FRIEDMAN INDUSTRIES INC Earnings Per Share Disclosure
8. EARNINGS PER SHARE
Basic and dilutive net earnings per share is computed based on the following information (in thousands, except for share data):
| Year Ended March 31, |
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| 2025 |
2024 |
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| Numerator (basic and diluted) |
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| Net earnings |
$ | 6,085 | $ | 17,345 | ||||
| Less: Allocation to unvested restricted stock units |
$ | 21 | $ | 177 | ||||
| Net earnings attributable to common shareholders |
6,064 | 17,168 | ||||||
| Denominator (basic and diluted) |
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| Weighted average common shares outstanding |
6,944,602 | 7,183,702 | ||||||
For fiscal 2025 and fiscal 2024, the Company allocated dividends and undistributed earnings to the unvested restricted stock units.
As the restricted stock qualifies as participating securities, the following restricted stock units were not accounted in the computation of weighted average diluted common shares outstanding under the two-class method:
| Year Ended March 31, |
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| 2025 |
2024 |
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| Restricted Stock Units |
12,400 | 48,049 | ||||||
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.