Earnings Per Share

9 Months Ended

Sep. 30, 2021

Note 11 — Earnings Per Share

The Series A Convertible Preferred Stock issued by the Company in April 2020 is considered participating securities because it has dividend rights determined on an as-converted basis in the event of Company’s declaration of a dividend or distribution for common shares. All Series A Convertible Preferred Stock were converted into common stock on October 8,2021. The Company’s participating securities also include unvested restricted stock awards that contain non-forfeitable rights to dividends. The two-class method is used in the calculation of basic and diluted earnings per share. Under the two-class method, earnings available to common shareholders for the period are allocated between common shareholders and participating securities according to dividends declared (or accumulated) and participation rights in undistributed earnings. Basic earnings per share is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if stock options or other contracts to issue common stock were exercised or converted into common stock and resulted in the issuance of common stock that shared in earnings.

The following table presents the basic and diluted earnings per share calculations for the three and nine months ended September 30, 2021 and 2020:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(In thousands, except per share data)				(In thousands, except per share data)
Basic EPS:
Net income	$	8,022	$	3,481	$	20,871	$	8,201
Less: deemed dividends on preferred stock		—		—		—		48,955
Net income (loss) attributable to common stockholders	$	8,022	$	3,481	$	20,871	$	(40,754	)
Less: undistributed earnings attributable to participating securities		3,030		—		7,884		—
Net earnings (loss) attributable to common stockholders	$	4,992	$	3,481	$	12,987	$	(40,754	)
Weighted average common shares outstanding		20,090		20,087		20,088		20,087
Basic earnings (loss) per common share	$	0.25	$	0.17	$	0.65	$	(2.03	)
Diluted EPS:
Net income (loss) attributable to common stockholders	$	8,022	$	3,481	$	20,871	$	(40,754	)
Weighted average common shares outstanding		20,090		20,087		20,088		20,087
Add dilutive effects for assumed conversion of Series A preferred stock		11,688		11,688		11,688		—
Add dilutive effects for warrants		2,157		659		1,909		—
Add dilutive effects for stock options		5		—		2		—
Add dilutive effects of unvested restricted stock awards		272		—		171		—
Weighted average diluted common shares outstanding		34,212		32,435		33,858		20,087
Diluted income (loss) per common share	$	0.23	$	0.11	$	0.62	$	(2.03	)

The following table sets forth the number of shares excluded from the computation of diluted earnings (loss) per share, as their inclusion would have been anti-dilutive (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Shares underlying Series A Convertible Preferred Stock		—		—		—		11,688
Shares underlying warrants		—		1,004		—		3,013
Stock options		773		773		773		773
Unvested restricted stock awards		—	NA			—	NA
Share equivalents excluded from EPS		773		1,777		773		15,474