EARNINGS PER SHARE

12 Months Ended

Feb. 29, 2016

NOTE 11 – EARNINGS PER SHARE

Earnings per share is computed using the two-class method. The two-class method determines earnings per share for each class of common stock and participating securities according to their respective participation rights in undistributed earnings. The Company's unvested restricted stock awards which contain nonforfeitable rights to dividends are considered participating securities. Basic earnings per share is computed by dividing net income for the period by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income for the period by the weighted average number of common shares outstanding during the period, plus the dilutive effect of outstanding stock options and restricted stock-based awards using the treasury stock method. The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share amounts):

	Year Ended February 28,
	2016		2015		2014
Net income	$	16,940	$	16,508	$	11,803

Basic weighted average number of common
shares outstanding		36,448		35,784		34,969
Effect of stock options and restricted stock units
computed on treasury stock method		502		746		1,054
Diluted weighted average number of common
shares outstanding		36,950		36,530		36,023

Earnings per share:
Basic	$	0.46	$	0.46	$	0.34
Diluted	$	0.46	$	0.45	$	0.33

Shares subject to anti-dilutive stock options and restricted stock-based awards of 199,000, 159,000 and 57,000 at February 28, 2016, 2015 and 2014, respectively, were excluded from the calculations of diluted earnings per share for the years then ended.

The Company has the option to pay cash, issue shares of common stock or any combination thereof for the aggregate amount due upon conversion of the Notes. The Company's intent is to settle the principal amount of the Notes in cash upon conversion. As a result, only the shares issuable for the conversion value, if any, in excess of the principal amounts of the Notes would be included in diluted earnings per share. During fiscal 2016 from the time of the issuance of Notes, the average market price of the Company's common stock was less than the $27.594 initial conversion price of the Notes, and consequently no shares have been included in diluted earnings per share for the conversion value of the Notes.