EARNINGS PER SHARE

9 Months Ended

Sep. 30, 2021

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, 2021 and 2020 (in thousands, except per share data):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Net loss attributable to Heska Corporation	$	(1,898)	$	(5,219)	$	(594)	$	(16,864)

Basic weighted-average common shares outstanding	10,195		9,123		9,949		8,486
Dilutive effect of stock options and restricted stock awards	—		—		—		—
Diluted weighted-average common shares outstanding	10,195		9,123		9,949		8,486

Basic loss per share attributable to Heska Corporation	$	(0.19)	$	(0.57)	$	(0.06)	$	(1.99)
Diluted loss per share attributable to Heska Corporation	$	(0.19)	$	(0.57)	$	(0.06)	$	(1.99)

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,
	2021	2020	2021	2020
Convertible preferred stock	—	—	—	611
Convertible Senior Notes	996	123	996	56
Stock options and restricted stock	404	312	381	329
	1,400	435	1,377	996

As more fully described in Note 16, the Notes are convertible under certain circumstances, as defined in the indenture, into a combination of cash and shares of the Company's common stock. As discussed in Note 1, the Company early adopted ASU 2020-06, effective January 1, 2021, which amends certain guidance on the computation of EPS for convertible instruments. Prior to the adoption of ASU 2020-06, the Company used the treasury stock method when calculating the potential dilutive effect of the conversion feature of the Notes on earnings per share, if any. Under ASU 2020-06, the treasury stock method is no longer available, and entities must apply the if-converted method for convertible instruments and the effect of potential share settlement must be included in the diluted earnings per share calculation when an instrument may be settled in cash or shares. To determine the dilutive effect to earnings per share using the if-converted method, interest expense on the outstanding Notes is added back to the diluted earnings per share numerator and all of the potentially dilutive shares are included in the diluted earnings per share denominator. For the three and nine months ended September 30, 2021, all of the potentially issuable shares with respect to the Notes were excluded from the calculation of diluted net earnings per share because the effect was anti-dilutive. The Company has elected to apply the modified retrospective method of adoption and will not restate EPS for the prior period.