Stock-based Compensation

3 Months Ended

Mar. 31, 2015

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

Stock-Based Compensation. Stock-based compensation expense before income tax expense for the three-month periods ended March 31, 2015 and 2014, consisted of the following (in thousands):



	2015		2014
Cost of goods sold	$	93	$	43
Research and development	27		16
Selling, general, and administrative	400		280
Stock-based compensation expense before taxes	$	520	$	339

As of March 31, 2015, the total remaining unrecognized compensation cost related to non-vested stock options, net of expected forfeitures, was approximately $6.7 million and is expected to be recognized over a weighted average period of 3.7 years.

During the three months ended March 31, 2015, we granted awards representing 446,800 shares of our common stock. We did not grant any stock-based awards during the three months ended March 31, 2014. 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 three months ended March 31, 2015, the fair value of our stock-based awards granted was estimated using the following assumptions for the periods indicated below:



	Three Months Ended
	March 31, 2015
Risk-free interest rate	1.53%
Expected option life	5.0
Expected dividend yield	—%
Expected price volatility	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.

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

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