Earnings Per Share

9 Months Ended

Jun. 30, 2011

Earnings Per Share [Abstract]

EARNINGS PER SHARE

3. 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 and potentially dilutive common shares outstanding during the period. Potentially dilutive common shares of our stock result from dilutive common stock options and shares purchased through our employee stock purchase plan.

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,
	2011		2010		2011		2010
Numerator:
Net income	$	3,615	$	3,812	$	8,170	$	6,697
Denominator:
Denominator for basic net income per common share — weighted average shares outstanding		25,369		24,930		25,236		24,815
Effect of dilutive securities:
Employee stock options and employee stock purchase plan		510		342		451		308
Denominator for diluted net income per common share — adjusted weighted average shares		25,879		25,272		25,687		25,123
Net income per common share, basic	$	0.14	$	0.15	$	0.32	$	0.27
Net income per common share, diluted	$	0.14	$	0.15	$	0.32	$	0.27

Because their effect would be anti-dilutive, certain potentially dilutive shares related to stock options to purchase common shares were not included in the computation of diluted earnings per common share set forth above as the options’ exercise prices were greater than the average market price of our common shares. For the three and nine month periods ended June 30, 2011, there were 1,921,684 and 1,767,934 potentially dilutive shares related to such stock options, respectively. For the three and nine month periods ended June 30, 2010, there were 2,482,104 and 2,726,104 potentially dilutive shares related to such stock options, respectively.