EARNINGS PER SHARE

9 Months Ended

Feb. 28, 2023

Earnings per share

EARNINGS PER SHARE

4. EARNINGS PER SHARE

Basic earnings per share is determined using the weighted average number of common shares outstanding during the period. Diluted earnings per share is determined using the weighted average number of common shares and potential common shares (representing the dilutive effect of stock options, restricted shares, restricted stock units (“RSUs”), Performance RSUs (“PRSUs”) and Amended and Restated 2006 Employee Stock Purchase Plan (“ESPP”) shares) outstanding during the period using the treasury stock method.

The following table presents the computation of basic and diluted earnings per share (in thousands, except per share data):

	Three Months Ended				Nine Months Ended
	February 28,				February 28,
	2023		2022		2023		2022
Numerator: Net income	$	4,132	$	2,243	$	8,446	$	3,656
Denominator for basic earnings per share:
Weighted average shares outstanding		27,893		26,871		27,571		25,684
Shares used in basic earnings per share calculation		27,893		26,871		27,571		25,684
Effect of dilutive securities		1,480		1,983		1,509		1,826
Denominator for diluted earnings per share		29,373		28,854		29,080		27,510
Basic earnings per share	$	0.15	$	0.08	$	0.31	$	0.14
Diluted earnings per share	$	0.14	$	0.08	$	0.29	$	0.13

 For the purpose of computing diluted earnings per share, weighted average potential common shares do not include stock options with an exercise price greater than the average fair value of the Company’s common stock for the period, as the effect would be anti-dilutive. In the three and nine months ended February 28, 2023, stock options to purchase 15,000 shares of common stock were outstanding, but were not included in the computation of diluted earnings per share, because the inclusion of such shares would be anti-dilutive. In the three and nine months ended February 28, 2022, stock options to purchase 11,000 shares of common stock were outstanding, but were not included in the computation of diluted earnings per share, because the inclusion of such shares would be anti-dilutive.