanding options at April 30, 2020 and 2019 was $7.7 million and $29.9 million, respectively. The fair value of options granted is estimated on the date of grant using the Black-Scholes option pricing model based on the assumptions in the table below.
|  | April 30, 2020 |  | April 30, 2019 |  | April 30, 2018
Expected terms (years) |  |  | 5.5 |  |  |  | 5.5 |  |  |  | 5.5 |
Risk-free interest rate |  |  | 1.75 | % |  |  | 2.79 | % |  |  | 1.81 | %
Volatility |  |  | 39 | % |  |  | 36 | % |  |  | 36 | %
Dividend yield |  |  | - |  |  |  | - |  |  |  | - |
The expected term of the options is based on evaluations of historical and expected future employee exercise behavior. The risk-free interest rate is based on the U.S. Treasury rates at the date of grant with maturity dates approximately equal to the expected life at the grant date. Volatility is based on historical volatility of the Company’s common stock. The Company has not historically issued dividends and does not expect to do so in the foreseeable future. There were 225,000 options granted during fiscal 2020. The grant-date fair value of all options granted during fiscal 2020, 2019 and 2018 was $9.3 million, $3.0 million and $336,000, respectively. The options were granted at fair market value on date of grant. Generally, options vest after three to five years, except for options issued to directors which are immediately vested at date of grant. The following is an aggregate summary of the activity in the Company’s stock option plans from April 30, 2017 to April 30, 2020:
|  | Number |  | Exercise |  | Proceeds |  | Weighted Average
|  | of |  | Price |  | on |  | Exercise Price per
|  | Options |  | per Share |  | Exercise |  | Share
|  |  |  |  |  |  |  | (in thousands)
Outstanding at April 30, 2017 |  |  | 1,028,500 |  |  |  |  |  |  |  |  | $ | 34,084 |  |  | $33.51
Granted |  |  | 25,000 |  |  |  |  | $ 37.30 |  |  |  |  | 933 |  |  | 37.30
Exercised |  |  | (323,000 | ) |  |  | $ 11.90 | to | $ 37.94 |  |  |  | (6,692 | ) |  | 20.72
Expired |  |  | (15,000 | ) |  |  | $ 44.52 | to | $ 51.81 |  |  |  | (710 | ) |  | 47.26
Cancelled |  |  | (20,000 | ) |  |  | $ 41.86 | to | $ 53.02 |  |  |  | (932 | ) |  | 46.61
Outstanding at April 30, 2018 |  |  | 695,500 |  |  |  |  |  |  |  |  | $ | 26,683 |  |  | $30.50
Granted |  |  | 145,000 |  |  |  | $ 53.30 | to | $ 54.85 |  |  |  | 7,915 |  |  | 54.58
Exercised |  |  | (275,000 | ) |  |  | $ 18.86 | to | $ 53.30 |  |  |  | (8,511 | ) |  | 30.95
Outstanding at April 30, 2019 |  |  | 565,500 |  |  |  |  |  |  |  |  | $ | 26,087 |  |  | $46.13
Granted |  |  | 225,000 |  |  |  | $ 99.05 | to | $ 109.06 |  |  |  | 24,287 |  |  | 107.95
Exercised |  |  | (121,250 | ) |  |  | $ 22.87 | to | $ 53.02 |  |  |  | (4,517 | ) |  | 37.25
Cancelled |  |  | (1,500 | ) |  |  |  | $ 53.02 |  |  |  |  | (80 | ) |  | 53.02
Outstanding at April 30, 2020 |  |  | 667,750 |  |  |  |  |  |  |  |  | $ | 45,777 |  |  | $68.55
Stock option compensation expense on a pre-tax basis was $3.6 million ( $2.9 million after tax effects), $2.7 million ( $2.0 million after tax effects) and $1.2 million ( $773,000 after tax effects) for the years ended April 30, 2020, 2019 and 2018, respectively. As of April 30, 2020, the Company had approximately $8.7 million of total unrecognized compensation cost related to unvested options that are expected to vest. These options have a weighted-average remaining vesting period of 1.9 years. The Company had the following options exercised for the periods indicated. The impact of these cash receipts is included in financing activities in the accompanying Consolidated Statements of Cash Flows .
