6. Stockholders’ Equity

Per Share Results

Basic and diluted per share results were based on the following:


	For the Three Months Ended				For the Nine Months Ended
	Aug. 31, 2017		Aug. 31, 2016		Aug. 31, 2017		Aug. 31, 2016
Net income (loss)	$	1,329	$	(49)	$	5,117	$	(763)

Weighted average shares outstanding for computation of basic per share results		5,001,000		5,093,000		5,013,000		5,132,000
Incremental shares from assumed exercise of Griffin stock options (a)		27,000		—		24,000		—
Adjusted weighted average shares for computation of diluted per share results		5,028,000		5,093,000		5,037,000		5,132,000

(a)

Incremental shares from the assumed exercise of Griffin stock options are not included in periods where the inclusion of such shares would be anti-dilutive. The incremental shares from the assumed exercise of stock options for the 2016 third quarter and 2016 nine month period would have been 23,000 and 2,000, respectively.

Griffin Stock Option Plan

Stock options are granted by Griffin under the Griffin Industrial Realty, Inc. 2009 Stock Option Plan (the “2009 Stock Option Plan”). Options granted under the 2009 Stock Option Plan may be either incentive stock options or non-qualified stock options issued at an exercise price not less than fair market value on the date approved by Griffin’s Compensation Committee. Vesting of all of Griffin's stock options is solely based upon service requirements and does not contain market or performance conditions.

Stock options issued will expire ten years from the grant date. In accordance with the 2009 Stock Option Plan, stock options issued to non-employee directors upon their initial election to the board of directors are fully exercisable immediately upon the date of the option grant. Stock options issued to non-employee directors upon their re-election to the board of directors vest on the second anniversary from the date of grant. Stock options issued to employees vest in equal installments on the third, fourth and fifth anniversaries from the date of grant. None of the stock options outstanding at August 31, 2017 may be exercised as stock appreciation rights.

The following options were granted by Griffin under the 2009 Stock Option Plan to Griffin employees:


	For the Nine Months Ended
	Aug. 31, 2017			Aug. 31, 2016
		Fair Value per			Fair Value per
	Number of	Option at		Number of	Option at
	Shares	Grant Date		Shares	Grant Date
Employees	5,000	$	11.13	101,450	$	7.51 - 11.65
Non-employee directors	6,570	$	13.49	8,409	$	11.30
	11,570			109,859

The fair values of all options granted were estimated as of the grant date using the Black-Scholes option-pricing model. Assumptions used in determining the fair value of the stock options granted in the 2017 and 2016 nine month periods were as follows:


	For the Nine Months Ended
	Aug. 31, 2017		Aug. 31, 2016
Expected volatility	32.7 to 39.6	%	32.9 to 41.1	%
Risk free interest rates	2.1 to 2.2	%	1.2 to 1.5	%
Expected option term (in years)	7.5 to 8.5		5 to 8.5
Annual dividend yield	0.8 to 0.9	%	0.9	%


Number of option holders at August 31, 2017		31

Compensation expense and related tax benefits for stock options were as follows:


	For the Three Months Ended				For the Nine Months Ended
	Aug. 31, 2017		Aug. 31, 2016		Aug. 31, 2017		Aug. 31, 2016
Compensation expense	$	90	$	71	$	260	$	185

Related tax benefit	$	19	$	17	$	59	$	41

For all periods presented, the forfeiture rate for directors was 0%, forfeiture rates for executives ranged from 17.9% to 22.6% and forfeiture rates for employees ranged from 38.3% to 41.1%. These rates were utilized based on the historical activity of the grantees.

As of August 31, 2017, the unrecognized compensation expense related to nonvested stock options that will be recognized during future periods is as follows:


Balance of Fiscal 2017	$	90
Fiscal 2018	$	340
Fiscal 2019	$	234
Fiscal 2020	$	112
Fiscal 2021	$	34

A summary of the activity under the 2009 Griffin Stock Option Plan is as follows:


	For the Nine Months Ended
	August 31, 2017			August 31, 2016
			Weighted			Weighted
			Avg.			Avg.
	Number of		Exercise	Number of		Exercise
	Shares		Price	Shares		Price
Outstanding at beginning of period	324,546	$	29.23	225,727	$	30.47
Granted	11,570	$	30.59	109,859	$	26.83
Forfeited	(2,354)	$	36.82	(11,040)	$	30.73
Outstanding at end of period	333,762	$	29.22	324,546	$	29.23


