2. Net Income per Share
 
 
 
Three Months Ended
 
Six Months Ended
 
 
June 30,
 
June 30,
Net Income per Basic and Diluted Share:
 
2016
 
2015
 
2016
 
2015
 (in thousands except per share amounts)
 
 
 
 
 
 
 
 
Numerator
 
 
 
 
 
 
 
 
Income used to compute net income per basic and diluted share
 
$
4,148

 
$
78,264

 
$
60,035

 
$
162,762

 
 
 
 
 
 
 
 
 
Denominator
 
 

 
 

 
 
 
 
Total weighted average shares used to compute net income per basic share
 
163,791

 
163,544

 
163,729

 
163,188

Restricted stock outstanding
 
238

 
134

 
191

 
117

Effect of dilutive stock options
 

 
19

 

 
19

Assumed conversion of Series 2012 Notes
 

 

 

 
266

Assumed conversion of warrants
 

 
503

 

 
1,551

Assumed conversion of May 2015 Notes
 

 
1,184

 

 
2,235

Shares used to compute net income per diluted share
 
164,029

 
165,384

 
163,920

 
167,376

 
 
 
 
 
 
 
 
 
Net income per share - basic
 
$
0.03

 
$
0.48

 
$
0.37

 
$
1.00

Net income per share - diluted
 
$
0.03

 
$
0.47

 
$
0.37

 
$
0.97



We compute net income per diluted share using the sum of the weighted-average number of common and common equivalent shares outstanding. Common equivalent shares used in the computation of net income per diluted share include shares that may be issued under our stock options and restricted stock awards, the Series 2012 Notes and the May 2015 Notes on a weighted average basis for the period that the notes were outstanding, including the effect of adding back interest expense and the underlying shares using the if converted method. In the first quarter of 2012, $179.0 million aggregate principal of the February 2015 Notes was exchanged for the Series 2012 Notes, and in the third quarter of 2013, $1.0 million aggregate principal of the February 2015 Notes was exchanged for the Series 2012 Notes and the February 2015 Notes were retired. In the first quarter of 2014, $131.7 million aggregate principal of the Series 2012 Notes was retired in a privately negotiated exchange and purchase agreement, and in the fourth quarter of 2014, the Company entered into a privately negotiated exchange agreement under which it retired approximately $26.0 million in principal of the outstanding Series 2012 Notes. In the first quarter of 2015, the Company completed the retirement of the remaining $22.3 million of aggregate principal of its Series 2012 Notes.

In May 2011, we issued the May 2015 Notes, and in January and February 2012 we issued the Series 2012 Notes. The Series 2012 Notes and May 2015 Notes were net share settled, with the principal amount settled in cash and the excess settled in our common stock. The weighted-average share adjustments related to the Series 2012 Notes and May 2015 Notes, shown in the table above, include the shares issuable in respect of such excess.

In the second quarter of 2015, the Company completed the retirement of the remaining $155.1 million of aggregate principal of its May 2015 Notes. Concurrently with the retirement of the May 2015 Notes, we exercised our purchased call options and received 5.2 million of PDL's common shares, which was the amount equal to the number of shares required to be delivered by us to the note holders for the excess conversion value (Note 9).

February 2018 Notes Purchase Call Option and Warrant Potential Dilution

We excluded from our calculation of net income per diluted share 23.8 million shares for the three and six months ended June 30, 2016, respectively, and 29.0 million shares for the three and six months ended June 30, 2015, respectively, for warrants issued in February 2014, because the exercise price of the warrants exceeded the VWAP of our common stock and conversion of the underlying February 2018 Notes is not assumed, therefore no stock would be issuable upon conversion. These securities could be dilutive in future periods. Our purchased call options, issued in February 2014, will always be anti-dilutive and therefore 26.9 million shares were excluded from our calculation of net income per diluted share for the three and six months ended June 30, 2016, respectively, and 32.7 million shares were excluded from our calculation of net income per diluted share for the three and six months ended June 30, 2015, because they have no effect on net income per diluted share. For information related to the conversion rates on our convertible debt, see Note 9.

Anti-Dilutive Effect of Stock Options and Restricted Stock Awards

For the three months ended June 30, 2016 and 2015, we excluded approximately 1,154,000 and 39,000 shares underlying restricted stock awards, respectively, and for the six months ended June 30, 2016 and 2015, we excluded approximately 1,095,000 and 38,000 shares underlying restricted stock awards, respectively, calculated on a weighted average basis, from our net income per diluted share calculations because their effect was anti-dilutive.

The above information was disclosed in a filing to the SEC. To see the filing, click here.

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Other recent filings from the company include the following:

Current report, items 7.01 and 9.01 - Nov. 14, 2017
PDL BioPharma Just Filed Its Quarterly Report: 2. Net Income per Sh... - Nov. 13, 2017
Notification of inability to timely file Form 10-Q or 10-QSB - Nov. 13, 2017
Pdl Biopharma’S Proposal To Acquire Neos Therapeutics Expires Today; - Nov. 8, 2017
PDL: Cook Williams Communications, Inc - Nov. 2, 2017

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