Company Quick10K Filing
Quick10K
Medifast
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$103.74 12 $1,234
10-Q 2019-06-30 Quarter: 2019-06-30
10-Q 2019-03-31 Quarter: 2019-03-31
10-K 2018-12-31 Annual: 2018-12-31
10-Q 2018-09-30 Quarter: 2018-09-30
10-Q 2018-06-30 Quarter: 2018-06-30
10-Q 2018-03-31 Quarter: 2018-03-31
10-K 2017-12-31 Annual: 2017-12-31
10-Q 2017-09-30 Quarter: 2017-09-30
10-Q 2017-06-30 Quarter: 2017-06-30
10-Q 2017-03-31 Quarter: 2017-03-31
10-K 2016-12-31 Annual: 2016-12-31
10-Q 2016-09-30 Quarter: 2016-09-30
10-Q 2016-06-30 Quarter: 2016-06-30
10-Q 2016-03-31 Quarter: 2016-03-31
10-K 2015-12-31 Annual: 2015-12-31
10-Q 2015-09-30 Quarter: 2015-09-30
10-Q 2015-06-30 Quarter: 2015-06-30
10-Q 2015-03-31 Quarter: 2015-03-31
10-K 2014-12-31 Annual: 2014-12-31
10-Q 2014-09-30 Quarter: 2014-09-30
10-Q 2014-06-30 Quarter: 2014-06-30
10-Q 2014-03-31 Quarter: 2014-03-31
10-K 2013-12-31 Annual: 2013-12-31
8-K 2019-09-12 Officers, Other Events, Exhibits
8-K 2019-08-01 Earnings, Exhibits
8-K 2019-06-12 Amend Bylaw, Shareholder Vote, Other Events, Exhibits
8-K 2019-05-01 Earnings, Exhibits
8-K 2019-03-13 Other Events, Exhibits
8-K 2019-02-26 Earnings, Exhibits
8-K 2019-01-14 Regulation FD, Exhibits
8-K 2018-12-11 Other Events, Exhibits
8-K 2018-11-06 Earnings, Exhibits
8-K 2018-09-06 Other Events, Exhibits
8-K 2018-08-02 Earnings, Exhibits
8-K 2018-07-24 Regulation FD, Exhibits
8-K 2018-06-15 Regulation FD
8-K 2018-06-14 Other Events, Exhibits
8-K 2018-06-13 Shareholder Vote
8-K 2018-05-03 Earnings, Exhibits
8-K 2018-03-15 Other Events, Exhibits
8-K 2018-03-06 Earnings, Officers, Exhibits
8-K 2018-02-28 Other Events, Exhibits
8-K 2018-01-09 Regulation FD, Exhibits
KHC Kraft Heinz 31,206
ADM Archer Daniels Midland 20,961
CPB Campbell Soup 13,043
POST Post Holdings 7,186
INGR Ingredion 4,982
LANC Lancaster Colony 3,970
HAIN Hain Celestial Group 1,982
DF Dean Foods 96
PETZ TDH Holdings 19
SMPL Simplicity Bancorp 0
MED 2019-06-30
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 6. Exhibits
EX-31.1 med-20190630ex3116e41a2.htm
EX-31.2 med-20190630ex3120eff47.htm
EX-32.1 med-20190630ex321c55eee.htm

Medifast Earnings 2019-06-30

MED 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2019

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File Number: 001-31573

Medifast, Inc.

(Exact name of registrant as specified in its charter)

Delaware

    

13-3714405

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

100 International Drive

Baltimore, Maryland 21202

Telephone Number: (410) 581-8042

(Address of Principal Executive Offices, Zip Code and Telephone Number, Including Area Code)

Indicate by checkmark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by checkmark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes No

Securities registered pursuant to Section 12(b) of the Act:

Title of each class:

    

Trading Symbol

    

Name of each exchange on which registered:

Common Stock, par value $0.001 per share

MED

NYSE

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

The number of shares of the registrant’s common stock outstanding at July 26, 2019 was 11,836,334.

