COMPUTATION OF NET INCOME PER COMMON SHARE Basic net income per share is computed by dividing net income attributable to stockholders of the Company by the weighted average number of outstanding common shares for the period. The computation of diluted net income per share is similar to the computation of basic net income per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued.
The following table sets forth the computation of basic and diluted net income per share for the periods presented:
| | | | | | | | | | | | | | | | | | | Year Ended December 31, | | 2023 | | 2022 | | 2021 | Numerator: | | | | | | Net income | $ | 13,910 | | | $ | 7,243 | | | $ | 2,148 | | Less: net income (loss) attributable to noncontrolling interest | 531 | | | 600 | | | (548) | | Net income attributable to The Pennant Group, Inc. | $ | 13,379 | | | $ | 6,643 | | | $ | 2,696 | | | | | | | | Denominator: | | | | | | Weighted average shares outstanding for basic net income per share | 29,863 | | | 29,064 | | | 28,406 | | Plus: incremental shares from assumed conversion(a) | 330 | | | 1,095 | | | 2,236 | | Adjusted weighted average common shares outstanding for diluted income per share | 30,193 | | | 30,159 | | | 30,642 | | | | | | | | Earnings Per Share: | | | | | | Basic net income per common share | $ | 0.45 | | | $ | 0.23 | | | $ | 0.09 | | Diluted net income per common share | $ | 0.44 | | | $ | 0.22 | | | $ | 0.09 | |
| | | | | | | | | (a) | | The calculation of dilutive shares outstanding excludes out-of-the-money stock options (i.e., such options’ exercise prices were greater than the average market price of our common shares for the period) because their inclusion would have been antidilutive. Options outstanding which are anti-dilutive and therefore not factored into the weighted average common shares amount above were 2,363, 1,860, and 478 for the years ended December 31, 2023, 2022 and 2021, respectively. | | | |
|