Quarterly report pursuant to Section 13 or 15(d)

Net (Loss) Income Per Share

Net (Loss) Income Per Share

6 Months Ended

Jun. 30, 2022

The Company presents both basic earnings per share (“EPS”) and diluted EPS. Basic EPS excludes potential dilution and is computed by dividing net loss by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if stock awards were exercised and if the 2028 Convertible Notes and 2025 Convertible Notes were converted. The potential dilution from stock awards is accounted for using the treasury stock method based on the average market value of the Company’s common stock. The potential dilution from conversion of the 2028 Convertible Notes and 2025 Convertible Notes is accounted for using the if-converted method, which requires that all of the shares of the Company’s common stock issuable upon conversion of the 2028 Convertible Notes and the 2025 Convertible Notes will be included in the calculation of diluted EPS assuming conversion of the 2028 Convertible Notes and the 2025 Convertible Notes at the beginning of the reporting period (or at time of issuance, if later).

The following table shows the calculations (in thousands, except net loss per share amounts):


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Adjustment to net (loss) income for convertible notes in diluted EPS (1)
NET (LOSS) INCOME	$	(35,303)	$	75,873	$	(84,711)	$	53,759
Convertible note accretion, amortization, and interest, net of tax	—		1,552		—		2,997
NET (LOSS) INCOME USED IN DILUTED EPS	$	(35,303)	$	77,425	$	(84,711)	$	56,756


Basic weighted average shares outstanding	124,068		118,287		123,850		117,249
Dilutive effect of stock options	—		2,027		—		2,221
Dilutive effect of restricted stock awards	—		170		—		196
Dilutive effect of Convertible Notes due 2025	—		5,538		—		5,538
Dilutive effect of Convertible Notes due 2028	—		5,215		—		5,043
Diluted weighted average shares outstanding	124,068		131,237		123,850		130,247

Basic net (loss) income per share	$	(0.28)	$	0.64	$	(0.68)	$	0.46
Diluted net (loss) income per share	$	(0.28)	$	0.59	$	(0.68)	$	0.44

(1) This adjustment compensates for the effects of the if-converted impact of convertible notes in adjusted net income. Since an entity using the if-converted method assumes that a convertible debt instrument was converted into common shares at the beginning of the reporting period, net (loss) income is adjusted to reverse any recognized interest expense (including any amortization of discounts).

The following potential dilutive shares were excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive (in thousands):


	Three Months Ended June 30,		Six Months Ended June 30,
	2022	2021	2022	2021
Stock options	68	—	332	—
Restricted stock awards	52	—	152	—
2025 Convertible Notes	5,538	—	5,538	—
2028 Convertible Notes	5,215	—	5,215	—

In connection with the 2028 Convertible Notes offering, on January 11, 2021, the Company entered into separate, privately negotiated convertible note hedge transactions (collectively, the “Capped Call Transactions”) with option counterparties pursuant to capped call confirmations at a cost of approximately $29.3 million. The potential effect of the Capped Call Transactions were excluded from the calculation of diluted net loss per share in the three and six months ended June 30, 2022 as the Company’s closing price on June 30, 2022 did not exceed the conversion price of $85.75 per share. The Capped Call Transactions are not reflected in diluted net loss per share as they are anti-dilutive.