Stockholders' Equity

9 Months Ended

Sep. 30, 2020

Stockholders’ Equity

Issuances of Common Stock

A summary of the status of stock option activity for the nine months ended September 30, 2020 is as follows (in thousands, except price data):


	Shares	Weighted-average exercise price per share
Outstanding at December 31, 2019	944	$	30.63
Granted	141	93.15
Exercised	(279)	21.07
Forfeited	(12)	43.34
Outstanding at September 30, 2020	794	$	44.89

A summary of the status of restricted stock unit activity for the nine months ended September 30, 2020 is as follows (in thousands, except price data):


	Shares	Weighted-average grant date fair value
Non-vested December 31, 2019	786	$	41.88
Granted	227	97.33
Vested	(115)	25.82
Forfeited	(18)	58.11
Non-vested at September 30, 2020	880	$	58.03

During the nine months ended September 30, 2020, the Company issued 49,972 shares of common stock in connection with the Company’s employee stock purchase plan (the “ESPP”).

On August 28, 2020, the Board authorized an increase of additional $150.0 million to the Company’s previously announced stock repurchase program authorization. The Board also extended the repurchase authorization through August 28, 2022. During the three months ended September 30, 2020, 10,157 shares of outstanding common stock were repurchased under the Company’s share repurchase program for $1.5 million. During the nine month ended September 30, 2020, 257,329 shares of outstanding common stock were repurchased under the Company’s share repurchase program for $43.7 million. As of September 30, 2020, the Company had approximately $156.3 million available under the revised repurchase program.

Stock-Based Compensation

The expense related to the Company’s stock-based compensation plans included in the accompanying Consolidated Statements of Income was as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,

	2020		2019		2020		2019
Cost of sales	$	539	$	265	$	1,232	$	807
Research and development	1,032		573		2,540		1,682
Sales and marketing	1,580		827		4,218		2,850
General and administrative	2,402		1,459		6,571		4,745
Total stock-based compensation expense	$	5,553	$	3,124	$	14,561	$	10,084

As of September 30, 2020, total unrecognized compensation expense was $35.8 million, which is expected to be recognized over a weighted-average period of approximately 1.8 years.

The estimated fair value of each stock option was determined on the date of grant using the Black-Scholes option valuation model with the following weighted-average assumptions for the option grants.


	Nine Months Ended September 30,
	2020			2019
Risk-free interest rate	1.20		%	2.51		%
Expected option life (in years)	5.13			5.68
Volatility rate	40		%	39		%
Dividend rate	0		%	0		%
Weighted-average grant date fair value	$	35.28		$	23.67

The fair value of RSUs is determined based on the closing market price of the Company’s common stock on the grant date. The weighted-average fair value of RSUs granted during the nine months ended September 30, 2020 and 2019 was $97.33 and $59.45, respectively.

Compensation expense capitalized to inventory and compensation expense related to the Company’s ESPP were not material for the three and nine months ended September 30, 2020 or 2019.