Stock-Based Compensation (Notes)

3 Months Ended

Mar. 31, 2024

Share-Based Payment Arrangement [Abstract]

Stock-based compensation expense for the three months ended March 31, 2024 and April 2, 2023 was $2.0 million and $1.1 million, respectively.

As of March 31, 2024, the total unrecognized stock-based compensation expense relating to time-vested restricted shares and stock options was approximately $10.3 million and the Company expects to record an additional $6.1 million in stock-based compensation expense related to the vesting of these awards in the remainder of 2024. The remaining weighted average vesting period for time-based non-vested shares was 1.9 years and performance-based restricted stock units was 2.1 years.

Time-based Non-vested Shares. During the three months ended March 31, 2024, the Company granted 570,390 non-vested shares of common stock to certain employees and officers of the Company and 75,419 non-vested shares of common stock to the outside directors of the Company. These shares generally vest in equal installments over their three-year service period, provided the participant has continuously remained an employee, officer or director of the Company, with provisions that require accelerated vesting upon a change of control.

A summary of all non-vested common share activity for the three months ended March 31, 2024 was as follows:


	Shares	Weighted Average Grant Date Price(1)
Non-vested at December 31, 2023	2,734,760	$	2.84
Granted	645,809	$	8.42
Vested	(1,028,216)	$	3.07
Forfeited	—	$	—
Non-vested at March 31, 2024	2,352,353	$	4.27

(1) The fair value of time-vested shares is based on the closing price on the date of grant.

Performance-based Restricted Shares. On April 1, 2022, the Company issued 600,000 performance-based restricted shares to a former CEO, of which 150,000 shares remain unvested as of March 31, 2024. These shares will fully vest on the third anniversary of the grant date based on the achievement of contractually defined EBITDA and share price growth targets, and include a provision that requires accelerated vesting upon a change of control. The fair value of the market-based restricted shares was determined using a Monte Carlo simulation valuation model and these shares will be expensed over their three year performance-based vesting period based on the probability of the Company's attainment of the contractually defined targets.

Performance-based Restricted Stock Units. On July 1, 2023, the Company granted 797,915 performance-based restricted stock units to its executive officers. The number of performance-based restricted stock units that will ultimately vest and be received by the participants is based on achievement of contractually defined EBITDA growth targets to be measured over the period ending fiscal 2025, and are subject to accelerated vesting upon a change of control. The Company estimated the fair-value of performance-based restricted stock units based on the closing stock price on the date of the grant which was $5.04. As the maximum EBITDA growth targets were met with the Company’s Adjusted EBITDA performance in fiscal 2023, expense is being recognized over the applicable service period at the maximum attainment level.

On January 15, 2024, the Company granted 243,900 performance-based restricted stock units to its executive officers. The number of performance-based restricted stock units that will ultimately vest and be received by the participants is based on achievement of contractually defined EBITDA growth targets to be measured over the period ending fiscal 2026, and are subject to accelerated vesting upon a change of control. The Company estimates the fair-value of performance-based restricted stock units based on the closing stock price on the date of the grant which was $8.42. The Company assesses the probability of target attainment on a quarterly basis and records the expense over the vesting period. As of March 31, 2024, the Company’s probability assessment was at the target attainment level.

Stock Options. The Company has issued options to purchase shares of its common stock to certain employees and officers of the Company. These options are fully vested and were expensed over their three-year vesting period. The options expire seven years from the date of the grant and were issued with an exercise price equal to the fair market value of the stock price, or $7.12 per share, on the date of the grant.

The following is a summary of all stock option activity for the three months ended March 31, 2024:


	Options	Weighted Average Exercise Price		Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value(1)
Options outstanding at December 31, 2023	925,000	$	7.12


Forfeited	—
Options Outstanding at March 31, 2024	925,000	$	7.12	3.4	$	2,211
Vested or expected to vest at March 31, 2024	925,000	$	7.12	3.4	$	2,211
Options exercisable at March 31, 2024	925,000	$	7.12	3.4	$	2,211

(1)The aggregate intrinsic value is calculated using the difference between the market price of the Company's common stock at March 31, 2024 of $9.51 and the grant price for only those awards that have a grant price that is less than the market price of the Company's common stock at March 31, 2024.

Restricted Stock Units. The Company has issued restricted stock units ("RSUs") on shares of the Company's common shares to certain officers of the Company.

The following is a summary of all RSU activity for the three months ended March 31, 2024:


			Units
Non-vested at December 31, 2023			17,523

Vested			(17,523)

Non-vested at March 31, 2024			—