Note 11 - Equity Incentive Plans and Equity

12 Months Ended

Dec. 31, 2023

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

Note 11 – Equity Incentive Plans and Equity: 

Total compensation cost for share-based payments recognized in 2023, 2022 and 2021 was approximately $19,774, $23,505 and $24,998, respectively. Cost of goods sold in 2023, 2022 and 2021 included share-based compensation of approximately $5,833, $4,706 and $4,152, respectively. Selling, general, and administrative expense in 2023, 2022 and 2021 included share-based compensation of approximately $13,941, $18,799 and $20,846, respectively. 

The Company maintains the approved 2014 Omnibus Incentive Plan under which shares of common stock may be issued or used for reference purposes as awards granted under the 2014 Plan. These awards may be in the form of stock options, stock appreciation rights, restricted stock, as well as other stock-based and cash-based awards. As of December 31, 2023, the awards granted were either time-based (cliff vest over three years), performance-based (vest when performance targets are met, as defined in the stock option grant agreement), or restricted stock units (employee RSUs cliff vest over three years and non-employee director RSUs cliff vest over one year). 

NASDAQ Marketplace Rules Inducement Award—During 2016, 500,000 service period stock options and 500,000 performance-based stock options were granted to the Company’s CEO as an inducement under the NASDAQ Marketplace Rules.

During 2022, as an inducement under the NASDAQ Marketplace Rules, and therefore outside of any Plan, 40,120 service period stock options and 22,381 restricted stock units were granted to the Company's CFO.

Under the terms of the applicable agreement, each grant is governed as if issued under the 2014 Omnibus Plan. The awards granted are time-based (cliff vest over four years or three years) and performance-based (vest when performance targets are met, as defined in the stock option grant agreement).

Service Period Stock Options—A summary of service period stock options outstanding and changes under the plans during the year ended December 31, 2023 is presented below:

Options	Shares			Weighted Average Exercise Price		Average Remaining Contractual Term		Aggregate Intrinsic Value
Outstanding at December 31, 2022		1,291		$	51.63
Granted		19			57.79
Exercised		(111	)		69.77
Forfeited		(36	)		139.17
Outstanding at December 31, 2023		1,163		$	47.30		4.40	$	58,718
Exercisable at December 31, 2023		1,016		$	40.25		2.50	$	57,641

Of the options exercisable at the end of December 31, 2023, 810 shares were in-the-money, which account for the entire aggregate intrinsic value.  

As of December 31, 2023, there was $9,287 of total unrecognized compensation costs related to non-vested service period options, of which $8,667 will be incurred in 2024, and the remaining $620 will be incurred in 2025. 

Performance Based Options—Performance based option vesting is contingent upon the Company achieving certain annual Net Sales or Adjusted EBITDA goals. A summary of performance-based stock options outstanding and changes under the plans in 2023 is presented below:

Options	Shares			Weighted Average Exercise Price		Average Remaining Contractual Term		Aggregate Intrinsic Value
Outstanding at December 31, 2022		1,925		$	75.50
Granted		65			65.88
Exercised		(47	)		67.95
Outstanding at December 31, 2023		1,943		$	75.36		5.2	$	73,466
Exercisable at December 31, 2023		1,109		$	22.88		3.3	$	72,115

Of the options exercisable at the end of December 31, 2023, 1,059 shares were in-the-money, which account for the entire aggregate intrinsic value.

As of December 31, 2023, there was approximately $8,805 of total unrecognized compensation costs related to performance-based awards for which the achievement of the vesting criteria is considered probable, of which $7,255 will be incurred in 2024, $760 will be incurred in 2025, $730 will be incurred in 2026, and the remaining $60 will be incurred in 2027. 

As of December 31, 2023, there were 423 unvested performance-based options outstanding that were deemed not probable, with an aggregate fair value of $30,965.

Service Period Restricted Stock Units—The following table includes activity related to outstanding restricted stock units in 2023.

	Shares			Weighted-Average Grant-Date Fair Value Per Unit
Outstanding at December 31, 2022		278		$	74.52
Granted		171			59.89
Exercised/Vested		(64	)		80.14
Forfeited		(13	)		70.53
Outstanding at December 31, 2023		372		$	66.97

As of December 31, 2023, there was approximately $14,395 of total unrecognized compensation costs related to restricted stock units, of which $7,224 will be incurred in 2024, $4,893 will be incurred in 2025, $2,241 will be incurred in 2026, and the remaining $37 will be incurred in 2027.  

Performance Based Restricted Stock Units—The following table includes activity related to outstanding restricted stock units in 2023.

	Shares			Weighted-Average Grant-Date Fair Value Per Unit
Outstanding at December 31, 2022		176		$	63.01
Exercised/Vested		(2	)		111.65
Forfeited		(7	)		71.77
Outstanding at December 31, 2023		167		$	62.11

As of December 31, 2023, there was approximately $5,478 of total unrecognized compensation costs related to performance-based restricted stock units for which the achievement of the vesting criteria is considered probable, of which $2,743 will be incurred in 2024, and the remaining $2,735 will be incurred in 2025.

Grant Date Fair Value of Options—The weighted average grant date fair value of options (service period options and performance based options) granted during in 2023, 2022 and 2021 were $35.81, $37.39 and $74.90 per share, respectively.

Expected Volatility—Expected volatility was based on the historical volatility of the Company’s common stock.

Weighted Average Expected Term—The Company determined the expected term based on the “shortcut method” described in FASB ASC 718, Compensation—Stock Compensation (an expected term based on the midpoint between the vesting date and the end of the contractual term).

Risk-Free Interest Rate—The risk-free interest rates are based on the U.S. Treasury yield for a period consistent with the expected term of the option in effect at the time of the grant.

Expected Dividend Yield—The Company has not historically declared dividends, and no future dividends are expected to be available to benefit option holders. Accordingly, the Company used an expected dividend yield of zero in the valuation model.

	Year Ended December 31,
	2023	2022	2021
Weighted average exercise price of options granted	$ 64.05	$ 67.02	$ 155.00
Expected volatility	51.8%	52.5%	50.4%
Average expected terms in years	6.4	6.5	6.1
Risk-free interest rate	4.5%	3.8%	1.1%
Expected dividend yield	0.0%	0.0%	0.0%