What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-11-04 compared with 2021-08-05 · 170 added, 142 removed, 607 unchanged (34% of the section changed)

2 unchanged sentences

Consolidated Balance Sheets

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

Assets (in thousands, except share and per share data)

24 unchanged sentences

Accounts payable $ 25,940 $ 12,447

Dividends payable 9,970 —

Accrued liabilities 48,266 46,586

6 unchanged sentences

Preferred stock, $ .001 par value, 5,000,000 shares authorized, no shares issued

Common stock, $ .004 par value, 100,000,000 shares authorized, 52,416,014 and 52,224,767 issued and outstanding at June 30, 2021 and December 31, 2020, respectively

Common stock, $ .004 par value, 100,000,000 shares authorized, 52,420,486 and 52,224,767 issued and outstanding at September 30, 2021 and December 31, 2020, respectively

Additional paid-in capital 11,966 5,161

7 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

7 unchanged sentences

Interest (expense) income, net ( 10 ) 10 ( 11 ) 90

Other income (expense), net 39 32 56 5

Other (expense) income, net ( 19 ) 15 37 20

Income before taxes 20,108 26,156 63,836 76,228

12 unchanged sentences

Consolidated Statements of Stockholders' Equity

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

Common Stock Paid-in Retained

8 unchanged sentences

Dividends — — — ( 9,964 ) ( 9,964 )

Balances at June 30, 2021 52,416 $ 210 $ 10,998 $ 372,518 $ 383,726

Three Months Ended June 30, 2021

Balances at September 30, 2021 52,420 $ 210 $ 11,966 $ 388,103 $ 400,279

Three Months Ended September 30, 2021

Common Stock Paid-in Retained

1 unchanged sentence

(in thousands)

Balances at March 31, 2021 52,424 $ 210 $ 10,957 $ 361,871 $ 373,038

Balances at June 30, 2021 52,416 $ 210 $ 10,998 $ 372,518 $ 383,726

Net income — — — 15,581 15,581

4 unchanged sentences

Dividends — — — 4 4

Balances at June 30, 2021 52,416 $ 210 $ 10,998 $ 372,518 $ 383,726

Six Months Ended June 30, 2020

Balances at September 30, 2021 52,420 $ 210 $ 11,966 $ 388,103 $ 400,279

Nine Months Ended September 30, 2020

Common Stock Paid-in Retained

8 unchanged sentences

Dividends — — — ( 9,910 ) ( 9,910 )

Balances at June 30, 2020 52,234 $ 209 $ 6,451 $ 316,035 $ 322,695

Three Months Ended June 30, 2020

Balances at September 30, 2020 52,265 $ 209 $ 8,175 $ 336,508 $ 344,892

Three Months Ended September 30, 2020

Common Stock Paid-in Retained

1 unchanged sentence

(in thousands)

Balances at March 31, 2020 52,044 $ 208 $ — $ 306,115 $ 306,323

Balances at June 30, 2020 52,234 $ 209 $ 6,451 $ 316,035 $ 322,695

Net income — — — 20,460 20,460

4 unchanged sentences

Dividends — — — 13 13

Balances at June 30, 2020 52,234 $ 209 $ 6,451 $ 316,035 $ 322,695

Balances at September 30, 2020 52,265 $ 209 $ 8,175 $ 336,508 $ 344,892

The accompanying notes are an integral part of these consolidated financial statements.

1 unchanged sentence

Consolidated Statements of Cash Flows

Six Months Ended

Nine Months Ended

September 30,

Operating Activities (in thousands)

4 unchanged sentences

Provision for credit losses on accounts receivable, net of adjustments — 193

Provision (recoveries) for excess and obsolete inventories 292 ( 193 )

Provision for excess and obsolete inventories 378 1,776

Share-based compensation 8,784 8,546

21 unchanged sentences

Employee taxes paid by withholding shares ( 1,537 ) ( 1,130 )

Net cash provided by (used in) financing activities 45 ( 2,866 )

Cash dividends paid to stockholders ( 9,964 ) ( 9,910 )

Net cash used in financing activities ( 11,942 ) ( 13,911 )

Net increase in cash, cash equivalents and restricted cash 20,185 34,228

30 unchanged sentences

This decision was based on the expected employee absenteeism as well as the expected rolling blackouts caused by the increased demand on the electrical and natural gas power grids.

