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Shareholders' Equity
6 Months Ended
Jun. 30, 2017
Stockholders Equity Note [Abstract]  
Shareholders' Equity

8. Shareholders’ Equity

Stock Appreciation Rights (“SARs”)

In 2012, the Company’s Chief Executive Officer (“CEO”) and Chief Operating Officer (“COO”) agreed to give up 50% of their equity incentive compensation awards under the 1998 Stock Option and Incentive Plan for the years 2012 through 2015 in exchange for 2.9 million SARs with an exercise price of $4.00, only to be earned upon the achievement of 50% growth in pro forma earnings per share and 50% growth in pro forma EBITDA from a base year of 2011.  The grants would have expired if neither target were achieved during a six-year term.

In the first quarter of 2015, the outstanding SARs awards for the achievement of 50% growth in pro forma earnings per share vested with the Audit Committee’s approval of the Company’s 2014 financial statements. In the first quarter of 2016, the outstanding SARs awards for the Company’s achievement of over 50% growth of pro forma EBITDA vested with the Audit Committee’s approval of the Company’s 2015 financial statements.  As of June 30, 2017, no SARs had been exercised. By the end of 2015, all non-cash stock compensation expense relating to the outstanding SARs had been expensed.

Treasury Stock

Under the Company’s share repurchase plan, the Company may buy back shares of its outstanding stock either on the open market or through privately negotiated transactions subject to market conditions and trading restrictions. During the quarter ended June 30, 2017, the Company repurchased 507 thousand shares of its common stock at an average price of $15.01 per share for a total cost of $7.6 million. During the six months ended June 30, 2017, the Company repurchased 566 thousand shares of its common stock at an average price of $15.55 per share for a total cost of $8.8 million. As of June 30, 2017, the Company had $0.6 million available under its share repurchase plan authorization. Subsequent to June 30, 2017, the Company’s Board of Directors approved an additional $5.0 million authorization under the repurchase plan increasing the total authorization to $137.2 million.  

During the quarter ended July 1, 2016, the Company repurchased 1.7 million shares of its common stock at an average price of $14.73 per share for a total cost of $25.4 million. During the six months ended July 1, 2016, the Company repurchased 2.0 million shares of its common stock at an average price of $14.60 per share for a total cost of $29.6 million.    

The shares repurchased under the share repurchase plan during the quarter and six months ended June 30, 2017, do not include 21 thousand and 195 thousand shares, respectively, which the Company bought back to satisfy employee net vesting obligations for a cost of $0.4 million and $3.3 million.  During the quarter and six months ended July 1, 2016, the Company bought back 29 thousand and 284 thousand shares, respectively, at a cost of $0.4 million and $3.8 million, respectively, to satisfy employee net vesting obligations.       

On May 6, 2016, the Company’s Board of Directors approved the repurchase of 697 thousand shares of its common stock from the Company’s CEO, 732 thousand shares of its common stock from the Company’s COO, and 73 thousand shares of its common stock from the Company’s Chief Financial Officer (“CFO”) for a total of approximately 1.5 million shares at a purchase price of $14.77 per share. The transaction was approved by the Audit Committee of the Board of Directors which is comprised solely of independent directors and was effected as part of the Company’s share repurchase program.  Following the transaction, Mr. Fernandez, Mr. Dungan and Mr. Ramirez remained the beneficial owners of 11.8%, 4.9% and 0.9% shares, respectively, of the outstanding common stock.  Following the transaction, approximately $3.1 million remained available under the Company’s share repurchase program. One of the primary reasons for this transaction was to lower the Company’s weighted average shares outstanding which had increased by 11% from the first quarter of 2016 as a result of the vesting of the SARs and appreciation in share price. The repurchase reduced weighted average shares outstanding by approximately 4% and is $0.03 to $0.04 accretive on an annualized basis. Based the most recent SEC filings, including shares of Company common stock beneficially owned and shares that could be acquired upon the exercise of the SARs, Mr. Fernandez continues to be the single largest beneficial shareholder of the Company.

In reviewing and approving the transaction, the independent directors of the Board considered, among other factors, the benefits to the Company’s stockholders of this transaction such as the fact that (i) the share repurchase transaction is expected to be accretive to earnings per share, and (ii) the transaction was a unique opportunity to repurchase a large block of shares in an orderly manner. The transaction was funded from borrowings under the Company’s Revolver which was amended on May 9, 2016 in order to provide an additional $25.0 million in borrowing capacity for an aggregate amount of up to $45.0 million from time to time.   


8. Shareholders’ Equity (continued)

Dividend Program

In 2016, the Company increased the annual dividend from $0.20 per share to $0.26 per share to be paid on a semi-annual basis which resulted in aggregate dividends of $4.0 million paid to shareholders of record on July 11, 2016 and December 22, 2016, respectively. These dividends were paid from U.S. domestic sources and are accounted for as an increase to accumulated deficit. The dividend declared in December 2016 was paid in January 2017. During the quarter ended March 31, 2017, the Company increased its annual dividend to $0.30 per share to be paid on a semi-annual basis.  The first semi-annual dividends for 2017 were paid on July 10, 2017.