Earnings per share ("EPS")

9 Months Ended

Sep. 30, 2020

16. Earnings per share (“EPS”)

The Company uses the two-class method of computing basic EPS due to the existence of non-vested restricted stock awards with nonforfeitable rights to dividends or dividend equivalents (referred to as participating securities). For the three and nine months ended September 30, 2020, no significant adjustments were made to net income for purposes of calculating basic and diluted EPS.

The following is a reconciliation of the weighted average shares used in diluted EPS computations.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Weighted average common shares-basic		19,335,718		18,957,876		19,217,057		18,847,728
Effect of dilutive securities
Unexercised stock options and stock purchase plan		10,607		—		41,701		—
Unvested restricted stock awards and units		52,242		—		60,544		—
Weighted average common shares-diluted		19,398,567		18,957,876		19,319,302		18,847,728

There were 1,771,113 and 1,814,544 weighted average outstanding stock options and restricted stock awards and units not included in the diluted EPS computation for the three months ended September 30, 2020 and 2019, respectively, and 1,527,735 and 1,880,423 weighted average outstanding stock options and restricted stock awards and units not included in the diluted EPS computation for the nine months ended September 30, 2020 and 2019, respectively, because inclusion of these awards was anti-dilutive or, for performance-based and market-based restricted stock awards and units, all necessary conditions had not been satisfied by the end of the respective period.