Common Stock and Stock-Based Awards Plans

3 Months Ended

Mar. 31, 2022

Equity [Abstract]

Common Stock and Stock-Based Awards Plans

Note 7 – Common Stock and Stock-Based Awards Plans

Dividends

The Company began declaring and paying quarterly dividends during the first quarter of 2018. For both the three months ended March 31, 2022 and 2021, cash dividends paid totaled $5.8 million. On March 15, 2021, the Company declared a quarterly cash dividend of $0.16 per share of the Company’s common stock to shareholders of record as of March 31, 2021. On June 15, 2021, September 15, 2021, December 15, 2021 and March 15, 2022, the Company declared a quarterly cash dividend of $0.165 per share of the Company’s common stock to shareholders of record as of June 30, 2021, September 30, 2021, December 31, 2021, and March 31, 2022, respectively. The dividends for the first, second, third, and fourth quarters of 2021 and the first quarter of 2022 were paid on April 15, 2021, July 14, 2021, October 14, 2021, December 31, 2021, and April 14, 2022, respectively. The Company’s future dividend policy is subject to the Company’s compliance with applicable law, and depends on, among other things, the Company’s results of operations, financial condition, level of indebtedness, capital requirements, contractual restrictions, restrictions in the Company’s debt agreements, and other factors that the Board of Directors may deem relevant, including the impact of the COVID pandemic. Dividend payments are not mandatory or guaranteed; there can be no assurance that the Company will continue to pay a dividend in the future.

Share Repurchase Authorization

On February 19, 2020 and October 26, 2018, the Board of Directors authorized the repurchase of $150 million and $100 million, respectively, of the Company’s common stock in addition to the $250 million previously approved on March 6, 2018. During the three months ended March 31, 2022, the Company repurchased a total of 0.2 million common shares for an aggregate of $5.5 million at an average price of $25.60 per share. As of March 31, 2022, the Company had an aggregate $158.5 million remaining under its stock repurchase program.

Stock-Based Compensation

The Company’s 2019 Omnibus Incentive Compensation Plan (the 2019 Plan) authorizes the Company, upon approval of the Human Capital and Compensation Committee of the Board of Directors, to grant a variety of awards, including stock options, restricted shares and restricted stock units (both time-based and performance-based) and other forms of equity awards, or any combination thereof, to any director, officer, employee or consultant (including any prospective director, officer, employee or consultant) of the Company. Stock options (which have not been awarded since 2015) are granted to employees with an exercise price equal to the market price of the Company’s common stock on the date of grant, generally vest over a four-year period from the date of grant and have a term of 10 years. Time-based restricted stock units granted to employees generally vest over a four-year period from the date of grant, subject to the continued employment of the employee by the Company. Performance-based restricted stock units generally vest over a three-year performance cycle, which includes the year of the grant, and are based upon the Company’s achievement of specified performance metrics. Awards under the 2019 Plan to non-employee directors have been in the form of restricted stock units, which generally vest one year from the grant date.

As of March 31, 2022, 1.5 million common shares were available for issuance under the Company’s 2019 Plan.

All share-based payments to employees, including grants of employee stock options, are recognized in the condensed consolidated financial statements based on their grant date fair values. The total compensation cost recognized for stock-based awards was $4.2 million for the three months ended March 31, 2022 and $2.9 million for the three months ended March 31, 2021. The future tax benefit of these stock-based awards as of the grant date was $1.0 million for the three months ended March 31, 2022 and $0.7 million for the three months ended March 31, 2021. Awards of restricted stock units and performance-based restricted stock units are valued at the closing market price of the Company’s common stock on the date of grant. For performance-based restricted stock units, compensation expense is based on the probability that the performance goals will be achieved, which is monitored by management throughout the requisite service period. When it becomes probable, based on the Company’s expectation of performance during the measurement period, that more or less than the previous estimate of the awarded shares will vest, an adjustment to stock-based compensation expense is recognized as a change in accounting estimate.

As of March 31, 2022, the unrecognized compensation cost and remaining weighted-average amortization period related to stock-based awards were as follows:

(in thousands)	Restricted Stock Units		Performance- based Restricted Stock Units (1)
Unrecognized compensation cost	$	30,909	$	10,538
Remaining weighted-average amortization period	3.0 years		2.04 years

(1) Based on the probable achievement of the performance goals identified in each award.

The total cash received by the Company as a result of stock option exercises for the three months ended March 31, 2022 and 2021 was approximately $0.5 million and $0.3 million, respectively. The actual tax benefit realized as a result of stock option exercises and the vesting of other share-based awards during the three months ended March 31, 2022 and 2021 was $2.1 million and $1.9 million, respectively. For the three months ended March 31, 2022 and 2021, the total intrinsic value of stock options exercised was $0.4 million and $0.5 million, respectively.

The Company awarded performance-based restricted stock units to employees during the three months ended March 31, 2022 and 2021. The number of performance-based restricted stock units that will ultimately be earned will not be determined until the end of the corresponding performance periods, and may vary from as low as zero to as high as 2.5 times the target number depending on the level of achievement of certain performance goals. The level of achievement of these goals is based upon the financial results of the Company for the last full calendar year within the performance period. The performance goals consist of certain levels of achievement using the following financial metrics: revenue, operating income margin, and return on invested capital. If the performance goals are not met based on the Company’s financial results, the applicable performance-based restricted stock units will not vest and will be forfeited. Shares subject to forfeited performance-based restricted stock units will be available for re-issuance under the Company’s 2019 Plan.

The following table summarizes activities relating to the Company’s stock options:

(in thousands, except per share data)	Number of Options			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Outstanding as of December 31, 2021		132		$	20.06
Exercised		(39	)		16.33
Forfeited or expired		(2	)		16.03
Outstanding and exercisable as of March 31, 2022		91		$	21.75		2.00	$	305

The aggregate intrinsic value in the table above is before income taxes and is calculated as the difference between the exercise price of the underlying options and the Company’s closing stock price as of the last business day of the period ended March 31, 2022 for options that had exercise prices that were below the closing price.

The following table summarizes the activities related to the Company’s time-based restricted stock units:

(in thousands, except per share data)	Number of Units			Weighted- Average Grant Date Fair Value
Non-vested awards outstanding as of December 31, 2021		1,057		$	28.02
Granted		534			25.97
Vested		(346	)		28.21
Forfeited		(11	)		28.34
Non-vested awards outstanding as of March 31, 2022		1,234		$	27.07

The following table summarizes the activities related to the Company’s performance-based restricted stock units:

				Weighted-
				Average
	Number of			Grant Date
(in thousands, except per share data)	Units			Fair Value
Non-vested units outstanding as of December 31, 2021		542		$	28.06
Granted(1)		177			25.97
Forfeited		(142	)		27.21
Non-vested units outstanding as of March 31, 2022		577		$	27.63

(1) Represents target number of units that can vest based on the achievement of the performance goals.