The Company is required, in periods in which it has net income, to calculate basic earnings per share (“basic EPS”) using the two-class method. The two-class method is required because the Company’s shares of Series N preferred stock, each of which is convertible to 40 common shares, have the right to receive dividends or dividend equivalents should the Company declare dividends on its common stock. Under the two-class method, earnings for the period are allocated on a pro-rata basis to the common and preferred stockholders. The weighted-average number of common and preferred shares outstanding during the period is then used to calculate basic EPS for each class of shares. For both the three and six months ended June 30, 2026 and 2025, the earnings allocated to the outstanding preferred shares were not material.

In periods in which the Company records a net loss, basic loss per share is calculated by dividing the loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period. As the preferred stock does not participate in losses, the two-class method is not used in periods in which the Company records a net loss.

Stock options and other potential common shares are included in the calculation of diluted earnings per share (“diluted EPS”). In calculating diluted EPS, such shares are assumed to be exercised or converted, except when their effect would be anti-dilutive.

The table below shows the calculation of the number of shares used in computing diluted EPS:


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Basic weighted average shares outstanding		34,627,501		34,871,767		34,611,969		35,120,131
Treasury stock effect of common stock options and restricted stock awards		-		634,483		-		680,221
Diluted weighted average common shares outstanding		34,627,501		35,506,250		34,611,969		35,800,352

Because the Company reported a net loss for the three and six months ended June 30, 2026, incremental shares from stock options and restricted stock awards were excluded from diluted loss per share because their effect would have been anti-dilutive. Accordingly, diluted weighted-average shares and diluted loss per share equal basic weighted-average shares and basic loss per share for those periods. For both the three and six months ended June 30, 2025, there were potential common shares of 0.9 million that were excluded from the computation of diluted EPS, as the inclusion of such common shares would have been anti-dilutive.