10. Earnings Per Share

Basic earnings (loss) per share is computed as net earnings (loss) divided by the basic weighted average common shares outstanding of 35.6 million and 35.5 million shares for the three and nine months ended September 30, 2018, respectively, and 35.1 million shares for the three and nine months ended September 30, 2017. The calculation of diluted earnings (loss) per share includes the effect of any dilutive equity incentive instruments. The Company uses the treasury stock method to calculate the effect of outstanding dilutive equity incentive instruments, which requires the Company to compute total proceeds as the sum of the amount the employee must pay upon exercise of the award and the amount of unearned stock-based compensation costs attributable to future services.

Equity incentive instruments for which the total employee proceeds from exercise exceed the average fair value of the same equity incentive instrument over the period have an anti-dilutive effect on earnings per share during periods with net earnings, and accordingly, the Company excludes them from the calculation. Anti-dilutive equity instruments of 448,595 and 64,483 common shares were excluded from the computation of diluted net earnings per share for the three months ended September 30, 2018 and 2017. Anti-dilutive equity instruments of 389,567 common shares were excluded from the computation of diluted net earnings per share for the nine months ended September 30, 2018. Due to the net loss incurred during the nine months ended September 30, 2017, the assumed exercise of all equity incentive instruments was anti-dilutive and, therefore, not included in the diluted loss per share calculation.

The following is a reconciliation of the average shares outstanding used to compute basic and diluted earnings per share:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Basic weighted average common shares outstanding		35,564,946		35,132,857		35,488,271		35,087,982
Effect of dilutive securities		363,381		701,438		446,822		—
Diluted weighted average common shares outstanding		35,928,327		35,834,295		35,935,093		35,087,982

No cash dividends were paid during any of the three and nine months ended September 30, 2018 and 2017.