Earnings Per Share

3 Months Ended

Dec. 31, 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. Since we reported discontinued operations, we used income from continuing operations as our control to determine whether potential common shares are dilutive or anti-dilutive. In our case for three months ended December 31, 2014, since we had income from continuing operations, we included all potentially dilutive common equivalent shares in our calculation of earnings per diluted share for income from continuing operations, loss on discontinued operations and net loss.

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



	Three months ended December 31,
	2015		2014
Numerator:
Income from continuing operations	$	3,131	$	1,018
Income (loss) from discontinued operations, after income taxes	3,319		(1,357		)
Net income (loss)	$	6,450	$	(339	)

Denominator:
Denominator for basic net income (loss) per common share — weighted average shares outstanding	25,331		24,150
Effect of dilutive securities:
Stock options and restricted stock units	840		312
Denominator for diluted net income (loss) per common share — adjusted weighted average shares	26,171		24,462

Basic net income (loss) per common share
Continuing operations	$	0.12	$	0.04
Discontinued operations	$	0.13	$	(0.06	)
Net income (loss)	$	0.25	$	(0.01	)
Diluted net income (loss) per common share
Continuing operations	$	0.12	$	0.04
Discontinued operations	$	0.13	$	(0.06	)
Net income (loss)	$	0.25	$	(0.01	)

For the three months ended December 31, 2015 and 2014, there were 902,084 and 5,676,561 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.