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Note 14 - Share-based Compensation

12 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

14.

SHARE-BASED COMPENSATION:

The Company has one active stock incentive plan for employees and directors, the 2022 Stock Incentive Plan, which provides for awards of stock options to purchase shares of common stock, stock appreciation rights, restricted and unrestricted shares of common stock, RSUs, and PSAs. In addition, the Company has one inactive stock incentive plan, the 2007 Stock Incentive Plan, under which previously granted awards remain outstanding.

The following table summarizes share-based compensation expense recorded (in thousands):

		Year Ended December 31,
		2022				2021				2020

Cost of sales		$	1,320			$	1,003			$	822
Selling, general, and administrative expense			2,382				2,213				2,266
Total		$	3,702			$	3,216			$	3,088

There were 873,402 shares of common stock available for future issuance under the Company’s stock incentive plan as of December 31, 2022, assuming the outstanding PSAs vest at the target level of 100%.

Stock Options Awards

The Company’s stock incentive plan provides that options become exercisable according to vesting schedules and terminate according to the terms of the grant. There were no options granted during the years ended December 31, 2022, 2021, or 2020. During the year ended December 31, 2020, 24,000 stock options at a weighted-average exercise price of $24.15 were exercised. The total intrinsic value of options exercised during the year ended December 31, 2020 was $0.1 million. There were no options exercised during the years ended December 31, 2022 or 2021. As of December 31, 2022 and 2021, there were no stock options outstanding.

Restricted Stock Units and Performance Share Awards

The Company’s stock incentive plan provides for equity instruments, such as RSUs and PSAs, which grant the right to receive a specified number of shares at specified times. RSUs and PSAs are service-based awards that vest according to the terms of the grant. PSAs have performance-based payout conditions.

The following table summarizes the Company’s RSU and PSA activity:

		Number of RSUs and PSAs (1)				Weighted-Average Grant Date Fair Value

Unvested RSUs and PSAs as of December 31, 2021			161,131			$	30.26
RSUs and PSAs granted			116,622				30.68
Unvested RSUs and PSAs canceled			(8,248	)			31.18
RSUs and PSAs vested (2)			(68,581	)			29.29
Unvested RSUs and PSAs as of December 31, 2022			200,924				30.80

(1)

The number of PSAs disclosed in this table are at the target level of 100%.

(2)

For the PSAs vested on March 31, 2022, the actual number of common shares that were issued was determined by multiplying the PSAs at the target level of 100%, as disclosed in this table, by a payout percentage based on the performance-based conditions achieved. The payout percentage was 141% for the 2020-2021 performance period and 93% for the 2021 performance period.

The unvested balance of RSUs and PSAs as of December 31, 2022 includes approximately 149,000 PSAs at the target level of 100%. The vesting of these awards is subject to the achievement of specified performance-based conditions, and the actual number of common shares that will ultimately be issued will be determined by multiplying this number of PSAs by a payout percentage ranging from 0% to 200%.

The weighted-average grant date fair value of RSUs and PSAs granted during the years ended December 31, 2022, 2021, and 2020 was $30.68, $33.30, and $26.61, respectively. The total fair value of RSUs and PSAs vested during the years ended December 31, 2022, 2021, and 2020 was $2.4 million, $3.3 million, and $2.0 million, respectively.

Based on the estimated level of achievement of the performance targets associated with the PSAs as of December 31, 2022, unrecognized compensation expense related to the unvested portion of the Company’s RSUs and PSAs was $3.5 million, which is expected to be recognized over a weighted-average period of 1.5 years.

Stock Awards

For the years ended December 31, 2022, 2021, and 2020, stock awards of 11,380 shares, 12,606 shares, and 17,442 shares, respectively, were granted to non-employee directors, which vested immediately upon issuance. The Company recorded compensation expense based on the weighted-average fair market value per share of the awards on the grant date of $30.75 in 2022, $30.94 in 2021, and $25.81 in 2020.