Table of Contents

Medifast, Inc. and subsidiaries

Index

Part 1 – Financial Information:

    

Item 1 – Financial Statements

Condensed Consolidated Statements of Income (unaudited) for the Three and Six Months Ended June 30, 2019 and 2018

2

Condensed Consolidated Statements of Comprehensive Income (unaudited) for the Three and Six Months Ended June 30, 2019 and 2018

3

Condensed Consolidated Balance Sheets (unaudited) as of June 30, 2019 and December 31, 2018

4

Condensed Consolidated Statements of Cash Flows (unaudited) for the Six Months Ended June 30, 2019 and 2018

5

Condensed Consolidated Statements of Changes in Stockholders’ Equity (unaudited) for the Three and Six Months Ended June 30, 2019 and 2018

6

Notes to Condensed Consolidated Financial Statements (unaudited)

7

Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations

14

Item 3 – Quantitative and Qualitative Disclosures about Market Risk

20

Item 4 – Controls and Procedures

20

Part II – Other Information:

Item 1 – Legal Proceedings

20

Item 1A – Risk Factors

21

Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds

21

Item 6 – Exhibits

21

1

Table of Contents

MEDIFAST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(in thousands, except per share amounts & dividend data)

Three months ended June 30,

Six months ended June 30,

2019

2018

2019

2018

Revenue

$

187,103

$

117,324

$

352,979

$

215,920

Cost of sales

46,393

28,525

87,122

52,313

Gross profit

140,710

88,799

265,857

163,607

Selling, general, and administrative

113,355

71,689

213,787

131,814

Income from operations

27,355

17,110

52,070

31,793

Other income (expense)

Interest income, net

425

330

737

579

Other income (expense)

(2)

179

(8)

178

423

509

729

757

Income from operations before income taxes

27,778

17,619

52,799

32,550

Provision for income taxes

6,395

3,486

10,666

6,195

Net income

$

21,383

$

14,133

$

42,133

$

26,355

Earnings per share - basic

$

1.80

$

1.17

$

3.55

$

2.19

Earnings per share - diluted

$

1.75

$

1.16

$

3.45

$

2.17

Weighted average shares outstanding -

Basic

11,861

12,037

11,870

12,032

Diluted

12,218

12,174

12,229

12,129

Cash dividends declared per share

$

0.75

$

0.48

$

1.50

$

0.96

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

2

Table of Contents

MEDIFAST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

(in thousands)

Three months ended June 30,

Six months ended June 30,

2019

2018

2019

2018

Net income

$

21,383

$

14,133

$

42,133

$

26,355

Other comprehensive income (loss), net of tax:

Foreign currency translation

-

-

1

-

Unrealized gains (losses) on marketable securities

102

25

228

(59)

Other comprehensive income (loss)

102

25

229

(59)

Comprehensive income

$

21,485

$

14,158

$

42,362

$

26,296

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

3

Table of Contents

MEDIFAST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in thousands, except par value)

June 30,

December 31,

2019

2018

ASSETS

Current Assets

Cash and cash equivalents

$

96,311

$

81,364

Accounts receivable-net of doubtful accounts of $931 and $394 at

June 30, 2019 and December 31, 2018, respectively

978

1,011

Inventory

48,473

38,888

Investment securities

17,211

19,670

Income taxes, prepaid

1,365

-

Prepaid expenses and other current assets

7,638

4,586

Total current assets

171,976

145,519

Property, plant and equipment - net

24,984

19,747

Right-of-use asset

12,296

-

Other assets

710

1,183

Deferred tax assets

2,605

2,980

TOTAL ASSETS

$

212,571

$

169,429

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities

Accounts payable and accrued expenses

$

73,570

$

60,323

Current lease obligation

2,474

-

Total current liabilities

76,044

60,323

Lease obligation, less current lease obligation

10,504

-

Total liabilities

86,548

60,323

Stockholders' Equity

Common stock, par value $.001 per share: 20,000 shares authorized;

12,126 and 12,117 issued and 11,827 and 11,868 outstanding

at June 30, 2019 and December 31, 2018, respectively

12

12

Additional paid-in capital

11,070

8,802

Accumulated other comprehensive income (loss)

56

(173)

Retained earnings

155,762

131,344

Less: Treasury stock at cost, 264 and 193 shares at June 30, 2019 and December 31, 2018, respectively

(40,877)

(30,879)

Total stockholders' equity

126,023

109,106

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

212,571

$

169,429

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

4

Table of Contents

MEDIFAST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(in thousands)

Six months ended June 30,

2019

2018

Operating Activities

Net income

$

42,133

$

26,355

Adjustments to reconcile net income to cash provided by operating activities

Depreciation and amortization

2,156

2,689

Share-based compensation

2,245

1,635

Loss on sale of disposal of property, plant and equipment

17

50

Realized loss (gain) on investment securities, net

8

(21)

Amortization of premium on investment securities

249

298

Deferred income taxes

375

(1,036)

Change in operating assets and liabilities:

Accounts receivable

33

199

Inventory

(9,585)

