Net Income (Loss) Per Share

6 Months Ended

Jun. 30, 2019

11. Net Income (Loss) Per Share

For the three months ended June 30, 2019 and 2018 and the six months ended June 30, 2019, the two class method was used in the computation as it was the more dilutive of the two approaches. For the six months ended June 30, 2018, earnings were not allocated to participating securities in the calculation of basic and diluted earnings per share as there were net losses and the net loss available to common shareholders was divided by the weighted-average number of common shares outstanding during the period to calculate diluted earnings per share. For the six months ended June 30, 2019, the assumed exercise of stock options and assumed vesting of restricted stock and restricted stock units were not included in the computation of net income (loss) per share as their effect would have been anti-dilutive.

The following presents a reconciliation of the numerator and denominator used in the calculation of basic net income (loss) per share and a reconciliation of the numerator and denominator used in the calculation of diluted net income (loss) per share (in thousands, except share and per share data):


	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Numerator:
Net income (loss), as reported	$	10,307		$	695		$	12,967		$	(504	)
Less: net income (loss) attributable to participating securities		(336	)		(29	)		(409	)		—

Net income (loss) available to common shareholders—basic	$	9,971		$	666		$	12,558		$	(504	)

Denominator:
Basic:
Weighted-average shares of common stock outstanding		41,377,788			42,188,672			41,321,044			42,252,027
Less: weighted-average shares of unvested restricted common stock outstanding		(1,350,923	)		(1,770,364	)		(1,305,372	)		(1,815,432	)

Weighted-average number of common shares used in computing basic net income (loss) per common share		40,026,865			40,418,308			40,015,672			40,436,595

Net income (loss) per share applicable to common shareholders—basic	$	0.25		$	0.02		$	0.31		$	(0.01	)


	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Numerator:
Net income (loss) available to common shareholders—basic	$	9,971		$	666		$	12,558		$	(504	)
Add-back: undistributed earnings allocated to unvested shareholders		180			—			107			—
Less: undistributed earnings reallocated to unvested shareholders		(180	)		—			(107	)		—

Net income (loss) available to common shareholders—diluted	$	9,971		$	666		$	12,558		$	(504	)

Denominator:
Diluted:
Weighted-average shares of common stock outstanding		41,377,788			42,188,672			41,321,044			42,252,027
Less: weighted-average shares of unvested restricted common stock outstanding		(1,350,923	)		(1,770,364	)		(1,305,372	)		(1,815,432	)
Weighted-average number of common shares issuable upon exercise of outstanding stock options		39,045			119,544			50,375			—

Weighted-average number of common shares used in computing diluted net income (loss) per common share		40,065,910			40,537,852			40,066,047			40,436,595

Net income (loss) per share applicable to common shareholders—diluted	$	0.25		$	0.02		$	0.31		$	(0.01	)

The following common share equivalents have been excluded from the computation of diluted weighted-average shares outstanding, as their effect would have been anti-dilutive:


	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Options		488,867		543,794		489,882		641,825
Unvested restricted stock		1,082,601		643,109		997,436		846,046
Unvested restricted stock units		86,034		57,158		83,944		67,219

Monotype Imaging Holdings Inc. 10-Q