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Earnings Per Share | 6 Months Ended
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Jun. 30, 2019
Earnings Per Share |
13. | Earnings Per Share
The Company reports earnings per share in accordance with ASC 260, “Earnings Per Share,” which establishes standards for computing and presenting earnings per share. Basic earnings per share is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income available to common shareholders by the weighted-average number of common shares and dilutive common share equivalents then outstanding. Potential common share equivalents consist of restricted stock awards and the incremental common shares issuable upon the exercise of stock options. Under the treasury stock method, unexercised “in-the- money” stock options and warrants are assumed to be exercised at the beginning of the period or at issuance, if later. The assumed proceeds are then used to purchase common shares at the average market price during the period. Share-based payment awards that entitle their holders to receive non-forfeitable dividends before vesting are considered participating securities and are considered in the calculation of basic and diluted earnings per share. There were no such participating securities outstanding during the three-month periods ended June 30, 2019 and 2018. Basic and diluted weighted average shares outstanding were as follows:
|  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |
|  | 2019 |  |  | 2018 |  |  | 2019 |  |  | 2018 |
|  | (Amounts in thousands, except per share data) |
Net income |  | $ | 8,095 |  |  | $ | 2,738 |  |  | $ | 16,148 |  |  | $ | 6,185 |
Weighted average shares used in computing net income per share - basic |  |  | 46,367 |  |  |  | 43,743 |  |  |  | 45,174 |  |  |  | 43,683 |
Effect of dilutive shares: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Stock options and restricted stock awards |  |  | 791 |  |  |  | 481 |  |  |  | 760 |  |  |  | 434 |
Convertible senior notes |  |  | 1,898 |  |  |  | 792 |  |  |  | 1,758 |  |  |  | 578 |
Dilutive potential common shares |  |  | 2,689 |  |  |  | 1,273 |  |  |  | 2,518 |  |  |  | 1,012 |
Weighted average shares used in computing net income per share - diluted |  |  | 49,056 |  |  |  | 45,016 |  |  |  | 47,692 |  |  |  | 44,695 |
Earnings per share: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic |  | $ | 0.17 |  |  | $ | 0.06 |  |  | $ | 0.36 |  |  | $ | 0.14 |
Diluted |  | $ | 0.17 |  |  | $ | 0.06 |  |  | $ | 0.34 |  |  | $ | 0.14 |
At June 30, 2019, there were outstanding options to purchase 985,266 shares of the Company’s common stock at a weighted average exercise price of $30.16 per share and 766,986 shares of common stock issuable upon the vesting of RSUs. For the three and six months ended June 30, 2019, 119,026 and 180,160 options to purchase shares of the Company’s common stock, respectively, were excluded from the calculation of diluted earnings per share because the exercise prices of the stock options were greater than or equal to the average price of the common shares and were therefore anti-dilutive. At June 30, 2018, there were outstanding options to purchase 1,058,834 shares of the Company’s common stock at a weighted average exercise price of $26.72 per share and 716,996 shares issuable upon the vesting of RSUs. For the three- and six- month periods ended June 30, 2018, 551,012 and 615,930 options to purchase shares of the Company’s common stock, respectively, were excluded from the calculation of diluted earnings per share because the exercise prices of the stock options were greater than or equal to the average price of the common shares and were therefore anti-dilutive. As provided by the terms of the indenture underlying the 2016 Notes, the Company has a choice to settle the conversion obligation for the 2016 Notes in cash, shares or any combination of the two. The Company currently intends to settle the par value of the 2016 Notes in cash and any excess conversion premium in shares. The Company applies the provisions of ASC 260, “Earnings Per Share”, Subsection 10-45-44, to determine the diluted weighted average shares outstanding as it relates to the conversion spread on the 2016 Notes. Accordingly, the par value of the 2016 Notes is not included in the calculation of diluted income per share, but the dilutive effect of the conversion premium is considered in the calculation of diluted net income per share using the treasury stock method. The dilutive impact of the 2016 Notes is based on the difference between the Company’s current period average stock price and the conversion price of the 2016 Notes, provided there is a premium. Pursuant to this accounting standard, there is no dilution from the accreted principal of the 2016 Notes for the periods shown.

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- Definition The entire disclosure for earnings per share. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 260 -URI http://asc.fasb.org/topic&trid=2144383 + Details
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