NOTE

- EARNINGS PER SHARE

EPS is computed by dividing reported net income by the weighted-average number of shares outstanding. Diluted EPS considers the potential dilution that could occur if common stock equivalents were exercised or converted into stock. The

difference between the basic and diluted weighted-average equivalent shares with respect to the Company’s EPS calculation is due entirely to the assumed exercise of stock options and the vesting and settlement of RSUs and PSAs.

PSAs are included in the computation of diluted shares only to the extent that the underlying performance conditions (i) are satisfied as of the end of the reporting period or (ii) would be considered satisfied if the end of the reporting period were also the end of the applicable performance period and the result would be dilutive under the treasury stock method.

As of

June 30, 2017,

the PSAs granted during the year ended

December 31, 2015

met the related performance conditions and were included in the calculation of diluted EPS. However, the PSAs granted during the year ended

December 31, 2016

and during the

six

-month period ended

June 30, 2017

have

not

yet completed their initial

two

-year performance period and therefore were excluded in the calculation of diluted EPS. There were

and

0.2

million weighted-average shares primarily associated with stock options, excluded from the calculation of EPS because they were anti-dilutive for the

six

-month periods ended

June 30, 2017

and

2016,

respectively.

The dilutive effect of stock options

, RSUs, and PSAs for each period reported is summarized below:

	Three Months Ended June 30,				Six Months Ended June 30,
	2017		201 6		201 7		201 6
Net Income	$	11,937	$	10,583	$	22,114	$	20,474

Weighted-average number of basic shares outstanding during the period		18,775		19,008		18,840		19,001
Dilutive effect of stock options , RSUs, and PSAs		311		285		412		319
Weighted-average number of diluted shares outstanding during the period		19,086		19,293		19,252		19,320

Basic earnings per share	$	0.64	$	0.56	$	1.17	$	1.08
Diluted earnings per share	$	0.63	$	0.55	$	1.15	$	1.06