Earnings per share

9 Months Ended

Sep. 30, 2011

Earnings per share

Basic earnings per share (“basic EPS”) is computed by dividing net income by the weighted average number of common shares outstanding for the reporting period. Diluted earnings per share (“diluted EPS”) gives effect to all dilutive potential shares outstanding resulting from employee stock options, restricted stock units, performance share units and stock appreciation rights (“SARs”) during the period. The following table sets forth the computation of basic and diluted earnings per share for the three and nine months ended September 30, 2010 and 2011.



	Three months ended September 30,				Nine months ended September 30,
	2010		2011		2010		2011

Net income	$	8,758	$	8,211	$	23,383	$	25,886

Basic – weighted average shares
outstanding	28,425		28,348		28,896		28,355

Effect of dilutive potential
securities	96		198		177		379

Diluted – weighted average
shares outstanding	28,521		28,546		29,073		28,734


Net income
Basic	$	0.31	$	0.29	$	0.81	$	0.91
Diluted	0.31		0.29		0.80		0.90

The shares used in the calculation of diluted EPS exclude options and SARs to purchase shares where the exercise price was greater than the average market price of common shares for the period. Shares excluded from the calculation of diluted EPS aggregated 1.9 million and 1.5 million for the three and nine months ended September 30, 2010, respectively. Shares excluded from the calculation of diluted EPS aggregated 1.5 million and 0.8 million for the three and nine months ended September 30, 2011, respectively. The shares used in the calculation of diluted EPS also exclude potential shares issuable under the Notes. Upon conversion of the Notes, the holder of each Note will receive the conversion value of the Note payable in cash up to the principal amount of the Note and CONMED common stock for the Note's conversion value in excess of such principal amount. As of September 30, 2011, our share price has not exceeded the conversion price of the Notes, therefore the conversion value was less than the principal amount of the Notes. Accordingly, under the net share settlement method, there were no potential shares issuable under the Notes to be used in the calculation of diluted EPS. The maximum number of shares we may issue with respect to the Notes is 5,750,000.