We calculate basic earnings per common share (“EPS”) pursuant to the two-class method as a result of the issuance of the Series A Preferred Stock on June 24, 2016. Our Series A Preferred Stock is considered a participating security because, in the event that we pay a dividend or make a distribution on the outstanding common stock, we shall also pay each holder of the Series A Preferred Stock a dividend on an as-converted basis. The two-class method is an earnings allocation formula that determines EPS for common stock and participating securities according to dividend and participation rights in undistributed earnings. Under this method, all earnings, distributed and undistributed, are allocated to common shares and participating securities based on their respective rights to receive dividends. The Series A Preferred Stock is not included in the computation of basic EPS in periods in which we have a net loss, as the Series A Preferred Stock is not contractually obligated to share in our net losses.

Diluted EPS is calculated using the more dilutive of the two-class method or as-converted method. The two-class method uses net income available to common shareholders and assumes conversion of all potential shares other than the participating securities. The as-converted method uses net income and assumes conversion of all potential shares including the participating securities. Dilutive potential common shares include outstanding stock options, unvested restricted share units and convertible preferred stock.


	Three Months Ended
	December 31,
	2022		2021
Basic earnings per common share:
Net income	$	2,648	$	14,822
Less: Preferred stock dividend declared	(1,277)		(1,323)
Net income available for distribution	1,371		13,499
Income allocated to participating securities	(514)		(5,267)
Net income available to common shareholders	$	857	$	8,232

Weighted average basic shares outstanding	33,805		32,849

Basic income per common share	$	0.03	$	0.25


	Three Months Ended
	December 31,
	2022		2021
Diluted earnings per common share:
Method used:	Two-class		Two-class
Net income available to common shareholders	$	857	$	8,232

Weighted average basic shares outstanding	33,805		32,849
Dilutive effect related to employee stock plans	603		723
Weighted average diluted shares outstanding	34,408		33,572

Diluted income per common share	$	0.02	$	0.25

Anti-dilutive shares excluded:
Outstanding stock-based grants	506		186
Convertible preferred stock	20,297		21,021
Total anti-dilutive shares excluded	20,803		21,207

Dilutive shares under the as-converted method(1)	54,705		54,593

(1) The dilutive shares under the as-converted method assume conversion of the Series A Preferred Stock and are presented here merely for reference. In a net income position, diluted earnings per share is determined by the more dilutive of the two-class method or the as-converted method.