Share-Based Compensation

12 Months Ended

Jun. 30, 2021

Share-based Payment Arrangement, Noncash Expense [Abstract]

Share-Based Compensation Plans

The Company has awards outstanding from two share-based compensation plans (the 2002 Long-Term Incentive Plan and the 2013 Long-Term Incentive Plan). Awards are currently only being granted under the 2013 Long-Term Incentive Plan. As of June 30, 2021, there were 879,660 shares available for future grant under the 2013 Long-Term Incentive Plan. All of the Company’s share-based compensation plans are shareholder approved, and it is the Company’s belief that such awards align the interests of its employees and directors with those of its shareholders. Under the plans, the Company is authorized to award officers, employees, consultants and non-employee members of the Board of Directors various share-based payment awards, including options to purchase common stock and restricted stock. Restricted stock can be in the form of a restricted stock award ("RSA"), restricted stock unit ("RSU") or a performance unit ("PU"). An RSA is common stock that is subject to risk of forfeiture or other restrictions that lapse upon satisfaction of specified conditions. An RSU represents the right to receive shares of common stock in the future with the right to future delivery of the shares subject to risk of forfeiture or other restrictions that lapse upon satisfaction of specified conditions.

The Company accounts for its share-based compensation awards in accordance with ASC 718, Stock Compensation, which requires all share-based compensation to be recognized in the income statement based on fair value and applies to all awards granted, modified, canceled or repurchased after the effective date. Total share-based compensation included as a component of selling, general and administrative expenses in our Consolidated Income Statements was as follows:


	Fiscal Year Ended June 30,
	2021		2020		2019
	(in thousands)
Share-based compensation related to:
Equity classified stock options	$	1,332	$	508	$	868
Equity classified restricted stock	6,707		4,970		5,177
Total share-based compensation	$	8,039	$	5,478	$	6,045

Stock Options

During the fiscal year ended June 30, 2021, the Company granted stock options for 640,782 shares. The Company did not grant stock options during the fiscal year ended June 30, 2020. Stock options granted in fiscal year ended June 30, 2021 and 2019 vest annually over 3 years and have a 10-year contractual life. These options were granted with an exercise price that is no less than 100% of the fair market value of the underlying shares on the date of the grant.

The fair value of each option (for purposes of calculation of share-based compensation) was estimated on the date of grant using the Black-Scholes-Merton option pricing formula that uses assumptions determined at the date of grant. Use of this option pricing model requires the input of subjective assumptions. These assumptions include estimating the length of time employees will retain their vested stock options before exercising them ("expected term"), the estimated volatility of the Company's common stock price over the expected term ("expected volatility") and the number of options that will ultimately not complete

their vesting requirements ("forfeitures"). Changes in the subjective assumptions can materially affect the estimate of the fair value of share-based compensation and, consequently, the related amount recognized in the Consolidated Income Statements.

The Company used the following weighted-average assumptions for the options granted in fiscal years ended June 30, 2021 and 2019:


	Fiscal Year Ended June 30,
	2021			2019
Expected term	5 years			4 years
Expected volatility	42.78		%	32.93		%
Risk-free interest rate	0.36		%	2.84		%
Dividend yield	0.00		%	0.00		%
Weighted-average fair value per option	$	9.01		$	11.86

The weighted-average expected term of the options represents the period of time the options are expected to be outstanding based on historical trends and behaviors of certain groups and individuals receiving these awards. The expected volatility is predominantly based on the historical volatility of our common stock for a period approximating the expected term. The risk-free interest rate reflects the interest rate at grant date on zero-coupon United States governmental bonds that have a remaining life similar to the expected option term. The dividend yield assumption was based on the Company's dividend payment history and management's expectations of future dividend payments.

A summary of activity under our stock option plans is presented below:


	Fiscal Year Ended June 30, 2021
	Options	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life	Aggregate Intrinsic Value
Outstanding, beginning of year	816,297	$	37.99
Granted during the period	640,782	25.09
Exercised during the period	(14,725)	29.80
Canceled, forfeited, or expired during the period	(206,785)	35.35
Outstanding, end of year	1,235,569	31.84		6.78	$	1,917,584
Vested and expected to vest at June 30, 2021	1,218,365	31.95		6.74	$	1,852,340
Exercisable, end of year	601,987	$	38.94	4.03	$	—

The aggregate intrinsic value was calculated using the market price of the Company's stock on June 30, 2021, and the exercise price for only those options that have an exercise price that is less than the market price of our stock. This amount will change as the market price per share changes. The aggregate intrinsic value of options exercised during the fiscal years ended June 30, 2021, 2020 and 2019 was less than $0.1 million, $0.2 million and $0.4 million, respectively.

A summary of the status of the Company’s shares subject to unvested options is presented below:


	Fiscal Year Ended June 30, 2021
	Options	Weighted Average Exercise Price		Weighted Average Grant Date Fair Value
Unvested, beginning of year	34,914	$	34.19	$	10.58
Granted	640,782	25.09		9.01
Vested	(32,371)	34.17		10.58
Canceled or forfeited	(9,743)	26.89		8.84
Unvested, end of year	633,582	$	25.10	$	9.02

As of June 30, 2021, there was approximately $4.5 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the plans in the form of stock options. This cost is expected to be recognized over a weighted-average period of 1.37 years. The total fair value of options vested during the fiscal years ended June 30, 2021, 2020 and 2019 is $0.3 million, $0.7 million and $1.1 million, respectively. The following table summarizes information about stock options outstanding and exercisable as of June 30, 2021:


	Options Outstanding				Options Exercisable
Range of Exercise Prices	Shares Outstanding	Weighted Average Remaining Contractual Life	Weighted Average Exercise Price		Number Exercisable	Weighted Average Exercise Price


$22.27 - $26.38	490,757	9.38	24.51		—	—
$26.38 - $30.49	142,825	9.40	27.14		—	—
$30.49 - $34.60	113,869	5.08	34.11		113,869	34.11
$34.60 - $38.71	208,669	4.84	37.71		208,669	37.71
$38.71 - $42.82	279,449	3.02	41.82		279,449	41.83
	1,235,569	6.74	$	31.84	601,987	$	38.94

The Company issues shares to satisfy the exercise of options.

Restricted Stock

Grants of Restricted Shares

During the fiscal year ended June 30, 2021, the Company granted 419,227 shares of restricted stock to employees and non-employee directors, all of which were issued in the form of RSUs:

Fiscal Year Ended June 30, 2021

Shares
granted

Date granted

Grant date
fair value

Vesting period

Employees

Certain employees based on performance

224,409

November 12, 2020

24.26

Annually over 3 years

Certain employees based on performance

123,636

November 19, 2020

24.68

Annually over 3 years

Certain employee based upon hire

27,482

March 1, 2021

29.11

Annually over 3 years

Non-Employee Directors

Certain Directors

43,700

November 19, 2020

24.68

6 months

A summary of the status of the Company’s outstanding restricted stock is presented below:


	Fiscal Year Ended June 30, 2021
	Shares	Weighted-Average Grant Date Fair Value
Outstanding, beginning of year	438,456	$	35.98
Granted during the period	419,227	24.75

Vested during the period	(163,146)	31.89
Cancelled, forfeited, or expired during the period	(156,554)	35.47
Outstanding, end of year	537,983	$	27.12

As of June 30, 2021, there was approximately $10.8 million of unrecognized compensation cost related to unvested restricted stock awards and restricted stock units granted, which is expected to be recognized over a weighted-average period of 1.21 years. The Company withheld 39,704 shares for income taxes during the fiscal year ended June 30, 2021.