Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2019

Stock-Based Compensation

Stock-based compensation expense, by award

The Company recorded stock-based compensation expense as follows in the unaudited condensed consolidated statements of income and comprehensive income (dollars in millions):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Stock options	$	0.7	$	1.2	$	2.1	$	3.2
Restricted stock awards		0.1		0.3		0.3		0.7
Restricted stock units		2.7		1.8		6.3		4.3
Total stock-based compensation	$	3.5	$	3.3	$	8.7	$	8.2

Stock-based compensation expense, cost allocation

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Costs of product revenue	$	0.5	$	0.5	$	1.3	$	1.2
Selling, general and administrative		2.5		2.3		6.1		5.8
Research and development		0.5		0.5		1.3		1.2
Total stock-based compensation	$	3.5	$	3.3	$	8.7	$	8.2

Assumptions regarding volatility, expected life, dividend yield and risk-free interest rates

	2019		2018
Risk-free interest rates	1.55	%	2.80	%
Expected life	5.33	years	5.38	years
Volatility	29.57	%	28.46	%
Expected dividend yield	0.38	%	0.47	%

Schedule of stock option activity

Stock option activity for the nine months ended September 30, 2019 was as follows:

				Weighted
				Average
		Weighted		Remaining	Aggregate
	Shares Subject	Average		Contractual	Intrinsic Value
	to Options	Option Price		Term (Yrs)	(in millions) (b)
Outstanding at December 31, 2018	2,593,310	$	21.41
Granted	112,232		44.17
Exercised	(465,701)		19.27
Forfeited/Expired	(85,340)		22.35
Outstanding at September 30, 2019	2,154,501	$	23.03	5.1	$	45.2
Exercisable at September 30, 2019	1,544,782	$	20.49	4.8	$	36.2
Exercisable and expected to vest at September 30, 2019 (a)	2,103,772	$	22.87	5.1	$	44.4

(a) In addition to the options that are vested at September 30, 2019, the Company expects a portion of the unvested options to vest in the future. Options expected to vest in the future are determined by applying an estimated forfeiture rate to the options that are unvested as of September 30, 2019.

(b) The aggregate intrinsic value is based on the positive difference between the fair value of the Company’s common stock price of $43.93 on September 30, 2019 and the exercise price of the underlying stock options.

Restricted stock awards

Stock-Based Compensation

Schedule of restricted stock award and restricted stock unit activity

Restricted stock award activity for the nine months ended September 30, 2019 was as follows:

		Weighted
		Average Grant
	Shares Subject	Date Fair
	to Restriction	Value
Outstanding at December 31, 2018	24,633	$	19.82
Vested	(24,633)		19.82
Outstanding at September 30, 2019	—	$	—

Restricted stock units

Stock-Based Compensation

Schedule of restricted stock award and restricted stock unit activity

Restricted stock unit activity for the nine months ended September 30, 2019 was as follows:

		Weighted
		Average Grant
	Shares Subject	Date Fair
	to Restriction	Value
Outstanding at December 31, 2018	806,249	$	29.88
Granted	346,462		40.66
Vested	(213,286)		31.14
Forfeited	(32,482)		29.20
Outstanding at September 30, 2019	906,943	$	33.73