NET INCOME PER SHARE
Basic net income per share has been computed by dividing net income by the basic number of weighted average shares outstanding. Diluted net income per share has been computed by dividing net income by the diluted number of weighted average shares outstanding using the treasury stock method. The share effect is as follows:
| | | | | | | | | | | | | | | | | |
| | For the Years Ended December 31, |
| | 2025 | | 2024 | | 2023 |
| Weighted average shares outstanding: | | | | | |
| Common shares | 11,342,184 | | | 12,159,941 | | | 12,728,888 | |
| Vested restricted stock units | 109,394 | | | 163,320 | | | 224,536 | |
| Basic number of weighted average shares outstanding | 11,451,578 | | | 12,323,261 | | | 12,953,424 | |
| Dilutive effect of restricted stock units and stock options | 199,195 | | | 146,022 | | | 57,311 | |
| Dilutive number of weighted average shares outstanding | 11,650,773 | | | 12,469,283 | | | 13,010,735 | |
The following outstanding stock awards were excluded from the computation of diluted net income per share because their inclusion would have been anti-dilutive:
| | | | | | | | | | | | | | | | | |
| For the Years Ended December 31, |
| 2025 | | 2024 | | 2023 |
| Stock options | 47,000 | | | 69,083 | | | 228,998 | |
| Restricted stock units | 7,329 | | | 240 | | | 3,185 | |
| Total | 54,329 | | | 69,323 | | | 232,183 | |
About Earnings Per Share Disclosures
The earnings per share disclosure breaks down the calculation from net income to both basic and diluted EPS, revealing the full impact of a company's capital structure on per-share economics. The reconciliation between basic and diluted share counts exposes how many stock options, RSUs, convertible securities, and warrants are potentially dilutive to existing shareholders.
Key signals: a widening gap between basic and diluted shares indicates growing dilution from equity compensation or convertible instruments. Anti-dilutive securities excluded from the diluted calculation deserve attention — they represent latent dilution that will materialize if the stock price rises. Watch for the effect of share buybacks on per-share metrics: EPS growth driven primarily by repurchases rather than income growth signals weakening fundamentals. Compare year-over-year changes in the diluted share count against equity compensation expense to assess whether management is effectively managing dilution.