Earnings Per Share

9 Months Ended

Sep. 30, 2016

COMMON STOCK AND EARNINGS PER SHARE

Earnings per Share

The calculation of basic and diluted earnings per common share follows (in thousands, except per share amounts):



	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Numerator:
Earnings from continuing operations	$	2,116	$	6,347	$	21,815	$	25,812
Weighted-average shares outstanding - basic	59,379		64,239		62,084		64,411
Common equivalent shares:
Effect of stock-based compensation awards	904		932		1,940		930
Weighted-average shares outstanding - diluted	60,283		65,171		64,024		65,341

Basic earnings per share from continuing operations	$	0.04	$	0.10	$	0.35	$	0.40
Diluted earnings per share from continuing operations	$	0.04	$	0.10	$	0.34	$	0.40

The determination of diluted earnings per share in accordance with GAAP requires the adjustment to the numerator, of the fair value re-measurement of the stock warrants recorded as a liability (see Note B) when the inclusion of the warrants has a dilutive effect on earnings per share. The dilutive effect of the stock warrants on the weighted-average shares outstanding is calculated using the treasury stock method. Under this method, the number of diluted shares is determined by dividing the assumed proceeds of the warrants by the average stock price during the period and comparing that amount with the number of warrants outstanding. The assumed proceeds are determined by multiplying the number of shares underlying the warrants by the strike price. The number of equivalent shares that were not included in weighted average shares outstanding assuming dilution, because their effect would have been anti-dilutive, was 3.3 million and 1.1 million for the three and nine month periods ended September 30, 2016, respectively. The underlying warrants as of September 30, 2016, could result in 9.8 million additional outstanding shares of the Company’s common stock if the warrants are settled by tendering cash.

Purchase of Common Stock

The Company's Board of Directors has authorized management to repurchase outstanding common stock of the Company from time to time on the open market or in privately negotiated transactions. The authorization does not require the Company to repurchase a specific number of shares and the Company may terminate the repurchase program at any time. Upon the retirement of common stock repurchased, the excess purchase price over the par value for retired shares of common stock is recorded to additional paid-in-capital.

On July 5, 2016 the Company purchased 3,825,554 shares of the Company's common stock from its largest shareholder, Red Mountain Partners, L.P., a fund that is affiliated with Red Mountain Capital Partners, LLC (“Red Mountain”), a related party, for an aggregate purchase price of $50.0 million. The purchase price was previously negotiated based on the closing price of the shares on June 20, 2016. The purchase price of $13.07 per share represents a large block discount of 2.5% and 6.2%, respectively, from the volume-weighted average prices of $13.41 for the 10 trading days and $13.93 for the 60 trading days prior to June 20, 2016.