NOTE 16. NET INCOME PER SHARE

Basic net income per share is computed by dividing the net income by the weighted average number of common shares outstanding during the period. Diluted net income per share is computed by dividing the net income by the weighted average number of common shares that would have been outstanding during the period assuming the issuance of common shares for all potential dilutive common shares outstanding using the treasury stock method. The treasury stock method assumes that proceeds, including the total unrecognized compensation expense for unvested share-based compensation awards and, prior to our adoption of the new accounting standard related to share-based compensation on April 1, 2017, the tax benefits resulting from share-based compensation tax deductions in excess of the related expense recognized for financial reporting purposes, would be used to purchase our common stock at the average market price during the period. The adoption of ASU 2016-09 is discussed further in Note 2, “Summary of Significant Accounting Policies.” Dilutive potential common shares outstanding include outstanding restricted stock units.

The computations for basic and diluted net income per share for the three and nine months ended December 31, 2017 and 2016 are as follows (in thousands, except share and per share data):

	Three Months Ended December 31,					Nine Months Ended December 31,
	2017		2016			2017		2016
Income from continuing operations	$	4,226	$	6,859		$	17,157	$	25,236
Loss from discontinued operations, net of tax		-		(15	)		-		(70	)
Net income	$	4,226	$	6,844		$	17,157	$	25,166

Weighted average common shares outstanding:
Basic		22,695,000		22,535,000			22,663,000		22,508,000
Effect of dilutive securities:
Restricted stock units		349,000		254,000			358,000		245,000
Diluted		23,044,000		22,789,000			23,021,000		22,753,000

Net income per share:
Basic
Continuing operations	$	0.19	$	0.30		$	0.76	$	1.12
Discontinued operations		-		-			-		-
Basic net income per share	$	0.19	$	0.30		$	0.76	$	1.12

Diluted
Continuing operations	$	0.18	$	0.30		$	0.75	$	1.11
Discontinued operations		-		-			-		-
Diluted net income per share	$	0.18	$	0.30		$	0.75	$	1.11

For our PSUs, if the performance criteria are achieved during the period, these awards will be considered outstanding for the purpose of computing diluted net income per share if the effect is dilutive. Because the performance criteria for FY2018 PSUs were not achieved during the three and nine months ended December 31, 2017, these awards were not included in the diluted net income per share calculation.

Restricted stock units for 78,000 and 0 shares during the three months ended December 31, 2017 and 2016, respectively, and 5,000 and 2,000 shares during the nine months ended December 31, 2017 and 2016, respectively, were outstanding but not included in the computation of diluted net income per share because the effect would be antidilutive.