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Stockholders' Equity | 6 Months Ended
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Jun. 30, 2022
Share-based Payment Arrangement [Abstract] |
Stockholders' Equity | STOCKHOLDERS’ EQUITY Restricted Stock Restricted stock activity is as follows (in thousands, except shares):
| Three months ended June 30, |  | Six months ended June 30, |  |
| 2021 |  | 2022 |  | 2021 |  | 2022 |  |  |  |
| Shares | Fair Value |  | Shares | Fair Value |  | Shares | Fair Value |  | Shares | Fair Value |  |  |  |  |  |
Granted(1) | — |  | $ | — |  |  | — |  | $ | — |  |  | 9,300 |  | $ | 324 |  |  | — |  | $ | — |  |  |  |  |  |  |
Returned for payroll taxes | — |  | $ | — |  |  | (49) |  | $ | (2) |  |  | 9,688 |  | $ | 347 |  |  | 4,136 |  | $ | 205 |  |  |  |  |  |  |
Cancelled | 966 |  | $ | 27 |  |  | 450 |  | $ | 16 |  |  | 966 |  | $ | 27 |  |  | 1,450 |  | $ | 47 |  |  |  |  |  |  |
(1) | Restricted stock granted during the six months ended June 30, 2021 vests over a three-year period, if the employee has remained continuously employed by us during the vesting period, at a weighted average stock price of $34.79.
We recorded stock-based compensation expense, which is included in General, administrative and other expenses, for restricted stock awards of $98,000 and $40,000 for the three months ended June 30, 2021 and 2022, respectively and $219,000 and $97,000 for the six months ended June 30, 2021 and 2022, respectively. Stock Options Stock option grants and cancellations are as follows (in thousands, except shares):
| Three months ended June 30, |  | Six months ended June 30, |  |
| 2021 |  | 2022 |  | 2021 |  | 2022 |  |  |  |
| Shares | Fair Value |  | Shares | Fair Value |  | Shares | Fair Value |  | Shares | Fair Value |  |  |  |  |  |
Granted(1) | — |  | $ | — |  |  | — |  | $ | — |  |  | 701,400 |  | $ | 7,115 |  |  | 58,500 |  | $ | 959 |  |  |  |  |  |  |
Granted(2) | — |  | $ | — |  |  | — |  | $ | — |  |  | — |  | $ | — |  |  | 310,000 |  | $ | 5,388 |  |  |  |  |  |  |
Granted(3) | — |  | — |  |  | — |  | — |  |  | 150,000 |  | $ | 1,684 |  |  | — |  | — |  |  |  |  |  |  |
Cancelled | — |  | $ | — |  |  | 18,138 |  | $ | 214 |  |  | 3,840 |  | $ | 24 |  |  | 25,138 |  | $ | 285 |  |  |  |  |  |  |
(1) | Stock options granted during the six months ended June 30, 2021 and 2022 had a weighted average price of $34.79 and $49.48, respectively. The fair value of these options was calculated using the Black-Scholes option pricing model. The options granted in 2021 and 2022 vest over a five-year period and have a ten-year term. These options will vest if the employee has remained continuously employed by us through the vesting period.
(2) | Stock options granted during the six months ended June 30, 2022 had a weighted average price of $49.48. The fair value of these options was calculated using the Black-Scholes option pricing model and vest over a seven-year period and have a ten-year term. These options will vest if the employee has remained continuously employed by us through the vesting period.
(3) | We granted 150,000 options to a certain key employee at a weighted average price of $34.79. These options will vest when the price of our common stock closes at or above $53.39 (50,000 options) and $77.34 (100,000 options) for three consecutive days within the ten-year term and the employee has remained continuously employed by us through such date. The fair value of these options was $1.7 million.
