EARNINGS PER SHARE

9 Months Ended

Feb. 29, 2012

Notes to Financial Statements

EARNINGS PER SHARE

3. EARNINGS PER SHARE

Earnings per share is computed based on the weighted average number of common and common equivalent shares (common stock options and ESPP shares) outstanding, when dilutive, during each period using the treasury stock method.

	Three Months Ended						Nine Months Ended
	February 29, 2012			February 28, 2011			February 29, 2012			February 28, 2011
	(in thousands, except per share amounts)
Numerator: Net loss	$	(1,361	)	$	(946	)	$	(2,610	)	$	(3,229	)
Denominator for basic net loss
per share:
Weighted-average shares outstanding		9,055			8,828			8,989			8,742
Shares used in basic net loss
per share calculation		9,055			8,828			8,989			8,742
Effect of dilutive securities		--			--			--			--
Denominator for diluted net loss
per share		9,055			8,828			8,989			8,742
Basic net loss per share	$	(0.15	)	$	(0.11	)	$	(0.29	)	$	(0.37	)
Diluted net loss per share	$	(0.15	)	$	(0.11	)	$	(0.29	)	$	(0.37	)

For the purpose of computing diluted earnings per share, weighted average potential common shares do not include stock options with an exercise price greater than the average fair value of the Company’s common stock for the period, as the effect would be anti-dilutive.  Potential common shares have not been included in the calculation of diluted net loss per share as the effect would be anti-dilutive.  As such, the numerator and the denominator used in computing both basic and diluted net loss per share are the same.  Stock options to purchase 2,916,000 shares of common stock were outstanding on February 29, 2012, but were not included in the computation of diluted net loss per share, because the inclusion of such shares would be anti-dilutive.  Stock options to purchase 2,148,000 shares of common stock were outstanding on February 28, 2011, but were not included in the computation of diluted net loss per share, because the inclusion of such shares would be anti-dilutive.