Earnings per Share

6 Months Ended

Mar. 31, 2022

NOTE 4: EARNINGS PER SHARE

The following table reconciles the number of common shares used to compute basic and diluted earnings per share attributable to EZCORP Inc., shareholders:


	Three Months Ended March 31,				Six Months Ended March 31,
(in thousands, except per share amounts)	2022		2021		2022		2021

Basic earnings per common share:
Net income - basic	$	14,887	$	5,330	$	30,608	$	9,629
Weighted shares outstanding - basic	56,561		55,661		56,370		55,509
Basic earnings per common share	$	0.26	$	0.10	$	0.54	$	0.17

Diluted earnings per common share:
Net income - basic	$	14,887	$	5,330	$	30,608	$	9,629
Add: Convertible Notes interest expense, net of tax	1,846		—		3,730		—
Net income - diluted	$	16,733	$	5,330	$	34,338	$	9,629
Weighted shares outstanding - basic	56,561		55,661		56,370		55,509
Effect of dilution from equity-based compensation awards*	622		4		676		2
Effect of dilution from if-converted Convertible Notes**	25,224		—		25,224		—
Weighted shares outstanding - diluted	82,407		55,665		82,270		55,511
Diluted earnings per common share	$	0.20	$	0.10	$	0.42	$	0.17

Potential common shares excluded from the calculation of diluted earnings per share above:
Restricted stock***	1,756		964		1,847		831

* Includes time-based share-based awards and performance based awards for which targets for fiscal year tranches have been achieved and vesting is subject only to achievement of service conditions.

** See Note 8: Debt for conversion price and initial conversion rate of the 2024 Convertible Notes and 2025 Convertible Notes.

*** Includes antidilutive share-based awards as well as performance-based share-based awards that are contingently issuable, but for which the condition for issuance has not been met as of the end of the reporting period.

As a result of our adoption of ASU 2020-06 on October 1, 2021, the dilutive impact of the Convertible Notes for our calculation of diluted net income per share is considered using the if-converted method. During the three months and six months ended March 31, 2022, we increased net income by $1.8 million and $3.7 million respectively to arrive at the numerator used to calculate diluted earnings per common share, which represents interest expense recognized on the convertible notes that were subject to this change in methodology. For periods prior to our October 1, 2021 adoption of ASU 2020-06, we applied the treasury stock method to account for the dilutive impact of the 2024 and 2025 Convertible Notes for diluted earnings per share purposes