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Earnings Per Share
 3 Months Ended
Dec. 31, 2013
Earnings Per Share  
Earnings Per Share

5. Earnings Per Share

 

 

 

For the three months ended December 31,

 

 

 

2013

 

2012

 

Numerator:

 

 

 

 

 

Net income

 

$

1,008,596

 

$

317,589

 

Denominator:

 

 

 

 

 

Basic weighted average shares

 

16,888,086

 

16,608,507

 

Dilutive effect of share-based awards

 

206,260

 

6

 

Diluted weighted average shares

 

17,094,346

 

16,608,513

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

Basic EPS

 

$

0.06

 

$

0.02

 

Diluted EPS

 

$

0.06

 

$

0.02

 

 

Earnings per share (“EPS”) is calculated pursuant to FASB ASC Topic 260, Earnings Per Share. (“ASC Topic 260”).  Basic EPS excludes potentially dilutive securities and is computed by dividing net income by the weighted average number of common shares outstanding for the period.  Diluted EPS is computed assuming the conversion or exercise of all dilutive securities such as employee stock options.

 

The number of incremental shares from the assumed exercise of stock options is calculated by using the treasury stock method. As of December 31, 2013 and 2012, there were 779,834 and 651,600 options to purchase common stock outstanding, respectively.  The average outstanding diluted shares calculation excludes options with an exercise price that exceeds the average market price of shares during the period.  For the three months ended December 31, 2013 and 2012, 84,598 and 800,645 weighted dilutive shares outstanding were excluded from the computation of diluted EPS because the effect would be anti-dilutive.