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Loss Per Share
6 Months Ended
Jun. 30, 2016
Earnings Per Share [Abstract]  
Loss Per Share

NOTE 9—LOSS PER SHARE

The Company computes earnings (loss) per share using the two-class method, as unvested restricted common stock and unvested performance shares contain non-forfeitable rights to dividends and meet the criteria of participating securities. Under the two-class method, earnings are allocated between common stock and participating securities. The presentation of basic and diluted earnings per share is required only for each class of common stock and not for participating securities. As such, the Company presents basic and diluted earnings per share for its one class of common stock.

The two-class method includes an earnings allocation formula that determines earnings per share for each class of common stock according to dividends declared and undistributed earnings for the period. The Company’s reported net earnings are reduced by the amount allocated to participating securities to arrive at the earnings allocated to common stockholders for purposes of calculating earnings per share.

Basic earnings (loss) per share is computed by dividing net earnings (loss) attributable to Real Industry, Inc., less dividends and accretion on the fair value adjustment to Redeemable Preferred Stock, by the weighted average number of common shares outstanding for the reporting period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. For the calculation of diluted earnings per share, the basic weighted average number of common shares outstanding is increased by the dilutive effect of unvested restricted common stock awards, common stock options, unvested performance shares and the Warrants, determined using the treasury stock method.

The following table sets forth the computation of basic and diluted earnings (loss) per share for the three and six months ended June 30, 2016 and 2015:

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

(In millions, except share and per share amounts)

2016

 

 

2015

 

 

2016

 

 

2015

 

Loss from continuing operations

$

(1.3

)

 

$

(13.7

)

 

$

(11.3

)

 

$

(31.5

)

Earnings from discontinued operations,

   net of income taxes

 

0.1

 

 

 

2.9

 

 

 

0.1

 

 

 

27.2

 

Net loss

 

(1.2

)

 

 

(10.8

)

 

 

(11.2

)

 

 

(4.3

)

Earnings from continuing operations

   attributable to noncontrolling interest

 

0.3

 

 

 

0.1

 

 

 

0.4

 

 

 

0.2

 

Net loss attributable to Real Industry, Inc.

 

(1.5

)

 

 

(10.9

)

 

 

(11.6

)

 

 

(4.5

)

Dividends on Redeemable Preferred

   Stock, in-kind

 

(0.5

)

 

 

(0.5

)

 

 

(0.9

)

 

 

(0.6

)

Accretion of fair value adjustment to

   Redeemable Preferred Stock

 

(0.2

)

 

 

(0.2

)

 

 

(0.5

)

 

 

(0.3

)

Numerator for basic and diluted earnings

   (loss) per share—Net loss available to

   common stockholders

$

(2.2

)

 

$

(11.6

)

 

$

(13.0

)

 

$

(5.4

)

Denominator for basic and diluted earnings

   (loss) per share—Weighted average

   shares outstanding

 

29,252,343

 

 

 

27,631,795

 

 

 

29,160,245

 

 

 

24,689,253

 

Basic and diluted earnings (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

$

(0.08

)

 

$

(0.53

)

 

$

(0.43

)

 

$

(1.32

)

Discontinued operations

 

0.01

 

 

 

0.11

 

 

 

 

 

 

1.10

 

Basic and diluted loss per share

$

(0.07

)

 

$

(0.42

)

 

$

(0.43

)

 

$

(0.22

)

 

Unvested restricted common stock, common stock options, unvested performance shares and the Warrants are antidilutive and excluded from the computation of diluted earnings per share if the assumed proceeds upon exercise or vesting are greater than the cost to reacquire the same number of shares at the average market price during the period. For the three and six months ended June 30, 2016 and 2015, the impact of all outstanding unvested shares of restricted common stock, common stock options, unvested performance shares and the Warrants are excluded from diluted loss per share as their impact would be antidilutive.

The following tables provide details on the average market price of Real Industry common stock; the outstanding shares of unvested restricted common stock, common stock options, unvested performance shares and Warrants that were potentially dilutive; and summary information about the potentially dilutive common stock equivalents for each of the periods presented:

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

Average market price of

   Real Industry common stock

$

8.12

 

 

$

9.63

 

 

$

7.51

 

 

$

8.44

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Potentially dilutive common stock equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unvested restricted common stock

 

491,286

 

 

 

264,630

 

 

 

491,286

 

 

 

264,630

 

Common stock options

 

775,650

 

 

 

815,650

 

 

 

775,650

 

 

 

815,650

 

Unvested performance shares

 

381,823

 

 

 

260,000

 

 

 

381,823

 

 

 

260,000

 

Warrants

 

1,448,333

 

 

 

1,485,000

 

 

 

1,448,333

 

 

 

1,485,000

 

Total potentially dilutive

   common stock equivalents

 

3,097,092

 

 

 

2,825,280

 

 

 

3,097,092

 

 

 

2,825,280

 

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

(In millions, except exercise prices)

2016

 

 

2015

 

 

2016

 

 

2015

 

Average unamortized share-based

   compensation expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unvested restricted common stock awards

$

3.0

 

 

$

1.6

 

 

$

2.6

 

 

$

1.3

 

Unvested performance share awards

$

2.1

 

 

$

0.6

 

 

$

2.0

 

 

$

0.3

 

Range of exercise prices on common stock options

$3.00 - $10.00

 

 

$3.00 - $10.00

 

 

$3.00 - $10.00

 

 

$3.00 - $10.00

 

Weighted average exercise price of the Warrants

$

5.64

 

 

$

5.64

 

 

$

5.64

 

 

$

5.81