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EARNINGS PER SHARE
 3 Months Ended
Mar. 31, 2015
Notes to Financial Statements  
NOTE 6. EARNINGS PER SHARE

We compute basic earnings per share (“basic EPS”) by dividing the net loss by the weighted average number of common shares outstanding for the reporting period. Diluted earnings per share (“diluted EPS”) gives effect to all dilutive potential shares outstanding (primarily stock options). The following table provides the computation of basic and diluted earnings per share for the three month periods ending March 31, 2015 and 2014.

 

    Three Months Ended  
    March 31,  
(in thousands, except per share data)   2015     2014  
Numerator:            
Net income (loss) available to common shareholders   $ 12,858     $ (9,811 )
Effect of dilutive securities                
Derivative liability - warrants   $ (1,444 )   $ -  
Accretion on  convertible preferred stock   $ 222     $ -  
Numerator for diluted income (loss) per common share   $ 11,636     $ (9,811 )
                 
Denominator:                
Weighted average shares used to compute basic income (loss) per common share     18,615       17,684  
Effect of dilutive securities:                
Derivative liability - warrants     326       -  
Convertible preferred stock     1,116       -  
Stock options     413       -  
Denominator for diluted income (loss) per common share     20,470       17,684  
                 
Basic income (loss) per common share   $ 0.69     $ (0.55 )
Diluted income (loss) per common share   $ 0.57     $ (0.55 )

  

For the three months ended March 31, 2014, options and warrants to purchase approximately 7.5 million shares of common stock respectively, were excluded from the computation of diluted earnings per share because their effects were anti-dilutive. For the three months ended March 31, 2014, the conversion of Series A Preferred Stock into 3,500,000 shares of common stock was excluded from the computation of diluted earnings per share because its effect is anti-dilutive.