Computation of Basic and Diluted Net Income Per Common Share

6 Months Ended

Jul. 04, 2015

Computation of Basic and Diluted Net Income Per Common Share

8. Computation of Basic and Diluted Net Income Per Common Share

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

Diluted net income per share is computed as follows:

In periods of net income from continuing operations, diluted net income per share is computed by dividing net income for the period by the weighted average number of shares plus the weighted average common stock equivalents outstanding during the period. 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. In periods of net loss from continuing operations, the basic and diluted weighted average shares of common stock equivalents are the same because inclusion of common stock equivalents would be anti-dilutive. Accordingly, for the three months ended July 4, 2015 and June 28, 2014, stock options to purchase 743,955 and 123,393 shares, respectively, were excluded from the computation of diluted weighted average shares outstanding. For the six months ended July 4, 2015 and June 28, 2014, respectively, stock options to purchase 743,955 and 91,448 shares were excluded from the computation of diluted weighted average shares outstanding.

A reconciliation of the numerator and denominator of basic and diluted net income per common share is provided as follows:

	Three Months Ended					Six Months Ended
	July 4, 2015			June 28, 2014		July 4, 2015			June 28, 2014
Numerator:
Net (loss) income	$	(652	)	$	297	$	(406	)	$	784

Denominator:
Weighted average shares of common stock (basic)		10,027			9,922		9,948			9,943
Effect of dilutive stock options		—			312		—			341
Effect of dilutive contingent shares		—			177		—			185
Weighted average shares of common stock (diluted)		10,027			10,411		9,948			10,469

Per share data:
Basic (loss) income per share	$	(0.07	)	$	0.03	$	(0.04	)	$	0.08
Diluted (loss) income per share	$	(0.07	)	$	0.03	$	(0.04	)	$	0.07