Although we lost several production days in mid-February 2021, we do not believe that the impact of this weather event will have a material adverse effect on the results of our operations, financial position and cash flows as of and for the year ending December 31, 2021.

Although we lost several production days in mid-February 2021, we do not believe that the impact of this weather event had a material adverse effect on the results of our operations, financial position and cash flows as of and for the year ending December 31, 2021.

Impact of COVID-19 Pandemic

3 unchanged sentences

Department of Homeland Security, as such, the decrees issued by national, state, and local governments in response to the COVID-19 pandemic have had minimal impact on our operations except for higher employee absenteeism, mostly in June 2020, in our manufacturing facilities.

We maintained continuous operations during the six months ended June 30, 2021, except for the weather related shutdown in February 2021.

Our Longview, TX facility suffered from COVID-19 related absenteeism in the quarter ending September 30, 2021, which reduced the production of coils that were needed to complete units at our Tulsa, OK facility.

We maintained continuous operations during the nine months ended September 30, 2021, except for planned maintenance in January and the weather related shutdown in February 2021.

For the most part, our workers are able to socially distance themselves during the manufacturing process.

Additional precautions have been taken to social distance workers that work in close environments and we have facilitated voluntary on-site COVID-19 vaccine clinics.

The Company utilizes sanitation stations and performs additional cleaning and sanitation throughout the day and deep cleaning overnight.

The Company utilizes sanitation stations and performs additional cleaning and sanitation throughout the day.

We witnessed increases in some of our raw material prices, especially in copper and steel, which appear to be an impact of COVID-19, and have put in place price increases in our products and continue to make strategic purchases of materials when we see opportunities.

Although, we have experienced some supply chain challenges, due to our strong vendor relationships as well as our favorable liquidity position, we have experienced minimal disruption to our supply chain due to COVID-19.

We anticipate that the average cost of raw materials and certain components purchased, including the impact of rising inflation and tariffs, for the remainder of 2021 will be higher than the costs experienced during the year ended December 31, 2020.

The magnitude of the impact of COVID-19 remains unpredictable and we, therefore, continue to anticipate potential supply chain disruptions, some employee absenteeism, and additional health and safety costs related to the COVID-19 pandemic that could unfavorably impact our business.

Although these disruptions and costs are expected to be temporary, there is uncertainty concerning the duration and overall impact to our business operations.

The Company experienced decreased demand in late 2020, however that demand began to rebound in the first quarter of 2021.

As COVID-19 restrictions lessened in 2021, we experienced increases in our order intake and minimal disruption to our operations.

We witnessed increases in some of our raw material prices which appear to be an impact of COVID-19, and have put in place price increases in our products and continue to make strategic purchases of materials when we see opportunities.

While our supply chain disruptions to date have been minimal and intermittent, they have impacted the production process which creates inefficiencies and can deteriorate our profit margins.

Additionally, we continue to experience challenges in a tight labor market, especially the hiring of both skilled and unskilled production labor.

In July 2021, we increased starting wages for our production workforce by 7.0 %.

We also have put a cost of living increase of 3.5 % in place in October for all employees below the Director level.

We will continue to implement human resource initiatives to retain and attract labor to further improve productivity and production efficiencies.

Because we have managed to maintain almost continuous operations with reasonable lead times through 2020 and 2021, our order intake is strong and has increased throughout 2021 as the economy has opened back up and COVID-19 restrictions have lessened.

We expect to increase our production for the remainder of 2021 and into 2022.

We do not believe that the impact of the COVID-19 pandemic will have a material adverse effect on the results of our operations, financial position and cash flows as of and for the year ended December 31, 2021.

However, we are continually monitoring the progression of the COVID-19 pandemic and its potential effects on our financial position, results of operations, and cash flows.

However, we are continually monitoring the progression of the COVID-19 pandemic, including the recent Delta variant, and its potential effects on our financial position, results of operations, and cash flows.

Accounting Policies

13 unchanged sentences

The fair value hierarchy gives the highest priority to quoted prices in active markets (Level 1) and the lowest priority to unobservable inputs (Level 3).

In some cases, the inputs used to measure fair value might fall into different levels of the fair

value hierarchy.

In some cases, the inputs used to measure fair value might fall into different levels of the fair value hierarchy.

The lowest level input that is significant to a fair value measurement determines the applicable level in the fair value hierarchy.

6 unchanged sentences

As of December 31, 2020, our intangible assets, net of amortization, were approximately $ 38 thousand.

