Earnings per Share

9 Months Ended

Jun. 30, 2022

We calculate basic earnings per common share (“EPS”) 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 EPS 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 EPS 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 EPS 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 units and convertible preferred stock. The basic and diluted weighted average shares outstanding are the same for the three months ended June 30, 2022 and the nine months ended June 30, 2021 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 EPS under the two-class or as-converted method, as well as the anti-dilutive shares excluded:


	Three Months Ended				Nine Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Basic earnings per common share:
Net income	$	843	$	3,000	$	23,019	$	2,536
Less: Preferred stock dividend declared	(1,296)		(1,313)		(3,913)		(3,938)
Net (loss) income available for distribution	(453)		1,687		19,106		(1,402)
Income allocated to participating securities	—		(659)		(7,272)		—
Net (loss) income available to common shareholders	$	(453)	$	1,028	$	11,834	$	(1,402)


	Three Months Ended				Nine Months Ended
	June 30,				June 30,
	2022		2021		2022		2021

Weighted average basic shares outstanding	33,257		32,821		33,032		32,746

Basic (loss) income per common share	$	(0.01)	$	0.03	$	0.36	$	(0.04)

Diluted earnings per common share:
Method used:	Two-class		Two-class		Two-class		Two-class
Net (loss) income available to common shareholders	$	(453)	$	1,028	$	11,834	$	(1,402)

Weighted average basic shares outstanding	33,257		32,821		33,032		32,746
Dilutive effect related to employee stock plans	—		215		518		—
Weighted average diluted shares outstanding	33,257		33,036		33,550		32,746

Diluted (loss) income per common share	$	(0.01)	$	0.03	$	0.35	$	(0.04)

Anti-dilutive shares excluded:
Outstanding stock-based grants	624		190		6		646
Convertible preferred stock	20,297		21,021		20,297		21,021
Total anti-dilutive shares excluded	20,921		21,211		20,303		21,667

Dilutive shares under the as-converted method(1)	54,174		54,057		53,847		53,950

(1) The dilutive shares under the as-converted method assume conversion of the Series A 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.