Note 4 - Earnings Per Share (“EPS”)

 

Basic EPS is computed by dividing net income by the basic weighted-average number of shares outstanding during the period.

 

Diluted EPS is computed by dividing net income by the diluted weighted-average number of shares outstanding during the period and, accordingly, reflects the potential dilution that could occur if securities or other agreements to issue common stock, such as stock options, were exercised, settled or converted into common stock and were dilutive. The diluted weighted-average number of shares used in our diluted EPS calculation is determined using the treasury stock method.

 

Unvested awards of share-based payments with rights to receive dividends or dividend equivalents, such as our restricted stock awards, are considered to be participating securities, and therefore, the two-class method is used for purposes of calculating EPS. Under the two-class method, a portion of net income is allocated to these participating securities and is excluded from the calculation of EPS allocated to common stock. Our restricted stock awards are subject to forfeiture and restrictions on transfer until vested and have identical voting, income and distribution rights to the unrestricted common shares outstanding. Our weighted average unvested restricted stock awards outstanding were 1,020,068 and 658,048 for the three months ended September 30, 2016 and 2015, respectively, and 930,674 and 221,760 for the nine months ended September 30, 2016 and 2015, respectively.

 

The calculations of basic and diluted EPS are as follows:

 

		Three Months Ended  September 30, 2016												Three Months Ended  September 30, 2015
		Net  Income				Weighted Average Shares Outstanding				Earnings Per Share				Net Loss				Weighted Average Shares Outstanding				Loss Per Share
		(in thousands, except per share data)												(in thousands, except per share data)
Basic:
As reported		$	1,168				22,204							$	(967	)			21,407
Amounts allocated to unvested restricted shares			(53	)			(1,020	)							—				—
Amounts available to common stockholders		$	1,115				21,184			$	0.05			$	(967	)			21,407			$	(0.04	)
Diluted:
Amounts allocated to unvested restricted shares			53				—								—				—
Non participating share units							1,020												—
Amounts reallocated to unvested restricted shares			(55	)			—								—				—
Amounts available to stockholders and assumed conversions		$	1,113				22,204			$	0.05			$	(967	)			21,407			$	(0.04	)

 

		Nine Months Ended  September 30, 2016												Nine Months Ended  September 30, 2015
		Net  Income				Weighted Average Shares Outstanding				Earnings Per Share				Net Loss				Weighted Average Shares Outstanding				Loss Per Share
		(in thousands, except per share data)												(in thousands, except per share data)
Basic:
As reported		$	2,786				21,966							$	(2,557	)			20,938
Amounts allocated to unvested restricted shares			(115	)			(931	)							—				—
Amounts available to common stockholders		$	2,671				21,035			$	0.13			$	(2,557	)			20,938			$	(0.12	)
Diluted:
Amounts allocated to unvested restricted shares			115				—								—				—
Non participating share units							931												—
Amounts reallocated to unvested restricted shares			(120	)			—								—				—
Amounts available to stockholders and assumed conversions		$	2,666				21,966			$	0.12			$	(2,557	)			20,938			$	(0.12	)