11.

Computation of Earnings per Share

Basic and diluted earnings per shar

e are calculated as follows (in thousands, except per share amounts):

	Three Months Ended				Six Months Ended
	September 30,				September 30,
	2017		2016		2017		2016
	(unaudited)				(unaudited)
Net income	$	3,463	$	3,935	$	8,957	$	6,954
Weighted average shares - basic		32,642		31,490		32,364		31,447
Weighted average shares - diluted		34,099		32,145		33,572		32,074
Net income per share - basic	$	0.11	$	0.12	$	0.28	$	0.22
Net income per share - diluted	$	0.10	$	0.12	$	0.27	$	0.22

Diluted weighted average shares included approximately

1,457,000

and

655,000

common equivalent shares from stock options for the

three

months ended

September 30, 2017

and

2016,

respectively, and approximately

1,207,000

and

628,000

common equivalent shares from stock options for the

six

months ended

September 30, 2017

and

2016,

respectively.

Basic net income available per common share is computed using net income and the weighted

average number of common shares outstanding

during the period. Diluted net income per common share is computed using net income and the weighted average number of common shares outstanding, assuming dilution, which includes potentially dilutive common shares outstanding during the period. Potentially dilutive common shares include the assumed exercise of stock options using the treasury stock method. During the

three

and

six

months ended

September 30, 2017,

there were outstanding options to purchase

558,000

and

339,224

shares, respectively, that were

not

included in the computation of diluted net income per share since their inclusion would be anti-dilutive. During the

three

and

six

months ended

September 30, 2016,

there were outstanding weighted average options to purchase

3,040,511

and

2,984,213

shares, respectively, that were

not

included in the computation of diluted net income per share since the exercise prices of the options exceeded the market price of the common stock and thus their inclusion would be anti-dilutive.

These options could dilute earnings per share in future periods if the market price of the common stock increases.