EARNINGS PER SHARE

Basic net (loss) 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 for the three month period ended December 31, 2017.

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



	Three months ended December 31,
	2017			2016
Numerator:
Net (loss) income	$	(4,569	)	$	2,357

Denominator:
Denominator for basic net (loss) income per common share — weighted average shares outstanding	26,748			26,175
Effect of dilutive securities:
Stock options and restricted stock units	—			797
Denominator for diluted net (loss) income per common share — adjusted weighted average shares	26,748			26,972

Net (loss) income per common share, basic	$	(0.17	)	$	0.09
Net (loss) income per common share, diluted	$	(0.17	)	$	0.09

For the three months ended December 31, 2017 and 2016, there were 1,998,740 and 1,108,900 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. In addition, due to the net loss for the three months ended December 31, 2017, there were 331,021 common stock options and restricted stock units that were not included in the above computation of diluted earnings per share.