The amount of amortization was $ 58.0 thousand for the three months ended June 30, 2020 and $ 38.0 thousand and $ 117.0 thousand for the six months ended June 30, 2021 and 2020, respectively.

The amount of amortization was $ 58 thousand for the three months ended September 30, 2020 and $ 38 thousand and $ 175 thousand for the nine months ended September 30, 2021 and 2020, respectively.

Goodwill represents the excess of the consideration paid for the acquired business, in our February 2018 business combination, over the fair value of the individual assets acquired, net of liabilities assumed.

Goodwill at June 30, 2021 is deductible for income tax purposes.

Goodwill at September 30, 2021 is deductible for income tax purposes.

Goodwill is not amortized, but instead is evaluated for impairment at least annually.

We perform our annual assessment of impairment during the fourth quarter of our fiscal year, and more frequently if circumstances warrant.

As of June 30, 2021 and December 31, 2020, our goodwill was approximately $ 3.2 million.

As of September 30, 2021 and December 31, 2020, our goodwill was approximately $ 3.2 million.

Recent Accounting Pronouncements

5 unchanged sentences

Disaggregated net sales by major source:

Three Months Ended Six Months Ended

2021 June 30,

2020 June 30,

2021 June 30,

Three Months Ended Nine Months Ended

September 30,

2021 September 30,

2020 September 30,

2021 September 30,

(in thousands)

8 unchanged sentences

Disaggregated units sold by major source:

Three Months Ended Six Months Ended

2021 June 30,

2020 June 30,

2021 June 30,

Three Months Ended Nine Months Ended

September 30,

2021 September 30,

2020 September 30,

2021 September 30,

Rooftop units 3,746 4,372 11,362 12,179

23 unchanged sentences

The Company is considered the principal for the equipment we design and manufacture and records that revenue.

The Company has no control over the Third Party Products to the end customer and the Company is under no obligation related to the Third Party Products.

The Company has no control over the Third Party Products to the end customer and the Company is under no

obligation related to the Third Party Products.

Amounts related to Third Party Products are not recognized as revenue but are recorded as a liability and are included in accrued liabilities on the consolidated balance sheet.

The Representatives’ fee and Third Party Products amounts (“Due to Representatives”) are paid only after all amounts associated with the order are collected from the customer.

The amount of payments to our Representatives were $ 14.0 million and $ 14.9 million for the three months ended June 30, 2021 and 2020, respectively.

The amount of payments to our Representatives were $ 25.0 million and $ 27.5 million for the six months ended June 30, 2021 and 2020, respectively.

The amount of payments to our Representatives were $ 9.5 million and $ 11.5 million for the three months ended September 30, 2021 and 2020, respectively.

The amount of payments to our Representatives were $ 34.5 million and $ 39.0 million for the nine months ended September 30, 2021 and 2020, respectively.

The Company also sells extended warranties on parts for various lengths of time ranging from six months to 10 years.

2 unchanged sentences

Accounts receivable and the related allowance for credit losses are as follows:

September 30,

2021 December 31, 2020

3 unchanged sentences

$ 58,756 $ 47,387

Three Months Ended Six Months Ended

2021 June 30,

2020 June 30,

2021 June 30,

Three Months Ended Nine Months Ended

September 30,

2021 September 30,

2020 September 30,

2021 September 30,

Allowance for credit losses:

3 unchanged sentences

losses, net of adjustments

Accounts receivable written off, net of recoveries

( 29 ) — ( 29 ) —

Balance, end of period $ 477 $ 546 $ 477 $ 546

3 unchanged sentences

The components of inventories and related changes in the allowance for excess and obsolete inventories account are as follows:

September 30,

2021 December 31, 2020

6 unchanged sentences

$ 104,553 $ 82,219

Three Months Ended Six Months Ended

2021 June 30,

2020 June 30,

2021 June 30,

Three Months Ended Nine Months Ended

September 30,

2021 September 30,

2020 September 30,

2021 September 30,

Allowance for excess and obsolete inventories:

1 unchanged sentence

Balance, beginning of period $ 2,726 $ 2,373 $ 3,261 $ 2,644

Provisions (recoveries) for excess and 486 81 292 ( 193 )

obsolete inventories

Provisions for excess and obsolete 86 1,969 378 1,776

Inventories written off ( 520 ) ( 230 ) ( 1,347 ) ( 308 )

