Shareholders' Deficit

12 Months Ended

Jan. 01, 2022

Share-based Payment Arrangement [Abstract]

Shareholders’ Deficit

Shareholders’ Deficit

Stock-Based Compensation Expense

Total stock-based compensation expense was as follows (in thousands):

	2021		2020		2019
Stock awards	$	20,216	$	19,435	$	14,265
Stock options	2,998		2,378		2,392
Total stock-based compensation expense(1)	23,214		21,813		16,657
Income tax benefit	5,722		5,126		3,998
Total stock-based compensation expense, net of tax	$	17,492	$	16,687	$	12,659

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(1)    Changes in annual stock-based compensation expense reflects the cumulative impact of the change in the expected achievements of certain performance targets.

Stock Options

A summary of our stock option activity was as follows (in thousands, except per share amounts and years):

	Stock Options	Weighted- Average Exercise Price per Share		Weighted- Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (1)
Outstanding at January 2, 2021	813	$	30.74	6.5	$	41,568
Granted	63	143.06
Exercised	(175)	25.42
Canceled/Forfeited	(2)	69.78
Outstanding at January 1, 2022	699	$	42.02	6.3	$	28,258
Exercisable at January 1, 2022	496	$	30.24	5.5	$	22,993
Vested and expected to vest at January 1, 2022	685	$	41.58	6.3	$	27,937

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(1)    Aggregate intrinsic value includes only those options where the current share price is equal to or greater than the share price on the date of grant.

Other information pertaining to options was as follows (in thousands, except per share amounts):

	2021		2020		2019
Weighted-average grant date fair value of stock options granted	$	71.93	$	15.10	$	18.97
Total intrinsic value (at exercise) of stock options exercised	$	16,003	$	14,357	$	9,636

Cash received from the exercise of stock options for the fiscal year ended January 1, 2022 was $4.4 million. Our tax benefit related to the exercise of stock options for the fiscal year ended January 1, 2022 was $3.9 million.

At January 1, 2022, there was $4.2 million of total stock option compensation expense related to non-vested stock options not yet recognized, which is expected to be recognized over a weighted-average period of 1.9 years.

The assumptions used to calculate the fair value of options granted using the Black-Scholes-Merton option-pricing model were as follows:

Valuation Assumptions	2021		2020		2019
Expected dividend yield	0.0	%	0.0	%	0.0	%
Expected volatility	58	%	46	%	43	%
Risk-free interest rate	0.9	%	0.7	%	2.2	%
Expected term (years)	5.2		5.4		5.4

Stock Awards

Stock award activity was as follows (in thousands, except per share amounts):

	Time- Based Stock Awards	Weighted-Average Grant Date Fair Value		Performance- Based Stock Awards	Weighted-Average Grant Date Fair Value
Outstanding at January 2, 2021	302	$	38.96	520	$	38.52
Granted	70	128.72		172	97.40
Vested	(156)	37.86		(247)	34.71
Canceled/Forfeited	(10)	60.76		(4)	65.57
Outstanding at January 1, 2022	206	$	69.55	441	$	63.37

At January 1, 2022, there was $8.3 million of unrecognized compensation expense related to non-vested time-based stock awards, which is expected to be recognized over a weighted-average period of 1.9 years, and $19.4 million of unrecognized compensation expense related to non-vested performance-based stock awards, which is expected to be recognized over a weighted-average period of 1.9 years.

Repurchases of Common Stock

Repurchases of our common stock were as follows (in thousands):

	2021		2020		2019
Amount repurchased under Board-approved share repurchase program	$	364,479	$	228,111	$	145,900
Amount repurchased in connection with the vesting of employee restricted stock grants	17,897		7,040		9,673
Total amount repurchased (based on trade dates)	$	382,376	$	235,151	$	155,573

As of January 1, 2022, the remaining authorization under our Board-approved $600 million share repurchase program was $403 million.

Net Income per Common Share

The components of basic and diluted net income per share were as follows (in thousands, except per share amounts):

	2021		2020		2019
Net income	$	153,746	$	139,189	$	81,845
Reconciliation of weighted-average shares outstanding:
Basic weighted-average shares outstanding	24,038		27,665		29,472
Dilutive effect of stock-based awards	909		763		883
Diluted weighted-average shares outstanding	24,947		28,428		30,355
Net income per share – basic	$	6.40	$	5.03	$	2.78
Net income per share – diluted	$	6.16	$	4.90	$	2.70

Additional potential dilutive stock options totaling 0.1 million for fiscal year 2021 and 0.2 million for fiscal years 2020 and 2019 have been excluded from our diluted net income per share calculations because these securities’ exercise prices were anti-dilutive (e.g., greater than the average market price of our common stock).