STOCKHOLDERS' EQUITY

3 Months Ended

Mar. 31, 2014

STOCKHOLDERS' EQUITY [Abstract]

STOCKHOLDERS' EQUITY

NOTE 2 – STOCKHOLDERS’ EQUITY

STOCK-BASED COMPENSATION

The Company records stock-based compensation in accordance with the provisions of ASC 718, “Compensation-Stock Compensation.” The Company’s results for the three months ended March 31, 2014 and 2013 reflected the following stock-based compensation cost, and such compensation cost had the following effects on net earnings:

	Increase/(Decrease) for the Three Months Ended March 31,
	2014			2013
Cost of sales	$	148		$	152
Operating expenses		840			924
Net earnings		(653	)		(670	)

As required by ASC 718, the Company has made an estimate of expected forfeitures based on its historical experience and is recognizing compensation cost only for those stock-based compensation awards expected to vest.

The Company’s stock incentive plans allow for the granting of restricted stock awards and options to purchase common stock. Both incentive stock options and nonqualified stock options can be awarded under the plans. No option will be exercisable for longer than ten years after the date of grant. The Company has approved and reserved a number of shares to be issued upon exercise of the outstanding options that is adequate to cover all exercises. As of March 31, 2014, the plans had 4,115,858 shares available for future awards. Compensation expense for stock options and restricted stock awards is recognized on a straight-line basis over the vesting period, generally three years for stock options, ninety days to four years for employee restricted stock awards, and four to seven years for non-employee director restricted stock awards. Certain awards provide for accelerated vesting if there is a change in control (as defined in the plans) or other qualifying events.

Option activity for the three months ended March 31, 2014 and 2013 is summarized below:

For the three months ended March 31, 2014	Shares (000s)			Weighted Average  Exercise Price		Aggregate Intrinsic Value ($000s)		Weighted Average Remaining Contractual Term
Outstanding as of December 31, 2013		1,893		$	20.94	$	71,465
Granted		158			50.57
Exercised		(125	)		10.60
Forfeited		(13	)		43.10
Outstanding as of March 31, 2014		1,913		$	23.92	$	53,946		5.6
Exercisable as of March 31, 2014		1,504		$	19.28	$	49,392		4.7

For the three months ended March 31, 2013	Shares (000s)			Weighted Average Exercise Price		Aggregate Intrinsic Value ($000s)		Weighted Average Remaining Contractual Term
Outstanding as of December 31, 2012		2,543		$	16.87	$	49,845
Granted		166			38.10
Exercised		(183	)		11.42
Outstanding as of March 31, 2013		2,526		$	18.67	$	63,825		5.4
Exercisable as of March 31, 2013		2,015		$	14.89	$	58,552		4.4

ASC 718 requires companies to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. The fair value of each option grant is estimated on the date of the grant using the Black-Scholes option-pricing model with the following weighted average assumptions: dividend yields of 0.6% and 0.5%; expected volatilities of 33% and 39%; risk-free interest rates of 1.7% and 0.9%; and expected lives of 5.6 and 5.0 years, in each case for the three months ended March 31, 2014 and 2013, respectively.

The Company used a projected expected life for each award granted based on historical experience of employees’ exercise behavior. Expected volatility is based on the Company’s historical volatility levels. Dividend yields are based on the Company’s historical dividend yields. Risk-free interest rates are based on the implied yields currently available on U.S. Treasury zero coupon issues with a remaining term equal to the expected life.

Other information pertaining to option activity during the three months ended March 31, 2014 and 2013 was as follows:

	Three Months Ended March 31,
	2014			2013
Weighted-average fair value of options granted		$	15.98		$	12.85
Total intrinsic value of stock options exercised ($000s)		$	5,418		$	5,097

Non-vested restricted stock activity for the three months ended March 31, 2014 and 2013 is summarized below:

Three months ended March 31, 2014	Shares (000s)			Weighted Average Grant Date Fair Value
Non-vested balance as of December 31, 2013		172		$	33.69
Granted		20			50.49
Vested		(2	)		35.79
Forfeited		(2	)		32.70
Non-vested balance as of March 31, 2014		188		$	35.42

Three months ended March 31, 2013	Shares (000s)			Weighted Average Grant Date Fair Value
Non-vested balance as of December 31, 2012		258		$	26.88
Granted		21			38.10
Vested		(2	)		35.79
Non-vested balance as of March 31, 2013		277		$	27.66

As of March 31, 2014 and 2013, there was $8,259 and $8,924, respectively, of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the plans. As of March 31, 2014, the unrecognized compensation cost is expected to be recognized over a weighted-average period of 1.7 years. The Company estimates that share-based compensation expense for the year ended December 31, 2014 will be approximately $4,000.

REPURCHASE OF COMMON STOCK

The Company has an approved stock repurchase program. The total authorization under this program is 3,763,038 shares. Since the inception of the program in June 1999, a total of 2,088,388 shares have been purchased, none of which remained in treasury at March 31, 2014. During the three months ended March 31, 2014, a total of 654 shares have been purchased at an average cost of $49.84 per share. The Company intends to acquire shares from time to time at prevailing market prices if and to the extent it deems it advisable to do so based on its assessment of corporate cash flow, market conditions and other factors.