1 unchanged sentence

Supplemental Cash Flow Information

Three Months Ended Six Months Ended

2021 June 30,

2020 June 30,

2021 June 30,

Three Months Ended Nine Months Ended

September 30,

2021 September 30,

2020 September 30,

2021 September 30,

Supplemental disclosures:

4 unchanged sentences

$ ( 1,052 ) $ ( 4,421 ) $ ( 2,897 ) $ 625

Dividends declared 9,970 $ 9,930 $ 9,970 $ 9,930

1 Includes non-cash changes in accrued capital expenditures

3 unchanged sentences

Changes in the warranty accrual are as follows:

Three Months Ended Six Months Ended

2021 June 30,

2020 June 30,

2021 June 30,

Three Months Ended Nine Months Ended

September 30,

2021 September 30,

2020 September 30,

2021 September 30,

Warranty accrual:

8 unchanged sentences

Accrued liabilities were comprised of the following:

September 30,

2021 December 31, 2020

12 unchanged sentences

Revolving Credit Facility

Our revolving credit facility, as amended, provides for maximum borrowings of $ 30.0 million.

On July 26, 2021, the Company entered into a new revolving credit facility which provides for maximum borrowings of $ 30.0 million.

Under the line of credit, there is one standby letter of credit totaling $ 1.8 million.

Borrowings available under the revolving credit facility at June 30, 2021 were $ 28.2 million.

Borrowings available under the revolving credit facility at September 30, 2021 were $ 28.2 million.

Interest on borrowings is payable monthly at LIBOR plus 2.0 %.

No fees are associated with the unused portion of the committed amount.

We had no outstanding balance under the revolving credit facility at June 30, 2021 and December 31, 2020.

On July 26, 2021, the Company entered into a new revolving credit facility.

The lender, borrowing terms, interest terms on borrowings, standby letter of credit, and fees associated with the unused portion of the committed amount are similar to the previous revolving credit facility.

Additionally, the new revolving credit facility includes fallback language clearly defining an alternative reference rate which provides for specified replacement rates, as defined in the revolving credit facility agreement, upon a LIBOR cessation event.

The new revolving credit facility includes fallback language clearly defining an alternative reference rate which provides for specified replacement rates, as defined in the revolving credit facility agreement, upon a LIBOR cessation event.

At the time of a LIBOR cessation event, the replacement rate self-executes without the need for negotiations or a formal amendment process.

The new revolving credit facility also contains financial covenants.

As of June 30, 2021, we were in compliance with our financial covenants related to the new revolving credit facility.

No fees are associated with the unused portion of the committed amount.

The revolving credit facility expires on July 26, 2024.

We had no outstanding balance under our revolving credit facility at September 30, 2021 and December 31, 2020.

As of September 30, 2021, we were in compliance with our financial covenants related to the new revolving credit facility.

These financial covenants require that we meet certain parameters related to our consolidated leverage ratio and our consolidated total liabilities to tangible net worth ratio.

At June 30, 2021, our consolidated leverage ratio was 0.01 to 1 and met the requirement of being less than 2 to 1.

At September 30, 2021, our consolidated leverage ratio was 0.02 to 1 and met the requirement of being less than 2 to 1.

Our consolidated total liabilities to tangible net worth ratio was 0.3 to 1, and met the requirement of being less than 2 to 1.

The provision (benefit) for income taxes consists of the following:

Three Months Ended Six Months Ended

2021 June 30,

2020 June 30,

2021 June 30,

Three Months Ended Nine Months Ended

September 30,

2021 September 30,

2020 September 30,

2021 September 30,

(in thousands)

4 unchanged sentences

The reconciliation of the Federal statutory income tax rate to the effective income tax rate is as follows:

Three Months Ended Six Months Ended

2021 June 30,

2020 June 30,

2021 June 30,

Three Months Ended Nine Months Ended

September 30,

2021 September 30,

2020 September 30,

2021 September 30,

Federal statutory rate 21.0 % 21.0 % 21.0 % 21.0 %

6 unchanged sentences

As a result of these changes, the Company adjusted its state deferred tax assets and liabilities in the second quarter of 2021 using the newly enacted rate for the periods when they are expected to be realized.

This resulted in a benefit of $ 0.8 million included in the table above under State income taxes, net of Federal benefit.

