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Note J - Earnings Per Share
 3 Months Ended
Mar. 31, 2023
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 were as follows:

 

  

Three Months Ended March 31,

 

In thousands, except per share amounts

 

2023

  

2022

 

Numerator:

        

Net (loss) income

 $(791) $3,345 

Less: Preferred stock dividends

  —   122 

Less: Earnings attributable to participating securities

  —   404 

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

  (791) $2,819 
         

Effect of dilutive securities:

        

Add back: Allocation of earnings to participating securities

  —   404 

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

  —   (389)

Numerator for diluted EPS

  (791)  2,834 
         

Denominator:

        

Basic EPS denominator: weighted-average common shares outstanding

  7,425   6,991 

Diluted EPS denominator

  7,425   7,286 
         

Basic (loss) income per Common Share

 $(0.11) $0.40 

Diluted (loss) income per Common Share

 $(0.11) $0.39 

 

For the three months ended March 31, 2023 and 2022, respectively, the following shares have been excluded from the calculation of shares used in the diluted EPS calculation: 9,921 and 15,074 shares of anti-dilutive market price options; 0 and 76,925 of anti-dilutive unvested restricted shares; and 0 and 1,001,614 shares of anti-dilutive Series A Preferred Stock (as if converted).