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 “2004 Plan”), which was effective January 1, 2014. One of the amendments included in the 2004 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 nine months ended September 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 the period. For the nine months ended September 30, 2014, approximately 0.5 million shares 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 period. For the three and nine months ended September 30, 2014, weighted-average outstanding stock options totaling approximately 1.2 million and 1.8 million, respectively, were anti-dilutive due to price and therefore not included in the computation of diluted net income per share. For the three and nine months ended September 30, 2013, weighted-average outstanding stock options totaling approximately 2.3 million and 2.4 million, respectively, 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 nine months ended September 30, 2014 is as follows:

	Three Months Ended September 30, 2014					Nine Months Ended September 30, 2014
	Net Income (Numerator)		Weighted Average Common Shares Outstanding (Denominator)	Per Share Amount		Net Loss (Numerator)			Weighted Average Common Shares Outstanding (Denominator)	Per Share Amount
	(in thousands, except per share data)

Basic net income (loss) per share	$	5,010	35,780	$	0.14	$	(707	)	35,339	$	(0.02	)

Effect of dilutive securities:
Stock options			366						—
Nonvested shares			142						—

Diluted net income (loss) per share	$	5,010	36,288	$	0.14	$	(707	)	35,339	$	(0.02	)

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

	Three Months Ended September 30, 2013						Nine Months Ended September 30, 2013
	Net Income (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	$	4,235					$	11,014
Less: amounts allocated to nonvested shares	(43		)				(111		)

Basic net income available to common stockholders	4,192			35,684	$	0.12	10,903			35,738	$	0.31

Effect of dilutive securities:
Stock options	—			813			—			896
Add back: amounts allocated to nonvested shares	43			—			111			—
Less: amounts re-allocated to nonvested shares	(43		)	—			(111		)	—
Diluted net income available to common stockholders	$	4,192		36,497	$	0.11	$	10,903		36,634	$	0.30