Net (Loss) Income Per Share

9 Months Ended

Sep. 30, 2021

The Company presents both basic earnings per share (“EPS”) and diluted EPS. Basic EPS excludes potential dilution and is computed by dividing “Net (loss) income” by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if stock awards were exercised and if the 2028 Convertible Notes and 2025 Convertible Notes were converted. The potential dilution from stock awards is accounted for using the treasury stock method based on the average market value of the Company’s common stock. The potential dilution from conversion of the 2028 Convertible Notes and 2025 Convertible Notes is accounted for using the if-converted method, which requires that all of the shares of the Company’s common stock issuable upon conversion of the 2028 Convertible Notes and the 2025 Convertible Notes will be included in the calculation of diluted EPS assuming conversion of the 2028 Convertible Notes and the 2025 Convertible Notes at the beginning of the reporting period (or at time of issuance, if later).

The following table shows the calculations (in thousands, except net (loss) income per share amounts):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Adjustment to net (loss) income for convertible notes in diluted EPS (1)
NET (LOSS) INCOME	$	(20,348)	$	2,557	$	33,412	$	(11,245)
Convertible note accretion, amortization, and interest, net of tax	—		1,975		—		—
NET (LOSS) INCOME USED IN DILUTED EPS	$	(20,348)	$	4,532	$	33,412	$	(11,245)


Basic weighted average shares outstanding	122,559		110,461		119,087		107,605
Dilutive effect of stock options	—		3,017		2,077		—
Dilutive effect of restricted stock awards	—		175		192		—
Dilutive effect of Convertible Notes due 2025	—		5,538		—		—

Diluted weighted average shares outstanding	122,559		119,191		121,356		107,605

Basic net (loss) income per share	$	(0.17)	$	0.02	$	0.28	$	(0.10)
Diluted net (loss) income per share	$	(0.17)	$	0.04	$	0.28	$	(0.10)

(1) This adjustment compensates for the effects of the if-converted impact of convertible notes in net income. Since an entity using the if-converted method assumes that a convertible debt instrument was converted into common shares at the beginning of the reporting period, net income is adjusted to reverse any recognized interest expense (including any amortization of discounts).

The following potential dilutive shares were excluded from the calculation of diluted net (loss) income per share because their effect would be anti-dilutive (in thousands):


	Three Months Ended September 30,		Nine Months Ended September 30,
	2021	2020	2021	2020
Stock options	1,811	—	—	3,069
Restricted stock awards	201	—	—	202
2025 Convertible Notes	5,538	—	5,538	3,113
2028 Convertible Notes	5,215	—	5,101	—

The potential effect of the Capped Call Transactions entered into concurrently with the 2028 Convertible Notes were excluded from the calculation of diluted net (loss) income per share in the three and nine months ended September 30, 2021 as the Company’s closing price on September 30, 2021 did not exceed the conversion price of $85.75 per share. The Capped Call Transactions are not reflected in diluted net (loss) income per share as they are anti-dilutive.

For further details on the Capped Call Transactions, please refer to Note 8. Debt.