| Earnings Per Common Share |
Note 11. Earnings Per Common Share
Basic EPS is computed based upon the weighted average number of common shares outstanding during the year. Diluted EPS is computed based upon the weighted average number of common shares outstanding during the year plus the dilutive effect of common stock equivalents using the treasury stock method and the average market price of our common stock for the year.
We include participating securities (unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents) in the computation of EPS pursuant to the two-class method. Our participating securities consist solely of unvested restricted stock awards, which have contractual participation rights equivalent to those of stockholders of unrestricted common stock. The two-class method of computing earnings per share is an allocation method that calculates earnings per share for common stock and participating securities.
The following table sets forth the computation of basic and diluted EPS available to shareholders of common stock (excluding participating securities):
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Three Months Ended
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Six Months Ended
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January 31,
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January 31,
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2016
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2015
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2016
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2015
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Numerator for basic and diluted earnings per share:
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Net income
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$
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15,389,000
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$
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11,085,000
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$
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29,643,000
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$
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22,324,000
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Less income allocated to participating securities
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(126,000
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)
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(88,000
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)
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(244,000
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)
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(218,000
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)
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Net income available to common shareholders
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$
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15,263,000
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$
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10,997,000
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$
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29,399,000
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$
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22,106,000
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Denominator for basic and diluted earnings per share, as adjusted for participating securities:
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Denominator for basic earnings per share - weighted average number of shares outstanding attributable to common stock
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41,360,279
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41,176,804
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41,321,762
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41,079,573
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Dilutive effect of stock options using the treasury stock method and the average market price for the year
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44,096
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|
60,043
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42,727
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|
75,823
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Denominator for diluted earnings per share - weighted average number of shares and common stock equivalents attributable to common stock
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41,404,375
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41,236,847
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41,364,489
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41,155,396
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Earnings per share attributable to common stock:
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Basic earnings per share
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$
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0.37
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$
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0.27
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$
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0.71
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$
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0.54
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Diluted earnings per share
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$
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0.37
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$
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0.27
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$
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0.71
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$
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0.54
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Stock options excluded from weighted average dilutive common shares outstanding because their inclusion would have been antidilutive
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15,000
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—
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—
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—
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A reconciliation of weighted average number of shares and common stock equivalents attributable to common stock, as determined above, to the Company’s total weighted average number of shares and common stock equivalents, including participating securities, is set forth in the following table:
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Three Months Ended
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Six Months Ended
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January 31,
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January 31,
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|
|
|
2016
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|
2015
|
|
2016
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|
2015
|
|
|
Denominator for diluted earnings per share - weighted average number of shares and common stock equivalents attributable to common stock
|
|
41,404,375
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|
41,236,847
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|
41,364,489
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|
41,155,396
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|
|
|
|
|
|
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Participating securities
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343,346
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346,684
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344,004
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413,472
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Total weighted average number of shares and common stock equivalents attributable to both common stock and participating securities
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41,747,721
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41,583,531
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41,708,493
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41,568,868
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