Shareholders' Equity and Share-based Compensation | 3 Months Ended |
Sep. 30, 2014 |
Share-based Compensation [Abstract] | ' |
Shareholders' Equity and Share-based Compensation | ' |
Shareholders' Equity and Share-based Compensation |
Share Repurchase |
On October 22, 2010, the Company's Board of Directors authorized a $25.0 million share repurchase program. Under this repurchase program the Company may, from time to time, repurchase shares from the open market or in privately negotiated transactions, subject to supervision and oversight by the Board. The Company accounts for treasury stock under the cost method. Shares repurchased are accounted for as treasury shares and the total cost of shares repurchased is recorded as a reduction of shareholders' equity. From time to time, treasury shares may be reissued as part of the Company's stock-based compensation programs. Gains on re-issuance of treasury stock are credited to additional paid-in capital; losses are charged to additional paid-in capital to offset the net gains, if any, from previous sales or re-issuance of treasury stock. Any remaining balance of the losses are charged to retained earnings. |
On May 8, 2014, the Company's Board of Directors approved to reactivate the share repurchase program with a remaining balance of $22.7 million. The Board authorized management to repurchase, subject to oversight by the Board, our common shares up to the remaining balance of the program, or $22.7 million. The repurchases may be made from the open market or through negotiated block transactions and to date repurchases have been made pursuant to a pre-established 10b5-1 trading plan. Such 10b5-1 trading plan was expired in August 2014 and the Board intends to review conditions from time to time to determine whether it is appropriate to implement a new 10b5-1 trading plan or to conduct repurchases under the program outside of a 10b5-1 trading plan. |
During the three months ended September 30, 2014, the Company did not repurchased any shares under the program. As of September 30, 2014, the Company repurchased an aggregate of 361,364 shares for a total cost of $3.2 million, at an average repurchase price of $8.82 per share since inception of the program. No repurchased shares have been retired. Of the 361,364 repurchased shares, 21,650 shares with a weighted average repurchase price of $13.81 per share, were reissued at an average price of $3.00 per share for option exercises and vested RSU. |
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Stock Options |
The following table summarizes the Company's stock option activities for the three months ended September 30, 2014: |
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| | | Weighted | | | | | | | |
| | | Average | | | | | | | |
| Number of | | Exercise Price | | Aggregate | | | | | |
| Shares | | Per Share | | Intrinsic Value | | | | | |
Outstanding at June 30, 2014 | 3,238,784 | | | $ | 10.28 | | | $ | 3,258,607 | | | | | | |
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Granted | 10,000 | | | $ | 9.07 | | | | | | | | |
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Exercised | (128,231 | ) | | $ | 6.69 | | | $ | 392,484 | | | | | | |
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Canceled or forfeited | (17,484 | ) | | $ | 15.87 | | | | | | | | |
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Outstanding at September 30, 2014 | 3,103,069 | | | $ | 10.4 | | | $ | 3,118,240 | | | | | | |
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Information with respect to stock options outstanding and exercisable at September 30, 2014 is as follows: |
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| Options Outstanding | | Options Vested and Exercisable |
| Number Outstanding | | Weighted-Average | | Weighted-Average | | Number Exercisable | | Weighted-Average |
Remaining Contractual Life (years) | Exercise Price | Exercise Price |
Total options outstanding | 3,103,069 | | | 5.68 | | $ | 10.4 | | | 2,115,149 | | | $ | 11.26 | |
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Options vested and expected to vest | 3,005,766 | | | 5.57 | | $ | 10.48 | | | | | |
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Options expected to vest are the result of applying the pre-vesting forfeiture rate assumption to total outstanding options. |
The fair value of stock options granted were estimated at the date of grant using the Black-Scholes option valuation model for the three months ended September 30, 2014 with the following weighted average assumptions: |
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| Three Months Ended September 30, | | | | | | | | | | | | | | |
| 2014 | | | | | | | | | | | | | | |
Volatility rate | 43.50% | | | | | | | | | | | | | | |
Risk-free interest rate | 1.70% | | | | | | | | | | | | | | |
Expected term | 5.5 years | | | | | | | | | | | | | | |
Dividend yield | 0% | | | | | | | | | | | | | | |
Historically, the Company estimates its expected volatility based on that of the publicly traded shares of industry peers over a period equivalent to the expected term of the stock awards granted. Beginning in July 2015, the Company estimates its expected volatility based on a weighted average calculation of both the Company's volatility of its publicly traded share prices since its IPO and that of the publicly traded shares of industry peers over a period equivalent to the expected term of the stock awards granted. |
Restricted Stock Units ("RSU") |
The following table summarizes the Company's RSU activities for the three months ended September 30, 2014: |
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| Number of Restricted Stock | | Weighted Average | | Weighted Average | | Aggregate Intrinsic Value | | | |
Units | Grant Date Fair | Remaining | | | |
| Value Per Share | Recognition | | | |
| | Period (Years) | | | |
Nonvested at June 30, 2014 | 656,374 | | | $ | 8.4 | | | 1.77 | | $ | 6,084,587 | | | | |
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Granted | 25,500 | | | $ | 9.48 | | | | | | | | |
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Vested | (19,674 | ) | | $ | 8.92 | | | | | | | | |
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Forfeited | (29,950 | ) | | $ | 8.41 | | | | | | | | |
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Nonvested at September 30, 2014 | 632,250 | | | $ | 8.43 | | | 1.61 | | $ | 5,943,150 | | | | |
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RSUs vested and expected to vest | 557,582 | | | | | 1.52 | | $ | 5,241,267 | | | | |
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The fair value of RSU is estimated based on the market price of the Company's share on the date of grant. |
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Employee Share Purchase Plan |
The Employee Share Purchase Plan (the "ESPP") was established in May 2010 upon the completion of the Company's initial public offering. The assumptions used to estimate the fair values of common shares issued under the ESPP were as follows: |
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| Three Months Ended September 30, | | | | | | | | | | | | | | |
| 2014 | | | | | | | | | | | | | | |
Volatility rate | 50% | | | | | | | | | | | | | | |
Risk-free interest rate | 0.1% - 0.4% | | | | | | | | | | | | | | |
Expected term | 1.3 years | | | | | | | | | | | | | | |
Dividend yield | 0% | | | | | | | | | | | | | | |
Share-based Compensation Expense |
The total share-based compensation expense related to stock options, ESPP and RSUs described above, recognized in the condensed consolidated statements of operations for the periods presented was as follows: |
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| Three Months Ended September 30, | | | | | | | | |
| 2014 | | 2013 | | | | | | | | |
| (in thousands) | | | | | | | | |
Cost of goods sold | $ | 154 | | | $ | 196 | | | | | | | | | |
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Research and development | 206 | | | 295 | | | | | | | | | |
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Selling, general and administrative | 742 | | | 718 | | | | | | | | | |
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| $ | 1,102 | | | $ | 1,209 | | | | | | | | | |
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Total unrecognized stock-based compensation expense as of September 30, 2014 was $4.7 million, which includes estimated forfeitures and is expected to be recognized over a weighted-average period of 1.4 years. |