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Earnings Per Share

3 Months Ended

Sep. 30, 2017

Note (3) - Earnings Per Share: The Company computes earnings per share using the two-class method. The two-class method of computing earnings per share is an earnings allocation formula that determines earnings per share for common stock and any participating securities according to dividends declared (whether paid or unpaid) and participation rights in undistributed earnings. Shares of the Company’s common stock subject to unvested restricted stock awards are considered participating securities because these awards contain a non-forfeitable right to cash dividends paid prior to forfeiture of the restricted stock, if any, irrespective of whether the awards ultimately vest. Basic and diluted earnings per share for the three months ended September 30, 2017 and 2016 are computed as follows (in thousands except per share data):

	For the three months ended September 30,
	2017 (Unaudited)		2016 (Unaudited)

Net income	$	563	$	352
Less: distributed and undistributed income allocated to non-vested restricted common stock		44		—
Net income allocated to EnviroStar, Inc. shareholders	$	519	$	352
Weighted average shares outstanding used in basic earnings per share		10,468		7,034

Dilutive common share equivalents		381		—
Weighted average shares outstanding used in dilutive earnings per share		10,849		7,034
Basic earnings per share	$	0.05	$	0.05
Diluted earnings per share	$	0.05	$	0.05

For the three months ended September 30, 2017, 509,373 shares of restricted common stock were not included in the calculation of dilutive earnings per share because their impact is anti-dilutive. There were no common share equivalents outstanding for the three months ended September 30, 2016.