Earnings per share

9 Months Ended

Jul. 31, 2011

Earnings per share

Note 6 - Earnings per share

Basic earnings per share is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income by the weighted average number of common shares outstanding increased by the effects of assuming that other potentially dilutive securities (such as stock options) outstanding during the period had been exercised and the treasury stock method had been applied. For the three months ended July 31, 2011, there were no anti-dilutive shares relating to the assumed exercise of stock. For the three months ended July 31, 2010, the effects of the assumed exercise of options to purchase 543,078 shares of the Company’s common stock, at a price of $2.56 to $3.78 per share, were not included in the computation of diluted per share amounts because they were anti-dilutive for that purpose. For the nine months ended July 31, 2011, the effects of the assumed exercise of options to purchase 420,008 shares of the Company’s common stock, at a price range of $3.75 to $3.78 per share, were not included in the computation of diluted per share amounts because they were anti-dilutive for that purpose.

For the nine months ended July 31, 2010, the effects of the assumed exercise of options to purchase 540,078 shares of the Company’s common stock, at a price range of $2.71 to $3.78 per share, were not included in the computation of diluted per share amounts because they were anti-dilutive for that purpose.

The following table summarizes the computation of basic and diluted weighted average shares outstanding:

	Three Months Ended July 31				Nine Months Ended July 31
	2011		2010		2011		2010
Weighted average shares outstanding for basic net earnings per share		6,486,577		5,701,856		6,131,944		5,700,420
Add effects of potentially dilutive securities-assumed exercise of stock options		976,592		734,896		954,052		704,982
Weighted average shares for diluted net earnings per share		7,463,169		6,436,752		7,085,996		6,405,402