Note 3. Net Income Per Share

Basic net income per share is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted net income per share is computed by dividing net income by the weighted average number of dilutive common shares outstanding during the period. Diluted shares outstanding are calculated by adding to the weighted average shares outstanding any potential dilutive securities outstanding for the period. Potential dilutive securities include stock options, restricted stock units, performance-based stock awards and shares to be purchased under the Company’s employee stock purchase plan. The Company’s basic and diluted net income per share for the three and six months ended September 30, 2018 and 2017 were as follows (in thousands, except per share data):

	For the Three Months Ended September 30,				For the Six Months Ended September 30,
	2018		2017		2018		2017
Basic Net Income Per Share
Net income	$	50,127	$	24,503	$	140,193	$	61,877

Basic weighted average shares outstanding		44,961		44,141		44,754		44,018

Basic net income per share	$	1.11	$	0.56	$	3.13	$	1.41

	For the Three Months Ended September 30,				For the Six Months Ended September 30,
	2018		2017		2018		2017
Diluted Net Income Per Share
Net income	$	50,127	$	24,503	$	140,193	$	61,877

Basic weighted average shares outstanding		44,961		44,141		44,754		44,018
Effect of dilutive securities		1,192		1,557		1,410		1,637
Diluted weighted average shares outstanding		46,153		45,698		46,164		45,655

Diluted net income per share	$	1.09	$	0.54	$	3.04	$	1.36

For the three and six months ended September 30, 2018, approximately 4,000 and 54,000 shares underlying out-of-the-money stock options, respectively, were excluded in the computation of diluted earnings per share because their effect would have been anti-dilutive. Also, approximately 97,000 restricted shares in each of the three and six months ended September 30, 2018, respectively, related to performance-based awards for which milestones have not been met, were not included in the computation of diluted earnings per share.

For the three and six months ended September 30, 2017, approximately 200 and 5,700 shares underlying out-of-the-money stock options, respectively, were excluded in the computation of diluted earnings per share because their effect would have been anti-dilutive. Also, approximately 77,000 restricted shares in each of the three and six months ended September 30, 2017, respectively, related to performance-based and market-based awards for which milestones have not been met, were not included in the computation of diluted earnings per share.