Earnings Per Share

6 Months Ended

Jun. 30, 2012

Earnings Per Share [Abstract]

Earnings Per Share

3. EARNINGS PER SHARE

The following table shows the shares (in thousands) used in computing diluted earnings per share (“EPS”) in accordance with ASC topic No. 260 – Earnings per Share:

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Diluted earnings per share:
Weighted average shares outstanding	13,010		12,815		13,020		12,838
Employee and director stock options		-		-		-		-
Weighted average shares assuming                                               dilution		13,010		12,815		13,020		12,838

Options outstanding to purchase 351,000 shares of the Company’s common stock for the three and six months ended June 30, 2012 and 593,000 shares for the three and six months ended June 30, 2011 were not included in the computation of diluted EPS because their effect was anti-dilutive.  On January 1, 2009 the Company adopted an update to ASC topic No. 260, which requires the inclusion of all unvested stock awards which contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid, in the number of shares outstanding in our basic and diluted EPS calculations.  As a result, we have included 675,637 of restricted shares in our calculation of basic and diluted EPS for the three months ended June 30, 2012 and 722,304 for the three months ended June 30, 2011.    These restricted shares include 265,956 restricted shares issued on April 16, 2007 under the Innotrac Corporation 2000 Stock Option and Incentive Award Plan and 570,000 restricted shares issued under the Innotrac Corporation 2010 Stock Award Plan which amounts were subsequently reduced by 160,319 shares when a grantee’s employment or service as director terminated at which time such grantee’s unvested restricted shares were forfeited and cancelled.  Both plans provide for immediate voting rights but vesting varies according to two vesting schedules.  With respect to shares issued to non-employee directors after June, 2011, shares vest 1/3 on issuance, 1/3 on the 1st anniversary and 1/3 on the second anniversary of the grant date unless earlier vested upon a change in control of the Company.  All other restricted shares vest 25% on the 7th, 8th, 9th and 10th anniversary of the grant date unless earlier vested upon a change in control of the Company.  Restricted shares are valued at the closing NASDAQ market price per share as of the grant date and expensed over the vesting term of the restricted share.