| Share-Based Payments |
The following table details our stock option activity for the first two quarters of fiscal 2025 (dollars in thousands, except per share data): | | | | | | | | | | | | | | | Weighted | | Weighted Average | | | | | | | Average | | Contractual Life | | Aggregate | | | Options | | Exercise Price | | Remaining (Years) | | Intrinsic Value | Outstanding at December 28, 2024 | | 1,773,573 | | $ | 24.35 | | 6.70 | | $ | — | Granted | | 398,647 | | $ | 4.15 | | | | | | Exercised | | — | | $ | — | | | | | | Forfeited | | — | | $ | — | | | | | | Expired | | (34,773) | | $ | 29.23 | | | | | | Outstanding at June 28, 2025 | | 2,137,447 | | $ | 20.50 | | 7.00 | | $ | 96 | Exercisable at June 28, 2025 | | 838,800 | | $ | 28.38 | | 4.96 | | $ | — |
The fair value of the options was estimated on the date of grant using the Black-Scholes option-pricing model utilizing the following assumptions. Expected volatility was based on both historical and implied volatilities of our common stock over the estimated expected term of the award. The expected term of the options granted represents the period of time that options were expected to be outstanding and is generally based on the “simplified method” in accordance with accounting guidance. We generally utilize the simplified method to determine the expected term of the options as we do not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term. The risk-free interest rate for the expected term of options is based on the U.S. Treasury implied yield at the date of grant. The assumptions used in the Black-Scholes option-pricing model for options granted during the first two quarters of 2025 and 2024 were as follows: | | | | | | | | | 2025 | | 2024 | Weighted average grant date fair value | | $ | 0.41 | | $ | 2.32 | Expected volatility | | | 53.77% | | | 48.19% | Expected term | | | 5.5 years | | | 5.5 years | Risk-free interest rate | | | 4.1% | | | 4.4% | Dividend yield | | | 18.3% | | | 7.9% |
The following table details the activity in our performance share long-term incentive awards (LTIAs) for the first two quarters of 2025: | | | | | | | | | | Weighted Average | | | Number of | | Grant Date Fair Value | | | Performance Shares(1) | | (per share)(2) | Outstanding at December 28, 2024 | | 2,684,106 | | $ | 12.03 | Granted | | 2,321,319 | | $ | 4.44 | Vested | | — | | $ | — | Forfeited | | (364,940) | | $ | 20.04 | Outstanding at June 28, 2025 | | 4,640,485 | | $ | 7.60 |
| (1) | Solely for purposes of this table, the number of performance shares is based on the participants earning the maximum number of performance shares (i.e., 233.333% or 300%, as applicable, of the target number of performance shares). |
| (2) | The fair value of the awards was determined based upon the closing price of our common stock on the applicable measurement dates (i.e., the deemed grant dates for accounting purposes), reduced by the present value of expected dividends using the risk-free interest-rate, as the award holders are not entitled to dividends or dividend equivalents during the vesting period. |
The following table details the activity in our restricted stock for the first two quarters of 2025: | | | | | | | | | | Weighted Average | | | Number of Shares | | Grant Date Fair Value | | | of Restricted Stock | | (per share)(1) | Outstanding at December 28, 2024 | | 689,137 | | $ | 12.86 | Granted | | 767,569 | | $ | 6.60 | Vested | | (279,854) | | $ | 13.63 | Forfeited | | (7,236) | | $ | 10.79 | Outstanding at June 28, 2025 | | 1,169,616 | | $ | 8.58 |
| (1) | The fair value of the awards was determined based upon the closing price of our common stock on the applicable measurement dates (i.e., the deemed grant dates for accounting purposes). |
The following table details the number of shares of common stock issued by our company during the second quarter and first two quarters of 2025 and 2024 upon the vesting of performance share LTIAs, the exercise of stock options, the issuance of restricted stock and other share-based compensation net of cancellations: | | | | | | | | | | | | | | | Thirteen Weeks Ended | | Twenty-six Weeks Ended | | | June 28, | | June 29, | | June 28, | | June 29, | | | 2025 | | 2024 | | 2025 | | 2024 | Number of performance shares vested | | | — | | | — | | | — | | | — | Shares withheld for tax withholding | | | — | | | — | | | — | | | — | Shares of common stock issued for performance share LTIAs | | | — | | | — | | | — | | | — | Shares of common stock issued to non-employee directors for annual equity grants | | | 222,003 | | | 116,532 | | | 222,003 | | | 116,532 | Shares of restricted common stock issued to employees | | | — | | | — | | | 767,569 | | | 479,746 | Shares of restricted stock withheld and cancelled for tax withholding upon vesting | | | (49) | | | (2,671) | | | (111,811) | | | (54,668) | Shares of restricted stock cancelled upon forfeiture | | | (4,517) | | | (1,467) | | | (7,236) | | | (2,143) | Net shares of common stock issued | | | 217,437 | | | 112,394 | | | 870,525 | | | 539,467 |
The following table sets forth the compensation expense recognized for share-based payments (performance share LTIAs, restricted stock, stock options, non-employee director stock grants and other share-based payments) during the second quarter and first two quarters of 2025 and 2024 and where that expense is reflected in our consolidated statements of operations (in thousands): | | | | | | | | | | | | | Thirteen Weeks Ended | | Twenty-six Weeks Ended | | June 28, | | June 29, | | June 28, | | June 29, | Consolidated Statements of Operations Location | 2025 | | 2024 | | 2025 | | 2024 | Compensation expense included in cost of goods sold | $ | 429 | | $ | 299 | | $ | 824 | | $ | 461 | Compensation expense included in selling, general and administrative expenses | | 2,954 | | | 2,313 | | | 5,730 | | | 3,934 | Total compensation expense for share-based payments | $ | 3,383 | | $ | 2,612 | | $ | 6,554 | | $ | 4,395 |
As of June 28, 2025, there was $6.7 million of unrecognized compensation expense related to performance share LTIAs, which is expected to be recognized over the next 2.5 years, $8.1 million of unrecognized compensation expense related to restricted stock, which is expected to be recognized over the next 2.7 years, and $1.4 million of unrecognized compensation expense related to stock options, which is expected to be recognized over the next 2.6 years.
|