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Stockholders' Equity
 3 Months Ended
Mar. 29, 2024
Stockholders' Equity Note [Abstract]  
Stockholders' Equity

Note 10 — Stockholders’ Equity

Incentive Plan

The Company maintains an Amended and Restated Omnibus Equity Incentive Plan (the “Equity Plan”). The Equity Plan allows for awards of stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”) and performance stock units (“PSUs”) and other stock- and cash-based awards, including awards that are subject to service-based and performance-based vesting conditions. As of March 29, 2024, the Company had outstanding grants of stock options, restricted stock awards, RSUs and PSUs.

Stock option granted under the Equity Plan are granted at fair market value on the date of grant, become exercisable generally over a three-year period, or as determined by the Board of Directors, and expire over periods not exceeding 10 years from the date of grant. Certain stock options and stock-based awards provide for accelerated vesting if there is a change in control and pre-established financial metrics are met (as defined in the Equity Plan). Grants of restricted stock outstanding under the Equity Plan generally vest over periods of one to three years. Grants of RSUs and PSUs outstanding under the Equity Plan generally vest based on service, performance, or a combination of both. On June 15, 2023, stockholders approved a proposal to increase the number of shares under the plan by 2,170,000 shares, for a total of 20,205,000 shares. As of March 29, 2024, there were 962,029 shares available for grant under the Equity Plan.

Stock-Based Compensation

The cost that has been charged against income for stock-based compensation is set forth below (in thousands):

 

 

Three Months Ended

 

 

 

March 29, 2024

 

 

March 31, 2023

 

Employee stock options

 

$

3,173

 

 

$

2,977

 

Restricted stock

 

 

28

 

 

 

67

 

RSUs

 

 

2,312

 

 

 

1,601

 

PSUs

 

 

685

 

 

 

1,106

 

Nonemployee stock options

 

 

141

 

 

 

314

 

Total stock-based compensation expense

 

$

6,339

 

 

$

6,065

 

 

The Company recorded stock-based compensation costs in the following categories (in thousands):

 

 

 

Three Months Ended

 

 

 

March 29, 2024

 

 

March 31, 2023

 

Cost of sales

 

$

298

 

 

$

149

 

General and administrative

 

 

3,075

 

 

 

3,363

 

Selling and marketing

 

 

1,210

 

 

 

857

 

Research and development

 

 

1,756

 

 

 

1,696

 

Total stock-based compensation expense, net

 

 

6,339

 

 

 

6,065

 

Amounts capitalized as part of inventory

 

 

337

 

 

 

369

 

Total stock-based compensation expense, gross

 

$

6,676

 

 

$

6,434

 

 

As of March 29, 2024, total unrecognized compensation cost related to non-vested stock-based compensation arrangements were as follows (in thousands):

 

 

 

March 29, 2024

 

Stock options

 

$

28,392

 

Restricted stock, RSUs and PSUs

 

 

43,614

 

Total unrecognized stock-based compensation cost

 

$

72,006

 

 

The cost is expected to be recognized over a weighted-average period of approximately two years.

 

Note 10 — Stockholders’ Equity (Continued)

Assumptions

The fair value of each stock option award is estimated on the date of grant using a Black-Scholes option valuation model applying the weighted-average assumptions noted in the following table. Expected volatilities are based on historical volatility of the Company’s stock. The expected term of stock options granted is derived from the historical exercises and post-vesting cancellations and represents the period of time that stock options granted are expected to be outstanding. The Company has calculated a 8% estimated forfeiture rate based on historical forfeiture experience. The risk-free rate is based on the U.S. Treasury yield curve corresponding to the expected term at the time of the grant.

 

 

 

Three Months Ended

 

 

 

March 29, 2024

 

 

March 31, 2023

 

Expected dividend yield

 

 

0

%

 

 

0

%

Expected volatility

 

 

59

%

 

 

60

%

Risk-free interest rate

 

 

4.16

%

 

 

3.96

%

Expected term (in years)

 

 

5.29

 

 

 

5.05

 

Stock Options

A summary of stock option activity under the Equity Plan for three months ended March 29, 2024 is presented below:

 

 

 

Stock
Options
(in 000’s)

 

 

Weighted-
Average
Exercise
Price

 

 

Weighted-
Average
Remaining
Contractual
Term (years)

 

 

Aggregate
Intrinsic
Value
(in 000’s)

 

Outstanding at December 29, 2023

 

 

2,630

 

 

$

46.38

 

 

 

 

 

 

 

Granted

 

 

523

 

 

 

37.21

 

 

 

 

 

 

 

Exercised

 

 

(187

)

 

 

28.50

 

 

 

 

 

 

 

Forfeited or expired

 

 

(83

)

 

 

76.05

 

 

 

 

 

 

 

Outstanding at March 29, 2024

 

 

2,883

 

 

$

45.01

 

 

 

6.98

 

 

$

16,386

 

Exercisable at March 29, 2024

 

 

1,668

 

 

$

42.93

 

 

 

5.41

 

 

$

15,090

 

 

Restricted Stock, Restricted Stock Units and Performance Stock Units

A summary of restricted stock, RSU and PSU activity under the Equity Plan for the three months ended March 29, 2024 is presented below (shares in thousands):

 

 

 

Restricted
Stock

 

 

RSUs

 

 

PSUs

 

Unvested at December 29, 2023

 

 

14

 

 

 

401

 

 

 

56

 

Granted

 

 

—

 

 

 

415

 

 

 

390

 

Vested

 

 

—

 

 

 

(110

)

 

 

(24

)

Forfeited or expired

 

 

(4

)

 

 

(1

)

 

 

(4

)

Unvested at March 29, 2024

 

 

10

 

 

 

705

 

 

 

418