Ecovyst, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Earnings per Share

Earnings per Share

9 Months Ended

Sep. 30, 2023

18. Earnings per Share:

Basic earnings per share is calculated as income available to common stockholders, divided by the weighted average number of common shares outstanding during the period. The weighted average number of common shares outstanding during the period for the computation of basic earnings per share excludes restricted stock awards that have legally been issued but are nonvested during the period, as the sale of these shares is prohibited pending satisfaction of certain vesting conditions by the award recipients in order to earn the rights to the shares.

Diluted earnings per share is calculated as income available to common stockholders, divided by the weighted average number of common and potential common shares outstanding during the period, if dilutive. Potential common shares reflect (1) unvested restricted stock awards and restricted stock units with service vesting conditions, (2) performance stock units with vesting conditions considered probable of achievement and (3) options to purchase common stock, all of which have been included in the diluted earnings per share calculation using the treasury stock method.

The reconciliation from basic to diluted weighted average shares outstanding is as follows:


	Three months ended September 30,		Nine months ended September 30,
	2023	2022	2023	2022
Weighted average shares outstanding – Basic	116,446,085	132,622,105	119,042,161	136,115,598
Dilutive effect of unvested common shares and restricted stock units with service conditions, performance stock units considered probable of vesting and assumed stock option exercises and conversions	928,262	1,474,734	1,374,971	1,550,617
Weighted average shares outstanding – Diluted	117,374,347	134,096,839	120,417,132	137,666,215

Basic and diluted income per share are calculated as follows:


	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
Numerator:
Net income	$	16,574	$	21,325	$	41,225	$	48,445

Denominator:
Weighted average shares outstanding – Basic	116,446,085		132,622,105		119,042,161		136,115,598
Weighted average shares outstanding – Diluted	117,374,347		134,096,839		120,417,132		137,666,215

Net income per share:
Basic income per share	$	0.14	$	0.16	$	0.35	$	0.36
Diluted income per share	$	0.14	$	0.16	$	0.34	$	0.35

The table below presents the details of the Company’s weighted average equity-based awards outstanding during each respective period that were excluded from the calculation of diluted earnings per share:


	Three months ended September 30,		Nine months ended September 30,
	2023	2022	2023	2022
Restricted stock awards with performance only targets not achieved	—	505,439	65,966	574,048
Stock options with performance only targets not achieved	—	300,788	68,890	316,187
Anti-dilutive restricted stock units and performance stock units	—	487,322	—	19,306
Anti-dilutive stock options	454,461	751,539	556,114	788,509

Restricted stock awards and stock options with performance only vesting conditions were not included in the dilution calculation, as the performance targets have not been achieved nor were probable of achievement as of the end of the respective periods. These awards and stock options were canceled on March 7, 2023 (see Note 17 to these condensed consolidated financial statements for additional information). Certain stock options to purchase shares of common stock were excluded from the computation of diluted earnings per share for the respective periods because the options’ exercise price was greater than the average market price of the common shares. These stock options and anti-dilutive awards are not included in the dilution calculation, as their inclusion would have the effect of increasing diluted income per share or reducing diluted loss per share.