XML 44 R16.htm IDEA: XBRL DOCUMENT v3.19.3.a.u2
10. Share-Based Employee Compensation
 12 Months Ended
Dec. 31, 2019
Employee Benefit and Share-based Payment Arrangement, Noncash Expense [Abstract]  
10. Share-Based Employee Compensation

The Company has an employee and non-employee director incentive compensation equity plan. Related to these programs, the Company recorded $148 and $95 of share-based employee compensation expense during the years ended December 31, 2019 and 2018, respectively, which is included as a component of cost of products and SG&A expenses in the accompanying consolidated statements of operations. No amount of share-based employee compensation expense was capitalized as part of capital expenditures or inventory for the years presented.

 

The Company uses the Black-Scholes-Merton option valuation model to calculate the fair value of a stock option grant. The share-based employee compensation expense recorded in the years ended December 31, 2019 and 2018 was calculated using the assumptions noted in the following table. Expected volatilities are based on the historical volatility of the Company’s common stock over the period of time, commensurate with the expected life of the stock options. The dividend yield assumption is based on the Company’s expectations of dividend payouts at the grant date. In 2019, the Company paid dividends on January 16, for a dividend declared in 2018, April 15, July 15 and October 15. In December 2019, the Company’s Board of Directors also declared a quarterly dividend that was paid on January 17, 2020. The Company has estimated its future stock option exercises. The expected term of option grants is based upon the observed and expected time to the date of post vesting exercises and forfeitures of options by the Company’s employees. The risk-free interest rate is derived from the average U.S. Treasury rate for the period, which approximates the rate at the time of the stock option grant.

 

    FY 2019     FY 2018  
Expected Volatility     49.0 %     51.9 %
Expected Dividends     2.0 %     2.0 %
Expected Term (in years)     6.5       6.5  
Risk-Free Rate     2.36 %     2.76 %
Estimated Forfeitures     0.0 %     0.0 %

 

A summary of stock option activity under the Company’s equity compensation plans as of December 31, 2019, and changes during the year ended December 31, 2019, are presented below:

 

As of January 1, 2019

   Stock Options      Wgt. Avg. Exercise Price ($)  Per Share      Wgt. Avg. Remaining Contractual Life (Years)      Wgt. Avg. Grant Date Fair Value ($) Per Share      Aggregate Intrinsic Value ($)  
Outstanding     460,500       4.22       —       1.76       —  
Vested     156,900       4.03       —       2.05       —  
Nonvested     303,600       4.32       —       1.61       —  
                                         
Period activity                                        
Issued     150,000       4.01       —       1.64       —  
Exercised     1,000       1.89       —       0.71       —  
Forfeited     40,000       4.35       —       1.49       —  
Expired     —       —       —       —       —  
                                         
As of December 31, 2019                                        
Outstanding     569,500       4.16       6.82       1.75       24,000  
Vested     214,800       4.12       4.20       1.95       24,000  
Nonvested     354,700       4.18       8.40       1.63       —  

 

Outstanding:

 

Range of Exercise Prices ($) Per Share    Stock Options Outstanding      Wgt. Avg. Exercise Price ($) Per Share      Wgt. Avg. Remaining Contractual Life (Years)               
2.23 3.83     175,000       3.50       7.68                  
4.07 5.10     394,500       4.45       6.44                  
      569,500       4.16       6.82                  

 

Exercisable:

 

Range of Exercise Prices ($) Per Share   Stock Options Exercisable      Wgt. Avg. Exercise Price ($) Per Share                     
2.23 3.83     53,000       3.03                          
4.07 5.10     161,800       4.48                          
      214,800       4.12                          

 

The weighted-average grant-date fair value per option granted during the years ended December 31, 2019 and 2018 was $1.64 and $1.61, respectively. The aggregate intrinsic value of stock options exercised during the years ended December 31, 2019 and 2018 was approximately $1 and $0, respectively.

 

In connection with the restricted stock units granted to non-employee directors, the Company accrues compensation expense based on the estimated number of shares expected to be issued, utilizing the most current information available to the Company at the date of the consolidated financial statements. The Company estimates the fair value of the restricted stock unit awards based upon the market price of the underlying common stock on the date of grant. As of December 31, 2019 and 2018, there was approximately $982 and $703, respectively, of total unrecognized compensation cost related to non-vested share-based compensation arrangements, including stock options and restricted stock units. This compensation cost is expected to be recognized approximately over four years.