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Earnings per Share
 6 Months Ended
Nov. 30, 2017
Earnings per Share  
Earnings per Share

 

Note 9 — Earnings per Share

 

The computation of basic earnings per share is based on the weighted average number of common shares outstanding during each period.  The computation of diluted earnings per share is based on the weighted average number of common shares outstanding during the period plus, when their effect is dilutive, incremental shares consisting of shares subject to stock options and shares issuable upon vesting of restricted stock awards.

 

In accordance with ASC 260-10-45, Share-Based Payment Arrangements and Participating Securities and the Two-Class Method, our unvested restricted stock awards are deemed participating securities since these shares are entitled to participate in dividends declared on common shares.  During periods of net income, the calculation of earnings per share for common stock excludes income attributable to unvested restricted stock awards from the numerator and excludes the dilutive impact of those shares from the denominator.  During periods of net loss, no effect is given to the participating securities because they do not share in the losses of the Company.

 

A reconciliation of the computations of basic and diluted earnings per share information for the three- and six-month periods ended November 30, 2017 and 2016 is as follows:

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

November 30,

 

November 30,

 

 

 

2017

 

2016

 

2017

 

2016

 

Basic and Diluted EPS:

 

 

 

 

 

 

 

 

 

Income (Loss) from continuing operations

 

$
(22.5

)

$
12.1

 

$
(11.9

)

$
22.0

 

Less income attributable to participating shares

 

—

 
(0.1

)

—

 
(0.2

)

 

 

 

 

 

 

 

 

 

 

Income (Loss) from continuing operations attributable to common shareholders

 
(22.5

)
12.0

 
(11.9

)
21.8

 

Income (Loss) from discontinued operations attributable to common shareholders

 
(0.1

)

—

 
(0.1

)
(0.4

)

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to common shareholders for earnings per share

 

$
(22.6

)

$
12.0

 

$
(12.0

)

$
21.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Shares:

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding — basic

 
34.0

 
33.7

 
34.1

 
33.9

 

Additional shares from the assumed exercise of stock options

 

—

 
0.4

 

—

 
0.3

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding — diluted

 
34.0

 
34.1

 
34.1

 
34.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings (Loss) per share — basic and diluted:

 

 

 

 

 

 

 

 

 

Earnings (Loss) from continuing operations

 

$
(0.66

)

$
0.35

 

$
(0.35

)

$
0.64

 

Loss from discontinued operations

 

—

 

—

 

—

 
(0.01

)

 

 

 

 

 

 

 

 

 

 

Earnings (Loss) per share — basic and diluted

 

$
(0.66

)

$
0.35

 

$
(0.35

)

$
0.63

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The potential dilutive effect of 520,000 shares and 476,000 shares were excluded from the computation of weighted average common shares outstanding – diluted for the three- and six-month periods ended November 30, 2017 as the shares would have been anti-dilutive.

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At November 30, 2017, the average market price of our common shares was in excess of all of our outstanding options.  At November 30, 2016, stock options to purchase 42,000 shares of common stock were outstanding, but were not included in the computation of diluted earnings per share because the exercise price of each of these options was greater than the average market price of the common shares during the interim period then ended.