Shareholders' Equity

12 Months Ended

Dec. 31, 2023

Shareholders' Equity

Shareholders' Equity

7.    Shareholders’ Equity

	Years Ended December 31, 2022 and 2023
(in thousands)	Retained Earnings		Accumulated		Common Stock		Capital in excess		ESOT		Treasury Stock		Total
			Other				of par value						shareholders'
			Comprehensive										equity
			Loss
December 31, 2021	$	25,858	$	(3,908)	$	523	$	14,500	$	(258)	$	(1,349)	$	35,366
Retirement benefits adjustment		—		1,571		—		—		101		—		1,672
Stock based compensation		—		—		—		56		—		135		191
Net Loss		(2,117)		—		—		—		—		—		(2,117)
December 31, 2022	$	23,741	$	(2,337)	$	523	$	14,556	$	(157)	$	(1,214)	$	35,112
Retirement benefits adjustment		—		(52)		—		—		101		—		49
Stock based compensation		—		—		2		61		—		57		120
Net Loss		(10,787)		—		—		—		—		—		(10,787)
December 31, 2023	$	12,954	$	(2,389)	$	525	$	14,617	$	(56)	$	(1,157)	$	24,494

Earnings Per Share

Basic earnings per share is computed by dividing net income (loss) by the weighted average number of shares outstanding during the period. The weighted average number of common shares outstanding does not include any potentially dilutive securities or any unvested restricted shares of common stock. These unvested restricted shares, although classified as issued and outstanding, are considered forfeitable until the restrictions lapse and will not be included in the basic EPS calculation until the shares are vested. Diluted earnings per share is computed by dividing net income (loss) by the weighted average number of shares outstanding during the period plus the number of shares of common stock that would be issued assuming all contingently issuable shares having a dilutive effect on the earnings per share that were outstanding for the period. The dilutive effect of unvested restrictive stock is determined using the treasury stock method.  However, if the assumed common shares are anti-dilutive, basic and diluted earnings per share are the same. As a result of the net losses generated in 2023, all outstanding common shares would be antidilutive.  As of the year ended December 31, 2023 and 2022, there were 24,110 and 27,010 common shares, respectively, that could potentially dilute basic earnings per share in the future. Incremental shares from assumed conversions are calculated as the number of shares that would be issued, net of the number of shares that could be purchased in the marketplace with the cash received upon stock option exercise.

	Years Ended December 31,
(in thousands except per share data)	2023		2022
Loss from continuing operations	$	(3,547)	$	(2,100)
Loss from discontinued operation, net of tax		(7,240)		(17)
Net loss	$	(10,787)	$	(2,117)
Weighted average common shares outstanding (basic)		2,470		2,422
Unvested restricted stock		24		27
Weighted average common shares outstanding (diluted)		2,494		2,449
Basic and diluted loss per share		—		—
Continuing operations	$	(1.44)	$	(0.87)
Discontinued operation		(2.93)		(0.01)
Basic and diluted loss per share	$	(4.37)	$	(0.88)

Common Stock Buyback

In January 2006, the Company’s Board of Directors (Board) authorized the purchase of up to 450,000 shares of its common stock in the open market or in privately negotiated transactions. As of December 31, 2023, the Company has purchased 360,615 shares and

there remain 89,385 shares available to purchase under this program. There were no shares purchased by the Company in 2023 or 2022. In March 2024, the Board formally approved the termination of the share repurchase authorization under this program.

Stock-Based Compensation

The Company’s 2022 Equity Incentive Plan (“the Equity Plan”) was approved by the shareholders at the 2022 Annual Meeting of Shareholders. The Equity Plan allows for various types of awards (rights) to be granted, including incentive stock options, non-qualified stock options, stock appreciation rights, restricted awards, performance share awards, cash awards, or any other equity-based awards. The total number of awards under the Equity Plan are limited to a maximum of 200,000 authorized shares.

The Company’s executive compensation program established by the Board of Directors determines the type of awards available to the Company’s executives. The program consists of an annual (cash) incentive plan (“AIP”) and a long-term (equity) incentive plan (“LTIP”). The LTIP includes service-based awards that vest annually over three years, and performance-based awards that cliff-vest based on the achievement of a financial metric over a specific three-year time period. On December 13, 2023, 5,793 service-based (restricted) shares were granted to Company executives under the 2023-2025 LTIP Stock Award (“the 2023-2025 Award”). Additionally, on May 1, 2023, the Board of Directors granted 1,759 service-based restricted shares in connection with the hiring of an executive officer. Those shares vest after a one-year service period.

The Company’s director compensation policy provides that non-employee directors receive a portion of their annual retainer in the form of shares under the Equity Plan. These shares vest quarterly over a twelve-month service period, have voting rights, and any dividends declared and paid during the restricted period accrue and are paid upon vesting. The aggregate amount of expense to the Company, measured based on the grant date fair value, is recognized over the requisite service period. An aggregate of 10,410 shares were issued on June 9, 2023 with a grant date fair value of approximately $125,000.

A summary of the status of restricted share awards granted under all employee plans is presented below:

		Weighted Average Grant
Restricted Share Activity:	Shares	Date Fair Value
Unvested at December 31, 2021	6,576	$	7.60
Granted in 2022	32,921	$	11.07
Vested in 2022	12,487	$	9.22
Unvested at December 31, 2022	27,010	$	11.09
Granted in 2023	18,687	$	11.74
Vested in 2023	23,249	$	11.26
Unvested at December 31, 2023	22,448	$	11.45

Of the 23,249 shares vested in 2023, 1,748 shares were withheld by the Company for approximately $22,000 to sastisfy statutory minimum withholding tax requirements as permitted under the Equity Plan.

Included in the years ended December 31, 2023 and 2022 is approximately $120,000 and $191,000, respectively, of stock-based compensation expense related to the restricted share awards. The Company has approximately $276,000 of stock-based compensation expense related to unvested service-based shares to be recognized over the requisite service periods.

Performance share awards represent a right to receive a certain number of shares of common stock based on the achievement of corporate performance goals and continued employment during the performance period.  Performance share awards granted to executives vest at the end of a three-year period and vested and issued amounts may range from 0% to a maximum of 200% of targeted amounts depending on the achievement of performance measures at the end of a three-year period. The expected cost of the shares is based on the Company’s assessment of the probability that the performance condition will be achieved. Any related compensation expense is recognized when the probability of the event is likely and performance criteria are met. Forfeitures are recognized as they occur. These awards may be settled in cash or shares of common stock at the election of the Company on the date of grant. It is the Company’s intent to settle these awards with shares of common stock.

On December 13, 2023, 17,381 performance-based shares were granted to Company executives under the 2023-2025 Award at a grant date fair value of $11.50 per share. These shares are not issued until the performance period is complete and the metrics are achieved. The maximum potential stock-based compensation expense for these performance-based shares under the 2023-2025 Award is approximately $400,000. However, no expense has been recorded in 2023 due to the low probability of achievement.