COMMON STOCK AND EARNINGS PER SHARE

9 Months Ended

Sep. 30, 2022

NOTE 14. COMMON STOCK AND EARNINGS PER SHARE

Basic earnings per common share is computed by dividing net income attributable to common stockholders during the period by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per common share is based on the assumption of the conversion of stock options and vesting of restricted stock at the beginning of each period using the treasury stock method at average cost for the periods. Effective as of January 1, 2022, diluted earnings per common share also reflects the 2025 Notes on an if-converted basis.

The following is a reconciliation of basic and diluted earnings per common share for each of the periods presented (in thousands, except share and per share data):


	Three Months Ended				Nine Months Ended
	September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021
Basic and Diluted Earnings:
Net Income Attributable to Common Stockholders, Used in Basic EPS	$	3,622	$	22,818	$	2,651	$	26,879
Add Back: Effect of Dilutive Interest Related to 2025 Notes ⁽¹⁾		539		—		—		—
Net Income Attributable to Common Stockholders, Used in Diluted EPS		4,161		22,818		2,651		26,879

Basic and Diluted Shares:
Weighted Average Shares Outstanding, Basic		18,386,435		17,703,284		18,044,299		17,678,701
Common Shares Applicable to Dilutive Effect of 2025 Notes ⁽²⁾		3,119,025		—		—		—
Weighted Average Shares Outstanding, Diluted		21,505,460		17,703,284		18,044,299		17,678,701

Per Share Information:
Net Income Attributable to Common Stockholders
Basic	$	0.20	$	1.29	$	0.15	$	1.52
Diluted	$	0.19	$	1.29	$	0.15	$	1.52

⁽¹⁾

As applicable, includes interest expense, amortization of discount, amortization of fees, and other changes in net income or loss that would result from the assumed conversion of the 2025 Notes (hereinafter defined). For the three months ended September 30 2022, a total of $0.5 million was included as the impact to earnings per share, if-converted, is dilutive. For the nine months ended September 30, 2022, the impact of $1.6 million was not included as the impact to earnings per share, if-converted, would be antidilutive to the net income of $2.6 million.

⁽²⁾

A total of 3.1 million shares representing the dilutive impact of the 2025 Notes, upon adoption of ASU 2020-06 effective January 1, 2022, were included in the computation of diluted net income per share attributable to common stockholders for the three months ended September 30, 2022. A total of 3.1 million shares representing the dilutive impact of the 2025 Notes, were not included in the computation of diluted net income per share attributable to common stockholders for the nine months ended September 30, 2022 because they were antidilutive to the net income of $2.6 million.

There were no potentially dilutive securities for the three and nine months ended September 30, 2022 or 2021 related to the Company’s stock options and restricted stock. The effect of 68,269 potentially dilutive stock options and restricted stock units were not included for the nine months ended September 30, 2022, as the effect would be anti-dilutive.

Effective January 1, 2022, the Company adopted ASU 2020-06 whereby diluted EPS includes the dilutive impact, if any, of the 2025 Notes (hereinafter defined) using the if-converted method, irrespective of intended cash settlement. The Company intends to settle its 3.875% Convertible Senior Notes due 2025 (the “2025 Notes”) in cash upon conversion with any excess conversion value to be settled in shares of our common stock. The Company elected, upon adoption, to utilize the modified retrospective approach, negating the required restatement of EPS for periods prior to adoption. The Company overcame the presumption of share settlement prior to the adoption of ASU 2020-06, and therefore, there was no dilutive impact for the year ended December 31, 2021. The effect of 3.1 million potentially dilutive 2025 Notes, if-converted, were not included for the nine months ended September 30, 2022, as the effect would be anti-dilutive.