Note J - Earnings Per Share

6 Months Ended

Jun. 30, 2022

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 were as follows:

	Three Months Ended June 30,
In thousands, except per share amounts	2022			2021
Numerator:
Net income	$	4,461		$	10,569
Less: Preferred stock dividends		124			124
Less: Earnings attributable to participating securities		542			1,361
Numerator for basic EPS: income attributable to common stockholders		3,795		$	9,084
Effect of dilutive securities:
Add back: Allocation of earnings to participating securities		542			1,361
Less: Re-allocation of earnings to participating securities considering potentially dilutive securities		(518	)		(1,277	)
Numerator for diluted EPS		3,819			9,168
Denominator:
Basic EPS denominator: weighted-average common shares outstanding		7,017			6,686
Diluted EPS denominator		7,388			7,193
Basic income per Common Share	$	0.54		$	1.36
Diluted income per Common Share	$	0.52		$	1.27

For the three months ended June 30, 2022 and 2021, respectively, the following shares have been excluded from the calculation of shares used in the diluted EPS calculation: 13,063 and 50,653 shares of anti-dilutive market price options; 0 and 3,846 of anti-dilutive unvested restricted shares; and 1,001,614 and 1,001,614 shares of anti-dilutive Series A Preferred Stock (as if converted).

	Six Months Ended June 30,
In thousands, except per share amounts	2022			2021
Numerator:
Net Income	$	7,806		$	8,811
Less: Preferred stock dividend		246			246
Less: Earnings attributable to common stockholders		946			1,118
Numerator for basic EPS: income attributable to common stockholders		6,614			7,447
Effect of dilutive securities:
Add back: Allocation of earnings to participating securities		946			1,118
Less: Re-allocation of earnings to participating securities considering potentially dilutive securities		(908	)		(1,055	)
Numerator for diluted EPS	$	6,652		$	7,510
Denominator:
Basic EPS denominator: weighted-average common shares outstanding		7,004			6,669
Diluted EPS denominator		7,338			7,131
Basic income per Common Share	$	0.94		$	1.12
Diluted income per Common Share	$	0.91		$	1.05

For the six months ended June 30, 2022 and 2021, respectively, the following shares have been excluded from the calculation of shares used in the diluted EPS calculation: 14,063 and 52,442 shares of anti-dilutive market price options; 11,138 and 1,934 of anti-dilutive unvested restricted shares; and 1,001,614 and 1,001,614 shares of anti-dilutive Series A Preferred Stock (as if converted).