(Loss) Earnings Per Share

6 Months Ended

Dec. 31, 2019

(Loss) Earnings Per Share [Abstract]

15. (Loss) Earnings per share

The Company has issued redeemable common stock which is redeemable at an amount other than fair value. Redemption of a class of common stock at other than fair value increases or decreases the carrying amount of the redeemable common stock and is reflected in basic earnings per share using the two-class method. There were no redemptions of common stock, or adjustments to the carrying value of the redeemable common stock during the three and six months ended December 31, 2019 or 2018. Accordingly, the two-class method presented below does not include the impact of any redemption. The Company’s redeemable common stock is described in Note 15 to the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended June 30, 2019.

Basic (loss) earnings per share includes shares of restricted stock that meet the definition of a participating security because these shares are eligible to receive non-forfeitable dividend equivalents at the same rate as common stock. Basic (loss) earnings per share has been calculated using the two-class method and basic (loss) earnings per share for the three and six months ended December 31, 2019 and 2018, reflects only undistributed earnings. The computation below of basic (loss) earnings per share excludes the net loss attributable to shares of unvested restricted stock (participating non-vested restricted stock) from the numerator and excludes the dilutive impact of these unvested shares of restricted stock from the denominator.

Diluted (loss) earnings per share has been calculated to give effect to the number of shares of additional common stock that would have been outstanding if the potential dilutive instruments had been issued in each period. Stock options are included in the calculation of diluted (loss) earnings per share utilizing the treasury stock method and are not considered to be participating securities, as the stock options do not contain non-forfeitable dividend rights.

15. (Loss) Earnings per share (continued)

The calculation of diluted (loss) earnings per share includes the dilutive effect of a portion of the restricted stock granted to employees in August 2016, August 2017, March 2018, May 2018 and September 2018 as these shares of restricted stock are considered contingently returnable shares for the purposes of the diluted (loss) earnings per share calculation and the vesting conditions in respect of a portion of the restricted stock had been satisfied. The vesting conditions for awards made in September 2018 and August 2017 are discussed in Note 14 above and the vesting conditions for all other awards are discussed in Note 17 to the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended June 30, 2019.

The following table presents net loss attributable to Net1 (loss from continuing operations) and the share data used in the basic and diluted (loss) earnings per share computations using the two-class method:

			Three months ended				Six months ended
			December 31,				December, 31
				2019		2018		2019		2018
				(in thousands except				(in thousands except
				percent and				percent and
				per share data)				per share data)
Numerator:
	Net loss attributable to Net1		$	(205)	$	(63 941)	$	(4 597)	$	(69 140)
	Undistributed (loss) earnings			(205)		(63 941)		(4 597)		(69 140)
		Continuing		(205)		(65 469)		(4 597)		(72 614)
		Discontinued	$	-	$	1 528	$	-	$	3 474
	Percent allocated to common shareholders
	(Calculation 1)			99%		98%		99%		99%
	Numerator for (loss) earnings per share: basic and diluted			(203)		(62 972)		(4 550)		(68 146)
		Continuing		(203)		(64 477)		(4 550)		(71 570)
		Discontinued		-		1 505		-		3 424

Denominator
	Denominator for basic (loss) earnings per share:
	weighted-average common shares outstanding			55 985		55 973		55 985		55 962
		Stock options		-		21		-		36
		Denominator for diluted (loss) earnings per share: adjusted weighted average common shares outstanding and assuming conversion		55 985		55 994		55 985		55 998

(Loss) Earnings per share:
	Basic		$	(0,00)	$	(1,13)	$	(0,08)	$	(1,22)
		Continuing	$	(0,00)	$	(1,16)	$	(0,08)	$	(1,28)
		Discontinued	$	-	$	0,03	$	-	$	0,06
	Diluted		$	(0,00)	$	(1,12)	$	(0,08)	$	(1,22)
		Continuing	$	(0,00)	$	(1,15)	$	(0,08)	$	(1,28)
		Discontinued	$	-	$	0,03	$	-	$	0,06

(Calculation 1)
	Basic weighted-average common shares outstanding (A)			55 985		55 973		55 985		55 962
	Basic weighted-average common shares outstanding and unvested restricted shares expected to vest (B)			56 568		56 834		56 568		56 778
	Percent allocated to common shareholders
	(A) / (B)			99%		98%		99%		99%

Options to purchase 1,425,579 shares of the Company’s common stock at prices ranging from $3.07 to $11.23 per share were outstanding during the three and six months ended December 31, 2019, respectively, but were not included in the computation of diluted (loss) earnings per share because the options’ exercise price was greater than the average market price of the Company’s common stock. Options to purchase 1,166,554 and 503,698 shares of the Company’s common stock at prices ranging from $6.20 to $13.16 per share and $8.75 to $13.16 per share were outstanding during the three and six months ended December 31, 2018, respectively, but were not included in the computation of diluted (loss) earnings per share because the options’ exercise price was greater than the average market price of the Company’s common stock. The options, which expire at various dates through October 14, 2029, were still outstanding as of December 31, 2019.