Earnings Per Share of Common Stock

3 Months Ended

Dec. 31, 2016

Basic net income (loss) per common share is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted net income (loss) per common share reflects the maximum dilution that would have resulted from the assumed exercise and share repurchase related to dilutive stock options and is computed by dividing net income (loss) by the assumed weighted average number of common shares outstanding.

We are required to present earnings per share, or EPS, utilizing the two class method because we had outstanding, non-vested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents, which are considered participating securities.

Basic and diluted earnings per share computations for the Company’s reported net income (loss) attributable to common stockholders are as follows:



	For the three months ended
	December 31, 2016			December 31, 2015
	(Amounts in thousands except per share data)
Net income (loss)	$	(43	)	$	283
Less: net income (loss) attributable to nonvested common stock	—			9
Net income (loss) attributable to common stockholders	$	(43	)	$	274

Weighted average total shares outstanding – basic	3,671			3,684
Less: weighted average non-vested shares outstanding	—			115
Weighted average number of common shares outstanding – basic	3,671			3,569
Potential common shares from non-vested stock awards and the assumed exercise of stock options	—			157
Weighted average common shares outstanding – diluted	3,671			3,726

Net income (loss) per share – basic	$	(0.01	)	$	0.08
Net income (loss) per share – diluted	$	(0.01	)	$	0.07

All anti-dilutive securities, including certain stock options, are excluded from the diluted income (loss) per share computation. For the three months ended December 31, 2016 and 2015, 0 and 35,000 shares subject to stock options, respectively, were excluded from the diluted income per share calculation because their inclusion would have been anti-dilutive as their exercise price exceeded fair value. Additionally, 149,000 shares subject to non-vested restricted stock awards were excluded from the diluted income per share calculation as there was a net loss for the three months ended December 31, 2016 and their inclusion would have been anti-dilutive.