Earnings Per Share

6 Months Ended

Jun. 30, 2020

Earnings Per Share

Earnings Per Share

5. Earnings Per Share

Basic net earnings per share is calculated by dividing the net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing the net income (loss) by the weighted average number of shares of common stock, plus potentially dilutive securities outstanding for the period, as determined in accordance with the treasury stock accounting method. Potentially dilutive securities outstanding include stock options, unvested restricted stock units, performance share units, warrants, and shares related to the convertible senior notes, but are only included to the extent that their addition is dilutive.

The following table presents the computations of basic and dilutive earnings (loss) per common share:

	Three months ended June 30,				Six months ended June 30,
		2020		2019 (1)		2020		2019 (1)
Numerator:
Net income (loss)	$	8,058	$	(4,712)	$	8,508	$	(14,412)
Denominator:
Weighted-average shares outstanding - basic		34,395,266		33,397,709		34,247,977		33,338,243
Effect of dilutive securities:
Stock options		432,688		—		491,985		—
Restricted stock units		212,221		—		262,849		—
Performance share units		8,796		—		8,459		—
Employee Stock Purchase Program		22,822				31,608
Warrants		20,113		—		46,862		—
Weighted average shares outstanding - diluted		35,091,906		33,397,709		35,089,740		33,338,243
Earnings (loss) per share — basic	$	0.23	$	(0.14)	$	0.25	$	(0.43)
Earnings (loss) per share — diluted	$	0.23	$	(0.14)	$	0.24	$	(0.43)

(1) The Company incurred a net loss for the three and six months ended June 30, 2019, causing inclusion of any potentially dilutive securities to have an anti-dilutive effect, which resulted in basic loss per share and dilutive loss per share being equivalent.

The Company has the option to settle the conversion obligation for its convertible senior notes due in 2026 in cash, shares or any combination of the two. Since the Company intends to settle the principal amount of the convertible senior notes in cash, the Company used the treasury stock method for determining the potential dilution in the diluted earnings per share computation. For the three and six months ended June 30, 2020 the Company excluded 4,925,134 shares related to the convertible senior notes because their effect is anti-dilutive.

The following table presents dilutive securities excluded from the calculation of diluted earnings per share due to their anti-dilutive effect:

	Three months ended June 30,		Six months ended June 30,
	2020	2019	2020	2019
Stock options	2,361,601	4,190,116	2,269,895	4,190,116
Warrants	—	1,041,667	—	1,041,667
Restricted stock units	722,388	892,237	648,842	892,237
Performance share units	267,498	99,400	267,498	99,400
Convertible senior notes	4,925,134	—	4,925,134	—