Earnings per Share

12 Months Ended

Dec. 31, 2022

Earnings per Share

Earnings per Share

17. EARNINGS PER SHARE

Basic earnings per share is calculated by diving net income by the weighted average number of shares of common stock outstanding. For the years ended December 31, 2022 and 2021, respectively, the Company calculated Diluted net income per common share is computed under the treasury stock method by using the weighted average number of shares of common stock outstanding, plus, for periods with net income attributable to common stockholders, the potential dilutive effects of stock options, stock appreciation rights and restricted stock units.

For the year ended December 31, 2020, the Company used the two-class method to compute net loss per common share because the Company has issued securities (convertible preferred stock) that entitled the holder to participate in dividends and earnings of the Company. Under this method, net income is reduced by the amount of any dividends earned and the accretion of convertible preferred stock to its redemption value during the period. The remaining earnings (undistributed earnings) are allocated to common stock and each series of convertible preferred stock to the extent that each preferred security may share in the earnings as if all of the earnings for the period had been distributed. The total earnings allocated to common stock is then divided by the number of outstanding shares to which the earnings are allocated to determine the earnings per share. The two-class method is not applicable during periods with a net loss, as the holders of the convertible preferred stock have no obligation to fund losses.

The Company reported a net loss for the year ended December 31, 2020, and the weighted average number of shares utilized for basic and diluted net loss per share attributable to common stockholders are the same for this period because all convertible preferred stock and stock options have been excluded from the computation of diluted weighted-average shares outstanding because such securities would have an antidilutive impact. Additionally, the fair value adjustment for the warrants was excluded from the computation of diluted net loss for the year ended December 31, 2020 since the additional income would have an antidilutive impact.

The following table sets forth the computation of basic and diluted net income (loss) per share:

	Year Ended December 31,
	2022		2021		2020
Numerator
Net income (loss)	$	181,468	$	34,597	$	(36,944)
Accumulation of dividends on preferred stock		—		—		(26,904)
Net income (loss) available to common shareholders	$	181,468	$	34,597	$	(63,848)
Denominator
Net income (loss) per common share - basic	$	3.07	$	0.60	$	(2.48)
Net income (loss) per common share - diluted	$	2.97	$	0.58	$	(2.48)
Weighted average number of shares of common stock - basic		59,173,121		57,531,540		25,772,419
Weighted average number of shares of common stock - diluted		61,097,045		59,205,213		25,772,419

Securities outstanding that were included in the computation above, utilizing the treasury stock method are as follows:

	Year Ended December 31,
	2022		2021		2020
Stock options, SARs, and RSUs to purchase common stock		1,923,924		1,536,825		—
Warrants		—		136,848		—
Total		1,923,924		1,673,673		—

Potential common shares issuable upon conversion of preferred stock, exercise of stock options, and exercise of warrants that were excluded from the computation of diluted weighted-average shares outstanding as well as the warrant fair value adjustments excluded from the numerator are as follows:

	Year Ended December 31,
	2022		2021		2020
Stock options, SARs, and RSUs to purchase common stock		4,640,231		4,289,066		5,260,126
Convertible preferred stock		—		—		—
Warrants		—		—		410,239
Total		4,640,231		4,289,066		5,670,365
Adjustment for warrants	$	—	$	—	$	3,109