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Preferred and Common Shares and Share-Based Compensation | 3 Months Ended
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Mar. 28, 2025
Share-Based Payment Arrangement [Abstract] |
Preferred and Common Shares and Share-Based Compensation | 11. Preferred and Common Shares and Share-Based Compensation Preferred Shares In May 2021, the Company’s shareholders approved a special resolution to amend the Company’s articles to authorize up to 7.0 million preferred shares for future issuance. The Company’s Board of Directors is authorized to designate and issue one or more series of preferred shares, fix the rights, preferences and designation, as deemed necessary or advisable, relating to the preferred shares, provided that no shares of any series may be entitled to more than one vote per share. As of March 28, 2025, no preferred shares had been issued and outstanding. Common Share Repurchases In February 2020, the Company’s Board of Directors approved a share repurchase plan (the “2020 Repurchase Plan”), authorizing the repurchase of $50.0 million worth of the Company’s common shares. During the three months ended March 28, 2025, the Company repurchased 46 thousand shares under the 2020 Repurchase Plan for an aggregate purchase price of $6.2 million and an average price of $134.54 per share. As of March 28, 2025, the Company had $43.3 million available for future share repurchases under the 2020 Repurchase Plan. Share-Based Compensation Expense The table below summarizes share-based compensation expense recorded in the consolidated statements of operations (in thousands):
| Three Months Ended |
| March 28, |  |  | March 29, |
| 2025 |  |  | 2024 |
Selling, general and administrative | $ | 6,136 |  |  | $ | 5,097 |
Research and development and engineering |  | 615 |  |  |  | 559 |
Cost of revenue |  | 349 |  |  |  | 421 |
Total share-based compensation expense | $ | 7,100 |  |  | $ | 6,077 |
Share-based compensation expense reported in selling, general and administrative expenses included expenses related to restricted stock units granted to the members of the Company’s Board of Directors of $1.6 million and $1.4 million during the three months ended March 28, 2025 and March 29, 2024, respectively. Restricted Stock Units The Company’s restricted stock units (“RSUs”) have generally been issued with vesting periods ranging from zero to four years and vest based solely on service conditions. Accordingly, the Company recognizes compensation expense on a straight-line basis over the requisite service period. The Company reduces the compensation expense by an estimated forfeiture rate which is based on anticipated forfeitures and historical forfeiture experience. The table below summarizes activities relating to RSUs issued and outstanding under the Company’s Amended and Restated 2010 Incentive Plan during the three months ended March 28, 2025:
| Shares (In thousands) |  |  | Weighted Average Grant Date Fair Value |
Unvested at December 31, 2024 |  | 198 |  |  | $ | 154.43 |
Granted |  | 131 |  |  | $ | 143.54 |
Vested |  | (72 | ) |  | $ | 150.60 |
Forfeited |  | (5 | ) |  | $ | 158.19 |
Unvested at March 28, 2025 |  | 252 |  |  | $ | 149.81 |
Expected to vest as of March 28, 2025 |  | 227 |  |  |  |
The total fair value of RSUs that vested during the three months ended March 28, 2025 was $10.2 million based on the market price of the underlying shares on the date of vesting. Performance Stock Units The Company typically grants PSUs that are based on the Company’s financial performance metrics, market conditions, or a hybrid of company financial performance metrics and market conditions. These PSUs generally cliff vest on the first day following the end of the specified performance period. The number of common shares to be issued upon settlement following vesting of attainment-based PSUs is determined based on the Company’s financial performance metrics over the specified performance period against the targets established by the Company’s Board of Directors at the time of grant and will be in the range of zero to 200% of the target number of shares. The Company recognizes the related compensation expense ratably over the performance period based on the number of shares that are deemed probable of vesting at the end of the specified performance period. This probability assessment is performed quarterly and the cumulative effect of a change in the estimated compensation expense, if any, is recognized in the consolidated statement of operations in the