Stock-Based Compensation

6 Months Ended

Jun. 30, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

Stock-Based Compensation. Stock-based compensation expense before income tax expense for the three and six-month periods ended June 30, 2016 and 2015, consisted of the following (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
Cost of goods sold	$	141	$	109	$	264	$	202
Research and development	54		32		96		59
Selling, general and administrative	591		424		1,050		824
Stock-based compensation expense before taxes	$	786	$	565	$	1,410	$	1,085

As of June 30, 2016, the total remaining unrecognized compensation cost related to non-vested stock options, net of expected forfeitures, was approximately $8.6 million and is expected to be recognized over a weighted average period of 3.61 years.

During the three and six-month periods ended June 30, 2016, we granted awards representing 220,875 and 784,375 shares of our common stock, respectively. During the three and six-month periods ended June 30, 2015, we granted awards representing 150,000 and 596,800 shares of our common stock, respectively. We use the Black-Scholes methodology to value the stock-based compensation expense for options. In applying the Black-Scholes methodology to the options granted during the six-month periods ended June 30, 2016 and 2015, the fair value of our stock-based awards granted was estimated using the following assumptions for the periods indicated below:

	Six months ended June 30,
	2016	2015
Risk-free interest rate	1.25% - 1.40%	1.53% - 1.57%
Expected option life	5.0	5.0
Expected dividend yield	—%	—%
Expected price volatility	36.50% - 37.06%	34.00% - 35.11%

For purposes of the foregoing analysis, the average risk-free interest rate is determined using the U.S. Treasury rate in effect as of the date of grant, based on the expected term of the stock option. The expected term of the stock options is determined using the historical exercise behavior of employees. The expected price volatility is determined using a weighted average of daily historical volatility of our stock price over the corresponding expected option life and implied volatility based on recent trends of the daily historical volatility. Compensation expense is recognized on a straight-line basis over the service period, which corresponds to the related vesting period.