EXHIBIT 11.1 ZITEL CORPORATION COMPUTATION OF NET INCOME (LOSS) PER COMMON AND COMMON EQUIVALENT SHARE Year Ended September 30, -------------------------------------------- 1995 1996 1997 ---------- ---------- ------------ Average common shares outstanding 14,158,000 14,726,000 15,222,000 Computation of incremental outstanding shares Net effect of dilutive stock options based on treasury stock method 1,008,000 900,000 - ---------- ---------- ---------- 15,166,000 15,626,000 15,222,000 ========== ========== ========== Net income (loss) $8,526,000 $4,049,000 $(17,501,000) ========== ========== ============ Net income (loss) per share $ 0.56 $ 0.26 $ (1.15) ========== ========== ============ Primary and fully diluted income (loss) per share differ by less than one cent in all periods. Page 61