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Earnings Per Share
 12 Months Ended
Dec. 31, 2014
Earnings Per Share [Abstract]  
Earnings Per Share

16.    Earnings Per Share

Basic earnings per share is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income by diluted weighted average shares. Diluted weighted average shares are determined using the weighted average number of common shares outstanding during the period plus the dilutive effect of potential future issues of common stock relating to CBIZ’s stock award programs, CBIZ’s convertible senior subordinated notes, business acquisitions, and other potentially dilutive securities. In calculating diluted earnings per share, the dilutive effect of stock awards is computed using the average market price for the period, in accordance with the treasury stock method.

As described in Note 8, CBIZ’s 2006 Notes and 2010 Notes may result in future issuances of CBIZ common stock. Under the net share settlement method, potential shares issuable under the 2006 Notes and 2010 Notes will be considered dilutive, and will be included in the calculation of diluted weighted average shares, if the Company’s market price per share exceeds the conversion price of $10.63 for the 2006 Notes and $7.41 of the 2010 Notes. As of December 31, 2014, the Company’s average annual market price per share of $8.71 had not exceeded the conversion price of the 2006 Notes, but had exceeded the conversion price of the 2010 Notes. For the years ended December 31, 2013 and 2012, the Company’s average annual market price per share had not exceeded the conversion price of the 2006 Notes or 2010 Notes.

 

The following table sets forth the computation of basic and diluted earnings per share from continuing operations (in thousands, except per share data):

 

     Year Ended December 31,  
     2014      2013      2012  

Numerator:

         

Income from continuing operations

    $ 30,414       $ 25,379       $ 23,793   
  

 

 

     

 

 

     

 

 

  

Denominator:

         

Basic

         

Weighted average common shares outstanding

      48,343         48,632         49,002   
  

 

 

     

 

 

     

 

 

  

Diluted

         

Stock options (1)

      761         194         —   

Restricted stock awards

      293         263         186   

Contingent shares (2)

      129         52         64   

Convertible senior subordinated notes (3)

      1,961         —         —   
  

 

 

     

 

 

     

 

 

  

Diluted weighted average common shares outstanding

      51,487         49,141         49,252   
  

 

 

     

 

 

     

 

 

  

Earnings Per Share:

         

Basic earnings per share from continuing operations

    $ 0.63       $ 0.52       $ 0.49   
  

 

 

     

 

 

     

 

 

  

Diluted earnings per share from continuing operations

    $ 0.59       $ 0.52       $ 0.48   
  

 

 

     

 

 

     

 

 

  

 

(1) For the years ended December 31, 2014, 2013 and 2012, a total of 0.9 million, 6.1 million and 8.2 million stock based awards, respectively, were excluded from the calculation of diluted earnings per share as their exercise prices would render them anti-dilutive.

 

(2) Contingent shares represent additional shares to be issued for purchase price earned by former owners of businesses acquired by CBIZ once future conditions have been met. See Note 19 for further discussion of acquisitions.

 

(3) The dilutive impact of potential shares to be issued related to the 2010 Notes is based on the average share price of $8.71 for the twelve months ended December 31, 2014 which exceeded the conversion price of $7.41.