Note J - Earnings Per Share

9 Months Ended

Sep. 30, 2021

Notes to Financial Statements

Earnings Per Share [Text Block]

Note J - Earnings Per Share

In periods in which the Company has net income, the Company is required to calculate earnings per share (“EPS”) using the two-class method. The two-class method is required because the Company’s Series A Preferred Stock is considered a participating security with objectively determinable and non-discretionary dividend participation rights. Series A Preferred stockholders have the right to participate in dividends above their five percent dividend rate should the Company declare dividends on its common stock at a dividend rate higher than the five percent (on an as-converted basis). Under the two-class method, undistributed and distributed earnings are allocated on a pro-rata basis to the common and the preferred stockholders. The weighted-average number of common and preferred stock outstanding during the period is then used to calculate EPS for each class of shares.

In periods in which the Company has a net loss, basic loss per share is calculated using the treasury stock method. The treasury stock method is calculated by dividing the net loss by the weighted-average number of common shares outstanding during the period. The two-class method is not used, because the calculation would be anti-dilutive.

Reconciliations of basic and diluted EPS were as follows:

	Three Months Ended September 30,
In thousands, except per share amounts	2021			2020
Numerator:
Net income (loss)	$	4,404		$	(1,621	)
Less: Preferred stock dividends		125			125
Less: Earnings attributable to participating securities		543			—
Numerator for basic EPS: income (loss) attributable to common stockholders		3,736		$	(1,746	)
Effect of dilutive securities:
Add back: Allocation of earnings to participating securities		543			—
Less: Re-allocation of earnings to participating securities considering potentially dilutive securities		(525	)		—
Numerator for diluted EPS		3,754			(1,746	)
Denominator:
Basic EPS denominator: weighted-average common shares outstanding		6,889			6,523
Diluted EPS denominator		7,162			6,523
Basic income (loss) per Common Share	$	0.54		$	(0.27	)
Diluted income (loss) per Common Share	$	0.52		$	(0.27	)

For the three months ended September 30, 2021 and 2020, respectively, the following shares have been excluded from the calculation of shares used in the diluted EPS calculation: 43 thousand and 0.1 million shares of anti-dilutive market price options; zero and 0.3 million of anti-dilutive unvested restricted shares; and 1.0 million and 1.0 million shares of anti-dilutive Series A Preferred Stock (as if converted).

	Nine Months Ended September 30,
In thousands, except per share amounts	2021			2020
Numerator:
Net Income (loss)	$	13,215		$	(2,738	)
Less: Preferred stock dividend		372			372
Less: Earnings attributable to common stockholders		1,661			—
Numerator for basic EPS: income (loss) attributable to common stockholders		11,182			(3,110	)
Effect of dilutive securities:
Add back: Allocation of earnings to participating securities		1,661			—
Less: Re-allocation of earnings to participating securities considering potentially dilutive securities		(1,578	)		—
Numerator for diluted EPS	$	11,265		$	(3,110	)
Denominator:
Basic EPS denominator: weighted-average common shares outstanding		6,743			6,432
Diluted EPS denominator		7,153			6,432
Basic income (loss) per Common Share	$	1.66		$	(0.48	)
Diluted income (loss) per Common Share	$	1.57		$	(0.48	)

For the nine months ended September 30, 2021 and 2020, respectively, the following shares have been excluded from the calculation of shares used in the diluted EPS calculation: 49 thousand and 0.1 million shares of anti-dilutive market price options; 63 thousand and 0.4 million of anti-dilutive unvested restricted shares; and 1.0 million and 1.0 million shares of anti-dilutive Series A Preferred Stock (as if converted).