Note 10. Common Stock and Earnings Per Share

3 Months Ended

Nov. 30, 2011

Earnings Per Share [Text Block]

10. COMMON STOCK AND EARNINGS PER SHARE

On November 10, 2011, the Company’s Board of Directors approved a regular quarterly dividend of $0.27 per share, or $1.08 per share per annum. The cash dividend of $12.2 million was paid on December 20, 2011, to common stockholders of record on November 30, 2011. Shares of common stock outstanding were as follows (in thousands):

	Three Months Ended November 30,
	2011			2010
Balance at September 1		45,055			46,024
Common stock issued for employee stock plans		209			626
Repurchase of common stock		(150	)		(303	)
Balance at November 30		45,114			46,347

Earnings per Share

Basic earnings per share (“EPS”) is computed by dividing net income by the number of weighted average common shares outstanding during the period. Diluted earnings per share is computed by dividing net income by the number of weighted average common shares outstanding during the period increased by the dilutive effect of potential common shares outstanding during the period. The number of potential common shares outstanding has been determined in accordance with the treasury stock method to the extent they are dilutive. Common share equivalents consist of common shares issuable upon the exercise of outstanding share-based compensation awards, including employee stock options and restricted stock. Under the treasury stock method, the exercise price paid by the optionee, future stock-based compensation expense that the Company has not yet recognized and the amount of tax benefits that would be recorded in additional paid-in capital when the award becomes deductible are assumed to be used to repurchase shares.

A reconciliation of the weighted average shares outstanding used in the basic and diluted earnings per share computations is as follows (in thousands, except per share data):

			Weighted Average
	Net Income		Common Shares		Per Share
	(Numerator)		(Denominator)		Amount
For the three months ended November 30, 2011
Basic EPS
Income available to common stockholders	$	45,544		45,107	$	1.01
Diluted EPS
Dilutive effect of stock options and restricted stock				996
Income available to common stockholders plus assumed conversions	$	45,544		46,103	$	0.99
For the three months ended November 30, 2010
Basic EPS
Income available to common stockholders	$	41,601		46,283	$	0.90
Diluted EPS
Dilutive effect of stock options and restricted stock				1,204
Income available to common stockholders plus assumed conversions	$	41,601		47,487	$	0.88

Dilutive potential common shares consist of stock options and unvested restricted stock awards.

The number of stock options excluded from the calculation of diluted earnings per share for the three months ended November 30, 2011 and 2010 was 160,786 and 28,270, respectively, because their inclusion would have been anti-dilutive. The number of restricted stock awards excluded from the calculation of diluted earnings per share for the three months ended November 30, 2011 and 2010 was 30,090 and 19,621, respectively, because their inclusion would have been anti-dilutive.

For the three months ended November 30, 2011, the number of performance-based stock option grants excluded from the calculation of diluted earnings per share was 2,329,439. Similarly, 2,494,651 performance-based stock option grants were excluded from the calculation of diluted earnings per share for the three months ended November 30, 2010. Performance-based stock options should be omitted from the calculation of diluted earnings per share until the performance criteria have been met. The criteria had not yet been met at November 30, 2011 and 2010 for these performance-based stock options.