Douglas Dynamics, 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, 2016

10.Earnings per Share

Basic earnings per share of common stock is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share of common stock is computed by dividing net income by the weighted average number of common shares and common stock equivalents related to the assumed exercise of stock options, using the two-class method. Stock options for which the exercise price exceeds the average fair value have an anti-dilutive effect on earnings per share and are excluded from the calculation.

As restricted shares and restricted stock units both participate in dividends, in accordance with ASC 260, the Company has calculated earnings per share pursuant to the two-class method, which is an earnings allocation formula that determines earnings per share for common stock and participating securities according to dividends declared and participation rights in undistributed earnings. Under this method, all earnings (distributed and undistributed) are allocated to common shares and participating securities based on their respective rights to receive dividends.



	Three Months Ended				Nine Months Ended
	September 30,		September 30,		September 30,		September 30,
	2016		2015		2016		2015
Basic earnings per common share
Net income	$	7,302	$	15,548	$	28,908	$	29,035
Less income allocated to participating securities		101		214		390		405
Net income allocated to common shareholders	$	7,201	$	15,334	$	28,518	$	28,630
Weighted average common shares outstanding		22,501,640		22,362,787		22,473,642		22,314,198
	$	0.32	$	0.69	$	1.27	$	1.28

Earnings per common share assuming dilution
Net income	$	7,302	$	15,548	$	28,908	$	29,035
Less income allocated to participating securities		101		214		390		405
Net income allocated to common shareholders	$	7,201	$	15,334	$	28,518	$	28,630
Weighted average common shares outstanding		22,501,640		22,362,787		22,473,642		22,314,198
Incremental shares applicable to stock based compensation		-		10,564		-		15,897
Weighted average common shares assuming dilution		22,501,640		22,373,351		22,473,642		22,330,095
	$	0.32	$	0.68	$	1.26	$	1.27