NOTE G – EARNINGS PER COMMON SHARE

Basic earnings per share are based on the weighted average number of common shares outstanding without consideration of potential common stock. Diluted earnings per share further includes the dilutive effect of potential common stock consisting of stock options, warrants, and restricted stock units, provided that the inclusion of such securities is not antidilutive.

The following table sets forth the reconciliation of the weighted-average number of common shares:

 

		Three Months Ended								Six Months Ended
		Nov 30,				Nov 30,				Nov 30,				Nov 30,
		2011				2010				2011				2010
Basic			25,190,246				24,845,305				25,106,911				24,799,247
Effect of dilutive securities			149,288				248,818				171,277				267,329
Diluted			25,339,534				25,094,123				25,278,188				25,066,576

Excluded from the calculation of diluted earnings per common share are options and restricted stock awards issued to employees and non-employees to purchase 2,435,199 and 2,087,086 shares of common stock for the three months and six months ended November 30, 2011, respectively, as their inclusion would be antidilutive. For the comparable three and six month periods ended November 30, 2010, options and restricted stock awards issued to employees and non-employees to purchase 2,463,014 and 2,196,891 shares of common stock were also excluded as their inclusion would be antidilutive.

In October 2011, our Board of Directors authorized the repurchase of up to $20 million of our common stock, prior to May 31, 2012. During the three month period ended November 30, 2011, we repurchased 142,305 shares at an average price of $14.79 and subsequently retired the shares. Accordingly, approximately $17.9 million remains available under the repurchase program.