Earnings per Share

12 Months Ended

Sep. 30, 2020

We calculate basic earnings per share pursuant to the two-class method as a result of the issuance of the Series A Preferred Stock on June 24, 2016. Our Series A Preferred Stock is considered a participating security because, in the event that we pay a dividend or make a distribution on the outstanding common stock, we shall also pay each holder of the Series A Preferred Stock a dividend on an as-converted basis. The two-class method is an earnings allocation formula that determines earnings per share for common stock and participating securities according to dividend and participation rights in undistributed earnings. Under this method, all earnings, distributed and undistributed, are allocated to common shares and participating securities based on their respective rights to receive dividends. The Series A Preferred Stock is not included in the computation of basic earnings per common share in periods in which we have a net loss as the Series A Preferred Stock is not contractually obligated to share in our net losses.

Diluted earnings per common share is calculated using the more dilutive of the two-class method or as-converted method. The two-class method uses net income available to common shareholders and assumes conversion of all potential shares other than the participating securities. The as-converted method uses net income and assumes conversion of all potential shares including the participating securities. Dilutive potential common shares include outstanding stock options, unvested restricted share awards and units and convertible preferred stock. The basic and diluted weighted average shares outstanding are the same for years ended September 30, 2019 and 2018 as a result of the net loss available to common shareholders and anti-dilutive impact of the potentially dilutive securities.

The following table summarizes the computation of basic and diluted earnings per common share under the two-class or as-converted method, as well as the anti-dilutive shares excluded:


	Year Ended September 30,
	2020		2019		2018
Basic earnings per common share:
Net income (loss)	$	8,008	$	(7,868)	$	(32,682)
Less: Preferred stock dividend declared	(5,264)		(5,250)		(5,250)
Income (loss) available for distribution	2,744		(13,118)		(37,932)
Income allocated to participating securities	(1,135)		—		—
Net income (loss) available to common shareholders	$	1,609	$	(13,118)	$	(37,932)


	Year Ended September 30,
	2020		2019		2018

Weighted average basic shares outstanding	29,812		25,438		25,115

Basic income (loss) per common share	$	0.05	$	(0.52)	$	(1.51)

Diluted earnings per common share:
Method used:	Two-class		Two-class		Two-class
Net income (loss) available to common shareholders	$	1,609	$	(13,118)	$	(37,932)

Weighted average basic shares outstanding	29,812		25,438		25,115
Dilutive effect related to employee stock plans	301		—		—
Weighted average diluted shares outstanding	30,113		25,438		25,115

Diluted income (loss) per common share	$	0.05	$	(0.52)	$	(1.51)

Anti-dilutive shares excluded:
Outstanding stock-based grants	14		733		334
Convertible preferred stock	21,021		21,021		21,021
Total anti-dilutive shares excluded	21,035		21,754		21,355

Dilutive shares under the as-converted method(1)	51,134		46,971		46,382

(1) The dilutive shares under the as-converted method assume conversion of the preferred stock and are presented here merely for reference. In a net income position, diluted earnings per share is determined by the more dilutive of the two-class method or the as-converted method.