Stock-Based Compensation Expense
As of February 23, 2019, there was $9.3 million of total unrecognized compensation cost related to unvested employee stock options
granted. That cost is expected to be recognized over a weighted-average period of 36 months. Stock-based compensation expense included in selling, general and administrative expenses was $1.9 million and $1.4 million for the three
months ended February 23, 2019 and February 24, 2018, respectively, and $5.0 million and $4.5 million for the nine months ended February 23, 2019 and February 24, 2018, respectively. These amounts consisted of
stock-based compensation expense related to employee stock options, employee stock purchases made via the ESPP and restricted stock awards. In addition, commencing in the third quarter of fiscal 2018, stock-based compensation expense includes
expense related to stock units credited under the Directors Deferred Compensation Plan. For the three and nine months ended February 23, 2019, this expense was $83,000 and $157,000, respectively, and $18,000 for both the three and nine months
ended February 24, 2018. As of February 23, 2019, there were 77,789 stock units not vested, with approximately $1.2 million of remaining unrecognized compensation cost. There were no capitalized share-based compensation costs during
the nine months ended February 23, 2019 or February 24, 2018.
The Company granted 21,537 shares of restricted stock during the
three and nine months ended February 23, 2019 and granted 37,778 shares and 117,588 of restricted stock during the three and nine months ended February 24, 2018, respectively. Stock-based compensation expense for restricted stock awards
was $0.4 million for both the three months ended February 23, 2019 and February 24, 2018, and $1.2 million and $1.0 million for the nine months ended February 23, 2019 and February 24, 2018, respectively. As of
February 23, 2019, there were 158,926 unvested restricted shares, with approximately $2.2 million of remaining unrecognized compensation cost.
The Company recognizes compensation expense for only the portion of stock options and restricted stock that is expected to vest, rather than
recording forfeitures when they occur. If the actual number of forfeitures differs from that estimated by management, additional adjustments to compensation expense may be required in future periods.
Employee Stock Purchase Plan
The ESPP allows qualified employees (as defined in the ESPP) to purchase designated shares of the Companys common stock at a price equal
to 85% of the lesser of the fair market value of common stock at the beginning or end of each semi-annual stock purchase period. The ESPPs term expires October 16, 2024. A total of 5,900,000 shares of common stock may be issued under
the ESPP. The Company issued 359,000 and 338,000 shares of common stock pursuant to the ESPP during the nine months ended February 23, 2019 and the year ended May 26, 2018, respectively. There were 221,000 shares of common stock
available for issuance under the ESPP as of February 23, 2019.
10. Segment Information and Enterprise Reporting
The Company discloses information regarding operations outside of the U.S. The Company operates as one segment. The accounting policies
for the domestic and international operations are the same as those described in Note 2
Summary of Significant Accounting Policies
in the Notes to Consolidated Financial Statements included in the Companys Annual Report on
Form
10-K
for the fiscal year ended May 26, 2018. Summarized information regarding the Companys domestic and international operations is shown in the following table (amounts in thousands):
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Revenue for the
Three Months Ended
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Revenue for the
Nine Months Ended
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Long-Lived Assets (1)
as of
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February 23,
2019
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February 24,
2018
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February 23,
2019
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February 24,
2018
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February 23,
2019
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May 26,
2018
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United States
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$
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142,409
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$
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134,334
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$
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432,539
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$
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366,902
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$
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200,057
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$
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198,280
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International
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37,089
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38,080
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114,316
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103,436
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32,410
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34,614
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Total
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$
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179,498
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$
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172,414
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$
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546,855
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$
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470,338
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$
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232,467
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$
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232,894
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(1)
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Long-lived assets are comprised of goodwill, intangible assets and property and equipment.
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11. Legal Proceedings
The Company is involved in certain legal matters arising in the ordinary course of business. In the opinion of management, all such matters, if
disposed of unfavorably, would not have a material adverse effect on the Companys financial position, cash flows or results of operations.
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