5.	Earnings Per Share

The Company reports earnings per share in accordance with ASC Topic 260, “Earnings Per Share,” which establishes standards for computing and presenting earnings per share. Basic earnings per share is computed by dividing net income available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income available to common shareholders by the weighted-average number of common shares and dilutive common share equivalents then outstanding. Potential common share equivalents consist of restricted stock awards and the incremental common shares issuable upon the exercise of stock options. Under the treasury stock method, unexercised “in-the-money” stock options and warrants are assumed to be exercised at the beginning of the period or at issuance, if later. The assumed proceeds are then used to purchase common shares at the average market price during the period. Share-based payment awards that entitle their holders to receive non-forfeitable dividends before vesting are considered participating securities and are considered in the calculation of basic and diluted earnings per share. There were no such participating securities outstanding during the three- and six-month periods ended June 30, 2017 and 2016.

Basic and diluted weighted average shares outstanding were as follows:


	Three months ended June 30,				Six months ended June 30,
	2017		2016		2017		2016
Weighted average common shares		34,097,805		33,649,296		33,995,323		33,336,989
Dilutive common stock options and restricted stock units		437,427		525,831		433,483		525,322
Dilutive effect of senior convertible notes		559,582		—		286,991		—

Weighted average common shares, assuming dilution		35,094,814		34,175,127		34,715,797		33,862,311

At June 30, 2017, there were outstanding options to purchase 803,532 shares of the Company’s common stock at a weighted average exercise price of $20.16 per share and 393,338 restricted stock units. For the three- and six-month periods ended June 30, 2017, 187,072 and 222,001 options to purchase shares of the Company’s common stock, respectively, were excluded from the calculation of diluted earnings per share because the exercise prices of the stock options were greater than or equal to the average price of the common shares, and were therefore anti-dilutive. As provided by the terms of the indenture underlying the senior convertible notes, the Company has a choice to settle the conversion obligation for its senior convertible notes in cash, shares or any combination of the two. The Company currently intends to settle the par value of its senior convertible notes in cash and any excess conversion premium in shares. The Company applies the provisions of ASC 260, Earnings Per Share, Subsection 10-45-44, to determine the diluted weighted average shares outstanding as it relates to the conversion spread on its convertible notes. Accordingly, the par value of the senior convertible notes is not included in the calculation of diluted income per share, but the dilutive effect of the conversion premium is considered in the calculation of diluted net income per share using the treasury stock method. The share figures in the table above represent the estimated incremental shares that would be issued related to the conversion premium, assuming conversion of all the outstanding senior convertible notes as of June 30, 2017.

At June 30, 2016, there were outstanding options to purchase 1,315,739 shares of the Company’s common stock at a weighted average exercise price of $11.70 per share. For the three- and six-month periods ended June 30, 2016, 359,828 and 417,279 options to purchase shares of the Company’s common stock, respectively, were excluded from the calculation of diluted earnings per share because the exercise prices of the stock options were greater than or equal to the average price of the common shares, and were therefore anti-dilutive. The Company intends to settle the par value of its senior convertible notes in cash and any excess conversion premium in shares. Accordingly, the par value of the senior convertible notes is not included in the calculation of diluted income per share. As of June 30, 2016, there is no dilution related to the conversion premium on these notes.

As detailed in Note 17, in July 2017, the Company completed a public offering in which a total of 3,228,069 shares of its common stock were sold to the public at a price of $42.75 per share.