Earnings per Share

6 Months Ended

Jun. 30, 2021

Basic earnings per share (EPS) is calculated using the weighted-average number of common shares outstanding. Diluted EPS is calculated using the weighted-average number of common shares outstanding, including the dilutive effect of the Company’s stock option grants, SARs, RSUs, employee stock purchase plan (ESPP) awards, and the 2023 Notes, as determined per the treasury stock method.

Effect of Convertible Notes and Related Convertible Note Hedges and Warrants

In connection with the issuance of the 2023 Notes, the Company entered into Convertible Note Hedge and Warrant Transactions as described further in Note 8, Convertible Senior Notes Due 2023. The expected collective impact of the Convertible Note Hedge and Warrant Transactions is to reduce the potential dilution that would occur if the price of the Company's common stock was between the conversion price of $59.33 per share and the strike price of the warrants of $80.9063 per share.

The 2023 Notes and related Convertible Note Hedge and Warrant Transactions are excluded in the calculation of diluted EPS because inclusion would be anti-dilutive.

In addition to the above described effect of the 2023 Notes and the related Convertible Note Hedge and Warrant Transactions, the Company also excluded the common stock equivalents of the following outstanding stock-based awards in the calculation of diluted EPS, because their inclusion would be anti-dilutive:


	Three Months ended June 30,		Six Months ended June 30,
	2021	2020	2021	2020
	(unaudited)		(unaudited)



Stock options, RSUs, PSUs	1,157,397	2,999,885	1,313,316	3,022,165

The following table sets forth the computation of basic and diluted net earnings per share for the three and six months ended June 30, 2021 and 2020 (dollars in thousands, except share and per share amounts):


	Three Months ended June 30,				Six Months ended June 30,
	2021		2020		2021		2020
	(unaudited)				(unaudited)
Numerator:
Net earnings	$	23,726	$	34,667	$	29,420	$	56,185
Denominator:
Weighted average shares outstanding, basic	53,005,344		52,557,035		52,985,472		52,545,910

Effect of dilutive securities:
Stock options, RSUs and SARs	1,718,802		1,088,793		1,616,061		1,065,508
Weighted average shares outstanding, diluted	54,724,146		53,645,828		54,601,533		53,611,418

Earnings per share, basic	$	0.45	$	0.66	$	0.56	$	1.07
Earnings per share, diluted	$	0.43	$	0.65	$	0.54	$	1.05