EARNINGS PER SHARE

9 Months Ended

Sep. 30, 2020

The following is a reconciliation of the weighted-average shares outstanding used in the calculation of basic and diluted earnings per share ("EPS") for the three and nine months ended September 30, 2020 and 2019 (in thousands, except per share data):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Net (loss) income attributable to Heska Corporation	$	(5,219)	$	(310)	$	(16,864)	$	263

Basic weighted-average common shares outstanding	9,123		7,501		8,486		7,461
Assumed exercise of dilutive stock options and restricted shares	—		—		—		499
Diluted weighted-average common shares outstanding	$	9,123	$	7,501	$	8,486	$	7,960

Basic (loss) earnings per share attributable to Heska Corporation	$	(0.57)	$	(0.04)	$	(1.99)	$	0.04
Diluted (loss) earnings per share attributable to Heska Corporation	$	(0.57)	$	(0.04)	$	(1.99)	$	0.03

The following potentially outstanding common shares from convertible preferred stock, convertible senior notes, stock options and restricted stock awards were excluded from the computation of diluted EPS because the effect would have been antidilutive (in thousands):


	Three Months Ended September 30,		Nine Months Ended September 30,
	2020	2019	2020	2019
Convertible preferred stock	—	—	611	—
Convertible senior notes	123	—	56	—
Stock options and restricted stock	312	273	329	272
	435	273	996	272

As more fully described in Note 16, our Notes are convertible under certain circumstances, as defined in the indenture, into a combination of cash and shares of our common stock. The Company intends to settle the principal value of the Notes in cash and issue shares of our common stock to settle the intrinsic value of the conversion feature. The Company will use the treasury stock method when calculating the potential dilutive effect of the conversion feature on earnings per share, if any. Potential dilution upon conversion of the Notes occurs when the average market price per share of our common stock is greater than the conversion price of the Notes of $86.63. For the periods presented, all potentially dilutive shares relating to the Notes were not included in the computation of diluted EPS as the effect would have been anti-dilutive.

As discussed in Note 12, the Company issued and sold an aggregate of 122,000 shares of its Preferred Stock to certain investors in a private placement offering. The shares were converted into 1,508,964 shares of Public Common Stock, effective on April 21, 2020. The potential dilutive effect of the convertible preferred stock was calculated using the if-converted method for the period the preferred shares were outstanding. For the three and nine months ended September 30, 2020, these shares were excluded from the computation of diluted EPS because the effect would have been antidilutive.