Earnings Per Share

6 Months Ended

Jan. 31, 2017

Our basic earnings per share (“EPS”) is computed based on the weighted average number of common shares (including vested but unissued stock units, share units, performance shares and restricted stock units ("RSUs")), outstanding during each respective period. Our diluted EPS reflects the dilution from potential common stock issuable pursuant to the exercise of equity-classified stock-based awards, if dilutive, outstanding during each respective period. Pursuant to FASB ASC 260, "Earnings Per Share," equity-classified stock-based awards that are subject to performance conditions are not considered in our diluted EPS calculations until the respective performance conditions have been satisfied. When calculating our diluted earnings per share, we consider (i) the amount an employee must pay upon assumed exercise of stock-based awards; (ii) the amount of stock-based compensation cost attributed to future services and not yet recognized; and (iii) the amount of excess tax benefits, if any, that would be credited to additional paid-in capital assuming exercise of in-the-money stock-based awards. This excess tax benefit is the amount resulting from a tax deduction for compensation in excess of compensation expense recognized for financial reporting purposes.

There were no repurchases of our common stock during the six months ended January 31, 2017 and 2016.

Weighted average stock options, RSUs and restricted stock outstanding of 2,173,000 and 2,369,000 for the three months ended January 31, 2017 and 2016, respectively, and 2,305,000 and 2,367,000 for the six months ended January 31, 2017 and 2016, respectively, were not included in our diluted EPS calculation because their effect would have been anti-dilutive.

Our EPS calculations exclude 237,000 and 144,000 weighted average performance shares outstanding for the three months ended January 31, 2017 and 2016, respectively, and 229,000 and 143,000 weighted average performance shares outstanding for the six months ended January 31, 2017 and 2016, respectively, as the performance conditions have not yet been satisfied. However, the compensation expense related to these awards is included in net income (the numerator) for EPS calculations for each respective period.

The following table reconciles the numerators and denominators used in the basic and diluted EPS calculations:



	Three months ended January 31,			Six months ended January 31,
	2017		2016	2017	2016
Numerator:
Net income for basic calculation	$	6,585,000	2,476,000	4,096,000	3,915,000
Numerator for diluted calculation	$	6,585,000	2,476,000	4,096,000	3,915,000

Denominator:
Denominator for basic calculation	23,428,000		16,186,000	23,406,000	16,178,000
Effect of dilutive securities:
Stock-based awards	17,000		19,000	21,000	23,000
Denominator for diluted calculation	23,445,000		16,205,000	23,427,000	16,201,000