Shareholders’ Equity

12 Months Ended

Dec. 31, 2023

Equity [Abstract]

Shareholders’ Equity

(7) Shareholders’ Equity

Common Stock

Holders of common stock are entitled to such dividends as our board of directors, in its discretion, may declare out of funds available, subject to the terms of any outstanding shares of preferred stock and other restrictions. In the event of liquidation of the Company, holders of common stock are entitled to receive, pro rata, all of the assets of the Company available for distribution, after payment of any liquidation preference to the holders of outstanding shares of preferred stock. Holders of the shares of common stock have no conversion or preemptive or other subscription rights and there are no redemption or sinking fund provisions applicable to the common stock.

Stock Purchases

For the year ending December 31, 2023, we purchased 1,976,356 shares of our common stock at an average price of $10.26. In January, March, and July 2022 our board of directors authorized the repurchase of up to $35.0 million of our common stock. There is approximately $1.5 million of board authorization remaining under such plans, which have no expiration date. The table below describes the purchase of our common stock for the twelve-month period ended December 31, 2023 and 2022:

	Twelve Months Ended
	December 31, 2023				December 31, 2022
	Shares		Avg. Price		Shares		Avg. Price
Open market purchases		670,968	$	10.20		3,246,511	$	10.44
Shares redeemed upon net exercise of stock options		1,305,388		10.29		893,153		13.56
Other		–		–		–		–
Total stock purchases		1,976,356	$	10.26		4,139,664	$	11.11

Options and Warrants

In 2006, the Company adopted and its shareholders approved the CPS 2006 Long-Term Equity Incentive Plan (the “2006 Plan”) pursuant to which our Board of Directors, or a duly-authorized committee thereof, may grant stock options, restricted stock, restricted stock units and stock appreciation rights to our employees or employees of our subsidiaries, to directors of the Company, and to individuals acting as consultants to the Company or its subsidiaries. In June 2008, May 2012, April 2013, May 2015, July 2018 and again in November 2021, the shareholders of the Company approved an amendment to the 2006 Plan to increase the maximum number of shares that may be subject to awards under the 2006 Plan to 5,000,000, 7,200,000, 12,200,000, 17,200,000, 19,200,000 and 22,200,000, respectively, in each case plus shares authorized under prior plans and not issued. Options that have been granted under the 2006 Plan and a previous plan approved in 1997 have been granted at an exercise price equal to (or greater than) the stock’s fair value at the date of the grant, with terms generally of 7-10 years and vesting generally over 4-5 years.

There were no stock options granted during the year ended December 31, 2023. The per share weighted-average fair value of stock options granted during the years ended December 31 2022 and 2021 was $5.42, and $2.65, respectively. That fair value was estimated using a binomial option pricing model using the weighted average assumptions noted in the following table. We use historical data to estimate the expected term of each option. The volatility estimate is based on the historical and implied volatility of our stock over the period that equals the expected life of the option. Volatility assumptions ranged from 75% to 80% for 2022, and 79% to 71% for 2021. The risk-free interest rate is based on the yield on a U.S. Treasury bond with a maturity comparable to the expected life of the option. The dividend yield is estimated to be zero based on our intention not to issue dividends for the foreseeable future.

	Year Ended December 31,
	2022		2021
Expected life (years)		4.00		4.00
Risk-free interest rate		2.38%		0.49%
Volatility		76%		72%
Expected dividend yield		–		–

For the years ended December 31, 2023, 2022 and 2021, we recorded stock-based compensation costs in the amount of $3.5 million, $4.4 million and $2.0 million, respectively. As of December 31, 2023, the unrecognized stock-based compensation costs to be recognized over future periods was equal to $6.0 million. This amount will be recognized as expense over a weighted-average period of 1.8 years.

At December 31, 2023 and 2022, options outstanding had intrinsic values of $8.1 million and $11.2 million, respectively. At December 31, 2023 and 2022, options exercisable had intrinsic values of $6.1 million and $7.8 million, respectively. The total intrinsic value of options exercised was $14.5 million and $23.4 million for the years ended December 31, 2023 and 2022, respectively. New shares were issued for all options exercised during the year ended December 2023 and cash of $16.6 million was received. At December 31, 2023, there were a total of 2,684,000 additional shares available for grant under the 2006 Plan.

Stock option activity for the year ended December 31, 2023 for stock options under the 2006 and 1997 plans is as follows:

						Weighted
	Number of			Weighted		Average
	Shares			Average		Remaining
	(in thousands)			Exercise Price		Contractual Term
Options outstanding at the beginning of period		11,167		$	5.21		N/A
Granted		–			–		N/A
Exercised		(3,020	)		5.49		N/A
Forfeited/Expired		(22	)		4.12		N/A
Options outstanding at the end of period		8,125		$	5.11		3.14 years
Options exercisable at the end of period		6,062		$	4.31		2.59 years

The following table presents the price distribution of stock options outstanding and exercisable for the years ended December 31, 2023 and 2022:

	Number of shares as of				Number of shares as of
	December 31, 2023				December 31, 2022
	Outstanding		Exercisable		Outstanding		Exercisable
Range of exercise prices:	(In thousands)				(In thousands)
$2.00 - $2.99		1,410		1,082		1,445		775
$3.00 - $3.99		2,473		2,473		3,785		3,495
$4.00 - $4.99		2,539		1,929		2,739		1,802
$6.00 - $6.99		–		–		740		740
$7.00 - $7.99		–		–		748		748
$10.00 - $10.99		1,703		578		1,710		210
Total shares		8,125		6,062		11,167		7,770

We did not issue any stock options with an exercise price above or below the market price of the stock on the grant date for the years ended December 31, 2023, 2022 and 2021.