During the six months ended June 30, 2021, the Company recorded an excess tax benefit of $ 3.4 million as compared to $ 1.9 million during the same period in 2020, an increase of 78 %.

The increase was primarily due to timing of stock option exercises as a result of our stock price during the three months ended March 31, 2021.

This resulted in a benefit of $ 0.8 million included in the table above under State income taxes, net of Federal benefit, for the nine months ended September 30, 2021.

During the nine months ended September 30, 2021, the Company recorded an excess tax benefit of $ 3.8 million as compared to $ 2.5 million during the same period in 2020, an increase of 54 %.

The increase was primarily due to timing of stock option exercises as a result of our high stock price during the three months ended March 31, 2021.

We earn investment tax credits from the state of Oklahoma’s manufacturing property investment program.

1 unchanged sentence

Under this method, the investment tax credits are recognized as a reduction to our Oklahoma income tax expense in the year they are used.

As of June 30, 2021, we have investment tax credit carryforwards of approximately $ 2.8 million.

As of September 30, 2021, we have investment tax credit carryforwards of approximately $ 3.7 million.

These credits have estimated expirations ranging from the year 2036 through 2040.

15 unchanged sentences

On March 11, 2021, the American Rescue Plan Act (the “ARPA”) was enacted and signed into law.

The ARPA is an economic stimulus package in response to the COVID-19 pandemic, which contains tax provisions that are not expected to have a material impact to our consolidated financial statements.

The ARPA is an economic stimulus package in response to the COVID-19 pandemic, which contains tax provisions that did not have a material impact to our consolidated financial statements.

In accordance with accounting standards for income taxes, the impact of this new tax legislation was taken into account in the first quarter of 2021, the period in which it was enacted.

2 unchanged sentences

Under the LTIP, the exercise price of shares granted could not be less than 100 % of the fair market value at the date of the grant.

On May 24, 2016, our stockholders adopted the 2016 Long-Term Incentive Plan ("2016 Plan") which provides for approximately 8.9 million shares, comprised of 3.4 million new shares provided for under the 2016 Plan, approximately 0.4 million shares that were available for issuance under the previous LTIP that are now authorized for issuance under the 2016 Plan, approximately 2.6 million shares that were approved by the stockholders on May 15, 2018, and an additional 2.5 million shares that were approved by the stockholders on May 12, 2020.

On May 24, 2016, our stockholders adopted the 2016 Long-Term Incentive Plan (as amended, the "2016 Plan") which provides for approximately 8.9 million shares, comprised of 3.4 million new shares provided for under the 2016 Plan, approximately 0.4 million shares that were available for issuance under the previous LTIP that are now authorized for issuance under the 2016 Plan, approximately 2.6 million shares that were approved by the stockholders on May 15, 2018, and an additional 2.5 million shares that were approved by the stockholders on May 12, 2020.

Under the 2016 Plan, shares can be granted in the form of stock options, stock appreciation rights, restricted stock awards, performance awards, dividend equivalent rights, and other awards.

2 unchanged sentences

Membership on the Committee is limited to independent directors.

The Committee will determine the persons to whom awards are to be made, determine the type, size and terms of awards, interpret the 2016 Plan, establish and revise rules and regulations relating to the 2016 Plan and make any other determinations that it believes necessary for the administration of the 2016 Plan.

The Committee determines the persons to whom awards are to be made, the type, size and terms of awards, interprets the 2016 Plan, establishes and revises rules and regulations relating to the 2016 Plan and makes any other determinations that it believes necessary for the administration of the 2016 Plan.

The Committee may delegate certain duties to one or more officers of the Company as provided in the 2016 Plan.

The total pre-tax compensation cost related to unvested stock options not yet recognized as of June 30, 2021 is $ 22.0 million and is expected to be recognized over a weighted average period of approximately 2.7 years.

The following weighted average assumptions were used to determine the fair value of the stock options granted on the original grant date for expense recognition purposes for options granted during the six months ended June 30, 2021 and 2020 using a Black Scholes-Merton Model:

Six months ended

June 30, 2021 June 30, 2020

The total pre-tax compensation cost related to unvested stock options not yet recognized as of September 30, 2021 is $ 19.5 million and is expected to be recognized over a weighted average period of approximately 2.5 years.

