Note 10 - Earnings Per Share

6 Months Ended

Jun. 30, 2023

Notes to Financial Statements

EARNINGS PER SHARE

NOTE 10—EARNINGS PER SHARE

Earnings per share (“EPS”) is not presented retrospectively for periods prior to the issuance of the tracking stock as the tracking stock was not a part of the Company’s capital structure during those periods and the issuance of the tracking stock changes the common shareholders’ relative residual interest in the Company. Therefore, EPS is presented for the Company’s single common stock up to the time the tracking stock was issued. EPS is presented prospectively under the two-class method starting on the date of initial distribution of the tracking stock. Refer to Note 6 for information related to the Company’s tracking stock.

The following is the computation of basic and diluted EPS:

(In thousands, except per share amounts)	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Earnings attribution
Single class of common stock (through 6/20/2023) *	$	6,125	$	33,280	$	31,382	$	74,751
Class A common stock (6/21/2023 - 6/30/2023)		1,326		—		1,326		—
Class A restricted stock awards (6/21/2023 - 6/30/2023)		105		—		105		—
Class B common stock (6/21/2023 - 6/30/2023)		—		—		—		—
Class B restricted stock awards (6/21/2023 - 6/30/2023)		—		—		—		—
Net income	$	7,556	$	33,280	$	32,813	$	74,751
* Common stock and restricted stock participated in earnings 1:1 and are shown on a combined basis through 6/20/2023 consistent with historical presentation
	Three months ended June 30,				Six months ended June 30,
	2023 **		2022		2023 **		2022
EPS data for single class of common stock through 6/20/2023
Numerator
Net earnings	$	6,125	$	33,280	$	31,382	$	74,751
Denominator
Weighted average shares used to compute basic earnings per share *		44,414		44,271		44,344		44,226
Dilutive effect of stock option awards		350		615		381		610
Dilutive effect of restricted stock units		—		249		—		186
Dilutive effect of performance stock units		55		—		27		—
Weighted average shares used to compute diluted earnings per share		44,819		45,135		44,752		45,022
Earnings per common share (single class of common stock)
Basic	$	0.14	$	0.75	$	0.71	$	1.69
Diluted	$	0.14	$	0.74	$	0.70	$	1.66
	6/21/2023 - 6/30/2023
	Class A		Class B
EPS data for dual-class common stock 6/21/2023 - 6/30/2023
Numerator
Net earnings	$	1,326	$	—
Denominator
Weighted average shares used to compute basic earnings per share **		41,123		8,225
Dilutive effect of stock option awards		326		93
Dilutive effect of restricted stock units		39		32
Dilutive effect of performance stock units		224		82
Weighted average shares used to compute diluted earnings per share		41,712		8,432
Earnings per common share (dual-class structure)
Basic	$	0.03	$	—
Diluted	$	0.03	$	—
** Does not include unvested restricted stock, which averaged 3,239 and 648 for Class A and Class B, respectively

Unvested restricted stock awards have the right to receive nonforfeitable dividends on the same basis as common shares; therefore, unvested restricted stock is considered a participating security for the purpose of calculating EPS. Historically, the Company has shown EPS for its common stock and unvested restricted stock on a combined basis since both instruments participate on the same basis and the resulting EPS is typically the same. Starting under the two-class method, the Company will report separately the net earnings allocated away from holders of Class A and Class B common stock to holders of unvested restricted stock awards.

For accounting purposes, Class B’s participation rights are, in substance, discretionary based on the power of the Company’s Board of Directors to add or modify expense allocation policies, redefine CORE assets, and redetermine CORE’s per-ton usage fees at any time, in its sole discretion, without shareholder approval. Therefore, no amount of the Company’s net earnings shall be allocated to Class B for the purpose of calculating EPS other than actual dividends declared during the period for the tracking stock. No dividends were declared on Class B common stock during the second quarter of 2023.

Diluted EPS for the second quarter and year-to-date periods through June 20, 2023 excluded all outstanding restricted stock units, or 684,151 units in total, because the effect would have been antidilutive. In addition, diluted EPS for the second quarter and year-to-date periods through June 20, 2023 excluded outstanding performance stock units originally granted in 2022, or 248,706 units at target, based on the guidance for contingently issuable shares, which requires exclusion when the shares would not be issuable if the end of the reporting period were the end of the contingency period.

For the period from June 21 through June 30, 2023, diluted EPS for Class A common stock excluded 165,803 RSUs because the effect would have been antidilutive. Class A diluted EPS for this period also excluded outstanding performance stock units originally granted in 2022, or 248,706 units at target, based on the guidance for contingently issuable shares. In addition, the Company’s ability to convert Class B common shares into Class A common shares, as discussed previously in Note 6, is a contingency that will not be reflected in the diluted EPS for Class A under the if-converted method until such time that the required Board resolutions occur, if ever.

For the period from June 21 through June 30, 2023, diluted EPS for Class B common stock excludes certain performance stock units, 49,737 at target, based on the guidance for contingently issuable shares guidance.