Computation of Basic and Diluted Net Income Per Common Share

9 Months Ended

Oct. 03, 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 October 3, 2015 and September 27, 2014, stock options to purchase 282,474 and 106,527 shares, respectively, were excluded from the computation of diluted weighted average shares outstanding. For the nine months ended October 3, 2015 and September 27, 2014, respectively, stock options to purchase 234,958 and 228,241 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				Nine Months Ended
	October 3, 2015		September 27, 2014		October 3, 2015		September 27, 2014
Numerator:
Net income	$	442	$	490	$	36	$	1,274

Denominator:
Weighted average shares of common stock (basic)		9,972		9,869		9,956		9,918
Effect of dilutive stock options		117		256		174		313
Effect of dilutive contingent shares		5		130		12		166
Weighted average shares of common stock (diluted)		10,094		10,255		10,142		10,397

Per share data:
Basic income per share	$	0.04	$	0.05	$	0.00	$	0.13
Diluted income per share	$	0.04	$	0.05	$	0.00	$	0.12