7. Earnings Per Share

Basic earnings per common share is calculated by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is calculated by dividing net income by the weighted average common stock outstanding plus stock equivalents that would arise from the assumed exercise of stock options, the conversion of warrants, and the delivery of stock underlying restricted stock units using the treasury stock method. There is no difference, for any of the periods presented, in the amount of net income used in the computation of basic and diluted earnings per share.

The Company had stock options and warrants outstanding of 2,575,585 as of March 31, 2016 that were not included in the computation of diluted earnings per share because they were not assumed to be exercised under the treasury stock method or because they were anti-dilutive. As of March 31, 2015, all stock options, warrants, and restricted stock units were included in the computation of diluted earnings per share. The following table reconciles basic weighted average common stock outstanding to diluted weighted average common stock outstanding (in thousands):



	Three Months Ended
	March 31,
	2016	2015
Basic weighted average common stock outstanding	38,284	38,011
Effect of dilutive securities
Employee stock options	9	118
Warrants	55	1,140
Restricted stock units	24	55
Diluted weighted average common stock outstanding	38,372	39,324