Stock-Based Compensation (Tables)

6 Months Ended

Jan. 31, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Summary of Stock-based Awards Outstanding by Award Type

As of January 31, 2015, the following stock-based awards, by award type, were outstanding:

	January 31, 2015
Stock options	2,234,733
Performance shares	173,341
RSUs and restricted stock	50,675
Share units	8,503
Total	2,467,252

Stock-based compensation for awards detailing where recorded in Condensed Consolidated Statement of Operations

Stock-based compensation for awards issued is reflected in the following line items in our Condensed Consolidated Statements of Operations:

	Three months ended January 31,					Six months ended January 31,
	2015			2014		2015		2014
Cost of sales	$	66,000		84,000		133,000		137,000
Selling, general and administrative expenses	856,000			832,000		1,958,000		1,603,000
Research and development expenses	139,000			153,000		307,000		276,000
Stock-based compensation expense before income tax benefit	1,061,000			1,069,000		2,398,000		2,016,000
Estimated income tax benefit	(383,000		)	(403,000	)	(851,000	)	(749,000	)
Net stock-based compensation expense	$	678,000		666,000		1,547,000		1,267,000

Summary of net stock-based compensation expense by award type

Stock-based compensation expense, by award type, is summarized as follows:

	Three months ended January 31,					Six months ended January 31,
	2015			2014		2015		2014
Stock options	$	731,000		719,000		1,489,000		1,367,000
Performance shares	167,000			230,000		575,000		407,000
ESPP	53,000			43,000		106,000		88,000
RSUs and restricted stock	96,000			68,000		200,000		136,000
Share units	14,000			6,000		28,000		12,000
Equity-classified stock-based compensation expense	1,061,000			1,066,000		2,398,000		2,010,000
Liability-classified stock-based compensation expense (SARs)	—			3,000		—		6,000
Stock-based compensation expense before income tax benefit	1,061,000			1,069,000		2,398,000		2,016,000
Estimated income tax benefit	(383,000		)	(403,000	)	(851,000	)	(749,000	)
Net stock-based compensation expense	$	678,000		666,000		1,547,000		1,267,000

Components of actual Income tax benefit recognized for tax deductions relating to settlement of stock-based awards

The following table reconciles the actual income tax benefit recognized for tax deductions relating to the settlement of stock-based awards to the excess income tax benefit reported as a cash flow from financing activities in our Condensed Consolidated Statements of Cash Flows:

	Six months ended January 31,
	2015		2014
Actual income tax benefit recorded for the tax deductions relating to the settlement of stock-based awards	$	941,000	174,000
Less: Tax benefit initially recognized on settled stock-based awards vesting subsequent to the adoption of accounting standards that require us to expense stock-based awards	803,000		145,000
Excess income tax benefit recorded as an increase to additional paid-in capital	138,000		29,000
Less: Tax benefit initially disclosed but not previously recognized on settled equity-classified stock-based awards vesting prior to the adoption of accounting standards that require us to expense stock-based awards	—		13,000
Excess income tax benefit from settled equity-classified stock-based awards reported as a cash flow from financing activities in our Condensed Consolidated Statements of Cash Flows	$	138,000	16,000

Summary of the Plan's activity relating to stock options

The following table summarizes the Plan's activity during the six months ended January 31, 2015:

	Awards (in Shares)		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Outstanding at July 31, 2014	2,132,896		$	28.17
Granted	253,000		33.94
Expired/canceled	(9,900	)	29.10
Exercised	(146,963	)	26.43
Outstanding at October 31, 2014	2,229,033		28.94
Granted	154,025		33.76
Expired/canceled	(10,800	)	29.20
Exercised	(137,525	)	28.06
Outstanding at January 31, 2015	2,234,733		$	29.32	7.23	$	8,645,000
Exercisable at January 31, 2015	722,743		$	28.24	5.19	$	3,469,000
Vested and expected to vest at January 31, 2015	2,063,199		$	29.29	7.16	$	7,745,000

Certain weighted average assumptions used to estimate the fair value of stock-based awards

The estimated per-share weighted average grant-date fair value of stock options granted during the three and six months ended January 31, 2015 was $6.46 and $6.14, respectively, and $6.26 and $5.50, respectively, during the three and six months ended January 31, 2014, which was determined using the Black-Scholes option pricing model, and included the following weighted average assumptions:

	Three months ended January 31,				Six months ended January 31,
	2015		2014		2015		2014
Expected dividend yield	3.55	%	3.84	%	3.54	%	4.03	%
Expected volatility	29.98	%	32.00	%	28.13	%	32.85	%
Risk-free interest rate	1.36	%	1.50	%	1.61	%	1.39	%
Expected life (years)	5.48		5.31		5.45		5.44

Summary of the Plan's activity relating to performance shares, RSUs, restricted stock and share units

The following table summarizes the Plan's activity relating to performance shares, RSUs, restricted stock and share units:

	Awards (in Shares)		Weighted Average Grant Date Fair Value		Aggregate Intrinsic Value
Outstanding at July 31, 2014	180,097		$	26.20
Granted	60,378		33.97
Converted to common stock	(13,376	)	27.75
Forfeited	(248	)	31.44
Outstanding at October 31, 2014	226,851		28.17
Granted	5,916		33.94
Converted to common stock	—		—
Forfeited	(248	)	31.44
Outstanding at January 31, 2015	232,519		$	28.31	$	7,682,000
Vested at January 31, 2015	23,308		$	27.09	$	770,000
Vested and expected to vest at January 31, 2015	203,485		$	28.31	$	6,723,000