XML 31 R20.htm IDEA: XBRL DOCUMENT

Note 13 - Stock-based Compensation

3 Months Ended

Jun. 27, 2021

Share-based Payment Arrangement [Text Block]

Note 13 – Stock-based Compensation

The Company has two incentive stock plans, the 2006 Omnibus Incentive Plan (the “2006 Plan”) and the 2014 Omnibus Equity Compensation Plan (the “2014 Plan”). As a result of the approval of the 2014 Plan by the Company’s stockholders at the Company’s 2014 annual meeting, grants may no longer be issued under the 2006 Plan. At June 27, 2021, 49 shares of the Company’s common stock were available for future issuance under the 2014 Plan, which may be issued from authorized and unissued shares of the Company’s common stock or treasury shares. During the three-month periods ended June 27, 2021 and June 28, 2020, the Company recorded stock-based compensation expense of $132,000 and $86,000, respectively. The Company records the compensation expense associated with stock-based awards granted to individuals in the same expense classifications as the cash compensation paid to those same individuals. No stock-based compensation costs were capitalized as part of the cost of an asset as of June 27, 2021.

Stock Options: The following table represents stock option activity for the three-month periods ended June 27, 2021 and June 28, 2020:

	Three-Month Periods Ended
	June 27, 2021					June 28, 2020
	Weighted-					Weighted-
	Average		Number of			Average		Number of
	Exercise		Options			Exercise		Options
	Price		Outstanding			Price		Outstanding
Outstanding at Beginning of Period	$	6.84		567,500		$	6.86		517,500
Granted		7.98		158,000			4.92		110,000
Exercised		4.84		(30,000	)		-		-
Outstanding at End of Period		7.18		695,500			6.52		627,500
Exercisable at End of Period		7.19		407,500			7.15		455,000

As of June 27, 2021, the intrinsic value of the outstanding and exercisable stock options was $527,000 and $358,000, respectively. The intrinsic value of the stock options exercised during the three-month period ended June 27, 2021 was $89,000. The Company did not receive any cash from the exercise of stock options during the three-month period ended June 27, 2021. Upon the exercise of stock options, participants may choose to surrender to the Company those shares from the option exercise necessary to satisfy the exercise amount and their income tax withholding obligations that arise from the option exercise. The effect on the cash flow of the Company from these “cashless” option exercises is that the Company remits cash on behalf of the participant to satisfy his or her income tax withholding obligations. The Company used cash to remit the required income tax withholding amounts from “cashless” option exercises of $34,000 during the three-month periods ended June 27, 2021. There were no stock options exercised during the three-month period ended June 28, 2020.

Stock-based compensation is calculated according to FASB ASC Topic 718, Compensation – Stock Compensation, which requires stock-based compensation to be accounted for using a fair-value-based measurement. To determine the estimated fair value of stock options granted, the Company uses the Black-Scholes-Merton valuation formula, which is a closed-form model that uses an equation to estimate fair value. The following table sets forth the assumptions used to determine the fair value of the non-qualified stock options that were awarded to certain employees during the three-month periods ended June 27, 2021 and June 28, 2020, which options vest over a two-year period, assuming continued service.

	Three-Month Periods Ended
	June 27, 2021			June 28, 2020
Number of options issued		158,000			110,000
Grant date	June 9, 2021			June 10, 2020
Dividend yield		4.00	%		6.50	%
Expected volatility		35.00	%		30.00	%
Risk free interest rate		0.530	%		0.275	%
Contractual term (years)		10.00			10.00
Expected term (years)		4.00			4.00
Forfeiture rate		5.00	%		5.00	%
Exercise price (grant-date closing price) per option	$	7.98		$	4.92
Fair value per option	$	1.61		$	0.56

During the three-month periods ended June 27, 2021 and June 28, 2020, the Company classified its compensation expense associated with stock options within the accompanying unaudited condensed consolidated statements of income as follows (in thousands):

	Three-Month Period Ended June 27, 2021						Three-Month Period Ended June 28, 2020
	Cost of		Marketing &				Cost of		Marketing &
	Products		Administrative		Total		Products		Administrative		Total
Options Granted in Fiscal Year	Sold		Expenses		Expense		Sold		Expenses		Expense
2019	$	-	$	-	$	-	$	3	$	3	$	6
2020		3		4		7		3		5		8
2021		4		16		20		-		1		1
2022		2		4		6		-		-		-

Total stock option compensation	$	9	$	24	$	33	$	6	$	9	$	15

As of June 27, 2021, total unrecognized stock option compensation expense amounted to $352,000, which will be recognized as the underlying stock options vest over a weighted-average period of 14.9 months. The amount of future stock option compensation expense could be affected by any future stock option grants and by the separation from the Company of any individual who has received stock options that are unvested as of such individual’s separation date.

Non-vested Stock Granted to Non-employee Directors: The following shares of non-vested stock were granted to the Company’s non-employee directors:

Number of Shares	Fair Value per Share		Grant Date
41,452	$	5.79	August 12, 2020
46,512		5.16	August 14, 2019
28,000		5.43	August 8, 2018

These shares vest over a two-year period, assuming continued service. The fair value of the non-vested stock granted to the Company’s non-employee directors was based on the closing price of the Company’s common stock on the date of each grant.

Non-vested Stock Granted to Employees: The following shares of non-vested stock were granted to certain of the Company’s employees:

Number of Shares	Fair Value per Share		Grant Date	Vesting Date
25,000	$	5.86	January 18, 2019	January 18, 2021
20,000		4.92	June 10, 2020	June 10, 2022
10,000		7.60	February 22, 2021	February 22, 2023
25,000		7.98	June 9, 2021	June 9, 2022

During the three-month periods ended June 27, 2021 and June 28, 2020, the Company recorded compensation expense associated with stock grants, which is included in marketing and administrative expenses in the accompanying unaudited condensed consolidated statements of income, as follows (in thousands):

	Three-Month Period Ended June 27, 2021						Three-Month Period Ended June 28, 2020
			Non-employee		Total				Non-employee		Total
Stock Granted in Fiscal Year	Employees		Directors		Expense		Employees		Directors		Expense
2019	$	-	$	-	$	-	$	18	$	19	$	37
2020		-		30		30		-		30		30
2021		22		30		52		4		-		4
2022		17		-		17		-		-		-

Total stock grant compensation	$	39	$	60	$	99	$	22	$	49	$	71

As of June 27, 2021, total unrecognized compensation expense related to the Company’s non-vested stock grants amounted to $431,000, which will be recognized over the respective vesting terms associated with each block of non-vested stock indicated above, such grants having an aggregate weighted-average vesting term of 7.7 months. The amount of future compensation expense related to the Company’s non-vested stock grants could be affected by any future non-vested stock grants and by the separation from the Company of any individual who has non-vested stock grants as of such individual’s separation date.