Earnings Per Share

9 Months Ended

Jun. 30, 2013

Basic net income per common share is calculated based on the weighted average number of common shares outstanding during the period. Diluted net income per common share is computed by dividing net income by the weighted average number of common and potentially dilutive common shares outstanding during the period. Potentially dilutive common shares of our stock result from dilutive common stock options, restricted stock units and shares purchased through our employee stock purchase plan.

The following table is a reconciliation of the numerators and denominators in the net income per common share calculations (in thousands, except per common share data):



	Three months ended June 30,				Nine months ended June 30,
	2013		2012		2013		2012
Numerator:
Net income	$	1,528	$	2,307	$	3,758	$	5,153
Denominator:
Denominator for basic net income per common share — weighted average shares outstanding	25,849		25,770		26,057		25,705
Effect of dilutive securities:
Employee stock options and restricted stock units	265		273		266		433
Denominator for diluted net income per common share — adjusted weighted average shares	26,114		26,043		26,323		26,138
Net income per common share, basic	$	0.06	$	0.09	$	0.14	$	0.20
Net income per common share, diluted	$	0.06	$	0.09	$	0.14	$	0.20

Because their effect would be anti-dilutive, certain potentially dilutive shares related to stock options to purchase common shares were not included in the above computation of diluted earnings per common share. This is because the options’ exercise prices were greater than the average market price of our common shares. For the three and nine month periods ended June 30, 2013, there were 1,516,657 and 2,194,757 potentially dilutive shares related to such stock options. For the three and nine month periods ended June 30, 2012, there were 3,254,285 and 2,019,690 potentially dilutive shares related to such stock options.

- Definition

The entire disclosure for earnings per share.

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