Earnings Per Share

9 Months Ended

Sep. 30, 2019

Note 9—Earnings Per Share

The Transactions were structured as a reverse capitalization by which the Company issued stock for the net assets of Royal accompanied by a recapitalization. Earnings per share is calculated for the Company only for periods after the Transactions due to the reverse recapitalization.

Earnings per share is computed using the two-class method. The two-class method determines earnings per share of common stock and participating securities according to dividends or dividend equivalents and their respective participation rights in undistributed earnings. Participating securities represent restricted stock awards in which the recipients have non-forfeitable rights to dividend equivalents during the performance period.

The following table sets forth the calculation of basic and diluted earnings per share for the periods indicated (in thousands, except per share data):

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2019			2018			2019			2018
Numerator:
Net income attributable to common stockholders - basic and diluted	$	2,884		$	2,529		$	12,022		$	2,529
Less: Earnings allocated to participating securities		(26	)		-			(125	)		-
	$	2,858		$	2,529		$	11,897		$	2,529

Denominator:
Weighted average shares outstanding - basic and diluted		45,899			45,855			45,871			45,855

Net income per common share, basic and diluted	$	0.06		$	0.06	⁽¹⁾	$	0.26		$	0.06	⁽¹⁾

(1)

Subsequent to the issuance of the Company's Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2018, the Company's management determined that net income attributable to non-controlling interests, net of tax, had been excluded from the numerator in the calculation of Earnings per common share (diluted). As a result, Earnings per common share (diluted) for the three months ended September 30, 2018 has been adjusted from $0.03 previously reported to $0.06.

The Company had the following shares that were excluded from the computation of diluted earnings per share because their inclusion would have been anti-dilutive for the periods presented but could potentially dilute basic earnings per share in future periods (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2018		2019		2018
Warrants		21,250		21,250		21,250		21,250
Class C common shares		40,000		40,000		40,000		40,000
Total		61,250		61,250		61,250		61,250

Diluted net income per share also excludes the effects of OpCo Common Units (and related Class C Common Stock) associated with the earn-out, which are convertible into Class A Common Stock, and the PSUs because each are considered contingently issuable shares and the conditions for issuance were not satisfied as of September 30, 2019.