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, 2019

20. 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 September 30,		Nine months ended September 30,
	2019	2018	2019	2018
Weighted average shares outstanding – Basic	134,511,819	133,336,352	134,213,571	133,237,653
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	1,137,891	1,239,810	1,091,799	985,975
Weighted average shares outstanding – Diluted	135,649,710	134,576,162	135,305,370	134,223,628

Basic and diluted earnings per share are calculated as follows:



	Three months ended September 30,				Nine months ended September 30,
	2019		2018		2019		2018
Numerator:
Net income attributable to PQ Group Holdings Inc.	$	26,713	$	14,185	$	60,438	$	30,181

Denominator:
Weighted average shares outstanding – Basic	134,511,819		133,336,352		134,213,571		133,237,653
Weighted average shares outstanding – Diluted	135,649,710		134,576,162		135,305,370		134,223,628
Net income per share:
Basic income per share	$	0.20	$	0.11	$	0.45	$	0.23
Diluted income per share	$	0.20	$	0.11	$	0.45	$	0.22

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,
	2019	2018	2019	2018
Restricted stock awards with performance only targets not yet achieved	1,537,572	1,709,463	1,601,474	1,719,775
Stock options with performance only targets not yet achieved	578,564	586,253	583,204	586,253
Anti-dilutive restricted stock awards, restricted stock units and performance stock units	—	—	—	18,076
Anti-dilutive stock options	863,063	760,766	863,063	668,596

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 621,747 shares of common stock at $16.97 per share for the three and nine months ended September 30, 2019 and 2018, 241,316 shares of common stock at $17.50 per share for the three and nine months ended September 30, 2019 and 139,019 and 46,849 shares of common stock at $17.50 per share for the three and nine months ended September 30, 2018, respectively, 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 621,747 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 September 30, 2019. Anti-dilutive awards are not included in the dilution calculation, as their inclusion would have the effect of increasing diluted income per share.