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

3 Months Ended

Mar. 31, 2020

19. Earnings per Share:

Basic earnings per share is calculated as income (loss) 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 (loss) 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 March 31,
	2020	2019
Weighted average shares outstanding – Basic	135,240,897	133,946,308
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	845,185	948,046
Weighted average shares outstanding – Diluted	136,086,082	134,894,354

Basic and diluted earnings per share are calculated as follows:


	Three months ended March 31,
	2020		2019
Numerator:
Net income attributable to PQ Group Holdings Inc.	$	224	$	3,151

Denominator:
Weighted average shares outstanding – Basic	135,240,897		133,946,308
Weighted average shares outstanding – Diluted	136,086,082		134,894,354
Net income per share:
Basic income per share	$	—	$	0.02
Diluted income per share	$	—	$	0.02

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 March 31,
	2020	2019
Restricted stock awards with performance only targets not yet achieved	1,526,613	1,639,514
Stock options with performance only targets not yet achieved	516,000	586,253
Anti-dilutive restricted stock awards, restricted stock units and performance stock units	1,264,324	—
Anti-dilutive stock options	850,807	863,063

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. On a weighted average basis, options to purchase 609,491 and 621,747 shares of common stock at $16.97 per share for the three months ended March 31, 2020 and 2019, respectively, and options to purchase 241,316 shares of common stock at $17.50 per share for the three months ended March 31, 2020 and 2019, were excluded from the computation of diluted earnings per share for the respective periods, because the combination of the options’ exercise price and remaining unamortized stock-based compensation expense was greater than the average market price of the common shares. The 609,491 stock options expire on October 2, 2027, while the 241,316 stock options expire on August 9, 2028. All of the options were outstanding as of March 31, 2020. Anti-dilutive awards are not included in the dilution calculation, as their inclusion would have the effect of increasing diluted income per share.