1 Exhibit 11.1 TRANSITION SYSTEMS, INC COMPUTATION OF EARNINGS PER SHARE For the three month period ended: June 30, 1997 June 30, 1996 ------------- ------------- Weighted averages shares outstanding: Common stock outstanding ........................... 17,433,000 15,638,000 Common stock equivalent ............................ 3,029,000 3,991,000 Weighted average number of common shares and common equivalent shares outstanding (1) ..... 20,462,000 19,629,000 =========== ============ Net income: Net income before extraordinary item ............... $ 3,562,000 $ 2,870,000 Extraordinary item ................................. -- (2,149,000) Net income allocable to common stockholders ...................................... $ 3,562,000 $ 128,000 Earnings per share: Net income before extraordinary item ............... $ 0.17 $ 0.15 Extraordinary item ................................. -- (0.11) Net income allocable to common stockholders ...................................... $ 0.17 $ 0.01 For the nine months ended: Weighted averages shares outstanding: Common stock outstanding ........................... 17,306,000 11,951,000 Common stock equivalent ............................ 3,168,000 3,980,000 Weighted average number of common shares and common equivalent shares outstanding (1) ..... 20,474,000 15,931,000 =========== ============ Net income: Net income before extraordinary item ............... $ 7,528,000 $ 3,139,000 Extraordinary item ................................. -- (2,149,000) Net income allocable to common stockholders ...................................... $ 7,528,000 $ 397,000 Earnings per share: Net income before extraordinary item ............... $ 0.37 $ 0.20 Extraordinary item ................................. -- (0.13) Net income allocable to common stockholders ...................................... $ 0.37 $ 0.02 (1) Gives effect to the Recapitalization. See Note 9 of Notes to Consolidated Financial Statements for the fiscal year ended September 30, 1996 which are contained in the Company's Annual Report on Form 10-K for such fiscal year, File No. 0-28182.