Electromed, Inc. Earnings Per Share Disclosure
| Note 11. | Earnings Per Common Share ("EPS") |
The computations of basic and diluted EPS amounts were as follows:
| Year Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Net Income | $ | 7,537,000 | $ | 5,150,000 | ||||
| Weighted-average common shares outstanding: | ||||||||
| Basic | 8,454,100 | 8,562,245 | ||||||
| Effect of dilutive common stock equivalents | 460,321 | 302,340 | ||||||
| Diluted | 8,914,421 | 8,864,585 | ||||||
| Earnings per common share: | ||||||||
| Basic | $ | 0.89 | $ | 0.60 | ||||
| Diluted | $ | 0.85 | $ | 0.58 | ||||
Common stock equivalents excluded from the calculation of diluted earnings per share because their impact was anti-dilutive were 52,146 and 288,792 shares for fiscal 2025 and 2024, respectively.
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.