Earnings (Loss) Per Share

3 Months Ended

Mar. 31, 2020

14.Earnings (Loss) Per Share

We use the two-class method to calculate earnings per share as the unvested restricted stock awards outstanding under our equity incentive plan are participating shares with nonforfeitable rights to dividends. Under the two-class method, we compute earnings per share of Common Stock by dividing the sum of distributed earnings to common stockholders (currently not applicable as we do not pay dividends) and undistributed earnings allocated to common stockholders by the weighted average number of outstanding shares of Common Stock for the period. In applying the two-class method, we allocate undistributed earnings to both shares of Common Stock and participating securities based on the number of weighted average shares outstanding during the period. Any undistributed losses are not allocated to unvested restricted stock as the restricted stockholders are not obligated to share in the losses. Following is a reconciliation of the numerator and denominator of basic and diluted earnings (loss) per share for the three months ended March 31, 2020 and 2019:

(In thousands except per share data)	Three Months Ended March 31,
	2020			2019
Numerator:
Net income (loss)	$	(198,106	)	$	4,214

Denominator:
Shares used for basic income (loss) per share		48,613			42,745
Effect of dilutive stock options and restricted stock units outstanding:
Non-qualified stock options		—			127
Restricted stock awards		—			16
Restricted stock units		—			292
Performance stock units		—			3
Shares used for diluted income (loss) per share ⁽¹⁾	$	48,613		$	43,183

Earnings (loss) per share:
Basic	$	(4.08	)	$	0.10
Diluted ⁽¹⁾	$	(4.08	)	$	0.10

Dilutive securities outstanding not included in the computation of earnings per share because their effect is anti-dilutive:
Non-qualified stock options		162			80
Restricted stock units		263			56
Restricted stock awards		38			—
Performance-based stock units		33			—

(1)

The impact of potentially dilutive securities for the three months ended March 31, 2020 was not considered because the impact would be anti-dilutive.

Market stock units and performance stock units outstanding are considered contingently issuable shares, and certain of these stock units were excluded from the calculations of diluted earnings per share for all periods presented as the performance criteria had not been met as of the end of the reporting periods.