EARNINGS PER SHARE

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.

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,
	2017		2016		2017		2016
Numerator:
Income from continuing operations	$	1,335	$	4,277	$	5,023	$	9,634
Income from discontinued operations, after income taxes	—		—		—		3,230
Net income	$	1,335	$	4,277	$	5,023	$	12,864

Denominator:
Denominator for basic net income per common share — weighted average shares outstanding	26,522		25,904		26,390		25,684
Effect of dilutive securities:
Stock options and restricted stock units	434		396		720		472
Denominator for diluted net income per common share — adjusted weighted average shares	26,956		26,300		27,110		26,156

Basic net income per common share:
Continuing operations	$	0.05	$	0.17	$	0.19	$	0.38
Discontinued operations	$	—	$	—	$	—	$	0.13
Net income (1)	$	0.05	$	0.17	$	0.19	$	0.50
Diluted net income per common share:
Continuing operations	$	0.05	$	0.16	$	0.19	$	0.37
Discontinued operations	$	—	$	—	$	—	$	0.12
Net income	$	0.05	$	0.16	$	0.19	$	0.49


(1)	Earnings per share presented are calculated by line item and may not add due to the use of rounded amounts.

For the three months ended June 30, 2017 and 2016, there were 1,910,081 and 1,829,631 potentially dilutive shares, respectively, and for the nine months ended June 30, 2017 and 2016, there were 1,169,422 and 1,806,131 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.