EARNINGS PER SHARE

12 Months Ended

Dec. 31, 2020

Basic earnings per share ("EPS") is computed by dividing net income attributable to the Company by the weighted-average number of common shares outstanding during the period. The computation of diluted EPS is similar to the computation of basic EPS except that the numerator is increased to exclude charges that would not have been incurred, and the denominator is increased to include the number of additional common shares that would have been outstanding (using the if-converted and treasury stock methods), if securities containing potentially dilutive common shares (stock options and restricted stock awards but excluding options to purchase fractional shares resulting from the Company's December 2010 1-for-10 reverse stock split) had been converted to common shares, and if such assumed conversion is dilutive.

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 years ended December 31, 2020, 2019 and 2018 (in thousands, except per share data):


	Years ended December 31,
	2020		2019		2018
Net (loss) income attributable to Heska Corporation	$	(14,399)	$	(1,465)	$	5,850

Basic weighted-average common shares outstanding	8,653		7,446		7,220
Assumed exercise of dilutive stock options and restricted shares	—		—		636
Diluted weighted-average common shares outstanding	8,653		7,446		7,856

Basic (loss) earnings per share attributable to Heska Corporation	$	(1.66)	$	(0.20)	$	0.81
Diluted (loss) earnings per share attributable to Heska Corporation	$	(1.66)	$	(0.20)	$	0.74

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):


	Years ended December 31,
	2020	2019	2018
Convertible preferred stock	458	—	—
Convertible senior notes	118	—	—
Stock options and restricted shares	328	300	111
	904	300	111

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 antidilutive.

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 twelve months ended December 31, 2020, these shares were excluded from the computation of diluted EPS because the effect would have been antidilutive.