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Stock-Based Compensation and Benefit Plans | 6 Months Ended
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Dec. 28, 2024
Share-Based Payment Arrangement [Abstract] |
Stock-Based Compensation and Benefit Plans | Stock-Based Compensation and Benefit Plans The Company’s 2024 Incentive Plan provides for equity and liability awards to employees and non-employee directors with service and performance vesting conditions in the form of stock options, stock appreciation rights (SARs), restricted stock, restricted stock units, stock awards, stock units, performance shares, performance units, and other stock-based or cash-based awards. At December 28, 2024, 1,595,362 shares were available for grant. Compensation cost is recognized on a straight-line basis over the requisite employee service period, which is generally the vesting period, and is recorded as employee compensation expense in cost of goods sold, research, development and engineering, and selling, general and administrative expenses. Share-based compensation is recognized only for those awards that are expected to vest. For SARs awards forfeitures are estimated at the date of grant based on historical experience and future expectations. Due to a lack of historical experience and a different grant pool than SARs, forfeitures for restricted stock units are accounted for prospectively as they occur. Stock Appreciation Rights In addition to service conditions, SARs contain a performance condition. The additional performance condition is based upon the achievement of Return on Invested Capital (ROIC) goals relative to a peer group. All awards with performance conditions are evaluated quarterly to determine the likelihood that performance metrics will be achieved during the performance period. These awards are charged to compensation expense over the requisite service period based on the number of shares expected to vest. If the performance and service conditions are attained, then the SARs cliff vest after the completion of the three-year period from date of grant and expire five years from date of grant.
| SARs | Aggregate Intrinsic Value (in thousands) | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (in years)
Balance, July 1, 2023 | 626,250 |  | — |  | $ | 6.41 |  | 2.2
SARs forfeited | (137,500) |  |  | 6.94 |  |
SARs expired | (101,250) |  |  | 8.17 |  |
Balance, December 30, 2023 | 387,500 |  | $ | — |  | $ | 5.78 |  | 1.8
Balance, June 30, 2024 | 387,500 |  | — |  | $ | 5.78 |  | 1.8
SARs forfeited | (136,250) |  |  | 7.17 |  |
SARs expired | (115,000) |  |  | 4.93 |  |
Balance, December 28, 2024 | 136,250 |  | $ | — |  | $ | 5.10 |  | 2.6
Exercisable at December 28, 2024 | — |  | — |  | — |  | —
The Black-Scholes option valuation model is used by the Company for estimating the fair value of SARs. Option valuation models require the input of highly subjective assumptions, particularly for the expected term and expected stock price volatility. Changes in these assumptions can materially affect the fair value estimates. There were no SARs granted during the three or six months ended December 28, 2024 and December 30, 2023. Share-based compensation expense is recognized only for those awards that are expected to vest, with forfeitures estimated at the date of grant based on the Company’s historical experience and future expectations. This forfeiture rate will be revised, if necessary, in subsequent periods if actual forfeitures differ from the amount estimated. Total SARs expense recognized during the three months ended December 28, 2024 and December 30, 2023 was approximately $(158,000) and $52,000, respectively. Total SARs expense recognized during the six months ended December 28, 2024 and December 30, 2023 was approximately $(139,000) and $111,000, respectively There were no SARs exercised during the three or six month periods ended December 28, 2024 or December 30, 2023. As of December 28, 2024, total unrecognized compensation expense for SARs awards was approximately $0.1 million, which is expected to be recognized over a weighted average period of approximately 0.6 years. Restricted Stock Units The Company grants restricted stock units that have a performance condition and/or a service condition. Restricted stock units with only a service condition generally vest in equal annual installments over a maximum of three years. Certain restricted stock units are granted with a performance condition. The final number of shares issued will be determined annually based on the achievement of annual financial targets. Forfeitures for restricted stock units are accounted for prospectively as they occur. The fair value of restricted stock units is the market close price on the date of grant. During the three months ended December 28, 2024, the Company granted 4,638 restricted stock units at a weighted average grant date fair value of $5.39 per share. Total restricted stock unit expense recognized during the three months ended December 28, 2024 was approximately $176,000. During the six months ended December 28, 2024, the Company granted 329,457 restricted stock units at a weighted average grant date fair value of $4.52 per share. Total restricted stock unit expense recognized during the six months ended December 28, 2024 was approximately $223,000. As of December 28, 2024, total unrecognized compensation expense on restricted stock units was $1.3 million, which is expected to be recognized over a weighted average period of approximately 2.4 years.

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