NET INCOME PER SHARE

Basic and diluted net income per share was as follows:



	Three Months Ended September 30,					Nine Months Ended September 30,
	2015			2014		2015			2014
	(In thousands, except per share amounts)
Basic net income (loss) per share:
Net (loss) income from continuing operations	$	(31,881	)	$	8,990	$	(8,129	)	$	15,890
Net income (loss) from discontinued operations	$	—		817		$	(10,370	)	948
Net (loss) income	$	(31,881	)	$	9,807	$	(18,499	)	$	16,838

Weighted average common shares outstanding	35,279			32,450		33,682			32,374

Basic net (loss) income per common share from continuing operations	$	(0.90	)	$	0.28	$	(0.24	)	$	0.49
Basic net income (loss) per common share from discontinued operations	—			0.03		(0.31		)	0.03
Basic net (loss) income per common share	$	(0.90	)	$	0.31	$	(0.55	)	$	0.52

Diluted net income per share:
Net (loss) income from continuing operations	$	(31,881	)	$	8,990	$	(8,129	)	$	15,890
Net income (loss) from discontinued operations	—			817		(10,370		)	948
Net (loss) income	$	(31,881	)	$	9,807	$	(18,499	)	$	16,838

Weighted average common shares outstanding — Basic	35,279			32,450		33,682			32,374
Effect of dilutive securities:
2016 Convertible notes	—			—		—			—
Stock options and restricted stock	—			456		—			470
Weighted average common shares for diluted earnings per share	35,279			32,906		33,682			32,844

Diluted net (loss) income per common share from continuing operations	$	(0.90	)	$	0.27	$	(0.24	)	$	0.48
Diluted net income (loss) per common share from discontinued operations	—			0.02		(0.31		)	0.03
Diluted net (loss) income per common share	$	(0.90	)	$	0.29	$	(0.55	)	$	0.51

In connection with the separation of SeaSpine on July 1, 2015 and in accordance with the Employee Matters Agreement the Company made certain adjustments to the exercise price and number of share-based compensation awards with the intention of preserving the intrinsic value of the awards prior to the separation. Stock options issued in 2015 prior to the separation converted to those of the entity where the employee is working post-separation. Stock options issued prior to 2015 converted to both Integra and SeaSpine options such that the holders received stock options in both companies. The exercise price of these outstanding awards was adjusted to preserve the value of the awards immediately prior to the separation. Performance stock, restricted stock, and contract stock were adjusted to provide holders performance stock, restricted stock, and contract stock in the company that employs such employee following the separation. The adjustments to the Company's stock-based compensation awards resulted in an increase in incremental fair value of $4.4 million, of which $3.0 million was recorded in the three-months ended September 30, 2015. The remaining $1.4 million will be recognized prospectively over the remaining term of outstanding awards, adjusted, as applicable, for forfeitures.

At September 30, 2015 and 2014, the Company had 1.1 million and 1.4 million of outstanding stock options, respectively. The Company also has warrants outstanding relating to its 2016 Notes at September 30, 2015 and 2014 and the Company's 2016 Notes are convertible to common shares in certain circumstances. See Note 6 - Debt for additional information. Stock options, restricted stock, warrants and the excess conversion value of the 2016 Notes are included in the diluted earnings per share calculation using the treasury stock method, unless the effect of including such items would be anti-dilutive.

For the three months ended September 30, 2015 and 2014, 0.5 million and 0.2 million, respectively, of anti-dilutive stock options and certain other performance awards were excluded from the diluted earnings per share calculation. For the nine months ended September 30, 2015 and 2014, 0.6 million and 0.2 million, respectively, of anti-dilutive stock options and certain other performance awards were excluded from the diluted earnings per share calculation. The effects of outstanding warrants were anti-dilutive because the strike price of the warrants exceeded the Company’s average stock price for the periods presented.

For the three and nine months ended September 30, 2015, the potential excess conversion value on the 2016 Notes was included in the Company's dilutive share calculation because the average stock price for the three and nine months ended September 30, 2015 exceeded the conversion price. The potential excess conversion value of the 2016 Notes were anti-dilutive because the conversion price exceeded the Company's stock price for the three and nine months ended September 30, 2014; therefore, these amounts have been excluded from the diluted earnings per share calculation.