EARNINGS PER SHARE

9 Months Ended

Sep. 30, 2016

EARNINGS PER SHARE:

Basic earnings per share are calculated by dividing net income by the weighted-average shares of common stock outstanding during the period. Diluted earnings per share are calculated by dividing net income by the weighted-average shares of common stock and dilutive common equivalent shares outstanding during the period. Dilutive common equivalent shares included in this calculation consist of dilutive shares issuable upon the assumed exercise of outstanding common stock options, the assumed vesting of outstanding restricted stock units, the assumed issuance of awards under the stock purchase plan and contingently issuable performance-based awards, as computed using the treasury stock method.

A summary of the earnings per share calculation is as follows:



	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In thousands, except per share amounts)	2016		2015		2016		2015
Basic earnings per share:
Net income	$	14,165	$	11,513	$	34,273	$	26,446
Weighted-average common shares	28,972		28,855		28,834		29,175
Basic earnings per share	$	0.49	$	0.40	$	1.19	$	0.91
Diluted earnings per share:⁽¹⁾
Net income	$	14,165	$	11,513	$	34,273	$	26,446
Weighted-average common shares	28,972		28,855		28,834		29,175
Effect of dilutive awards:
Employee stock plans	653		443		646		681
Diluted weighted-average common shares	29,625		29,298		29,480		29,856
Diluted earnings per share	$	0.48	$	0.39	$	1.16	$	0.89

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(1)

The Company includes the shares underlying performance-based awards in the calculation of diluted earnings per share if the performance conditions have been satisfied as of the end of the reporting period and excludes such shares when the necessary conditions have not been met. The Company has excluded the shares underlying the outstanding performance-based awards in the 2016 and 2015 calculations as the shares were not contingently issuable as of the end of the reporting periods.

In the three and nine months ended September 30, 2016, no outstanding stock awards were determined to be anti-dilutive and therefore excluded from the computation of diluted earnings per share. In the three and nine months ended September 30, 2015, 69,000 and 8,000 outstanding stock awards were determined to be anti-dilutive, respectively, and therefore were excluded from the computation of diluted earnings per share.