4. EARNINGS PER SHARE

Basic earnings per share (“EPS”) is computed by dividing net income or loss applicable to common stock by the weighted average number of common shares outstanding during the period, without considering any dilutive items. Nonvested shares of restricted stock are included in the computation of basic EPS because the holder has voting rights and shares in non-forfeitable dividends during the vesting period. Diluted EPS is computed by dividing net income or loss applicable to common stock by the weighted average number of common shares and common stock equivalents for items that are dilutive, net of shares assumed to be repurchased using the treasury stock method at the average share price for the Company’s common stock during the period. Common stock equivalents arise from the assumed exercise of outstanding stock options. For the three and six months ended September 30, 2020 and 2019, there were no stock options excluded in computing diluted EPS.

In February 2020, the Company’s Board of Directors adopted a stock repurchase program (the “repurchase program”). Under the repurchase program, the Company may repurchase up to 500,000 shares of the Company’s outstanding shares of common stock, in the open market based on prevailing market prices, or in private negotiated transactions, during the period from March 12, 2020 until the earlier of the completion of the repurchase of 500,000 shares of the Company’s common stock or the next six months, depending on market conditions. As of April 17, 2020, the Company had repurchased the 500,000 shares under the repurchase program at an average price of $4.89 per share. The Company did not repurchase any shares of its common stock during the fiscal year ended March 31, 2019 or any interim period within that fiscal year.

The following table presents a reconciliation of the components used to compute basic and diluted EPS for the periods indicated:


	Three Months Ended				Six Months Ended
	September 30,				September 30,
	2020		2019		2020		2019
Basic EPS computation:
Numerator-net income	$	2,543,000	$	4,534,000	$	3,023,000	$	8,726,000
Denominator-weighted average common shares outstanding		22,261,709		22,643,103		22,259,201		22,631,406
Basic EPS	$	0.11	$	0.20	$	0.14	$	0.39
Diluted EPS computation:
Numerator-net income	$	2,543,000	$	4,534,000	$	3,023,000	$	8,726,000
Denominator-weighted average common shares outstanding		22,261,709		22,643,103		22,259,201		22,631,406
Effect of dilutive stock options		14,603		59,593		17,107		62,661
Weighted average common shares and common stock equivalents		22,276,312		22,702,696		22,276,308		22,694,067
Diluted EPS	$	0.11	$	0.20	$	0.14	$	0.38