SHARE-BASED COMPENSATION

3 Months Ended

Mar. 31, 2025

Share-Based Payment Arrangement [Abstract]

Stock Options

The Company has issued non-qualified and incentive stock options to employees and non-employee directors under the Amended and Restated 2012 Share Incentive Program. The fair value of these options was estimated on the date of grant using the Black-Scholes option pricing model, which required estimates of the expected term of the option, the risk-free interest rate, the expected volatility of the price of the Company’s common stock, and dividend yield. Options outstanding as of March 31, 2025 generally vested over a period of 3 years and expire 10 years from the date of grant. The exercise price of these options is $66.68. Due to the Company’s lack of option exercise history on the date of grant, the expected term was calculated using the simplified method defined as the midpoint between the vesting period and the contractual term of each option. The risk-free interest rate was based on the U.S. Treasury yield curve in effect on the date of grant that most closely corresponds to the expected term of the option. The expected volatility was based on the historical volatility of the Company’s common stock over the period of time equivalent to the expected term for each award. The dividend yield was computed as the annualized dividend rate at the grant date divided by the strike price of the stock option. For the three months ended March 31, 2025 and 2024, the Company did not grant stock options.

The following table is a summary of our stock option activity (in thousands, except per share data):


	Three months ended March 31,
	2025			2024
	Awards	Weighted-Average Exercise Price		Awards	Weighted-Average Exercise Price

Outstanding at beginning of period	22	$	66.68	25	$	62.20
Exercised	—	—		(1)	27.68
Forfeited	—	—		(2)	26.52
Outstanding at end of the period	22	$	66.68	22	$	66.68
Exercisable at end of the period	22	$	66.68	22	$	66.68

As of March 31, 2025, the weighted-average remaining contractual life for both the outstanding stock options and exercisable stock options was 2.9 years with an aggregate intrinsic value of $0. There was no unrecognized compensation on the awards for the period ended March 31, 2025. For the three months ended March 31, 2025 and 2024, the Company received $0 thousand

and $36 thousand in cash proceeds from the exercise of stock options, respectively. The total intrinsic value for stock options exercised during the three months ended March 31, 2025 and 2024 was $0 thousand and $15 thousand, respectively.

Restricted Stock

The Company has issued restricted stock under the Amended and Restated 2012 Share Incentive Plan to employees and non-employee directors generally with vesting terms up to 3 years after the date of grant. The fair value of the restricted stock is equal to the market price of the Company’s common stock on the date of grant. Expense for restricted stock is amortized ratably over the vesting period.

The following table summarizes our restricted stock activity (in thousands, except per share data):


	Three months ended March 31,
	2025			2024
	Shares	Weighted-Average Grant Date Fair Value		Shares	Weighted-Average Grant Date Fair Value

Outstanding at beginning of period	279	$	57.21	114	$	127.87
Granted	451	13.86		162	35.75
Vested	(80)	67.24		(34)	139.19
Forfeited	(1)	54.78		—	—
Outstanding at end of the period	649	$	25.87	242	$	64.55

The Company withheld approximately 26 thousand shares and 11 thousand shares of the Company’s common stock to cover minimum tax liability withholding obligations upon the vesting of shares of restricted stock for the three months ended March 31, 2025 and 2024, respectively. The total fair value of restricted stock awards vested during the three months ended March 31, 2025 and 2024 was $1.1 million and $1.3 million, respectively.

Market and Performance-based Share Awards

The Company has issued market and performance-based share awards in 2022, 2023, and 2025, and performance-based share awards in 2021 and 2024 under the Amended and Restated 2012 Share Incentive Plan to certain key executives who were granted deferred shares and may earn between 0% and 229% of the target number depending upon both the Company’s total stockholder return (“TSR”), for those with market conditions, and the Company’s performance against predetermined performance goals over a three-year performance period after the date of grant. Market and performance-based share awards that are tied to the Company’s TSR are valued using the Monte Carlo method and are recognized ratably as expense over the award’s performance period. The fair value of the performance-based share awards is equal to the market price of the Company’s common stock on the date of grant adjusted by expected level of achievement over the performance period. Expense for performance-based share awards is amortized ratably over the performance period. In the event that management determines that the Company will not reach the lower threshold of the predetermined performance goals established in the grant agreement, any previously recognized expense is reversed in the period in which such a determination is made.

No market and performance-based share awards were issued during the three months ended March 31, 2025, as a result of the market and performance-based share awards granted in March of 2022 not reaching the lower threshold of the predetermined performance goals. The total fair value of performance-based share awards issued during the three months ended March 31, 2024 was $1.3 million. The Company withheld 0 shares and approximately 8 thousand for the quarters ended March 31, 2025 and 2024, respectively to cover minimum tax liability withholding obligations upon the vesting of shares of market and performance-based share awards.

Share-based compensation expense is recorded in selling, general, and administrative expense in the accompanying Condensed Consolidated Statements of Income. The total expense during the three months ended March 31, 2025 and 2024 are as follows (in thousands):


	Three months ended March 31,
	2025			2024
	Shares	Share-Based Compensation Expense		Shares	Share-Based Compensation Expense
Options and restricted stock	671	$	1,353	264	$	1,600
Market and performance-based share awards granted in 2025	319	34		—	—
Performance-based share awards granted in 2024	117	367		117	77
Market and performance-based share awards granted in 2023	47	176		47	482
Market and performance-based share awards granted in 2022	—	—		24	—
Performance-based share awards granted in 2021	—	—		14	12
Total share-based compensation	1,154	$	1,930	466	$	2,171

The total income tax expense recognized in the accompanying Unaudited Condensed Consolidated Statements of Operations for restricted stock awards was $0.4 million for the three months ended March 31, 2025 and the three months ended March 31, 2024.

There was $11.9 million of total unrecognized compensation cost related to restricted stock awards as of March 31, 2025, which is expected to be recognized over a weighted-average period of 2.3 years. There was $7.9 million of unrecognized compensation costs related to the 117 thousand performance-based shares and 366 thousand market and performance-based shares presented in the table above as of March 31, 2025, which is expected to be recognized over a weighted-average period of 2.1 years.