PRO DEX INC Earnings Per Share Disclosure
We calculate basic earnings per share by dividing net income by the weighted-average number of common shares outstanding during the reporting period. Diluted earnings per share reflects the effects of potentially dilutive securities based upon the treasury stock method for in-the-money stock options and the fully diluted shares outstanding method for restricted stock and performance awards. The summary of the basic and diluted earnings per share calculations for the years ended June 30, 2025 and 2024 is as follows (in thousands, except per share data):
| Years Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Basic: | ||||||||
| Net income | $ | 8,978 | $ | 2,127 | ||||
| Weighted-average shares outstanding | 3,288 | 3,499 | ||||||
| Basic earnings per share | $ | 2.73 | $ | 0.61 | ||||
| Diluted: | ||||||||
| Net income | $ | 8,978 | $ | 2,127 | ||||
| Weighted-average shares outstanding | 3,288 | 3,499 | ||||||
| Effect of dilutive securities – stock options & performance awards | 73 | 72 | ||||||
| Weighted-average shares used in calculation of diluted earnings per share | 3,361 | 3,571 | ||||||
| Diluted earnings per share | $ | 2.67 | $ | 0.60 | ||||
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.