Stock-Based Compensation

9 Months Ended

Dec. 31, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

9. STOCK-BASED COMPENSATION

ADS has several programs for stock-based payments to employees and directors, including stock options and restricted stock. Equity-classified restricted stock awards are measured based on the grant-date estimated fair value of each award. Liability-classified stock option arere-measured at fair value at each reporting date until the date of settlement, and the pro-rata vested portion of the award is recognized as a liability. The Company accounts for all restricted stock granted to directors as equity-classified awards. The Company recognized stock-based compensation expense (benefit) in the following line items of the Condensed Consolidated Statements of Operations for the three and nine month periods ended December 31, 2016 and 2015:

	Three Months Ended December 31,						Nine Months Ended December 31,
	2016			2015			2016			2015
	(in thousands)
Component of income before income taxes:
Cost of goods sold	$	(40	)	$	(200	)	$	(40	)	$	(200	)
Selling expenses		(70	)		(300	)		130			(300	)
General and administrative expenses		(3,303	)		(4,706	)		2,609			(2,494	)
Total stock-based compensation expense	$	(3,413	)	$	(5,206	)	$	2,699		$	(2,994	)

When stock options are exercised, the liability is reclassified to additional paid in capital at fair value. The proceeds from the exercise are also recorded as additional paid in capital.

Stock Options- Our 2000 stock option plan (“2000 Plan”) provides for the issuance of statutory and non-statutory stock options to management based upon the discretion of the Board of Directors. The plan generally provides for grants with the exercise price equal to fair value on the date of grant, which vest in three equal annual amounts beginning in year five and expire after approximately 10 years from issuance.

Our 2013 stock option plan (“2013 Plan”) provides for the issuance of non-statutory common stock options to management subject to the Board’s discretion. The plan generally provides for grants with the exercise price equal to fair value on the date of grant. The grants generally vest in five equal annual amounts beginning in year one and expire after approximately 10 years from issuance. Options issued to the Chief Executive Officer vest equally over four years and expire after approximately 10 years from issuance.

The Company determines the fair value of the options based on the Black-Scholes option pricing model. This methodology requires significant inputs including the price of our common stock, risk-free interest rate, dividend yield and expiration date.

We estimate the fair value of stock options using the Black-Scholes option-pricing model, with assumptions as follows:

	Three Months Ended December 31,		Nine Months Ended December 31,
	2016	2015	2016	2015
Common stock price	$18.70 - $23.58	$22.39 - $32.31	$18.70 - $28.17	$22.39 - $32.37
Expected stock price volatility	27.9% - 35.6%	29.6% - 38.8%	27.9% - 35.6%	29.6% - 38.8%
Risk-free interest rate	0.0% - 2.1%	<0.1% - 2.2%	0.0% - 2.1%	<0.1% - 2.2%
Weighted-average expected option life (years)	0.1 – 5.4	0.1 – 6.4	0.1 – 5.4	0.1 – 6.4
Dividend yield	1.2%	0.8%	1.2%	0.8%