EARNINGS PER SHARE

Basic net income (loss) 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 nine month period ended June 30, 2018.

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 June 30,				Nine months ended June 30,
	2018		2017		2018			2017
Numerator:
Net income (loss)	$	2,621	$	1,335	$	(2,305	)	$	5,023

Denominator:
Denominator for basic net income (loss) per common share — weighted average shares outstanding	27,177		26,522		27,002			26,390
Effect of dilutive securities:
Stock options and restricted stock units	587		434		—			720
Denominator for diluted net income (loss) per common share — adjusted weighted average shares	27,764		26,956		27,002			27,110

Net income (loss) per common share, basic	$	0.10	$	0.05	$	(0.09	)	$	0.19
Net income (loss) per common share, diluted	$	0.09	$	0.05	$	(0.09	)	$	0.19

4. EARNINGS PER SHARE (CONTINUED)

For the three months ended June 30, 2018 and 2017, there were 770,178 and 1,910,081 potentially dilutive shares, respectively, and for the nine months ended June 30, 2018 and 2017, there were 977,828 and 1,169,422 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 nine month period ended June 30, 2018, there were 440,002 common stock options and restricted stock units, respectively, that were not included in the above computation of diluted earnings per share.