period in which such determination is made. The number of common shares to be issued upon settlement following vesting of market-based PSUs is determined based on the relative market performance of the Company’s common shares compared to the Russell 2000 Index over the specified performance period using a payout formula established by the Company’s Board of Directors at the time of grant and will be in the range of zero to 200% of the target number of shares. The Company recognizes the related compensation expense based on the fair value of the market-based PSUs, determined using the Monte-Carlo valuation method as of the grant date, on a straight-line basis from the grant date to the end of the specified performance period. Compensation expense on market-based PSUs will not be affected by the number of shares that will ultimately vest at the end of the specified performance period. The number of common shares to be issued upon settlement following vesting of PSU awards that are based on the achievement of a hybrid of company financial performance metrics and market conditions (“Hybrid PSUs”) is determined based on the Company's financial performance metrics achieved over the specified performance period against the targets established by the Company's Board of Directors at the time of grant and a market-based multiplier based on the percentile ranking of the relative market performance of the Company’s common shares compared to the Russell 2000 Index companies. The payout will be in the range of zero to 260% of the target number of shares. The Company determines the fair value of these Hybrid PSUs using the Monte-Carlo valuation method as of the grant date. The Company recognizes compensation expense associated with the Hybrid PSUs ratably over the performance period based on the fair value of the PSUs as of the grant date and the number of shares that are deemed probable of vesting based on the estimated achievement of the pertinent company financial performance metrics at the end of the specified performance period. The probability assessment is performed quarterly and the cumulative effect of a change in the estimated compensation expense, if any, is recognized in the consolidated statement of operations in the period in which such determination is made. The table below summarizes the activities relating to the performance-based awards issued and outstanding under the Company’s Amended and Restated 2010 Incentive Plan during the three months ended March 28, 2025:
| Shares (In thousands) |  |  | Weighted Average Grant- Date Fair Value |
Unvested at December 31, 2024 |  | 227 |  |  | $ | 165.13 |
Granted |  | 82 |  |  | $ | 160.93 |
Performance adjustments(1) |  | (7 | ) |  | $ | 140.62 |
Vested |  | (49 | ) |  | $ | 139.41 |
Forfeited |  | (8 | ) |  | $ | 164.74 |
Unvested at March 28, 2025 |  | 245 |  |  | $ | 169.62 |
Expected to vest as of March 28, 2025 |  | 207 |  |  |  |
(1) The amount shown represents performance adjustments related to the performance-based awards vested during the three months ended March 28, 2025. The unvested PSUs are shown at target payout levels in the table above. As of March 28, 2025, the maximum number of common shares that could be earned under these PSU grants was approximately 551 thousand shares. The total fair value of PSUs that vested during the three months ended March 28, 2025 was $7.2 million based on the market price of the underlying common shares on the date of vesting. The grant-date fair value per unit of the hybrid PSUs granted during the three months ended March 28, 2025 was estimated using the Monte Carlo valuation method with the following assumptions:
| Three Months Ended March 28, 2025 |
Grant-date stock price | $ | 142.80 |
Expected volatility |  | 36.94 | %
Risk-free interest rate |  | 4.18 | %
Expected annual dividend yield |  | — |
Fair value | $ | 160.93 |
Stock Options The table below summarizes the activities relating to stock options issued and outstanding under the Company’s Amended and Restated 2010 Incentive Plan during the three months ended March 28, 2025:
| Shares (In thousands) |  |  | Weighted Average Exercise Price |
Outstanding as of December 31, 2024 |  | 149 |  |  | $ | 139.17 |
Granted |  | — |  |  | $ | — |
Exercised |  | (4 | ) |  | $ | 135.86 |
Forfeited or expired |  | (4 | ) |  | $ | 156.91 |
Outstanding as of March 28, 2025 |  | 141 |  |  | $ | 138.77 |
Exercisable as of March 28, 2025 |  | 94 |  |  |  |
Expected to vest as of March 28, 2025 |  | 47 |  |  |  |

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