NOTE 10 – EARNINGS PER SHARE

EPS is computed by dividing reported net income by the weighted-average number of shares outstanding. Diluted EPS considers the potential dilution that could occur if common stock equivalents were exercised or converted into stock. The difference between the basic and diluted weighted-average equivalent shares with respect to the Company’s EPS calculation is due entirely to the assumed exercise of stock options and the vesting and settlement of RSUs and PSAs. PSAs are included in the computation of diluted shares only to the extent that the underlying performance conditions (i) are satisfied as of the end of the reporting period or (ii) would be considered satisfied if the end of the reporting period were also the end of the applicable performance period and the result would be dilutive under the treasury stock method.

As of September 30, 2017, the PSAs granted during the year ended December 31, 2015 met the related performance conditions and were included in the calculation of diluted EPS. However, the PSAs granted during the year ended December 31, 2016 and during the nine months ended September 30, 2017 have not yet completed their initial two-year performance period and therefore were excluded in the calculation of diluted EPS. There was no weighted-average shares excluded from the calculation of EPS because they were anti-dilutive for the three and nine months ended September 30, 2017, and 0.2 million for each of the three and nine months ended September 30, 2016. The anti-dilutive shares were primarily associated with stock options and RSUs.

The dilutive effect of stock options, RSUs, and PSAs for each period reported is summarized below:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2017		2016		2017		2016
Net Income	$	13,692	$	13,437	$	35,806	$	33,911

Weighted-average number of basic shares outstanding during the period		18,666		18,965		18,807		18,989
Dilutive effect of stock options, RSUs, and performance shares		358		364		411		356
Weighted-average number of diluted shares outstanding during the period		19,024		19,329		19,218		19,345

Basic earnings per share	$	0.73	$	0.71	$	1.90	$	1.79
Diluted earnings per share	$	0.72	$	0.70	$	1.86	$	1.75