EARNINGS PER SHARE
Basic earnings per share is computed by dividing net income or loss by the weighted-average number of shares of common stock outstanding during the period. For purposes of determining diluted earnings per share, basic weighted-average common shares outstanding is adjusted to include potentially dilutive securities, including restricted stock, stock options, and performance units. The treasury-stock method is used to measure the dilutive impact of potentially dilutive shares. Potentially dilutive shares are excluded from the diluted weighted-average shares outstanding computation in periods in which they have an anti-dilutive effect. The following table shows the calculation of basic and diluted earnings (loss) per share (in thousands, except per share amounts):
| | | | | | | | | | | | | | | | | | | | |
| | Year Ended December 31, |
| | 2025 | | 2024 | | 2023 |
| Net income (loss) | | $ | 11,185 | | | $ | (212,845) | | | $ | (35,673) | |
| | | | | | |
| Basic weighted average common shares outstanding | | 13,014 | | | 12,880 | | | 12,761 | |
| Add: Dilutive effect restricted common stock | | 120 | | | — | | | — | |
| Add: Dilutive effect of stock options outstanding | | 38 | | | — | | | — | |
| Add: Dilutive effect of performance units | | 2 | | | — | | | — | |
| Diluted weighted average common shares outstanding | | 13,174 | | | 12,880 | | | 12,761 | |
| | | | | | |
| Earnings (loss) per share: | | | | | | |
| Basic | | $ | 0.86 | | | $ | (16.53) | | | $ | (2.80) | |
| Diluted | | $ | 0.85 | | | $ | (16.53) | | | $ | (2.80) | |
The following table shows anti-dilutive shares excluded from the calculation of diluted earnings (loss) per share (in thousands):
| | | | | | | | | | | | | | | | | | | | |
| | Year Ended December 31, |
| | 2025 | | 2024 | | 2023 |
| Anti-dilutive effect of restricted shares and units | | 186 | | | 287 | | | 348 | |
| Anti-dilutive effect of stock options outstanding | | 117 | | | 273 | | | 273 | |
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.