The following weighted average assumptions were used to determine the fair value of the stock options granted on the original grant date for expense recognition purposes for options granted during the nine months ended September 30, 2021 and 2020 using a Black Scholes-Merton Model:

Nine months ended

September 30, 2021 September 30, 2020

Directors and SLT 1 :

7 unchanged sentences

Expected life (in years) 3.0 5.0

1 Senior Leadership Team ("SLT") consist of officers and key members of management.

1 Senior Leadership Team ("SLT") consists of officers and key members of management.

The expected term of the options is based on evaluations of historical and expected future employee exercise behavior.

2 unchanged sentences

Volatility is based on historical volatility of our stock over time periods equal to the expected life at grant date.

The following is a summary of stock options vested and exercisable as of June 30, 2021:

The following is a summary of stock options vested and exercisable as of September 30, 2021:

Prices Number

7 unchanged sentences

Total 1,149,047 5.97 $ 36.12 $ 33,579

The following is a summary of stock options vested and exercisable as of June 30, 2020:

The following is a summary of stock options vested and exercisable as of September 30, 2020:

Prices Number

15 unchanged sentences

( 140,077 ) 48.51

Outstanding at June 30, 2021

Outstanding at September 30, 2021

3,561,564 $ 42.49

Exercisable at June 30, 2021

Exercisable at September 30, 2021

1,149,047 $ 36.12

The total intrinsic value of options exercised during the six months ended June 30, 2021 and 2020 was $ 12.7 million and $ 8.8 million, respectively.

The cash received from options exercised during the six months ended June 30, 2021 and 2020 was $ 11.8 million and $ 14.2 million, respectively.

The total intrinsic value of options exercised during the nine months ended September 30, 2021 and 2020 was $ 15.1 million and $ 12.1 million, respectively.

The cash received from options exercised during the nine months ended September 30, 2021 and 2020 was $ 14.6 million and $ 18.5 million, respectively.

The impact of these cash receipts is included in financing activities in the accompanying Consolidated Statements of Cash Flows.

5 unchanged sentences

At the end of the measurement period, each award will be converted into common stock at 0 % to 200 % of the PSUs held, depending on overall TSR as compared to the S&P SmallCap 600 Index benchmark companies.

The total pre-tax compensation cost related to unvested PSUs not yet recognized as of June 30, 2021 is $ 1.3 million and is expected to be recognized over a weighted average period of approximately 2.4 years.

The following weighted average assumptions were used to determine the fair value of the PSUs granted on the original grant date for expense recognition purposes for PSUs granted during the six months ended June 30, 2021 using a Monte Carlo Model:

Six months ended

June 30, 2021

The total pre-tax compensation cost related to unvested PSUs not yet recognized as of September 30, 2021 is $ 1.1 million and is expected to be recognized over a weighted average period of approximately 2.2 years.

The following weighted average assumptions were used to determine the fair value of the PSUs granted on the original grant date for expense recognition purposes for PSUs granted during the nine months ended September 30, 2021 using a Monte Carlo Model:

Nine months ended

September 30, 2021

Expected dividend rate $ 0.38

10 unchanged sentences

( 1,632 ) 87.78

Unvested at June 30, 2021

Unvested at September 30, 2021

16,851 $ 87.78

2 unchanged sentences

common stock on the respective grant dates, reduced for the present value of dividends.

At June 30, 2021, unrecognized compensation cost related to unvested restricted stock awards was approximately $ 5.4 million, which is expected to be recognized over a weighted average period of approximately 2.6 years.

At September 30, 2021, unrecognized compensation cost related to unvested restricted stock awards was approximately $ 4.8 million, which is expected to be recognized over a weighted average period of approximately 2.3 years.

A summary of the unvested restricted stock awards is as follows:

4 unchanged sentences

( 7,051 ) 49.81

Unvested at June 30, 2021

Unvested at September 30, 2021

160,717 $ 45.29

1 unchanged sentence

A summary of share-based compensation is as follows:

Three Months Ended Six Months Ended

2021 June 30,

2020 June 30,

2021 June 30,

Three Months Ended Nine Months Ended

September 30,

2021 September 30,

2020 September 30,

2021 September 30,

Grant date fair value of awards during the period:

32 unchanged sentences

Administrative expenses are paid for by Plan participants.

The Company paid no administrative expenses during the six months ended June 30, 2021 and 2020.

The Company matches 175 % up to 6 % of employee contributions of eligible compensation.

The Company paid no administrative expenses during the nine months ended September 30, 2021 and 2020.

