Share-based Arrangements

3 Months Ended

Mar. 31, 2023

Share-Based Payment Arrangement, Noncash Expense [Abstract]

Share-based Payment Arrangement

14. SHARE-BASED ARRANGEMENTS

The Company accounts for stock options, restricted stock awards ("RSAs"), restricted stock units ("RSUs") and performance stock units ("PSUs") as equity awards and measures the cost of all share-based payments, including stock options, at fair value on the grant date and recognizes this cost in the statement of operations. The Company also has an employee stock purchase plan, which is accounted for as a liability award. Compensation expense for stock options, RSAs, RSUs and PSUs is recognized on a straight-line basis over the vesting period of the awards. Throughout the course of the vesting period, the Company monitors the achievement level for the return on invested capital ("ROIC") metric of the PSUs compared to the ROIC target and adjusts the number of shares expected to be earned, and the related compensation expense recorded thereafter, to reflect the most probable outcome. The PSUs granted in 2023 and 2022 assumed a 100% achievement level. Share-based compensation expense recorded for the three-month fiscal periods ended March 31, 2023 and April 1, 2022 was $2.0 million and $2.1 million, respectively. For the three-month fiscal period ended March 31, 2023, $0.3 million was recorded to restructuring and severance costs and the remaining amount was recorded to selling, general and administrative expenses on the Company's Condensed Consolidated Statements of Operations.

14. SHARE-BASED ARRANGEMENTS (CONTINUED)

Stock option activity was as follows:

	For the Three Months Ended
	March 31, 2023
	Options	Weighted - average exercise price
Options outstanding at beginning of period	710,782	$	54.12
Granted	—	$	—
Exercised	—	$	—
Forfeited or expired	(24,061)	$	43.07
Options outstanding at March 31, 2023	686,721	$	54.51

The fair value of each option award is estimated on the date of grant using the Black-Scholes option valuation model. No options were granted in the three-month fiscal periods ended March 31, 2023 and April 1, 2022.

Restricted stock award and restricted stock unit activity were as follows:

	For the Three Months Ended
	March 31, 2023
	Restricted  Stock	Weighted- average grant date fair value
Restricted Stock outstanding at beginning of period	159,521	$	45.78
Granted	102,600	$	25.24
Vested	(62,488)	$	47.14
Forfeited or expired	(4,366)	$	47.51
Restricted Stock outstanding at March 31, 2023	195,267	$	34.51

Performance stock unit activity was as follows:

	For the Three Months Ended
	March 31, 2023
	Performance Stock	Weighted- average grant date fair value
Performance Stock outstanding at beginning of period	172,144	$	60.44
Granted	178,385	$	32.03
Vested	—	$	—
Forfeited or expired	(30,345)	$	56.88
Performance Stock outstanding at March 31, 2023	320,184	$	44.95

The fair value of the PSUs based on total shareholder return ("TSR") was estimated on the date of grant using a Monte-Carlo simulation model. The following table indicates the weighted-average assumptions used in estimating fair value:

	For the Three Months Ended
	March 31, 2023			April 1, 2022
Expected term (years)	2.9			2.9
Expected volatility	41.2		%	39.4		%
Risk-free interest rate	4.4		%	1.7		%
Expected dividend yield	3.3		%	1.9		%
Per share fair value of performance stock granted	$	38.83		$	68.10