Shareholder's Equity

3 Months Ended

May 31, 2014

Shareholder's Equity

Note 8. – Shareholder’s Equity

Earnings (Loss) Per Share

Basic earnings (loss) per share is computed by dividing income or loss available to common shareholders by the weighted average number of common shares outstanding during each period. Shares issued during the period are weighted for the portion of the period that they were outstanding. Diluted earnings (loss) per share is calculated in a manner consistent with that of basic earnings (loss) per share while giving effect to all potentially dilutive common shares that were outstanding during the period.

The following table sets forth the computation of basic and diluted earnings (loss) per share for the three-month periods ended May 31, 2014 and 2013 (in thousands, except per share data):

				Weighted
				Average		Earnings (Loss)
	Net			Common Shares		Per
	Income (Loss)			Outstanding		Share
Three months ended May 31, 2014
Basic	$	139			6,850	$	0.02
Effect of dilution:
Options		—			25		—
Diluted	$	139			6,875	$	0.02
Three months ended May 31, 2013
Basic-continuing operations	$	(451	)		7,584	$	(0.06	)
Basic-discontinued operations		215					0.03
Effect of dilution:
Diluted-continuing operations		—
Diluted-discontinued operations		—			40		—
Diluted	$	(236	)		7,624	$	(0.03	)

Stock-Based Compensation Plans

For the three-month period ended May 31, 2014 and 2013, the Company recognized general and administrative expenses of $2.2 thousand and $1.8 thousand, respectively, related to share-based compensation. The liability for the share-based compensation recognized is presented in the consolidated balance sheet as part of additional paid in capital. As of May 31, 2014, total unrecognized compensation costs related to stock options granted was $6.4 thousand. The unrecognized stock option compensation cost is expected to be recognized over a period of approximately 1 year.

The Company estimates the fair value of stock options granted using the Black-Scholes option-pricing model, which requires the Company to estimate the expected term of the stock option grants and expected future stock price volatility over the term. The term represents the expected period of time the Company believes the options will remain outstanding based on historical information. Estimates of expected future stock price volatility are based on the historic volatility of the Company’s common stock, which represents the standard deviation of the differences in the weekly stock closing price, adjusted for dividends and stock splits.

No options were granted during the three month periods ended May 31, 2014 and 2013.

Stock Repurchase Program

The Company has a stock repurchase program, pursuant to which it was originally authorized to repurchase up to 1,632,500 shares of the Company’s common stock in the open market. On January 20, 2014, the Board of Directors of the Company approved a one time continuation of the stock repurchase program, and authorized the Company to repurchase up to 1,500,000 additional shares of the Company’s common stock, depending on the market price of the shares. There is no minimum number of shares required to be repurchased under the program. The Company did purchase 524,694 shares in the quarter ended May 31, 2014. For the quarter ended May 31, 2013, the Company did not purchase any shares. Under the Company’s stock repurchase program, an additional 1,107,815 shares remain authorized to be repurchased by the Company at May 31, 2014.