Computation of Basic and Diluted Net (Loss) Income Per Common Share

6 Months Ended

Jun. 30, 2012

Computation of Basic and Diluted Net (Loss) Income Per Common Share [Abstract]

Computation of Basic and Diluted Net (Loss) Income Per Common Share

9. Computation of Basic and Diluted Net (Loss) Income Per Common Share

Basic net income (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of shares outstanding during the period.

Diluted net income (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of shares, plus common stock equivalents outstanding during the period which includes 1,000,000 shares of common stock issuable upon the conversion of 500,000 shares of convertible Series A Preferred Stock. Common stock equivalents also include the effect of outstanding dilutive stock options and awards computed using the treasury stock method. In periods of net loss from continuing operations, the Company excludes common stock equivalents from the computation of diluted weighted average shares outstanding because their inclusion would be anti-dilutive.

A reconciliation of the numerator and denominator of basic and diluted net income per common share is provided as follows (in thousands, except per share amounts):

	Three Months Ended					Six Months Ended
	June 30, 2012			July 2, 2011		June 30, 2012		July 2, 2011
Numerator:
Income from continuing operations	$	397		$	899	$	132	$	1,084
(Loss) income from discontinued operations		(61	)		10		1,809		391
Net income	$	336		$	909	$	1,941	$	1,475
Denominator:
Weighted average shares of common stock (basic)		8,983			8,961		8,958		8,962
Effect of dilutive preferred shares		1,000			1,000		1,000		1,000
Effect of dilutive stock options		262			258		277		249
Effect of dilutive contingent shares		41			12		35		12
Weighted average shares of common stock (diluted)		10,286			10,231		10,270		10,223
Per share data:
Basic income per share:
Income before discontinued operations	$	0.04		$	0.10	$	0.01	$	0.12
Discontinued operations		0.00			0.00		0.21		0.04
Net income	$	0.04		$	0.10	$	0.22	$	0.16
Diluted (loss) income per share:
Income before discontinued operations		0.04			0.09		0.01		0.10
Discontinued operations		(0.01	)		0.00		0.18		0.04
Net income	$	0.03		$	0.09	$	0.19	$	0.14

The Company excludes options from the computation of diluted weighted average shares outstanding if the exercise price of the options is greater than the average market price of the shares because the inclusion of these options would be anti-dilutive to earnings per share. Accordingly, for the three months ended June 30, 2012 and July 2, 2011, respectively, stock options to purchase 921,241 and 604,256 shares were excluded from the computation of diluted weighted average shares outstanding. For the six months ended June 30, 2012 and July 2, 2011, respectively, stock options to purchase 880,371 and 662,691 shares were excluded from the computation of diluted weighted average shares outstanding.