NET INCOME PER COMMON SHARE

3 Months Ended

Mar. 31, 2017

17.	NET INCOME PER COMMON SHARE:

The Company computes earnings per share in accordance with ASC Topic 260, Earnings per Share ("ASC 260"), which requires earnings per share 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 shareholder’s proportionate share of weighted average shares of common stock outstanding on an if-converted basis. The effect of using the two-class method is immaterial to the consolidated financial statements and does not change the reported earnings per share figures and as such is not presented.

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 stock options, restricted stock units and performance units, and the impact of shares to be issued under the ESPP.

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, 2017 and 2016 (in thousands, except share and per share data):

	Three Months Ended March 31,
	2017			2016
Numerator:
Net income	$	10,365		$	1,949
Adjustment for Basic EPS:
Earning allocated to unvested shareholders		(191	)		(32	)
Adjusted net income	$	10,174		$	1,917
Denominator:
Weighted average common shares outstanding – Basic		46,661,559			46,774,360
Effect of dilutive shares:
Common stock equivalents arising from stock options and ESPP		2,151			9,442
Restricted stock awards and units and performance units		79,184			123,756
Weighted average common shares outstanding – Diluted		46,742,894			46,907,558
Net income per common share:
Basic	$	0.22		$	0.04
Diluted	$	0.22		$	0.04

For the three months ended March 31, 2017 and 2016, the combined effects of unvested restricted stock awards, restricted stock units, performance unit awards and stock options of 2,108 and 710, respectively, were excluded from the calculation of diluted EPS as their impact would have been antidilutive. The impact of shares to be issued under the ESPP, which was not significant, was excluded from the calculation of diluted EPS as their impact would have been antidilutive.