Earnings Per Share (“EPS”)

Basic EPS is calculated by dividing net income by the weighted average number of shares outstanding during the period. Unvested restricted shares, although legally issued and outstanding, are

not

considered outstanding for purposes of calculating basic earnings per share. Diluted EPS is calculated by dividing net income by the weighted average number of shares outstanding plus the dilutive effect, if any, of outstanding stock options, SARs, RSAs, RSUs, and PSUs using the treasury stock method.

The following table provides share information used in the calculation of the Company's basic and diluted earnings per share (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Shares used in the calculation of basic earnings per share		14,070		14,237		14,065		14,524
Effect of dilutive securities:
Stock options, SARs, RSAs, RSUs and PSUs		317		140		201		296
Diluted shares used in the calculation of earnings per share		14,387		14,377		14,266		14,820

Stock options of

0.4

million and

0.9

million shares were outstanding for the

three

-month periods ended

September 30, 2019

and

2018,

respectively, and were

not

included in the computation of diluted EPS because the awards’ impact on EPS would have been anti-dilutive. Stock options of

0.7

million and

0.6

million shares were outstanding for the

nine

-month periods ended

September 30, 2019

and

2018

and were

not

included in the computation of diluted EPS because the awards’ impact on EPS would have been anti-dilutive.

May 2, 2019,

the Company announced that its Board of Directors had authorized the repurchase of up to

$50.0

million shares of the Company’s common stock with

$30.0

million to be repurchased through an accelerated share repurchase program and up to

$20.0

million to be potentially repurchased on the open market from time-to-time. Through

September 30, 2019,

open market repurchases had been executed. On

May 7, 2019,

the Company entered into an accelerated share repurchase agreement with Morgan Stanley & Co. LLC (“Morgan Stanley”) pursuant to a Fixed Dollar Accelerated Share Repurchase Transaction (“ASR Agreement") to purchase

$30.0

million shares of the Company’s common stock. Pursuant to the terms of the ASR Agreement, the Company delivered

$30.0

million cash to Morgan Stanley and received an initial delivery of

0.5

million shares of the Company’s common stock on

May 8, 2019

based on a closing market price of

$39.85

and the applicable contractual discount. This was approximately

60%

of the then estimated total number of shares expected to be repurchased under the ASR Agreement. These shares were restored to the status of authorized but unissued shares. The initial delivery of shares resulted in an immediate reduction of the number of outstanding shares used to calculate the weighted-average of shares of the Company’s common stock outstanding for basic and diluted net income per share on the effective date of the ASR Agreement.

As of

September 30, 2019,

the Company has approximately

$12.0

million remaining under the ASR Agreement, which was recorded as an equity forward sale contract and was included in additional paid-in capital in stockholders’ equity in the condensed consolidated balance sheet as it met the criteria for equity accounting. Pursuant to the terms of the ASR Agreement, the final number of shares and the average purchase price will be determined at the end of the applicable purchase period, which is expected to occur in the

first

quarter of

2020.

Upon settlement of the ASR Agreement, the Company

may

receive additional shares or be required to either pay additional cash or deliver shares of its common stock (at its option) to Morgan Stanley, based on the forward price. If the ASR Agreement had been settled as of

September 30, 2019,

based on the volume-weighted average price since the effective date of the ASR Agreement, Morgan Stanley would have been required to deliver approximately

0.2

million additional shares to the Company’s common stock. However, the Company cannot predict the final number of shares to be received, or delivered, by it under the ASR Agreement. These shares are

not

included in the calculation of diluted weighted-average of shares of common stock outstanding during the period because the effect is anti-dilutive.