Additional stock option activity is as follows (in thousands, except shares):
| Three months ended June 30, |  | Six months ended June 30, |  |
| 2021 |  | 2022 |  | 2021 |  | 2022 |  |  |  |
| Shares | Cash |  | Shares | Cash |  | Shares | Cash |  | Shares | Cash |  |  |  |  |  |
Exercised(1) | 180,629 |  | (1) |  | — |  | — |  |  | 281,629 |  | (1) |  | 18,736 |  | (1) |  |  |  |  |  |
Returned for option price(2) | 77,792 |  | $ | 733 |  |  | — |  | $ | — |  |  | 142,524 |  | $ | 879 |  |  | 8,125 |  | $ | 60 |  |  |  |  |  |  |
Returned for payroll taxes(3) | 17,971 |  | $ | 681 |  |  | — |  | $ | — |  |  | 25,982 |  | $ | 976 |  |  | 1,601 |  | $ | 82 |  |  |  |  |  |  |
(1) | Stock options exercised during the three months ended June 30, 2021 had a weighted average exercise price of $20.44, with an aggregate intrinsic value of $3.1 million. Stock options exercised during the six months ended June 30, 2021 and 2022 had a weighted average exercise price of $21.78 and $25.88, respectively, with an aggregate intrinsic value of $4.4 million and $0.5 million, respectively.
(2) | Represents shares withheld/cash received for the payment of the option price.
(3) | Represents shares withheld/cash paid for the payment of payroll taxes.
We recorded stock-based compensation expense, which is included in General, administrative and other expenses, for stock options of $480,000 and $550,000 for the three months ended June 30, 2021 and 2022, respectively and $1,040,000 and $1,188,000 for the six months ended June 30, 2021 and 2022, respectively. Performance Awards Performance award activity is as follows (in thousands, except shares):
| Three months ended June 30, |  | Six months ended June 30, |  |
| 2021 |  | 2022 |  | 2021 |  | 2022 |  |  |  |
| Shares | Fair Value |  | Shares | Fair Value |  | Shares | Fair Value |  | Shares | Fair Value |  |  |  |  |  |
Granted | — |  | $ | — |  |  | 23,263 |  | $ | 1,100 |  |  | 10,254 |  | $ | 402 |  |  | 27,013 |  | $ | 1,262 |  |  |  |  |  |  |
Cancelled | 6,987 |  | $ | 67 |  |  | 13,974 |  | $ | 134 |  |  | 34,935 |  | $ | 335 |  |  | 20,961 |  | $ | 201 |  |  |  |  |  |  |
On June 1, 2021, we amended the performance award agreements granted on May 19, 2020 for three of our executives. The amendment increased the amount of performance awards payable in shares for the last three predetermined growth targets. It was treated as a modification of the original performance award agreement and resulted in an additional $2.6 million of incremental compensation expense, expected to be recognized over the remaining term of 36 months. The fair value of the performance awards granted during the three months ended June 30, 2022 was determined by using the Monte-Carlo simulation pricing model with the following assumptions:
Grant date |  | April 1, 2022 |  |  |  |  |  |
Performance Period |  | April 1, 2022 - December 31, 2024 |  |  |  |  |  |
Simulation period (years) |  | 2.75 |  |  |  |  |  |
Share price at grant date |  | $52.49 |  |  |  |  |  |
Expected volatility |  | 44.44 | % |  |  |  |  |  |
Risk-free interest rate |  | 2.55 | % |  |  |  |  |  |
We recorded stock-based compensation expense, which is included in General, administrative and other expenses, for performance awards of $352,000 and $637,000 for the three months ended June 30, 2021 and 2022, respectively and $589,000 and $1,203,000 for the six months ended June 30, 2021 and 2022, respectively. Employee Stock Purchase Plan ESPP activity is as follows (in thousands, except shares):
| Three months ended June 30, |  | Six months ended June 30, |  |
| 2021 |  | 2022 |  | 2021 |  | 2022 |  |  |  |
| Shares | Price |  | Shares | Price |  | Shares | Price |  | Shares | Price |  |  |  |  |  |
ESPP | 13,706 |  | $ | 26.32 |  |  | 11,796 |  | $ | 33.70 |  |  | 31,888 |  | $ | 26.32 |  |  | 25,089 |  | $ | 39.86 |  |  |  |  |  |  |
The fair value of the right (option) to purchase shares under the ESPP is estimated at the date of purchase with the four quarterly purchase dates using the following assumptions:
| 2022
Dividend yield | 0.01%
Expected volatility | 30.24%
Risk-free interest rate | 0.08%, 0.22%, 0.31%, 0.40%
Expected life (years) | 0.25, 0.50, 0.75, 1.00
We recorded stock-based compensation expense, which is included in General, administrative and other expenses and Regional and unallocated funeral and cemetery costs, for the ESPP totaling $135,000 and $152,000 for the three months ended June 30, 2021 and 2022, respectively and $341,000 and $351,000 for the six months ended June 30, 2021 and 2022, respectively. Good To Great Incentive Program Common stock issued to certain employees under this incentive program is as follows (in millions, except shares):
Three months ended June 30, |  | Six months ended June 30, |  |
2021 |  | 2022 |  | 2021 |  | 2022 |  |  |  |
Shares | Fair Value |  | Shares | Fair Value |  | Shares | Fair Value |  | Shares | Fair Value |  |  |  |  |  |
— |  | $ | — |  |  | — |  | $ | — |  |  | — |  | $ | — |  |  | 27,448 |  | $ | 1.4 |  |  |  |  |  |  |
(1) | Common stock granted during the six months ended June 30, 2022 had a grant date stock price of $49.48.
