Exhibit 11 Continental Medical Systems, Inc. and Subsidiaries Computation of Earnings per Share Three Months Ended Six Months Ended December 31, March 31, 1993 1992 (1) 1993 1992 (1) ---------------------------------------- (In thousands, except per share data) Primary: Shares outstanding at beginning of period 37,168 35,888 36,935 35,560 Weighted average shares issued pursuant to: Employee benefit plans 56 111 107 210 Acquisition agreements 220 63 244 111 Dilutive effect of outstanding stock options 319 1,300 252 1,373 Contingent shares issuable pursuant to acquisition agreements 601 505 608 525 -------- -------- -------- -------- Weighted average number of shares and equivalent shares outstanding 38,364 37,867 38,146 37,779 ======== ======== ======== ======== Net income $3,788 $9,996 $11,361 $19,091 Additional goodwill amortization from contingent shares issuable pursuant to acquisition agreements (44) (47) (88) (100) Adjusted net income used in -------- -------- -------- -------- primary calculation $3,744 $9,949 $11,273 $18,991 ======== ======== ======== ======== Net income per share and equivalent share $0.10 $0.26 $0.30 $0.50 ======== ======== ======== ======== Fully Diluted: Weighted average number of shares and equivalent shares used in primary calculation 38,364 37,867 38,146 37,779 Additional dilutive effect of stock options 31 Assumed conversion of dilutive convertible debentures 234 234 234 234 -------- -------- -------- -------- Fully diluted weighted average number of shares and equivalent shares outstanding 38,598 38,101 38,411 38,013 ======== ======== ======== ======== Net income used in primary calculation $3,744 $9,949 $11,273 $18,991 Adjustment for interest expense, net of related income tax benefits 23 24 46 48 -------- -------- -------- -------- Adjusted net income used in fully diluted calculation $3,767 $9,973 $11,319 $19,039 ======== ======== ======== ======== Fully diluted net income per share and equivalent share $0.10 $0.26 $0.29 $0.50 ======== ======== ======== ======== (1) On February 23, 1993, CMS acquired Kron in a business combination accounted for as a pooling of interests. Accordingly, all share data at the beginning of the period has been restated to include the shares issued in the combination, and all financial results have been restated to include the financial results of Kron prior to February 23, 1993.