NET INCOME PER SHARE

6 Months Ended

Jun. 30, 2014

NET INCOME PER SHARE

NET INCOME PER SHARE

NOTE 4:   NET INCOME PER SHARE

Basic net income per share is computed on the basis of weighted average outstanding common shares.

On June 11, 2014, our shareholders approved the Amended and Restated 2004 Equity Incentive Plan (the “Current Plan”), which was effective January 1, 2014.  One of the amendments included in the Current Plan is to specify that dividends are no longer payable on nonvested share awards during the vesting period.  Such dividends declared during the vesting period will be accrued and are payable only if and when the nonvested share awards vest.   As a result of this amendment, nonvested share awards (also referred to as restricted stock awards) issued by the Company are no longer considered to be participating securities because they do not have non-forfeitable rights to dividends. Accordingly, basic and diluted net income per share are calculated using the treasury stock method which does not require the allocation of net income to nonvested shares.

Diluted net income per share is computed on the basis of basic weighted average outstanding common shares adjusted for the dilutive effect, if any, of outstanding stock options.  For the three and six months ended June 30, 2014, we did not include the effect of stock options and non-vested shares in the calculation of diluted loss per share because the effect would have been anti-dilutive due to the net loss reported for these periods.  For the three and six months ended June 30, 2014, approximately 0.4 million shares and 0.5 million shares, respectively, related to outstanding options or nonvested shares that otherwise would have been included in the diluted earnings per share calculation were not included because they would have been anti-dilutive due to the net loss for the periods.  For the three and six months ended June 30, 2014, weighted-average outstanding stock options totaling approximately 2.3 million and 2.0 million shares, respectively, were anti-dilutive due to price and were therefore not included in the computation of diluted earnings per share.  For the three and six months ended June 30, 2013, weighted-average outstanding stock options totaling approximately 2.4 million and 2.5 million were anti-dilutive and therefore not included in the computation of diluted net income per share.

The computation of basic and diluted net income per share for the three and six months ended June 30, 2013 is as follows:

	Three Months Ended June 30, 2013						Six Months Ended June 30, 2013
	Net Loss (Numerator)			Weighted Average Common Shares Outstanding (Denominator)	Per Share Amount		Net Income (Numerator)			Weighted Average Common Shares Outstanding (Denominator)	Per Share Amount
	(in thousands, except per share data)
Net income	$	2,842					$	6,779
Less: amounts allocated to nonvested shares	(28		)				(67		)
Basic net income available to common stockholders	2,814			35,933	$	0.08	6,712			35,765	$	0.18
Effect of dilutive securities:
Stock options	—			926			—			937
Add back: amounts allocated to nonvested shares	28			—			67			—
Less: amounts re-allocated to nonvested shares	(28		)	—			(67		)	—
Diluted net income available to common stockholders	$	2,814		36,859	$	0.08	$	6,712		36,702	$	0.18