The Company matches 175 %, up to 6 %, of employee contributions of eligible compensation in Company stock.

The Company match vests over six years , with 20 % vesting each year after two years of service.

Additionally, Plan participant forfeitures are used to reduce the cost of the Company contributions.

Three Months Ended Six Months Ended

2021 June 30,

2020 June 30,

2021 June 30,

Three Months Ended Nine Months Ended

September 30,

2021 September 30,

2020 September 30,

2021 September 30,

(in thousands)

3 unchanged sentences

Eligible employees are regular full-time employees who are actively employed and working on the first and last days of the calendar quarter and who were employed full-time for at least three full months prior to the beginning of the calendar quarter, excluding the Company's SLT.

Three Months Ended Six Months Ended

2021 June 30,

2020 June 30,

2021 June 30,

Three Months Ended Nine Months Ended

September 30,

2021 September 30,

2020 September 30,

2021 September 30,

(in thousands)

6 unchanged sentences

In addition, the Company matches 175 % of a participating employee's allowed contributions to a qualified health saving account to assist employees with our health insurance plan deductibles.

Three Months Ended Six Months Ended

2021 June 30,

2020 June 30,

2021 June 30,

Three Months Ended Nine Months Ended

September 30,

2021 September 30,

2020 September 30,

2021 September 30,

(in thousands)

4 unchanged sentences

Diluted net income per share assumes the conversion of all potentially dilutive securities and is calculated by dividing net income by the sum of the weighted average number of shares of common stock outstanding plus all potentially dilutive securities.

Dilutive common shares consist primarily of stock options and restricted stock awards.

Dilutive common shares consist primarily of stock options, restricted stock awards and performance restricted stock units.

The following table sets forth the computation of basic and diluted earnings per share:

Three Months Ended Six Months Ended

2021 June 30,

2020 June 30,

2021 June 30,

Three Months Ended Nine Months Ended

September 30,

2021 September 30,

2020 September 30,

2021 September 30,

(in thousands, except share and per share data)

2 unchanged sentences

52,420,711 52,260,551 52,392,300 52,174,705

Effect of dilutive stock options and restricted stock

Effect of dilutive stock options, restricted stock

1,125,802 890,744 1,272,697 780,344

and performance awards

Diluted weighted average shares

28 unchanged sentences

Our repurchase activity is as follows:

Six Months Ended

June 30, 2021 June 30, 2020

Nine Months Ended

September 30, 2021 September 30, 2020

(in thousands, except share and per share data)

5 unchanged sentences

Our repurchase activity since Company inception, including our current authorized stock repurchase programs, are as follows:

Inception to June 30, 2021

Inception to September 30, 2021

(in thousands, except share and per share data)

4 unchanged sentences

14,359,231 $ 257,095 $ 17.90

Subsequent to June 30, 2021 and through August 2, 2021, the Company repurchased 20,970 shares for $ 1.3 million from our 401(k) savings and investment plan.

Subsequent to September 30, 2021 and through November 1, 2021, the Company repurchased 19,545 shares for $ 1.3 million from our 401(k) savings and investment plan.

At the discretion of the Board, we pay semi-annual cash dividends.

30 unchanged sentences

These contracts are not accounted for as derivative instruments because they meet the normal purchase and normal sales exemption.

We had no material contractual purchase obligations as of June 30, 2021.

We had no material contractual purchase obligations as of September 30, 2021.

Related Parties

The Company purchases some supplies from an entity controlled by the Company’s Executive Chairman.

The Company sometimes makes sales to the Executive Chairman for parts.

The Company sometimes makes sales to the Executive Chairman and CEO/President.

Additionally, the Company sells units to an entity owned by a member of the CEO/President's immediate family.

1 unchanged sentence

The following is a summary of transactions and balance with affiliates:

Three Months Ended Six Months Ended

2021 June 30,

2020 June 30,

2021 June 30,

Three Months Ended Nine Months Ended

September 30,

2021 September 30,

2020 September 30,

2021 September 30,

(in thousands)

1 unchanged sentence

Payments to affiliates 23 110 153 207

September 30,

2021 December 31,

9 unchanged sentences

As such, this information is not included below.

Three Months Ended Six Months Ended

2021 June 30,

2020 June 30,

2021 June 30,

Three Months Ended Nine Months Ended

September 30,

2021 September 30,

2020 September 30,

2021 September 30,

(in thousands)

12 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements