Note J - Earnings Per Share

12 Months Ended

Dec. 31, 2020

Notes to Financial Statements

Earnings Per Share [Text Block]

Note J — Earnings Per Share

In periods in which the Company has net income, the Company is required to calculate earnings per share (“EPS”) using the

two

-class method. The

two

-class method is required because the Company's Series A Preferred Stock is considered a participating security with objectively determinable and non-discretionary dividend participation rights. Series A Preferred stockholders have the right to participate in dividends above their

five

percent dividend rate should the Company declare dividends on its common stock at a dividend rate higher than the

five

percent (on an as-converted basis). Under the

two

-class method, undistributed and distributed earnings are allocated on a pro-rata basis to the common and the preferred stockholders. The weighted-average number of common and preferred stock outstanding during the period is then used to calculate EPS for each class of shares.

In periods in which the Company has a net loss, basic loss per share is calculated using the treasury stock method. The treasury stock method is calculated by dividing the net loss by the weighted-average number of common shares outstanding during the period. The

two

-class method is

not

used, because the calculation would be anti-dilutive.

Reconciliations of basic and diluted EPS are as follows:

	Year Ended December 31,
In thousands, except per share amounts	2020			2019
Numerator:
Net loss	$	(1,694	)	$	(26,264	)
Less: Preferred stock dividend		496			496
Numerator for basic EPS: loss attributable to common stockholders		(2,190	)		(26,760	)
Denominator:
Basic EPS denominator: weighted-average common shares outstanding		6,469			6,284
Basic loss per common share	$	(0.34	)	$	(4.26	)
Diluted loss per common share	$	(0.34	)	$	(4.26	)

For the years ended 

December 31, 2020

and

2019

, respectively, the following shares have been excluded from the calculation of shares used in the diluted EPS calculation:

32

 thousand and

0.1

 million shares of anti-dilutive market price options;

0.5

 million and

0.2

 million of anti-dilutive unvested shares; and

1.0

million and

1.0

million shares of anti-dilutive Series A Preferred Stock (as if converted).