Earnings per Share

3 Months Ended

Mar. 31, 2023

Note 6 — Earnings per Share

Basic and Diluted Earnings per Share

Basic earnings per share of Class A common stock is computed by dividing net income available to PetIQ, Inc. by the weighted-average number of shares of Class A common stock outstanding during the period. Diluted earnings per share of Class A common stock is computed by dividing net income available to PetIQ, Inc. by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive securities.

The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings per share of Class A common stock:


	Three months ended March 31,
(in 000's, except for per share amounts)	2023		2022
Numerator:
Net income	$	9,781	$	3,160
Less: net income attributable to non-controlling interests	82		29
Net income attributable to PetIQ, Inc. — basic	9,699		3,131
Plus: interest expense on Convertible Notes	1,676		—
Net income attributable to PetIQ, Inc. — diluted	11,375		3,131
Denominator:
Weighted-average shares of Class A common stock outstanding — basic	29,125		29,164
Dilutive effects of stock options that are convertible into Class A common stock	—		60
Dilutive effect of RSUs	45		66
Dilutive effect of conversion of Convertible Notes	6,060		—
Weighted-average shares of Class A common stock outstanding — diluted	35,230		29,290

Income per share of Class A common stock — basic	$	0.33	$	0.11
Income per share of Class A common stock — diluted	$	0.32	$	0.11

Shares of the Company’s Class B common stock do not share in the earnings of the Company and are therefore not participating securities. As such, separate presentation of basic and diluted earnings per share of Class B common stock under the two-class method has not been presented.

The computation of dilutive effect of other potential common shares includes 0 and 60 for stock options as well as 45 and 66 restricted stock units for the three months ended March 31, 2023 and 2022, respectively. All stock options and 693 thousand restricted stock units have been excluded from the computation of dilutive effect as they are antidilutive for the three months ended March 31, 2023. For the three months ended March 31, 2022 stock awards of 1,797 thousand shares were excluded from the computation of dilutive effect as they were antidilutive.

The dilutive impact of the Notes has been included in the dilutive earnings per share calculation for the three months ended March 31, 2023. The dilutive impact of the Notes have not been included in the dilutive earnings per share calculation for the three months ended March 31, 2022 as they would have been antidilutive.