Annual report pursuant to Section 13 and 15(d)

Net Income (Loss) Per Share

v3.8.0.1
Net Income (Loss) Per Share
12 Months Ended
Dec. 31, 2017
Earnings Per Share [Abstract]  
Net Income (Loss) Per Share
Net Income (Loss) per Share
Basic net income (loss) per share is computed by dividing the net income (loss) by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is computed by using the weighted average number of common shares outstanding, including potential dilutive shares of common stock assuming the dilutive effect of outstanding stock options and restricted stock using the treasury stock method. Weighted average shares from common share equivalents in the amount of 193,274, 220,473, and 912,257 were excluded from the dilutive shares outstanding because their effect was anti-dilutive for the years ended December 31, 2017, 2016, and 2015, respectively.
For purposes of considering the Convertible Notes in determining diluted net income (loss) per share, it is the current intent of the Company to settle conversions of the Convertible Notes through combination settlement, which involves repayment of the principal portion in cash and any excess of the conversion value over the principal amount (the “conversion premium”) in shares of our common stock. Therefore, only the impact of the conversion premium will be included in total dilutive weighted average shares outstanding using the treasury stock method. The dilutive effect of the conversion premium is shown in the table below.
The Warrants sold in connection with the issuance of the Convertible Notes will not be considered in calculating the total dilutive weighted average shares outstanding until the price of the Company’s common stock exceeds the strike price of $57.58 per share, as described in Note 7. When the price of the Company’s common stock exceeds the strike price of the Warrants, the effect of the additional shares that may be issued upon exercise of the Warrants will be included in total dilutive weighted average shares outstanding using the treasury stock method. The Note Hedges purchased in connection with the issuance of the Convertible Notes are considered to be anti-dilutive and therefore do not impact the Company’s calculation of diluted net income (loss) per share. Refer to Note 7 for further discussion regarding the Convertible Notes.
As discussed in Note 2, the Company adopted ASU 2016-09 on January 1, 2017. As a result, the weighted average effect of dilutive securities for the year ended December 31, 2017, was calculated without including consideration of windfall tax benefits, resulting in the repurchase of fewer hypothetical shares and a greater dilutive effect. This change was applied on a prospective basis, and dilutive securities for the same period in 2016 have not been adjusted.
The following table presents the calculation of basic and diluted net income (loss) per share attributable to common stockholders:
 
 
Year Ended December 31,
 
 
2017
 
2016
 
2015
 
 
(in thousands, except per share amounts)
Numerator:
 
 
 
 
 
 
Net income (loss)
 
$
377

 
$
16,650

 
$
(9,218
)
Denominator:
 
 
 
 
 
 
Basic:
 
 
 
 
 
 
Weighted average shares used in computing basic net income (loss) per share:
 
79,433

 
76,854

 
76,689

Diluted:
 
 
 
 
 
 
Weighted average shares used in computing basic net income (loss) per share:
 
79,433

 
76,854

 
76,689

Add weighted average effect of dilutive securities:
 
 
 
 
 
 
Stock options and restricted stock
 
2,884

 
989

 

Convertible Notes
 
81

 

 

Weighted average shares used in computing diluted net income (loss) per share:
 
82,398

 
77,843

 
76,689

Net income (loss) per share attributable to common stockholders:
 
 
 
 
 
 
Basic
 
$
0.00

 
$
0.22

 
$
(0.12
)
Diluted
 
$
0.00

 
$
0.21

 
$
(0.12
)