Stock Compensation

9 Months Ended

Sep. 30, 2018

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

Stock Compensation

12. Stock Compensation

The Company recognizes compensation expense for all stock-based payment awards made to employees and directors based on estimated grant date fair values. Stock-based compensation expense included in selling and administrative expenses approximated $0.2 million for each of the three month periods ended September 30, 2018 and 2017, and $0.6 million and $0.5 million for the nine month periods ended September 30, 2018 and 2017, respectively.

The Company’s 2017 Omnibus Equity Compensation Plan (“2017 Plan”) was approved by the Company’s stockholders and provides the Compensation Committee of the Board of Directors with the discretion to grant stock options, stock appreciation rights, restricted shares, restricted stock units, performance shares, performance units and other stock-based awards and cash-based awards. Vesting terms vary with each grant and may be subject to vesting upon a “change in control” of the Company. The total number of shares authorized for issuance under the 2017 Plan is 1,371,189 shares, with 1,121,654 shares remaining available for grant at September 30, 2018.

Options

The Company granted a total of 387,500 and 435,000 options during the nine month periods ended September 30, 2018 and 2017, respectively. Options to purchase shares of common stock were granted with exercise prices equal to the fair value of the common stock on the date of grant.

The weighted average grant date fair value of stock options granted during the nine month periods ended September 30, 2018 and 2017 was $1.82 and $2.42, respectively. The fair value of each stock option granted was estimated on the date of grant using a Black-Scholes valuation model with the following weighted average assumptions:

	2018			2017
Expected dividend yield at date of grant		0.00	%		0.00	%
Risk-free interest rate		2.49	%		1.99	%
Expected stock price volatility		35.65	%		34.85	%
Expected life of options (in years)		6.0			6.0

The risk-free interest rate assumptions were based on the U.S. Treasury yield curve in effect at the time of the grant. Expected volatility is based on historical daily price changes of the Company’s stock for six years prior to the date of grant. The expected life of options is the average number of years the Company estimates that options will be outstanding.

The following table summarizes stock option activity for the nine months ended September 30, 2018:

	Number of Options			Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2017		930,300		$	5.63		8.7	$	150
Granted		387,500			4.70
Exercised		-			-
Forfeited		(249,000	)		5.72
Expired		(144,300	)		4.84
Outstanding at September 30, 2018		924,500		$	5.26		8.5	$	-
Exercisable at September 30, 2018		163,000		$	5.23		7.7	$	-

The aggregate intrinsic value in the table above represents the total that would have been received by the option holders if all in-the-money options had been exercised and sold on the date indicated.

As of September 30, 2018, 761,500 stock option awards were non-vested. Unrecognized compensation cost related to stock option awards was approximately $1.3 million, which is expected to be recognized over a weighted average period of 3.7 years.

Restricted Stock

The Company estimates the fair value of restricted stock awards based upon the market price of the underlying common stock on the date of grant. As of September 30, 2018, the total unrecognized compensation cost related to non-vested restricted stock awards was approximately $0.8 million, which is expected to be recognized over a weighted average period of 2.1 years.

The following table summarizes restricted stock share activity for the nine months ended September 30, 2018:

	Number of Restricted Stock Shares			Weighted Average Grant Date Fair Value
Non-vested at December 31, 2017		85,000		$	6.50
Granted		-			-
Shares vested		(28,333	)		6.50
Shares forfeited		(10,000	)		6.50
Non-vested at September 30, 2018		46,667		$	6.50

The following table summarizes restricted stock unit activity for the nine months ended September 30, 2018:

	Number of Restricted Stock Units			Weighted Average Grant Date Fair Value
Non-vested at December 31, 2017		35,835		$	6.45
Granted		147,500			4.70
Shares vested		(35,835	)		6.45
Shares forfeited		-			-
Non-vested at September 30, 2018		147,500		$	4.70