Stamps.com 2013 Annual Report Download - page 63

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STAMPS.COM INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
The following table reconciles share amounts utilized to calculate basic and diluted net income per share (in thousands, except per share data):
The calculation of dilutive shares excludes the effect of the following options that are considered anti-dilutive (in thousands):
Stock-Based Compensation
We estimate the fair value of share-based payment awards on the date of grant using an option-pricing model and recognize stock-based
compensation expense during each period based on the value of that portion of share-based payment awards that is ultimately expected to vest
during the period, reduced for estimated forfeitures. We estimate forfeitures at the time of grant based on historical data and revise, if necessary,
in subsequent periods if actual forfeitures differ from those estimates. Compensation expense recognized for all employee stock options granted
is recognized using the straight-line method over their respective vesting periods of three to five years.
The following table sets forth the stock-based compensation expense that we recognized for the periods indicated (in thousands):
F-13
Table of Contents
Year Ended December 31,
2013
2012
2011
Net income
$
44,153
$
38,557
$
26,265
Basic
-
weighted average common shares
15,691
16,079
14,767
Dilutive effect of common stock equivalents
607
714
401
Diluted - weighted average common shares
16,298
16,793
15,168
Net income per share:
Basic
$
2.81
$
2.40
$
1.78
Diluted
$
2.71
$
2.30
$
1.73
Year ended December 31,
2013
2012
2011
Anti-dilutive stock option shares
65
119
1,023
2013
2012
2011
Stock
-
based compensation expense relating to:
Employee and director stock options
$
3,751
$
3,438
$
3,112
Employee stock purchases
741
553
307
Total stock-based compensation expense
$
4,492
$
3,991
$
3,419
Stock
-
based compensation expense relating to:
Cost of revenues
$
406
$
325
$
278
Sales and marketing
864
873
764
Research and development
990
893
750
General and administrative
2,232
1,900
1,627
Total stock-based compensation expense
$
4,492
$
3,991
$
3,419