NOTE 11 – 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 March 31, 2018, the PSAs granted during the year ended December 31, 2016 met the related performance conditions for the initial performance period and were included in the calculation of diluted EPS. However, the PSAs granted during the year ended December 31, 2017 and during the three months ended March 31, 2018 have not yet completed their initial two-year performance period and therefore were excluded in the calculation of diluted EPS. There were 26,420 weighted-average shares excluded from the calculation of EPS because they were anti-dilutive for the three months ended March 31, 2018, and no shares excluded for the three months ended March 31, 2017. The anti-dilutive shares were primarily associated with RSUs.

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

	Three Months Ended
	March 31,
	2018		2017
Net Income	$	12,417	$	10,177

Weighted-average number of basic shares outstanding during the period		18,670		18,972
Dilutive effect of stock options, RSUs, and performance shares		488		451
Weighted-average number of diluted shares outstanding during the period		19,158		19,423

Basic earnings per share	$	0.67	$	0.54
Diluted earnings per share	$	0.65	$	0.52