Note B — Earnings Per Share

Basic earnings per common share is computed using the weighted average number of common shares outstanding during the period. Diluted earnings per common share is computed using the weighted average number of common shares outstanding during the period plus any potentially dilutive common shares, such as stock options, restricted stock units, and performance-based units calculated using the treasury stock method. Total anti-dilutive shares excluded from diluted earnings per share were 10 and zero for the three and nine months ended September 30, 2019, and zero and 48,502 for the three and nine months ended September 30, 2018.

Our credit agreement restricts the payment of dividends or other distributions to our shareholders with respect to Hanger, Inc., or any of its subsidiaries.

The reconciliation of the numerators and denominators used to calculate basic and diluted net loss per share are as follows:


	For the Three Months Ended				For the Nine Months Ended
	September 30,				September 30,
(in thousands except per share data)	2019		2018		2019		2018

Net income (loss)	$	5,691	$	4,369	$	8,775	$	(5,321)

Weighted average shares outstanding - basic		37,349		36,857		37,218		36,717
Effect of potentially dilutive restricted stock units and options (1)		638		700		704		—
Weighted average shares outstanding - diluted		37,987		37,557		37,922		36,717

Basic income (loss) per share	$	0.15	$	0.12	$	0.24	$	(0.14)

Diluted income (loss) per share	$	0.15	$	0.12	$	0.23	$	(0.14)

(1) In accordance with ASC 260 - Earnings Per Share, during periods of a net loss, shares used to compute diluted per share amounts exclude potentially dilutive shares related to unvested restricted stock units and unexercised options. For the nine months ended September 30, 2018, potentially dilutive shares of 680,444 were excluded.