Net Income per Share

9 Months Ended

Dec. 31, 2021

11. Net Income per Share

Basic net income per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted net income per share includes the effect, if any, from the potential exercise or conversion of securities, such as stock options, which would result in the issuance of incremental shares of common stock to the extent such impact is not anti-dilutive.

The following presents a reconciliation of basic and diluted net income per share:

	Three Months Ended December 31,				Nine Months Ended December 31,
	2021		2020		2021		2020
Net income	$	3,139,000	$	8,469,000	$	7,683,000	$	20,641,000
Basic shares		19,184,339		19,053,232		19,124,824		19,016,302
Effect of potentially dilutive securities		359,835		383,561		479,956		317,456
Diluted shares		19,544,174		19,436,793		19,604,780		19,333,758
Net income per share:
Basic net income per share	$	0.16	$	0.44	$	0.40	$	1.09
Diluted net income per share	$	0.16	$	0.44	$	0.39	$	1.07

Potential common shares that would have the effect of increasing diluted net income per share or decreasing diluted net loss per share are considered to be anti-dilutive and as such, these shares are not included in calculating diluted net income per share. For the three months ended December 31, 2021 and 2020, there were 1,130,694 and 1,319,937, respectively, of potential common shares not included in the calculation of diluted net income per share because their effect was anti-dilutive. For the nine months ended December 31, 2021 and 2020, there were 720,756 and 1,328,437, respectively, of potential common shares not included in the calculation of diluted net income per share because their effect was anti-dilutive.