STOCK-BASED COMPENSATION

9 Months Ended

Apr. 01, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

We recognize stock-based compensation expense in our condensed consolidated statement of operations related to all share-based awards, including grants of stock options, based on the grant date fair value of such share-based awards.

As there were no stock options granted during the three and nine months ended April 1, 2017 and March 26, 2016, the Black-Scholes assumptions used to value stock option grants is not applicable.

The amounts included in cost of revenues and operating expenses for stock-based compensation were as follows:

	Three Months Ended				Nine Months Ended
	April 1, 2017		March 26, 2016		April 1, 2017			March 26, 2016
	(Thousands)
Stock-based compensation by category of expense:
Cost of revenues	$	630	$	523	$	1,381		$	1,451
Research and development	590		455		1,573			1,370
Selling, general and administrative	1,670		1,095		4,968			3,619
	$	2,890	$	2,073	$	7,922		$	6,440
Stock-based compensation by type of award:
Stock options	$	32	$	52	$	102		$	167
Restricted stock awards	2,747		1,962		7,950			6,258
Inventory adjustment to cost of revenues	111		59		(130		)	15
	$	2,890	$	2,073	$	7,922		$	6,440

As of April 1, 2017 and July 2, 2016, we had capitalized approximately $0.5 million and $0.3 million, respectively, of stock-based compensation as inventory.

As of April 1, 2017, we had capitalized approximately $0.2 million of stock-based compensation in connection with the development of internal use software.

As of April 1, 2017, we had $0.1 million in unrecognized stock-based compensation expense related to unvested stock options, net of estimated forfeitures, that will be recognized over a weighted-average period of 1.2 years, and $18.0 million in unrecognized stock-based compensation expense related to unvested time-based restricted stock awards and restricted stock units, net of estimated forfeitures, that will be recognized over a weighted-average period of 2.4 years.

The amount of stock-based compensation expense recognized in any one period related to PSUs can vary based on the achievement or anticipated achievement of the performance conditions. If the performance conditions are not met or not expected to be met, no compensation cost would be recognized on the shares underlying the PSUs, and any previously recognized compensation expense related to those PSUs would be reversed. As of April 1, 2017, we determined that the achievement of the performance conditions associated with the PSUs issued in August 2016 is probable at 100 percent of the target level.

During the three and nine months ended April 1, 2017, we recorded $0.7 million and $1.9 million, respectively, in stock-based compensation in connection with the PSUs issued in August 2015 and August 2016. During the three and nine months ended March 26, 2016, we recorded $0.2 million and $1.2 million, respectively in stock-based compensation expense in connection with the issuance of PSUs.