Non-Employee Director and Board Advisor Compensation Non-Employee Director and Board Advisor common stock activity is as follows (in thousands, except shares):
| Three months ended June 30, |  | Six months ended June 30, |  |
| 2021 |  | 2022 |  | 2021 |  | 2022 |  |  |  |
| Shares | Fair Value |  | Shares | Fair Value |  | Shares | Fair Value |  | Shares | Fair Value |  |  |  |  |  |
Board of Directors | 4,333 |  | $ | 160 |  |  | 2,372 |  | $ | 94 |  |  | 9,373 |  | $ | 338 |  |  | 5,041 |  | $ | 236 |  |  |  |  |  |  |
Advisor to the Board | 135 |  | $ | 5 |  |  | 126 |  | $ | 5 |  |  | 277 |  | $ | 10 |  |  | 219 |  | $ | 10 |  |  |  |  |  |  |
(1) | Common stock granted during the three months ended June 30, 2021 and 2022 had a weighted average price of $36.97 and $39.65, respectively and $36.01 and $46.83 for the six months ended June 30, 2021 and 2022.
We recorded compensation expense, which is included in General, administrative and other expenses, related to annual retainers, including the value of stock granted to non-employee Directors and an advisor to our Board, of $219,000 and $184,000 for the three months ended June 30, 2021 and 2022, respectively and $455,000 and $385,000 for the six months ended June 30, 2021 and 2022, respectively. Share Repurchase On February 23, 2022, our Board authorized an increase in our share repurchase program to permit us to purchase up to an additional $75.0 million under our share repurchase program, in addition to amounts previously authorized and outstanding in accordance with Rule 10b-18 of the Securities Exchange Act of 1934, as amended (“the Exchange Act”). Share repurchase activity is as follows (dollar value in thousands):
| Three months ended June 30, |  | Six months ended June 30,
| 2021 |  | 2022 |  | 2021 |  | 2022 |  |
Number of Shares Repurchased(1) | 324,700 |  |  | 205,496 |  |  | 324,700 |  |  | 695,496 |  |  |
Average Price Paid Per Share | $ | 37.88 |  |  | $ | 40.02 |  |  | $ | 37.88 |  |  | $ | 49.22 |  |  |
Dollar Value of Shares Repurchased(1) | $ | 12,301 |  |  | $ | 8,224 |  |  | $ | 12,301 |  |  | $ | 34,234 |  |  |
(1) | During the six months ended June 30, 2021, 24,700 shares settled in July 2021, which had a cost of $0.7 million.
Our shares were purchased in the open market at times and in amounts as management determined appropriate based on factors such as market conditions, legal requirements and other business considerations. Shares purchased pursuant to the repurchase program are currently held as treasury shares. At June 30, 2022, our share repurchase program had $48.9 million authorized for repurchases. Cash Dividend Our Board declared the following dividends payable on the dates below (in thousands, except per share amounts):
2022 | Per Share |  | Dollar Value
March 1 st | $ | 0.1125 |  |  | $ | 1,725 |
June 1 st | $ | 0.1125 |  |  | $ | 1,730 |
2021 | Per Share |  | Dollar Value
March 1 st | $ | 0.1000 |  |  | $ | 1,799 |
June 1 st | $ | 0.1000 |  |  | $ | 1,808 |

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