Stockholders' Equity

3 Months Ended

Mar. 28, 2025

Stockholders' Equity Note [Abstract]

Stockholders' Equity

Note 10 — Stockholders’ Equity

Incentive Plan

The Company maintains an Amended and Restated Omnibus Equity Incentive Plan, as amended (the “Equity Plan”). The Equity Plan allows for awards of stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”) and performance stock units (“PSUs”) and other stock- and cash-based awards, including awards that are subject to service-based and performance-based vesting conditions. As of March 28, 2025, the Company had outstanding grants of stock options, restricted stock awards, RSUs and PSUs.

Stock options granted under the Equity Plan are granted at fair market value on the date of grant, become exercisable generally over a three-year period, or as determined by the Board of Directors, and expire over periods not exceeding 10 years from the date of grant. Certain stock options and stock-based awards provide for accelerated vesting if there is a change in control and pre-established financial metrics are met (as defined in the Equity Plan). Grants of restricted stock outstanding under the Equity Plan generally vest over periods of one to three years. Grants of RSUs and PSUs outstanding under the Equity Plan generally vest based on service, performance, or a combination of both. On June 19, 2024, stockholders approved a proposal to increase the number of shares under the plan by 2,600,000 shares, for a total of 22,805,000 shares. As of March 28, 2025, there were 720,036 shares available for grant under the Equity Plan.

Note 10 — Stockholders’ Equity (Continued)

Stock-Based Compensation

The cost that has been charged against income for stock-based compensation is set forth below (in thousands):

	Three Months Ended
	March 28, 2025		March 29, 2024
Employee stock options	$	2,405	$	3,173
Restricted stock		157		28
RSUs		2,963		2,312
PSUs		396		685
Nonemployee stock options		94		141
Total stock-based compensation expense	$	6,015	$	6,339

The Company recorded stock-based compensation costs in the following categories (in thousands):

	Three Months Ended
	March 28, 2025		March 29, 2024
Cost of sales	$	290	$	298
General and administrative		2,683		3,075
Selling and marketing		1,277		1,210
Research and development		1,765		1,756
Total stock-based compensation expense, net		6,015		6,339
Amounts capitalized as part of inventory		312		337
Total stock-based compensation expense, gross	$	6,327	$	6,676

As of March 28, 2025, total unrecognized compensation cost related to non-vested stock-based compensation arrangements were as follows (in thousands):

	March 28, 2025
Stock options	$	14,969
Restricted stock, RSUs and PSUs		47,090
Total unrecognized stock-based compensation cost	$	62,059

The cost is expected to be recognized over a weighted-average period of approximately two years.

Assumptions

The fair value of each stock option award is estimated on the date of grant using a Black-Scholes option valuation model applying the weighted-average assumptions noted in the following table. Expected volatilities are based on historical volatility of the Company’s stock. The expected term of stock options granted is derived from the historical exercises and post-vesting cancellations and represents the period of time that stock options granted are expected to be outstanding. The Company has calculated a 8% estimated forfeiture rate based on historical forfeiture experience. The risk-free rate is based on the U.S. Treasury yield curve corresponding to the expected term at the time of the grant.

	Three Months Ended
	March 28, 2025			March 29, 2024
Expected dividend yield		0	%		0	%
Expected volatility		60	%		59	%
Risk-free interest rate		4.33	%		4.16	%
Expected term (in years)		5.05			5.29

Note 10 — Stockholders’ Equity (Continued)

Stock Options

A summary of stock option activity under the Equity Plan for three months ended March 28, 2025 is presented below:

	Stock Options (in 000’s)			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (years)		Aggregate Intrinsic Value (in 000’s)
Outstanding at December 27, 2024		2,808		$	45.72
Granted		22			15.35
Exercised		(52	)		7.21
Forfeited or expired		(140	)		43.07
Outstanding at March 28, 2025		2,638		$	46.34		5.70	$	1,468
Exercisable at March 28, 2025		1,988		$	47.93		4.86	$	1,415

Restricted Stock, Restricted Stock Units and Performance Stock Units

A summary of restricted stock, RSU and PSU activity under the Equity Plan for the three months ended March 28, 2025 is presented below (shares in thousands):

	Restricted Stock		RSUs			PSUs
Unvested at December 27, 2024		16		695			406
Granted		—		1,037			777
Vested		—		(223	)		(20	)
Forfeited or expired		—		(9	)		(386	)
Unvested at March 28, 2025		16		1,500			777