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Stock Options and Share-Based Compensation | 12 Months Ended
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Apr. 30, 2018
Equity [Abstract] |
Stock Options and Share-Based Compensation | Note 5—Stock Options and Share-Based Compensation The Company adopted ASU 2016-9, “Stock Compensation – Improvements to Employee Share-Based Payment Accounting” standard prospectively effective May 1, 2017. Prior periods were not retrospectively adjusted. The Company elected prospectively to account for forfeitures as they occur rather than apply an estimated rate to share-based compensation expense. The stockholders approved the 2017 Omnibus Incentive Plan (“2017 Plan”) on August 30, 2017, which enables the Company to grant a broad range of equity, equity-related, and non-equity types of awards, with potential recipients including directors, consultants and employees. This plan replaces the 2010 Stock Option Plan for Directors and the 2008 Key Employee Stock Option Plan. No new awards will be granted under the prior plans. All outstanding options granted under the prior plans will remain subject to the prior plans. At the date of approval of the 2017 Plan there were 280,100 shares available for issuance under the prior plans. These shares and any outstanding awards that subsequently cease to be subject to such awards are available under the 2017 Plan. The 2017 Plan did not increase the total number of shares available for issuance under the Company’s equity compensation plans. At April 30, 2018 there were 263,942 shares available for future issuance. The Company issued restricted stock units (“RSUs”) under the 2017 Plan and recorded stock-based compensation expense of $141,000 during fiscal year 2018 in accordance with ASC 718, “Compensation—Stock Compensation.” The RSUs include both a service and performance component vesting over a three year period. The recognized expense is based upon the vesting period for service criteria and estimated attainment of the performance criteria at the end of the three year period based on the ratio of cumulative days incurred to total days over the three year period. The remaining estimated compensation expense of $394,000 will be recorded over the remaining two year period. The stockholders approved the 2010 Stock Option Plan for Directors (“2010 Plan”) in fiscal year 2011 which allowed the Company to grant options on an aggregate of 100,000 shares of the Company’s common stock. Under this plan, each eligible director was granted options to purchase 10,000 shares at the fair market value at the date of grant for a term of five years. These options are exercisable in four equal installments, one-fourth becoming exercisable on the next August 1 following the date of grant, and one-fourth becoming exercisable on August 1 of each of the next three years. At April 30, 2018, there were no shares available for future grants under the 2010 Plan. The stockholders approved the 2008 Key Employee Stock Option Plan (“2008 Plan”) in fiscal year 2009 which allowed the Company to grant options on an aggregate of 300,000 shares of the Company’s common stock. On August 26, 2015, the stockholders approved an amendment to this plan to increase the number of shares available under the 2008 Plan by 300,000. Under the plan, options were granted at not less than the fair market value at the date of grant and options are exercisable in such installments, for such terms (up to 10 years), and at such times, as the Board of Directors may determine at the time of the grant. At April 30, 2018, there were no shares available for future grants under the 2008 Plan. The Company recorded stock-based compensation expense in accordance with ASC 718. In order to determine the fair value of stock options on the date of grant, the Company applied the Black-Scholes option pricing model. Inherent in the model are assumptions related to expected stock-price volatility, option life, risk-free interest rate, and dividend yield. The Company did not grant any stock options during fiscal year 2018. For stock options granted during the fiscal years 2017 and 2016, the Company believes that its historical share option experience does not