EARNINGS (LOSS) PER SHARE

9 Months Ended

Sep. 30, 2020

EARNINGS (LOSS) PER SHARE

EARNINGS (LOSS) PER SHARE

5.    EARNINGS (LOSS) PER SHARE

Basic earnings (loss) per share is computed by dividing net income (loss) available to common shareholders by the weighted-average number of shares of common stock outstanding during the period.

For periods of net income, and when the effects are not anti-dilutive, we calculate diluted earnings (loss) per share by dividing net income available to common shareholders by the weighted-average number of shares outstanding plus the impact of all potential dilutive common shares, consisting primarily of common stock options, shares to be purchased under our Employee Stock Purchase Plan (“ESPP”), unvested restricted stock awards, and stock purchase warrants, using the treasury stock method. For periods of net loss, diluted loss per share is calculated similarly to basic loss per share.

Our unvested restricted shares contain non-forfeitable rights to dividends, and therefore are considered to be participating securities; in periods of net income, the calculation of basic and diluted earnings (loss) per share

excludes from the numerator net income (but not net loss) attributable to the unvested restricted shares, and excludes the impact of those shares from the denominator.

For purposes of determining diluted earnings (loss) per share in 2019, we elected a policy to settle the principal portion of our 3% Convertible Senior Notes (the “Notes”), which matured and were settled in December 2019, in cash. As such, the principal portion of the Notes had no effect on either the numerator or denominator when determining diluted earnings (loss) per share. Any conversion gain was assumed to be settled in shares and was incorporated in diluted earnings per share using the treasury method. The warrants issued in conjunction with the issuance of the Notes were considered to be dilutive if they were in-the-money relative to our average stock price during the period; the bond hedge purchased in conjunction with the issuance of the Notes was always considered to be anti-dilutive.

Earnings (loss) per share for the three and nine months ended September 30, 2020 and 2019 are calculated for basic and diluted earnings (loss) per share as follows:

	Basic				Diluted				Basic				Diluted
(in thousands, except per share amounts)	Three Months Ended September 30,				Three Months Ended September 30,				Nine Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019		2020		2019		2020		2019
Net income/(loss)	$	434	$	3,895	$	434	$	3,895	$	(18,913)	$	10,929	$	(18,913)	$	10,929
Net income allocated to restricted stock		(12)		(63)		(13)		(63)		—		(176)		—		(176)
Net income/(loss) allocated to common shares	$	422	$	3,832	$	421	$	3,832	$	(18,913)	$	10,753	$	(18,913)	$	10,753
Basic Weighted-Average Shares Outstanding		11,991		11,879		11,991		11,879		11,953		11,826		11,953		11,826
Dilutive effect of stock options and ESPP						12		128						—		106
Dilutive effect of Notes						—		78						—		128
Diluted Weighted-Average Shares Outstanding						12,003		12,085						11,953		12,060
Earnings/(Loss) per share	$	0.04	$	0.32	$	0.04	$	0.32	$	(1.58)	$	0.91	$	(1.58)	$	0.89

The number of anti-dilutive shares, which have been excluded from the computation of diluted earnings (loss) per share was 1.1 million and 2.2 million for the three months ended September 30, 2020 and 2019, respectively, and was 1.3 million and 2.9 million for the nine months ended September 30, 2020 and 2019, respectively. Anti-dilutive shares consist of out-of-the-money Class C Special stock, out-of-the-money common stock options, common stock options that are anti-dilutive when calculating the impact of the potential dilutive common shares using the treasury stock method, underlying shares related to out-of-the-money bonds issued as convertible debt (for 2019 only) and out-of-the-money warrants exercisable for common stock.