Income Per Common Share

9 Months Ended

Sep. 30, 2022

Income Per Common Share

Income Per Common Share

Note 2 — Income Per Common Share

Basic income per share is calculated by dividing net income by the weighted average number of shares outstanding during the period. Diluted income per share is calculated by dividing net income available to common shareholders by the weighted average number of shares used to calculate basic income per share plus the weighted average number of common share equivalents outstanding during the period. The dilutive effect of outstanding options to purchase common stock and share-based awards is considered in diluted income per share by application of the treasury stock method. The dilutive effect of performance share units is included in diluted income per common share if the performance targets have been achieved, or would have been achieved if the reporting date was the end of the contingency period. Upon the adoption of ASU 2020-06 on January 1, 2022, the Company includes the dilutive effect of shares issuable upon conversion of its Notes in the calculation of diluted income per share using the if-converted method. Prior to the adoption of ASU 2020-06, based on the Company’s ability and intent to settle the principal amount of its convertible senior notes in cash, and the excess of the principal portion in shares of its common stock, the Company accounted for the conversion spread using the treasury stock method, and the shares issuable upon conversion of the Notes were not included in the calculation of diluted earnings per share except to the extent that the conversion value of the Notes exceeds their principal amount and if the effect would be dilutive. The computations of basic and diluted income per share for the three months and nine months ended September 30, 2022 and 2021 are as follows:

	Three months ended September 30,				Nine months ended September 30,
	2022		2021		2022		2021
	(in thousands, except per share amounts)
Numerator:
Net income	$	15,041	$	8,993	$	38,026	$	17,835
Interest expense associated with convertible notes		2,549		—		7,639		—
Net income available to common shareholders	$	17,590	$	8,993	$	45,665	$	17,835
Denominator:
Basic weighted average shares outstanding		49,887		49,021		49,831		48,968
Effect of potentially dilutive share-based awards		801		1,507		796		1,377
Dilutive effect of convertible notes		14,463		3,321		14,463		3,261
Diluted weighted average shares outstanding		65,151		53,849		65,090		53,606
Net income per common share:
Basic	$	0.30	$	0.18	$	0.76	$	0.36
Diluted	$	0.27	$	0.17	$	0.70	$	0.33
Potentially dilutive shares excluded from the diluted calculation as their effect would be antidilutive		1,016		451		751		447
Maximum potential shares to be issued for settlement of the convertible notes excluded from the diluted calculation as their effect would be antidilutive		504		8,811		504		8,811