Note 4 — Net Income Per Share

The Company has unvested share-based payment awards with a right to receive nonforfeitable dividends which are considered participating securities under ASC Topic 260, “Earnings Per Share.” The Company allocates earnings to participating securities and computes earnings per share using the two-class method. The determination of earnings per share under the two-class method is as follows:


	Three Months Ended November 30,
	2019		2018

Basic Earnings per Share

Net income	$	7,362	$	8,823
Less: Allocated to participating securities		54		69
Net income available to common shareholders	$	7,308	$	8,754

Basic weighted average shares outstanding		9,352,148		9,329,570
Net income per share - Basic	$	0.78	$	0.94

Diluted Earnings per Share

Net income	$	7,362	$	8,823
Less: Allocated to participating securities		54		69
Net income available to common shareholders	$	7,308	$	8,754

Basic weighted average shares outstanding		9,352,148		9,329,570
Additional dilutive common stock equivalents		82,070		51,733
Diluted weighted average shares outstanding		9,434,218		9,381,303
Net income per share - Diluted	$	0.77	$	0.93

For the three-month periods ended November 30, 2019 and 2018, stock options to purchase 8,805 and 12,418 shares, respectively, of common stock were outstanding but were not included in the calculation of diluted income per share because their inclusion would be anti-dilutive. Included in the calculation of dilutive common stock equivalents are the unvested portion of restricted stock and stock options.