Carriage Services (CSV) 10-Q 2005 Q3 Quarterly report

EXHIBIT 11.1

CARRIAGE SERVICES, INC.
COMPUTATION OF PER SHARE EARNINGS
(unaudited and in thousands, except per share data)

     Earnings per share for the three and nine month periods ended September 30, 2004 and 2005 is calculated based on the weighted average number of common and common equivalent shares outstanding during the periods as prescribed by SFAS 128. The following table sets forth the computation of the basic and diluted earnings per share for the three and nine month periods ended September 30, 2004 and 2005:

	Three months				Nine months
	ended September 31,				ended September 30,
	2004		2005		2004			2005
Income (loss) from continuing operations available to common stockholders	$	471	$	140	$	5,089		$	(782	)
Income (loss) from discontinued operations available to common stockholders		686		530		(1,338	)		881
Change in accounting method		—		—		—			(22,756	)
Effect of dilutive securities		—		—		—			—
Net income (loss) available to common stockholders	$	1,157	$	670	$	3,751		$	(22,657	)
Weighted average number of common shares outstanding for basic EPS computation		17,834		18,426		17,751			18,294
Effect of dilutive securities:
Stock options		447		512		475			—
Weighted average number of common and common equivalent shares outstanding for diluted EPS computation		18,281		18,938		18,226			18,294
Basic earnings (loss) per common share:
Continuing operations	$	0.03	$	0.01	$	0.29		$	(0.04	)
Discontinued operations	$	0.04	$	0.03	$	(0.08	)	$	0.05
Cumulative effect of change in accounting method	$	—	$	—	$	—		$	(1.25	)
Net income (loss)	$	0.07	$	0.04	$	0.21		$	(1.24	)
Diluted earnings (loss) per common share:
Continuing operations	$	0.03	$	0.01	$	0.28		$	(0.04	)
Discontinued operations	$	0.03	$	0.03	$	(0.07	)	$	0.05
Cumulative effect of change in accounting method	$	—	$	—	$	—		$	(1.25	)
Net income (loss)	$	0.06	$	0.04	$	0.21		$	(1.24	)

     Options to purchase $0.1 million and $1.5 million shares were not included in the computation of diluted earnings per share for the three and nine month periods, respectively ending September 30, 2005, because the effect would be antidilutive. Options to purchase 0.2 million shares were not included in the computation of diluted earnings per share for the periods ending September 30, 2004, because the effect would be antidilutive.

     The convertible junior subordinated debenture is convertible into 4.6 million shares of common stock and is not included in the computation of diluted earnings per share because the effect would be antidilutive.