12. Earnings per Share

Basic earnings per share have been computed by dividing net earnings by the weighted average number of common shares outstanding during the applicable period. Diluted earnings per share reflect the potential dilution that could occur if stock options or other contracts to issue common shares were exercised or converted into common stock.

For the three months ended May 31, 2018, all options were included in the diluted earnings per share computation because the average fair market value of the Company’s stock exceeded the exercise price of the options. For the three months ended May 31, 2017, 95,692 shares related to stock options were not included in the diluted earnings per share computation because the exercise price exceeded the average fair market value of the Company’s stock. The following table sets forth the computation for basic and diluted earnings (loss) per share for the periods indicated:

	Three months ended
	May 31,
	2018		2017
Basic weighted average common shares outstanding		25,333,673		25,422,856
Effect of dilutive options		30,099		13,931
Diluted weighted average common shares outstanding		25,363,772		25,436,787
Earnings per share:
Net earnings - basic	$	0.37	$	0.31
Net earnings - diluted	$	0.36	$	0.31
Cash dividends	$	0.200	$	0.175