(6,670)

Income taxes, prepaid

(1,365)

2,673

Prepaid expenses and other current assets

(3,052)

368

Other assets

35

33

Accounts payable and accrued expenses

13,963

11,958

Net cash flow provided by operating activities

47,212

38,531

Investing Activities

Sale and maturities of investment securities

2,430

1,200

Sale of property and equipment

-

184

Purchase of property and equipment

(6,972)

(2,094)

Net cash flow used in investing activities

(4,542)

(710)

Financing Activities

Options exercised by executives and directors

279

62

Net shares repurchased for employee taxes

(256)

(215)

Cash dividends paid to stockholders

(17,749)

(11,673)

Stock repurchases

(9,998)

(19,996)

Net cash flow used in financing activities

(27,724)

(31,822)

Foreign currency impact

1

-

Increase in cash and cash equivalents

14,947

5,999

Cash and cash equivalents - beginning of the period

81,364

75,077

Cash and cash equivalents - end of period

$

96,311

$

81,076

Supplemental disclosure of cash flow information:

Income taxes paid

$

11,338

$

4,380

Dividends declared included in accounts payable

$

9,102

$

5,914

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

5

Table of Contents

MEDIFAST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED)

(in thousands)

Six months ended June 30, 2019

Number of Shares Issued

Common Stock

Additional Paid-In Capital

Accumulated Other Comprehensive Income (Loss)

Retained Earnings

Treasury Stock

Total

Balance, December 31, 2018

12,117

$

12

$

8,802

$

(173)

$

131,344

$

(30,879)

$

109,106

Net income

-

-

-

-

20,750

-

20,750

Share-based compensation

-

-

990

-

-

-

990

Options exercised by executives and directors

10

-

269

-

-

-

269

Net shares repurchased for employee taxes

(1)

-

(256)

-

-

-

(256)

Other comprehensive income

-

-

-

127

-

-

127

Cash dividends declared to stockholders

-

-

-

-

(8,918)

-

(8,918)

Balance, March 31, 2019

12,126

12

9,805

(46)

143,176

(30,879)

122,068

Net income

-

-

-

-

21,383

-

21,383

Share-based compensation

-

-

1,255

-

-

-

1,255

Options exercised by executives and directors

-

-

10

-

-

-

10

Other comprehensive income

-

-

-

102

-

-

102

Treasury stock from stock repurchases

-

-

-

-

-

(9,998)

(9,998)

Cash dividends declared to stockholders

-

-

-

-

(8,797)

-

(8,797)

Balance, June 30, 2019

12,126

$

12

$

11,070

$

56

$

155,762

$

(40,877)

$

126,023

Six months ended June 30, 2018

Number of Shares Issued

Common Stock

Additional Paid-In Capital

Accumulated Other Comprehensive Loss

Retained Earnings

Treasury Stock

Total

Balance, January 1, 2018, as reported

12,103

$

12

$

4,967

$

(160)

$

103,762

$

-

$

108,581

Cumulative effect adjustments from changes

in accounting standards

-

-

-

-

(2,018)

-

(2,018)

Balance January 1, 2018, as adjusted

12,103

12

4,967

(160)

101,744

-

106,563

Net income

-

-

-

-

12,222

-

12,222

Share-based compensation

16

-

805

-

-

-

805

Options exercised by executives and directors

14

-

62

-

-

-

62

Net shares repurchased for employee taxes

(3)

-

(215)

-

-

-

(215)

Treasury stock from cashless options

9

-

750

-

-

(750)

-

Other comprehensive loss

-

-

-

(84)

-

-

(84)

Cash dividends declared to stockholders

-

-

-

-

(5,723)

-

(5,723)

Balance, March 31, 2018

12,139

12

6,369

(244)

108,243

(750)

$

113,630

Net income

-

-

-

-

14,133

-

14,133

Share-based compensation

-

-

830

-

-

-

830

Options exercised by executives and directors

2

-

-

-

-

-

-

Treasury stock from stock repurchases

-

-

-

-

-

(19,996)

(19,996)

Other comprehensive income

-

-

-

25

-

-

25

Cash dividends declared to stockholders

-

-

-

-

(5,759)

-

(5,759)

Balance, June 30, 2018

12,141

$

12

$

7,199

$

(219)

$

116,617

$

(20,746)

$

102,863

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

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MEDIFAST, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation - The accompanying unaudited condensed consolidated financial statements of Medifast, Inc. and its wholly-owned subsidiaries (the “Company,” “we,” “us,” or “our”) included herein have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”), for interim reporting and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, certain information and notes that are normally required by GAAP have been condensed or omitted. However, in the opinion of management, all adjustments consisting of normal, recurring adjustments considered necessary for a fair presentation of the financial position and results of operations have been included and management believes the disclosures that are made are adequate to make the information presented not misleading. The condensed consolidated balance sheet at December 31, 2018 has been derived from the audited consolidated financial statements at that date.

