Earnings Per Share

9 Months Ended

Jun. 30, 2015

Basic net income per common share is calculated based on the weighted average number of common shares outstanding during the period. Diluted net income per common share is computed by dividing net income by the weighted average number of common shares and potentially dilutive common shares outstanding during the period. Potentially dilutive common shares result from dilutive common stock options and restricted stock units. Diluted net loss per common share is computed by dividing net loss by the weighted average number of common shares. All potentially dilutive common equivalent shares are excluded from the calculations of net loss per diluted share due to their anti-dilutive effect. As a result, no common equivalent shares were included in the calculation of net loss per diluted share for the three month period ended June 30, 2014.

2. EARNINGS PER SHARE (CONTINUED)

The following table is a reconciliation of the numerators and denominators in the net income per common share calculations (in thousands, except per common share data):



	Three months ended June 30,					Nine months ended June 30,
	2015		2014			2015		2014
Numerator:
Net income (loss)	$	2,496	$	(101	)	$	3,603	$	1,325
Denominator:
Denominator for basic net income per common share — weighted average shares outstanding	24,938		25,274			24,525		25,545
Effect of dilutive securities:
Stock options and restricted stock units	772		—			560		420
Denominator for diluted net income per common share — adjusted weighted average shares	25,710		25,274			25,085		25,965
Net income per common share, basic	$	0.10	$	—		$	0.15	$	0.05
Net income per common share, diluted	$	0.10	$	—		$	0.14	$	0.05

For the three months ended June 30, 2015 and 2014, there were 2,416,518 and 4,979,372 potentially dilutive shares, respectively, and for the nine months ended June 30, 2015 and 2014, there were 3,451,827 and 3,399,013 potentially dilutive shares, respectively, related to stock options to purchase common shares that were not included in the above computation of diluted earnings per common share. This is because the options’ exercise prices were greater than the average market price of our common shares.