|  | Years Ended April 30,
(Dollars in thousands) |  | 2020 |  | 2019 |  | 2018
Options Exercised |  |  | 121,250 |  |  |  | 275,000 |  |  |  | 323,000 |
Cash Received from Options Exercised |  | $ | 2,928 |  |  | $ | 5,663 |  |  | $ | 2,832 |
Intrinsic Value of Options Exercised |  | $ | 7,580 |  |  | $ | 10,817 |  |  | $ | 8,381 |
During the year ended April 30, 2020, there were 57,500 options exercised through net settlements in accordance with plan provisions, wherein the shares issued were reduced by 28,307 shares to satisfy the exercise price and applicable withholding taxes to acquire 29,193 shares. As of April 30, 2020, there were 155,250 vested and exercisable stock options outstanding with an aggregate intrinsic value of $2.6 million and a weighted average remaining contractual life of 3.7 years and a weighted average exercise price of $36.38. Stock Incentive Plan On August 5, 2015, the shareholders of the Company approved the Amended and Restated Stock Incentive Plan (the “Stock Incentive Plan”), which extended the term of the Stock Incentive Plan to June 10, 2025. On August 29, 2018, the shareholders of the Company approved an amendment to the Company’s Stock Incentive Plan that increased the number of shares of common stock that may be issued under the Stock Incentive Plan from 350,000 to 450,000. For shares issued under the Stock Incentive Plan, the associated compensation expense is generally recognized equally over the vesting periods established at the award date and is subject to the employee’s continued employment by the Company. The following is a summary of the activity in the Company’s Stock Incentive Plan:
|  | Number of Shares |  | Weighted Average Grant Date Fair Value
Unvested shares at April 30, 2017 |  |  |  | 17,000 |  |  | $ | 44.86 |
Shares granted |  |  |  | 166,500 |  |  |  | 45.86 |
Shares vested |  |  |  | - |  |  |  | - |
Shares cancelled |  |  |  | (4,500 | ) |  |  | 38.28 |
Unvested shares at April 30, 2018 |  |  |  | 179,000 |  |  | $ | 45.96 |
Shares granted |  |  |  | 3,000 |  |  |  | 53.30 |
Shares vested |  |  |  | - |  |  |  | - |
Shares cancelled |  |  |  | (1,500 | ) |  |  | 36.38 |
Unvested shares at April 30, 2019 |  |  |  | 180,500 |  |  | $ | 46.16 |
Shares granted |  |  |  | 12,328 |  |  |  | 102.03 |
Shares vested |  |  |  | (7,000 | ) |  |  | 52.10 |
Shares cancelled |  |  |  | (1,000 | ) |  |  | 37.07 |
Unvested shares at April 30, 2020 |  |  |  | 184,828 |  |  | $ | 49.71 |
The fair value at vesting for awards under the stock incentive plan was $9.2 million, $8.3 million and $8.2 million in fiscal 2020, 2019 and 2018, respectively. During the fiscal year 2020, 3,000 shares were granted with a fair value of $99.05, 4,224 shares were granted with a fair value of $109.06 and 5,104 shares were granted with a fair value of $97.97. During the fiscal year 2019, 3,000 restricted shares were granted with a fair value of $53.30 per share. During the fiscal year 2018, 132,000 restricted shares were granted with a fair value of $48.70 per share and 34,500 shares were granted with a fair value of $35.00 per share. A total of 94,199 shares remain available for award at April 30, 2020. The Company recorded compensation cost of $1.1 million ( $839,000 after tax effects), $1.0 million ( $760,000 after tax effects) and $430,000 ( $288,000 after tax effects) related to the Stock Incentive Plan during the years ended April 30, 2020, 2019 and 2018, respectively. As of April 30, 2020, the Company had $6.3 million of total unrecognized compensation cost related to unvested awards granted under the Stock Incentive Plan, which the Company expects to recognize over a weighted-average remaining period of 6.3 years.

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