The results of operations for the three and six months ended June 30, 2019 are not necessarily indicative of results that may be expected for the fiscal year ending December 31, 2019. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the 2018 audited consolidated financial statements and notes thereto, which are included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018 (“2018 Form 10-K”).

Presentation of Financial Statements - The unaudited condensed consolidated financial statements included herein include the accounts of the Medifast, Inc. and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated.

Use of Estimates - The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from those estimates.

Accounting Pronouncements Adopted in 2019 – In February 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220) to address a specific consequence of the Tax Cuts and Jobs Act (“TCJA”) by allowing a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the TCJA’s reduction of the U.S. federal corporate income tax rate. This ASU is effective for all entities for annual periods beginning after December 15, 2018, with early adoption permitted, and is to be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the U.S. federal corporate income tax rate in the TCJA is recognized. The Company adopted this ASU in the first quarter of 2019. There was no material impact on the Company's condensed consolidated results of operations or cash flows. The Company's policy for releasing disproportionate income tax effects from accumulated other comprehensive income utilizes the portfolio approach.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires an entity to recognize a right-of-use (“ROU”) asset and a lease liability on the balance sheet for all leases, including operating leases, and also requires disclosures about the amount, timing and uncertainty of cash flows arising from leases. Subsequent to the issuance of Topic 842, the FASB clarified the guidance through several ASUs; hereinafter the collection of lease guidance is referred to as “ASC 842”.

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On January 1, 2019, the Company adopted ASC 842 using the modified retrospective method for all lease arrangements at the beginning of the period of adoption. Results for reporting periods beginning January 1, 2019 are presented under ASC 842, while prior period amounts were not adjusted and continue to be reported in accordance with the Company’s historic accounting under ASC 840, Leases. The standard had a material impact on the Company’s Consolidated Condensed Balance Sheets, but did not have a significant impact on the Company’s consolidated net earnings and cash flows. The most significant impact was the recognition of ROU assets and lease liabilities for operating leases. For leases that commenced before the effective date of ASC 842, the Company elected the permitted practical expedients that do not require the Company to reassess: (i) whether any expired or existing contracts contain leases; (ii) the lease classification for any expired or existing leases; and (iii) initial direct costs for any existing leases. The Company also elected to exclude leases with a term of 12 months or less in the recognized ROU assets and lease liabilities.

As a result of the cumulative impact of adopting ASC 842, the Company recorded ROU assets of $11.9 million, net of $686 thousand of accrued rent, and lease liabilities of $12.6 million as of January 1, 2019, primarily related to office and warehouse space and certain equipment, based on the present value of the future lease payments on the date of adoption.

The Company determines if an arrangement is a lease at inception. The ROU assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent an obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit interest rate, the Company uses its incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments. The ROU asset also consists of any prepaid lease payments and lease incentives received. The lease terms used to calculate the ROU asset and related lease liability include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for operating leases is recognized on a straight-line basis over the lease term as an operating expense. See Note 5 “LEASES” for additional information about this adoption.

2. INVENTORIES

Inventories consist principally of packaged meal replacements held in the Company’s warehouses. Inventory is stated at the lower of cost or net realizable value, utilizing the first-in, first-out method. The cost of finished goods includes the cost of raw materials, packaging supplies, direct and indirect labor and other indirect manufacturing costs. On a quarterly basis, management reviews inventory for unsalable or obsolete inventory.

Inventories consisted of the following (in thousands):

June 30, 2019

December 31, 2018

Raw materials

$

11,204

$

11,156

Packaging

2,264

1,563

Non-food finished goods

5,186

2,391

Finished goods

32,474

25,509

Reserve for obsolete inventory

(2,655)

(1,731)

Total

$

48,473

$

38,888

3. EARNINGS PER SHARE

Basic earnings per share (“EPS”) computations are calculated utilizing the weighted average number of shares of the Company’s common stock outstanding during the periods presented. Diluted EPS is calculated utilizing the weighted average number of shares of the Company’s common stock outstanding adjusted for the effect of dilutive common stock equivalents.

