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Earnings (Loss) per Share

3 Months Ended

Mar. 31, 2023

Earnings (Loss) per Share

Earnings (Loss) per Share

13. Earnings (Loss) per Share

Basic earnings (loss) per share (“EPS” or “LPS”) is calculated by dividing net income or loss attributable to Target Hospitality by the weighted average number of shares of Common Stock outstanding during the period. Diluted EPS is computed similarly to basic net income per share, except that it includes the potential dilution that could occur if dilutive securities were exercised. During periods when net losses are incurred, potential dilutive securities would be anti-dilutive and are excluded from the calculation of diluted loss per share for that period. Net income was recorded for the three months ended March 31, 2023 and 2022. The following table reconciles net income attributable to common stockholders

and the weighted average shares outstanding for the basic calculation to the weighted average shares outstanding for the diluted calculation for the periods indicated below ($ in thousands, except per share amounts):


	For the Three Months Ended
	March 31,			March 31,
	2023			2022
Numerator
Net income attributable to Common Stockholders - basic	$	43,825		$	494
Change in fair value of warrant liabilities		(3,711)			1,227
Net income attributable to Common Stockholders - diluted	$	40,114		$	1,721

Denominator
Weighted average shares outstanding - basic		100,643,271			96,936,785
Dilutive effect of outstanding securities:
Warrants		2,264,522			—
PSUs		489,063			—
SARs		224,796
Stock Options		797,457			—
RSUs		1,838,339			—
Weighted average shares outstanding - diluted		106,257,448			96,936,785

Net income per share - basic	$	0.44		$	0.01
Net income per share - diluted	$	0.38		$	0.01

When liability-classified warrants are in the money and the impact of their inclusion on diluted EPS is dilutive, diluted EPS also assumes share settlement of such instruments through an adjustment to net income available to common stockholders for the fair value (gain) loss on common stock warrant liabilities and inclusion of the number of dilutive shares in the denominator. The Public and Private Warrants representing a total of 16,166,650 shares of the Company’s Common Stock for the three months ended March 31, 2022 were excluded from the computation of diluted EPS because they are considered anti-dilutive. Public and Private Warrants representing a total 8,058,787 shares of the Company’s Common Stock for the three months ended March 31, 2023 were included in the computation of diluted EPS because their effect is dilutive as noted in the above table.

As discussed in Note 15, stock-based compensation awards were outstanding for the three months ended March 31, 2023 and 2022. These stock-based compensation awards were excluded from the computation of diluted EPS for the three months ended March 31, 2022 because their effect would have been anti-dilutive. For the three months ended March 31, 2023, stock-based compensation awards were included in the computation of diluted EPS because their effect is dilutive as noted in the above table.

Shares of treasury stock have been excluded from the computation of EPS.