(11) Stockholders’ Equity:

Treasury Stock

During fiscal 2017, our board of directors authorized the repurchase of up to $50.0 million of our common stock, subject to certain conditions, in the open market or in privately negotiated transactions until March 28, 2019. As of July 31, 2018, there were no share repurchases under this stock repurchase program.

Earnings per Share

The following table provides a reconciliation of the net income/(loss) amounts and weighted average number of common and common equivalent shares used to determine basic and diluted earnings/(loss) per share for the three months ended July 31, 2018 and 2017 (in thousands, except per share data):

	For the Three Months Ended July 31,
	2018								2017
	Net					Per Share			Net						Per Share
	Income			Shares		Amount			Income				Shares		Amount
Basic earnings	$		7,645		54,345	$		0.14	$		(2,165	)		53,905	$		(0.04	)
Effect of dilutive stock awards		—			586		—			—			—			—
Diluted earnings	$		7,645		54,931	$		0.14	$		(2,165	)		53,905	$		(0.04	)

All of our outstanding stock options and restricted stock units, or RSUs, were included in the computation of diluted earnings per share for the three months ended July 31, 2018 and 2017.

Incentive Stock and Employee Stock Purchase Plans

We have two stock incentive plans: the 2004 Incentive Stock Plan and the 2013 Incentive Stock Plan. New grants under the 2004 Incentive Stock Plan have not been made since the approval of the 2013 Incentive Stock Plan at our September 23, 2013 annual meeting of stockholders. All new grants covering all participants are issued under the 2013 Incentive Stock Plan. Except in specific circumstances, grants vest over a period of three or four years and stock options are exercisable for a period of 10 years from the date of grant. The plan also permits the grant of awards to non-employees, which our board of directors has authorized in the past.

The number of shares and weighted average exercise prices of stock options for the three months ended July 31, 2018 and 2017 were as follows:

	For the Three Months Ended July 31,
	2018					2017
				Weighted				Weighted
				Average				Average
	Shares			Exercise Price		Shares		Exercise Price
Options outstanding, beginning of year		316,160		$	6.69		335,160	$	6.58
Exercised during the period		(17,399	)		7.98	—		—
Options outstanding, end of period		298,761		$	6.61		335,160	$	6.58
Weighted average remaining contractual life	2.86 years					3.76 years
Options exercisable, end of period		298,761		$	6.61		335,160	$	6.58
Weighted average remaining contractual life	2.86 years					3.76 years

The aggregate intrinsic value of outstanding and exercisable stock options as of July 31, 2018 and 2017 was $853,000 and $4.7 million, respectively. The aggregate intrinsic value of the stock options exercised for the three months ended July 31, 2018 was $76,000. There were no stock options exercised for the three months ended July 31, 2017. At July 31, 2018, there were no unrecognized compensation costs of outstanding stock options.

We have an Employee Stock Purchase Plan, or ESPP, in which each participant is granted an option to purchase our common stock on each subsequent exercise date during the offering period (as such terms are defined in the ESPP) in accordance with the terms of the ESPP.

The total stock-based compensation expense, including stock options, purchases under our ESPP, RSUs, and performance-based RSUs, or PSUs, was $2.0 million and $1.9 million for the three months ended July 31, 2018 and 2017, respectively. Stock-based compensation expense is included in cost of sales, sales and marketing, research and development, and general and administrative expenses.

We grant service-based RSUs to employees and directors. The awards are made at no cost to the recipient. An RSU represents the right to receive one share of our common stock and does not carry voting or dividend rights. Except in specific circumstances, RSU grants to employees vest over a period of four years with one-fourth of the units vesting on each anniversary of the grant date. The aggregate fair value of our RSU grants is amortized to compensation expense over the vesting period.

We grant PSUs to our executive officers and certain management employees who are not executive officers. The PSUs vest, and the fair value of such PSUs will be recognized, over the corresponding three-year performance period.

During the three months ended July 31, 2018, we granted an aggregate of 140,771 service-based RSUs to non-executive officer employees. Compensation expense recognized related to grants of RSUs and PSUs was $1.8 million for the three months ended July 31, 2018. During the three months ended July 31, 2018, we cancelled 112,000 PSUs as a result of the performance metric not being met and 6,180 service-based RSUs as a result of the service condition not being met. In connection with the vesting of RSUs, during the three months ended July 31, 2018, we delivered common stock to our employees, including our executive officers, with a total market value of $1.7 million.

During the three months ended July 31, 2017, we granted an aggregate of 164,180 service-based RSUs to non-executive officer employees. In addition, in connection with a 2014 grant of 105,500 PSUs (i.e., the target amount granted), which achieved 115.2% of the targeted award, or the maximum award possible, we vested and delivered awards totaling 121,504 shares to certain of our executive officers. Compensation expense recognized related to grants of RSUs and PSUs was $1.7 million for the three months ended July 31, 2017. We delivered common stock to our employees, including our executive officers, during the three months ended July 31, 2017 under vested RSUs and PSUs with a total market value of $1.7 million.

A summary of activity for unvested RSUs and PSUs for the three months ended July 31, 2018 and 2017 is as follows:

	For the Three Months Ended July 31,
	2018					2017
				Weighted					Weighted
	Total # of			Average		Total # of			Average
	Restricted			Grant Date		Restricted			Grant Date
	Stock Units			Fair Value		Stock Units			Fair Value
RSUs and PSUs outstanding, beginning of period		1,442,316		$	17.80		1,428,848		$	18.46
Awarded		140,771			12.35		180,184			23.57
Vested		(146,523	)		18.78		(247,491	)		16.94
Forfeited		(118,180	)		15.53		(92,902	)		12.71
RSUs and PSUs outstanding, end of period		1,318,384		$	17.31		1,268,639		$	19.91

As of July 31, 2018, there was $9.3 million of unrecognized compensation cost related to unvested RSUs and PSUs. This cost is expected to be recognized over a weighted average remaining contractual term of 1.8 years.