Earnings Per Share

12 Months Ended

Dec. 31, 2022

EARNINGS PER SHARE

Share-based awards that contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid, are participating securities and included in the computation of both basic and diluted earnings per share. Our grants of stock awards to our employees are considered participating securities and we have prepared our earnings per share calculations to exclude earnings allocated to unvested restricted stock awards, using the two-class method, in the basic and diluted weighted average shares outstanding calculation.

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


	Years Ended December 31,
	2020		2021		2022
Numerator for basic and diluted earnings per share:
Net income	$	16,090	$	33,159	$	41,381
Less: Earnings allocated to unvested restricted stock	(46)		(53)		(26)
Income attributable to common stockholders	$	16,044	$	33,106	$	41,355

Denominator:
Denominator for basic earnings per common share - weighted average shares outstanding	17,872		17,409		14,857
Effect of dilutive securities:
Stock options	196		475		183
Convertible Notes	9		—		—
Performance awards	—		382		670
Denominator for diluted earnings per common share - weighted average shares outstanding	18,077		18,266		15,710

Basic earnings per common share	$	0.90	$	1.90	$	2.78
Diluted earnings per common share	$	0.89	$	1.81	$	2.63

For the year ended December 31, 2022, there were 311,143 stock options excluded from the computation of diluted earnings per share because the inclusion of such stock options would result in an antidilutive effect. For the years ended December 31, 2020 and 2021, no stock options were excluded from the computation of diluted earnings per share.

Our performance awards are considered to be contingently issuable shares because their issuance is contingent upon the satisfaction of certain performance and service conditions. At December 31, 2022, we had satisfied certain performance criteria for the first, second and third predetermined growth targets of our performance awards to be considered outstanding. Therefore, we included these awards in the computation of diluted earnings per share as of the beginning of the reporting period.

The fully diluted weighted average shares outstanding for the year ended December 31, 2020 and the corresponding calculation of fully diluted earnings per share, included approximately 9,000 shares that would have been issued upon the conversion of our Convertible Notes as a result of the application of the if-converted method prescribed by the FASB ASC 260. At December 31, 2021 and 2022, we had no Convertible Notes outstanding.