XML 62 R10.htm IDEA: XBRL DOCUMENT v2.4.0.8
STOCKHOLDERS' EQUITY
 6 Months Ended
Jun. 30, 2014
STOCKHOLDERS' EQUITY [Abstract]  
STOCKHOLDERS' EQUITY
NOTE 3 – 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 and six months ended June 30, 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 June 30,
2014 2013
 
Cost of sales
 
$
163
  
$
152
 
Operating expenses
  
1,196
   
753
 
Net earnings
  
(847
)
  
(573
)

 
 
Increase/(Decrease) for the
Six Months Ended June 30,
2014 2013
 
Cost of sales
 
$
311
  
$
304
 
Operating expenses
  
2,036
   
1,677
 
Net earnings
  
(1,499
)
  
(1,243
)

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 June 30, 2014, the plans had 4,117,896 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, 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 six months ended June 30, 2014 and 2013 is summarized below:

 
 
For the six months ended June 30, 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
  
268
   
53.80
      
 
Exercised
  
(249
)
  
11.56
      
 
Forfeited
  
(126
)
  
56.03
      
 
 
Outstanding as of June 30, 2014
  
1,786
  
$
24.71
  
$
51,517
   
5.3
 
Exercisable as of June 30, 2014
  
1,425
  
$
20.40
  
$
47,250
   
4.4
 

 
 
For the six months ended June 30, 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
  
172
   
38.35
      
 
Exercised
  
(402
)
  
12.65
      
 
Forfeited
  
(31
)
  
33.88
       
 
 
Outstanding as of June 30, 2013
  
2,282
  
$
19.01
  
$
58,749
   
5.2
 
Exercisable as of June 30, 2013
  
1,802
  
$
15.11
  
$
53,425
   
4.2
 

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 0.5% and 0.5%; expected volatilities of 34% and 39%; risk-free interest rates of 1.8% and 1.0%; and expected lives of 5.6 and 5.0 years, in each case for the six months ended June 30, 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 six months ended June 30, 2014 and 2013 was as follows:

 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
 
2014
 
2013
 
2014
 
2013
 
Weighted-average fair value of options granted
 
$
19.68
  
$
15.58
  
$
17.53
  
$
12.94
 
Total intrinsic value of stock options exercised ($000s)
 
$
5,526
  
$
6,887
  
$
10,944
  
$
11,984
 

Non-vested restricted stock activity for the six months ended June 30, 2014 and 2013 is summarized below:

 
 
Six months ended June 30, 2014
 
 
 
 
Shares (000s)
   
Weighted
Average
Grant Date
Fair Value
 
Non-vested balance as of December 31, 2013
  
172
  
$
33.69
 
Granted
  
25
   
51.03
 
Vested
  
(24
)
  
37.61
 
Forfeited
  
(6
)
  
45.32
 
Non-vested balance as of June 30, 2014
  
167
  
$
35.27
 
 
 
 
Six months ended June 30, 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
  
(3
)
  
35.79
 
Forfeited
  
(24
)
  
31.97
 
Non-vested balance as of June 30, 2013
  
252
  
$
27.18
 

As of June 30, 2014 and 2013, there was $7,158 and $7,047, respectively, of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the plans. As of June 30, 2014, the unrecognized compensation cost is expected to be recognized over a weighted-average period of 1.6 years. The Company estimates that share-based compensation expense for the year ended December 31, 2014 will be approximately $4,500.

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 2,092,703 shares have been purchased, none of which remained in treasury at June 30, 2014. During the six months ended June 30, 2014, a total of 4,969 shares have been purchased at an average cost of $53.81 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.