Equity

12 Months Ended

Aug. 31, 2023

Equity [Abstract]

Equity

Note 15 — Equity

Stock Incentive Plan

The 2021 Stock Incentive Plan was approved by shareholders on January 6, 2021. The new plan replaced the 2014 Amended and Restated Stock Incentive Plan, which was amended and restated as the 2017 Amended and Restated Stock Incentive Plan on October 24, 2017 and approved by shareholders on January 5, 2018. The 2021 Stock Incentive Plan provides for the grant of incentive stock options, non-statutory stock options, restricted shares, restricted stock units and stock appreciation rights. In addition to the 1.5 million shares reserved for issuance under the 2021 Stock Incentive Plan, up to 0.5 million shares previously reserved for issuance, but not issued or subject to outstanding awards, are available for issuance under the 2021 Stock Incentive Plan, and up to 0.9 million shares that were subject to outstanding awards under the 2017 Amended and Restated Stock Incentive Plan as of the effective date of the 2021 Stock Incentive Plan will also become available for issuance under the 2021 Stock Incentive Plan to the extent such shares are not issued and cease to be subject to such awards following the effective date of the 2021 Stock Incentive Plan.

On August 31, 2023, there were 1.2 million shares available for grant compared to 1.4 million and 1.6 million shares available for grant as of the years ended August 31, 2022 and 2021, respectively. There are no stock options or stock appreciation rights outstanding as of August 31, 2023. The Company currently grants restricted stock units. Shares associated with restricted stock unit awards are not considered legally outstanding shares of common stock until they are issued following vesting. Restricted stock unit awards, including performance-based awards, are entitled to participate in dividends.

During the years ended August 31, 2023, 2022, and 2021, the Company awarded restricted share and restricted stock unit grants totaling 0.5 million, 0.4 million, and 0.5 million shares, respectively, which include performance-based grants and dividend equivalent rights. For performance-based awards granted in 2022 and 2021, the performance metrics included an earnings before interest, taxes, depreciation and amortization (EBITDA) metric, weighted 80%, and a return on invested capital (ROIC) metric, weighted 20%. For performance-based awards granted in 2023, the performance metrics included the Company’s total shareholder return relative to a designated peer group (Relative TSR), weighted 20%, in addition to an EBITDA metric, weighted 60%, and an ROIC metric, weighted 20%. Performance-based award share payouts depend on the extent to which the performance goal has been achieved. The number of shares that a participant receives is equal to the award granted multiplied by a payout factor, which ranges from 0% to a maximum of 200%.

The fair value of awards granted, including performance-based grants that did not contain a Relative TSR market condition, was determined based on the market closing price of the underlying shares on the date of grant. For the awards granted with a Relative TSR market condition, the Company estimates the fair value using a Monte-Carlo simulation model utilizing the following key assumptions for such awards granted in October 2022:

Expected share price volatility (GBX)	54.0	%
Risk-free rate of return	4.4	%

The fair value of awards granted was $12.4 million, $18.7 million, and $18.0 million for the years ended August 31, 2023, 2022 and 2021, respectively. The grant date fair value of stock awarded under restricted share grants and restricted stock unit grants is amortized as compensation expense over the vesting period of one to three years. Compensation expense recognized related to restricted share grants and restricted stock unit grants for the years ended August 31, 2023, 2022 and 2021 was $12.1 million, $15.5 million, and $14.7 million, respectively, and was recorded in Selling and administrative and Cost of revenue on the Consolidated Statements of Income. Unamortized compensation cost related to restricted stock unit grants was $11.8 million as of August 31, 2023, which is expected to be recognized over a weighted average period of approximately two years.

During the year ended August 31, 2023, a total of 0.3 million restricted stock units vested, including shares that were withheld on behalf of employees to satisfy the minimum statutory tax withholding requirements. The following table summarizes the activity for the Company’s restricted share and restricted stock unit grants, including performance-based grants, under the 2021 Stock Incentive Plan and the 2017 Amended and Restated Stock Incentive Plan:

(in thousands, except per unit amounts)	Number of Units			Weighted Average Grant Date Fair Value
Outstanding as of August 31, 2022		1,042		$	37.90
Granted		450		$	27.65
Vested		(311	)	$	39.32
Forfeited		(209	)	$	32.96
Outstanding as of August 31, 2023		972		$	33.75

Share Repurchase Program

The Board of Directors has authorized the Company to repurchase in aggregate up to $100.0 million of the Company’s common stock. The program may be modified, suspended, or discontinued at any time without prior notice. Under the share repurchase program, shares of common stock may be purchased from time to time on the open market or through privately negotiated transactions. The timing and amount of purchases is based upon market conditions, securities law limitations and other factors. The share repurchase program does not obligate the Company to acquire any specific number of shares in any period. The prior authorization was set to expire on January 31, 2023. On January 5, 2023, the Board of Directors authorized the extension of the existing share repurchase program to January 31, 2025.

During the year ended August 31, 2023, the Company purchased a total of 1.9 million shares for $56.9 million, of which 1.8 million shares for $53.6 million were purchased under the current authorization of the share repurchase program. For shares repurchased subsequent to December 31, 2022, the Company has accrued excise tax of $0.5 million to Additional paid-in capital for the year ended August 31, 2023. As of August 31, 2023, the amount remaining for repurchase under the share repurchase program was $46.4 million. There were no shares repurchased under the share repurchase program during the years ended August 31, 2022 and 2021.

Other Share Repurchases

The Company repurchased $20.0 million of its common stock during 2021. These shares were repurchased, in privately negotiated transactions, as part of the Company’s debt refinancing in April 2021 and were not associated with the Company’s publicly announced share repurchase program.