				Weighted Avg.
				Remaining
Range of Exercise Prices for	Outstanding at	Weighted Avg.		Contractual Life	Total Intrinsic
Vested and Nonvested Options	August 31, 2017	Exercise Price		(in years)	Value
$23.00 - $28.00	124,543	$	26.67	8.2	$	957
$28.00 - $32.00	128,248	$	29.07	4.3		677
$32.00 - $39.00	80,971	$	33.40	1.1		77
	333,762	$	29.22	5.0	$	1,711

Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss, net of tax, is comprised of the following:


	For the Nine Months Ended Aug. 31, 2017
			Unrealized gain
	Unrealized loss on		on investment in
	cash flow hedges		Centaur Media		Total
Balance November 30, 2016	$	(1,062)	$	13	$	(1,049)
Other comprehensive (loss) income before reclassifications		(1,322)		159		(1,163)
Amounts reclassified		636		(172)		464
Net activity for other comprehensive loss		(686)		(13)		(699)
Balance August 31, 2017	$	(1,748)	$	—	$	(1,748)


	For the Nine Months Ended Aug. 31, 2016
			Unrealized gain
	Unrealized loss on		on investment in
	cash flow hedges		Centaur Media		Total
Balance November 30, 2015	$	(1,744)	$	659	$	(1,085)
Other comprehensive loss before reclassifications		(1,825)		(593)		(2,418)
Amounts reclassified		646		—		646
Net activity for other comprehensive loss		(1,179)		(593)		(1,772)
Balance August 31, 2016	$	(2,923)	$	66	$	(2,857)

The components of other comprehensive loss are as follows:


	For the Three Months Ended
	August 31, 2017						August 31, 2016
			Tax						Tax
			(Expense)		Net-of				(Expense)		Net-of
	Pre-Tax		Benefit		Tax		Pre-Tax		Benefit		Tax
Reclassifications included in net income (loss):
Loss on cash flow hedges (interest expense)	$	326	$	(117)	$	209	$	348	$	(129)	$	219
Realized gain on sale of Centaur Media (gain on sale)		(281)		109		(172)		—		—		—
Total reclassifications included in net income (loss)		45		(8)		37		348		(129)		219

Mark to market adjustment on Centaur Media for a decrease in the foreign currency exchange rate		(11)		3		(8)		(108)		37		(71)
Mark to market adjustment on Centaur Media for a decrease in fair value		(39)		14		(25)		(283)		100		(183)
Decrease in fair value adjustments on Griffin’s cash flow hedges		(1,087)		390		(697)		(1,129)		419		(710)

Total change in other comprehensive loss		(1,137)		407		(730)		(1,520)		556		(964)

Other comprehensive loss	$	(1,092)	$	399	$	(693)	$	(1,172)	$	427	$	(745)


	For the Nine Months Ended
	August 31, 2017						August 31, 2016
			Tax						Tax
			(Expense)		Net-of				(Expense)		Net-of
	Pre-Tax		Benefit		Tax		Pre-Tax		Benefit		Tax
Reclassifications included in net income (loss):
Loss on cash flow hedges (interest expense)	$	1,007	$	(371)	$	636	$	1,025	$	(379)	$	646
Realized gain on sale of Centaur Media (gain on sale)		(281)		109		(172)		—		—		—
Total reclassifications included in net income (loss)		726		(262)		464		1,025		(379)		646

Mark to market adjustment on Centaur Media for an increase (decrease) in the foreign currency exchange rate		25		(9)		16		(181)		63		(118)
Mark to market adjustment on Centaur Media for an increase (decrease) in fair value		220		(77)		143		(731)		256		(475)
Decrease in fair value adjustments on Griffin’s cash flow hedges		(2,052)		730		(1,322)		(2,898)		1,073		(1,825)

Total change in other comprehensive loss		(1,807)		644		(1,163)		(3,810)		1,392		(2,418)

Other comprehensive loss	$	(1,081)	$	382	$	(699)	$	(2,785)	$	1,013	$	(1,772)

Stock Repurchases

In fiscal 2016, Griffin’s Board of Directors authorized a stock repurchase program whereby, starting on May 11, 2016, Griffin could repurchase up to $5,000 of its outstanding common stock over a twelve month period in privately negotiated transactions. The stock repurchase program expired on May 10, 2017. In fiscal 2017, prior to the expiration of the stock repurchase program, Griffin repurchased 47,173 shares of its outstanding common stock for $1,474. Including the stock repurchased in fiscal 2016, Griffin repurchased a total of 152,173 shares for $4,828 under the stock repurchase program.

Cash Dividend

Griffin did not declare a cash dividend in the 2017 or 2016 nine month periods. During the 2017 first quarter, Griffin paid $1,514 for the cash dividend declared in the 2016 fourth quarter. During the 2016 first quarter, Griffin paid $1,546 for the cash dividend declared in the 2015 fourth quarter.