NET INCOME PER COMMON SHARE

3 Months Ended

Mar. 31, 2024

22. NET INCOME PER COMMON SHARE:

The Company computes earnings per share in accordance with ASC Topic 260, Earnings per Share, which requires earnings per share (EPS) for each class of stock to be calculated using the two-class method. The two-class method is an allocation of income between the holders of common stock and the Company's participating security holders. Under the two-class method, income for the reporting period is allocated between common shareholders and other security holders based on their respective participation rights in undistributed income. Unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents are participating securities and, therefore, are included in computing earnings per share pursuant to the two-class method.

Basic net income per common share is computed by dividing net income allocated to common shareholders by the weighted-average number of shares of common stock outstanding for the period excluding unvested restricted stock units and performance units. Net income allocated to the holders of the Company's unvested restricted stock awards is calculated based on the shareholders proportionate share of weighted average shares of common stock outstanding on an if-converted basis.

For purposes of determining diluted net income per common share, basic net income per share is further adjusted to include the effect of potential dilutive common shares outstanding, including restricted stock units, performance units and the impact of shares to be issued under the Company's Employee Stock Purchase Plan.

The following table is a reconciliation of net income and the shares used in calculating basic and diluted net income per common share for the three months ended March 31, 2024 and 2023 (in thousands, except share and per share data):


	Three Months Ended March 31,
	2024			2023
Numerator:
Net income	$	56,853		$	39,839
Adjustment for Basic EPS:
Earnings allocated to unvested shareholders		(201	)		(213	)
Adjusted net income	$	56,652		$	39,626
Denominator:
Weighted average common shares outstanding – Basic		47,557,959			47,523,593
Effect of dilutive shares:
Common stock equivalents arising from stock options and ESPP		462			940
Restricted stock awards and units and performance units		70,071			42,474
Weighted average common shares outstanding – Diluted		47,628,492			47,567,007
Net income per common share:
Basic	$	1.19		$	0.83
Diluted	$	1.19		$	0.83

For the three months ended March 31, 2024 and 2023, the combined effects of unvested restricted stock awards, restricted stock units, performance unit awards and stock options of 27,453 and 41,505, respectively, were excluded from the calculation of diluted EPS as their impact would have been antidilutive.