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The following table sets forth the computation of basic and diluted EPS (in thousands, except per share data):

Three months ended June 30,

Six months ended June 30,

2019

2018

2019

2018

Numerator:

Net income

$

21,383

$

14,133

$

42,133

$

26,355

Denominator:

Weighted average shares of common stock outstanding

11,861

12,037

11,870

12,032

Effect of dilutive common stock equivalents

357

137

359

97

Weighted average shares of common stock outstanding

12,218

12,174

12,229

12,129

Earnings per share - basic

$

1.80

$

1.17

$

3.55

$

2.19

Earnings per share - diluted

$

1.75

$

1.16

$

3.45

$

2.17

The calculation of diluted EPS excluded 611 and 56 antidilutive options outstanding for the three months ended June 30, 2019 and 2018, respectively, and 752 and 6,220 antidilutive options outstanding for the six months ended June 30, 2019 and 2018, respectively. The calculation of diluted EPS also excluded 350 and 0 antidilutive restricted stock awards for the three months ended June 30, 2019 and 2018, respectively, and 705 and 0 antidilutive restricted stock awards for the six months ended June 30, 2019 and 2018, respectively. EPS is computed independently for each of the periods presented above, and accordingly, the sum of the quarterly earnings per common share may not equal the year-to-date total computed.

4. SHARE-BASED COMPENSATION

Stock Options:

The Company has issued non-qualified and incentive stock options to employees and nonemployee directors. The fair value of these options are estimated on the date of grant using the Black-Scholes option pricing model, which requires estimates of the expected term of the option, the risk-free interest rate, the expected volatility of the price of the Company’s common stock, and dividend yield. Options outstanding as of June 30, 2019 generally vest over a period of three years and expire ten years from the date of grant. The exercise price of these options ranges from $26.52 to $171.68. Due to the Company’s lack of option exercise history, the expected term is calculated using the simplified method defined as the midpoint between the vesting period and the contractual term of each option. The risk free interest rate is based on the U.S. Treasury yield curve in effect on the date of grant that most closely corresponds to the expected term of the option. The expected volatility is based on the historical volatility of the Company’s common stock over the period of time equivalent to the expected term for each award. For the six months ended June 30, 2019, the Company did not grant stock options. For the six months ended June 30, 2018, the weighted average input assumptions used were as follows:

2018

Expected term (in years)

6.4

Risk-free interest rate

2.62%

Expected volatility

33.30%

Dividend yield

2.87%

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The following table is a summary of our stock option activity:

Six months ended June 30,

2019

2018

Shares

Weighted-Average Exercise Price

Shares

Weighted-Average Exercise Price

(shares in thousands)

Outstanding at beginning of period

107

$

49.26

106

$

31.18

Granted

-

-

51

67.50

Exercised

(10)

28.21

(21)

28.87

Outstanding at end of the period

97

$

52.53

136

$

45.17

Exercisable at end of the period

52

$

40.96

60

$

29.94

As of June 30, 2019, the weighted-average remaining contractual life for outstanding stock options was 7.61 years with an aggregate intrinsic value of $7.5 million and the weighted-average remaining contractual life for exercisable stock options was 6.85 years with an aggregate intrinsic value of $4.6 million. For the six months ended June 30, 2019, the Company did not grant stock options. The weighted-average grant date fair value of options granted during the six months ended June 30, 2018 was $18.08. The unrecognized compensation expense calculated under the fair value method for stock options expected to vest as of June 30, 2019 was $0.7 million and is expected to be recognized over a weighted average period of 2.92 years. The Company received $279 thousand and $62 thousand in cash proceeds from the exercise of stock options during the six months ended June 30, 2019 and 2018, respectively. Upon exercising of stock options, the Company withheld shares of the Company’s common stock for employee taxes of 1 thousand and 3 thousand for the six months ended June 30, 2019 and 2018, respectively. The total intrinsic value for stock options exercised during the six months ended June 30, 2019 and 2018 was $1.0 million and $1.4 million, respectively.

Restricted Stock:

The Company has issued restricted stock to employees and nonemployee directors generally with vesting terms up to five years after the date of grant. The fair value of the restricted stock is equal to the market price of the Company’s common stock on the date of grant. Expense for restricted stock is amortized ratably over the vesting period. The following table summarizes our restricted stock activity:

Six months ended June 30,

2019

2018

Shares

Weighted-Average Grant Date Fair Value

Shares

Weighted-Average Grant Date Fair Value

(shares in thousands)

Outstanding at beginning of period

57

$

50.55

129

$

32.15

Granted