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Net Income (Loss) Per Share

9 Months Ended

Sep. 30, 2022

Net Income (Loss) Per Share

Net Income (Loss) Per Share

Note 10. Net Income (Loss) Per Share

Basic net income (loss) per share is computed using the weighted-average number of common shares outstanding during the periods less shares of common stock subject to repurchase and non-vested stock awards. Diluted net income (loss) per share is computed using the weighted-average number of common shares outstanding and potentially dilutive common shares outstanding during the periods. The dilutive effect of outstanding stock options and restricted stock awards is reflected in diluted earnings per share by application of the treasury stock method. Potentially dilutive common shares consist of common shares issuable upon the exercise of stock options and vesting of restricted stock awards. Potentially dilutive common shares are excluded from the computation of weighted-average number of common shares outstanding in net loss years, as their effect would be anti-dilutive to the computation.

A reconciliation of the numerators and denominators of the basic and diluted net income (loss) per share calculations is as follows (in thousands, except per share data):


		Three Months Ended						Nine Months Ended
		September 30,						September 30,
		2022			2021			2022			2021
Numerator:
Net income attributable to AXT, Inc.		$	5,759		$	3,800		$	14,470		$	11,610
Less: Preferred stock dividends			(44)			(44)			(132)			(132)
Net income available to common stockholders		$	5,715		$	3,756		$	14,338		$	11,478
Denominator:
Denominator for basic net income per share - weighted-average common shares			42,163			41,460			42,011			41,237
Effect of dilutive securities:
Common stock options			440			691			399			887
Restricted stock awards			379			527			308			586
Denominator for dilutive net income per common shares			42,982			42,678			42,718			42,710
Net income attributable to AXT, Inc. per common share:
Basic		$	0.14		$	0.09		$	0.34		$	0.28
Diluted		$	0.13		$	0.09		$	0.34		$	0.27

Options excluded from diluted net income per share as the impact is anti-dilutive			184			124			201			21
Restricted stock excluded from diluted net income per share as the impact is anti-dilutive			69			138			202			112

The 883,000 shares of $0.001 par value Series A preferred stock issued and outstanding as of September 30, 2022 and December 31, 2021, valued at $3,532,000, are non-voting and non-convertible preferred stock with a 5.0% cumulative annual dividend rate payable when declared by the Board of Directors and a $4 per share liquidation preference over common stock, which must be paid before any distribution is made to common stockholders. These preferred shares were issued to Lyte Optronics, Inc. stockholders in connection with the completion of our acquisition of Lyte Optronics, Inc. on May 28, 1999.