Earnings Per Common Share (EPS)

9 Months Ended

Sep. 30, 2024

Earnings Per Share [Abstract]

Earnings Per Common Share (EPS)

11.   Earnings Per Common Share (EPS). The computation of weighted average shares outstanding and the basic and diluted earnings per common share for the three and nine-month periods ended September 30, 2024 and 2023 consisted of the following (in thousands, except per share amounts):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
Net income	$	28,444	$	25,834	$	92,410	$	66,782
Average common shares outstanding		58,231		57,682		58,110		57,525
Basic EPS	$	0.49	$	0.45	$	1.59	$	1.16
Average common shares outstanding		58,231		57,682		58,110		57,525
Effect of dilutive stock awards		866		693		691		820
Effect of dilutive convertible notes		440		—		147		—
Total potential shares outstanding		59,537		58,375		58,948		58,345
Diluted EPS	$	0.48	$	0.44	$	1.57	$	1.14
Equity awards excluded as the impact was anti-dilutive (1)		448		1,242		821		1,091

(1) Does not reflect the impact of incremental repurchases under the treasury stock method.

Convertible Notes

For our Convertible Notes, the dilutive effect is calculated using the if-converted method. Upon surrender of the Convertible Notes for conversion, Merit will pay cash up to the aggregate principal amount of the Notes to be converted and pay or deliver, as the case may be, cash, shares of Common Stock or a combination of cash and shares of Common Stock, at Merit’s election, in respect of the remainder, if any, of Merit’s conversion obligation in excess of the aggregate principal amount of the Convertible Notes being converted. Under the if-converted method, we include the number of shares required to satisfy the remaining conversion obligation, assuming all the Convertible Notes were converted. The convertible notes only have an impact on diluted earnings per share when the average share price of our common stock exceeds the conversion price of $86.83. The average closing price of the Common Stock for the period ended September 30, 2024 was used as the basis for determining the dilutive effect on EPS.