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 the Notes 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 are considered to be dilutive when they are 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 months ended March 31, 2020 and 2019 are calculated for basic and diluted earnings (loss) per share as follows:


	Basic				Diluted
	Three Months Ended				Three Months Ended
	March 31,				March 31,
(in thousands, except per share amounts)	2020		2019		2020		2019
Net(loss)/ income	$	(7,011)	$	449	$	(7,011)	$	449
Net income allocated to restricted stock		—		(9)		—		(9)
Net(loss)/ income allocated to common shares	$	(7,011)	$	440	$	(7,011)	$	440

Basic Weighted-Average Shares Outstanding		11,902		11,747		11,902		11,747
Dilutive effect of stock options and ESPP						—		76
Diluted Weighted-Average Shares Outstanding						11,902		11,823

(Loss)/Earnings Per Share	$	(0.59)	$	0.04	$	(0.59)	$	0.04

The number of anti-dilutive shares, which have been excluded from the computation of diluted earnings (loss) per share was 1.8 million and 4.1 million for the three months ended March 31, 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.