provide a reasonable basis upon which to estimate expected term. The stock options granted have the “plain-vanilla” characteristics as defined in SEC Staff Accounting Bulletin No. 107 (SAB 107). The Company utilized the Safe Harbor option “Simplified Method” to determine the expected term of these options in accordance with the guidance of SAB 107 for options granted. The Company intends to continue to utilize the “Simplified Method” for future grants in accordance with the guidance of SAB 110 until such time that the Company believes that its historical share option experience will provide a reasonable basis to estimate expected term. The fair value of the options granted as shown below was estimated using the Black-Scholes model with the following assumptions:
|  | 2017 |  |  | 2016 |
|  | 2008 Plan |  |  | 2008 Plan |
Options granted |  |  | 45,200 |  |  |  | 40,200 |
Weighted average expected stock price volatility |  |  | 29.17 | % |  |  | 30.45 | %
Expected option life |  |  | 6.25 years |  |  |  | 6.25 years |
Average risk-free interest rate |  |  | 2.10 | % |  |  | 1.97 | %
Average dividend yield |  |  | 3.00 | % |  |  | 2.78 | %
Estimated fair value of each option |  | $ | 5.04 |  |  | $ | 3.97 |
The stock-based compensation expense is recorded over the vesting period (4 years) for the options granted, net of tax. The Company recorded $172,000, $199,000 and $192,000 of compensation expense and $42,000, $74,000 and $72,000 deferred income tax benefit in fiscal years 2018, 2017 and 2016, respectively. The remaining compensation expense of $209,000 and deferred income tax benefit of $51,000 will be recorded over the remaining vesting periods. The Company issued new shares of common stock and treasury stock to satisfy options exercised during fiscal years 2018, 2017 and 2016. Stock option activity and weighted average exercise price are summarized as follows:
|  | 2018 |  |  | 2017 |  |  | 2016 |
|  | Number of Shares |  |  | Weighted Average Exercise Price |  |  | Number of Shares |  |  | Weighted Average Exercise Price |  |  | Number of Shares |  |  | Weighted Average Exercise Price |
Outstanding at beginning of year |  |  | 180,350 |  |  | $ | 17.29 |  |  |  | 185,375 |  |  | $ | 14.68 |  |  |  | 239,575 |  |  | $ | 13.24 |
Granted |  |  | — |  |  |  | — |  |  |  | 45,200 |  |  |  | 22.92 |  |  |  | 40,200 |  |  |  | 16.92 |
Canceled |  |  | (6,300 | ) |  |  | 19.09 |  |  |  | (150 | ) |  |  | 10.64 |  |  |  | (10,400 | ) |  |  | 16.37 |
Exercised |  |  | (36,800 | ) |  |  | 14.31 |  |  |  | (50,075 | ) |  |  | 12.72 |  |  |  | (84,000 | ) |  |  | 11.44 |
Outstanding at end of year |  |  | 137,250 |  |  | $ | 18.01 |  |  |  | 180,350 |  |  | $ | 17.29 |  |  |  | 185,375 |  |  | $ | 14.68 |
Exercisable at end of year |  |  | 79,100 |  |  | $ | 16.28 |  |  |  | 78,650 |  |  | $ | 14.22 |  |  |  | 92,075 |  |  | $ | 12.83 |
The number of options outstanding, exercisable, and their weighted average exercise prices were within the following ranges at April 30, 2018:
|  | Exercise Price Range |
|  | $8.59-$11.78 |  |  | $15.85-$23.62 |
Options outstanding |  |  | 17,550 |  |  |  | 119,700 |
Weighted average exercise price |  | $ | 11.35 |  |  | $ | 18.98 |
Weighted average remaining contractual life |  |  | 4.03 years |  |  |  | 6.68 years |
Aggregate intrinsic value |  | $ | 414,000 |  |  | $ | 1,911,000 |
Options exercisable |  |  | 17,550 |  |  |  | 61,550 |
Weighted average exercise price |  | $ | 11.35 |  |  | $ | 17.69 |
Aggregate intrinsic value |  | $ | 414,000 |  |  | $ | 1,062,000 |

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- Definition The entire disclosure for accounts comprising shareholders' equity, comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income, and compensation-related costs for equity-based compensation. Includes, but is not limited to, disclosure of policies, compensation plan details, equity-based arrangements to obtain goods and services, deferred compensation arrangements, and employee stock purchase plan details. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -URI http://asc.fasb.org/topic&trid=2208762 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 + Details
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