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Note J - Earnings Per Share
 12 Months Ended
Dec. 31, 2021
Notes to Financial Statements  
Earnings Per Share [Text Block]

 

Note J — Earnings Per Share

 

In periods in which the Company has net income, the Company is required to calculate earnings per share (“EPS”) using the two-class method. The two-class method is required because the Company’s Series A Preferred Stock is considered a participating security with objectively determinable and non-discretionary dividend participation rights. Series A Preferred stockholders have the right to participate in dividends above their five percent dividend rate should the Company declare dividends on its common stock at a dividend rate higher than the five percent (on an as-converted basis). Under the two-class method, undistributed and distributed earnings are allocated on a pro-rata basis to the common and the preferred stockholders. The weighted-average number of common and preferred stock outstanding during the period is then used to calculate EPS for each class of shares.

 

In periods in which the Company has a net loss, basic loss per share is calculated using the treasury stock method. The treasury stock method is calculated by dividing the net loss by the weighted-average number of common shares outstanding during the period. The two-class method is not used, because the calculation would be anti-dilutive.

 

 

Reconciliations of basic and diluted EPS are as follows:

 

  

Year Ended December 31,

 

In thousands, except per share amounts

 

2021

  

2020

 

Numerator:

        

Net income (loss)

 $14,971  $(1,694)

Less: Preferred stock dividend

  496   496 

Less: Earnings attributable to participating securities

  1,858   — 

Numerator for basic EPS: income (loss) attributable to common stockholders

  12,617   (2,190)
         

Effect of dilutive securities:

        

Add back: Allocation of earnings to participating securities

  1,858   — 

Less: Re-allocation of earnings to participating securities considering potentially dilutive securities

  (1,766)  — 

Numerator for diluted EPS

 $12,709  $(2,190)
         

Denominator:

        

Basic EPS denominator: weighted-average common shares outstanding

  6,802   6,469 

Diluted EPS denominator

  7,209   6,469 
         

Basic income (loss) per common share

 $1.85  $(0.34)

Diluted income (loss) per common share

 $1.76  $(0.34)

 

For the years ended  December 31, 2021 and 2020, respectively, the following shares have been excluded from the calculation of shares used in the diluted EPS calculation: 46,380 and 31,906 shares of anti-dilutive market price options; 29,983 and 536,189 of anti-dilutive unvested shares; and 1,000,000 and 1,000,000 shares of anti-dilutive Series A Preferred Stock (as if converted).