EARNINGS PER SHARE

Basic earnings per share is computed by dividing net (loss) or income by the weighted average number of shares outstanding. Diluted earnings per share is computed by also considering the impact of potential common stock on both net income and the weighted average number of shares outstanding. Our potential common stock consists of employee and director stock options, restricted stock units and performance-based awards. Our potential common stock is included in the diluted earnings per share calculation when doing so would not be anti-dilutive. Performance-based awards are included in the computation of diluted earnings per share only to the extent that the underlying performance conditions (and any applicable market condition) (i) are satisfied as of the end of the reporting period or (ii) would be considered satisfied if the end of the reporting period were the end of the related contingency period and the result would be dilutive under the treasury stock method. When we report a net loss, which we did for the nine months ended September 30, 2017, the calculation of diluted net loss per share excludes our potential common stock, as the effect would be anti-dilutive.

For the three and nine months ended September 30, 2017, there were approximately 1,143,523 and 1,145,632 shares, respectively, issuable upon the exercise of options and the contingent vesting of performance-based awards that were excluded from the dilutive calculations, as they were anti-dilutive. For the three and nine months ended September 30, 2016, there were approximately 1,002,856 and 1,042,366, respectively, shares issuable upon the exercise of options and the contingent vesting of performance-based awards that were excluded from the dilutive calculations, as they were anti-dilutive.

A reconciliation of the number of common shares used in the calculation of basic and diluted earnings per share (“EPS”) is presented below:



	Three Months Ended
	September 30, 2017			September 30, 2016
	Shares	Per-Share Amount		Shares	Per-Share Amount
Basic EPS	16,708,446	$	0.10	16,674,176	$	0.07
Effect of dilutive securities	88,072	—		27,441	—
Diluted EPS	16,796,518	$	0.10	16,701,617	$	0.07



	Nine months ended
	September 30, 2017				September 30, 2016
	Shares	Per-Share Amount			Shares	Per-Share Amount
Basic EPS	16,697,729	$	(0.21	)	16,647,662	$	0.45
Effect of dilutive securities	—	—			21,888	—
Diluted EPS	16,697,729	$	(0.21	)	16,669,550	$	0.45