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Note J - Earnings Per Share

9 Months Ended

Sep. 30, 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 December 2022, we repurchased all 9,926 shares of the Company’s Series A Preferred Stock then outstanding.

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 September 30,*
In thousands, except per share amounts		*2023*				*2022*
Numerator:
Net income		$	618			$	7,166
Less: Preferred stock dividends			—				125
Less: Earnings attributable to participating securities			—				868
Numerator for basic EPS: income attributable to common stockholders			618				6,173

Effect of dilutive securities:
Add back: Allocation of earnings to participating securities			—				868
Less: Re-allocation of earnings to participating securities considering potentially dilutive securities			—				(827	)
Numerator for diluted EPS		$	618			$	6,214

Denominator:
Basic EPS denominator: weighted-average common shares outstanding			7,239				7,125
Diluted EPS denominator			7,314				7,524

Basic income per Common Share		$	0.09			$	0.87
Diluted income per Common Share		$	0.08			$	0.83

For the three months ended September 30, 2023 and 2022, respectively, the following shares have been excluded from the calculation of shares used in the diluted EPS calculation: 132,193 and 12,694 shares of anti-dilutive market price options; 58,869 and 0 of anti-dilutive unvested restricted shares; and 0 and 1,001,614 shares of anti-dilutive Series A Preferred Stock (as if converted).

		*Nine Months Ended September 30,*
In thousands, except per share amounts		*2023*				*2022*
Numerator:
Net income		$	407			$	14,972
Less: Preferred stock dividend			—				371
Less: Earnings attributable to common stockholders			—				1,817
Numerator for basic EPS: income attributable to common stockholders			407				12,784

Effect of dilutive securities:
Add back: Allocation of earnings to participating securities			—				1,817
Less: Re-allocation of earnings to participating securities considering potentially dilutive securities			—				(1,737)
Numerator for diluted EPS		$	407			$	12,864

Denominator:
Basic EPS denominator: weighted-average common shares outstanding			7,340				7,045
Diluted EPS denominator			7,509				7,418

Basic income per Common Share		$	0.06			$	1.81
Diluted income per Common Share		$	0.05			$	1.73

For the nine months ended September 30, 2023 and 2022, respectively, the following shares have been excluded from the calculation of shares used in the diluted EPS calculation: 8,098 and 13,602 shares of anti-dilutive market price options; 40,389 and 16,849 of anti-dilutive unvested restricted shares; and 0 and 1,001,614 shares of anti-dilutive Series A Preferred Stock (as if converted).