EARNINGS PER SHARE

Basic earnings per share (EPS) of common stock are based on the weighted-average number of common shares outstanding during each period. Diluted earnings per share of common stock include the dilutive effect of potential common shares outstanding. The Company’s potential common shares outstanding are stock options, shares associated with the Long-Term Incentive Compensation plan and non-vested shares. The Company calculates the dilutive effect of outstanding options using the treasury stock method. Anti-dilutive shares are not included in the computation of diluted EPS when their exercise price is greater than the average closing market price of the common shares. The Company calculates the dilutive effect of shares related to the long-term incentive compensation plan and non-vested shares based on the number of shares, if any, that would be issuable if the end of the fiscal period were the end of the contingency period.

In computing EPS for the quarters ended December 31, 2017 and 2016, net income as reported for each respective period is divided by the fully diluted weighted-average number of shares outstanding:



	Three Months Ended		Six Months Ended
	December 31,		December 31,
(in thousands)	2017	2016	2017	2016

Basic shares	7,847	7,779	7,839	7,752

Potential common shares:
Stock options	73	113	75	106
Long-term incentive plan	14	12	15	5
Non-vested shares	3	2	2	2
	90	127	92	113

Diluted shares	7,937	7,906	7,931	7,865

Anti-dilutive shares	-	-	-	-

Cash dividends declared per common share were $0.22 and $0.20 for the quarters ended December 31, 2017 and 2016, respectively. Cash dividends declared per common share were $0.44 and $0.40 for the six months ended December 31, 2017 and 2016, respectively.