Net Income Per Share

6 Months Ended

Jun. 30, 2011

Net Income Per Share

Net Income Per Share

4. Net Income per Share

The following table presents the calculation of basic and diluted net income per share (in thousands, except per share information):

	Three Months Ended June 30,				Six Months Ended June 30,
	2011		2010		2011		2010
Net income	$	2,767	$	2,051	$	4,560	$	2,919
Basic:
Weighted-average shares of common stock outstanding		27,852		27,183		27,647		27,101
Shares used in computing basic net income per share		27,852		27,183		27,647		27,101
Effect of dilutive securities:
Stock options		279		736		355		742
Warrants		7		7		7		7
Restricted stock subject to vesting		601		810		613		759
Shares issuable for acquisition consideration (1)		263		--		199		--
Shares used in computing diluted net income per share (2)		29,002		28,736		28,821		28,609
Basic net income per share	$	0.10	$	0.08	$	0.16	$	0.11
Diluted net income per share	$	0.10	$	0.07	$	0.16	$	0.10

(1)

Represents the shares held in escrow pursuant to the Agreement and Plan of Merger with speakTECH and pursuant to the Asset Purchase Agreement with Exervio Consulting, Inc. ("Exervio") as part of the consideration. These shares were not included in the calculation of basic net income per share due to the uncertainty of their ultimate status.

(2)

For the three months ended June 30, 2011, approximately 215,000 shares of restricted stock were excluded.  For the six months ended June 30, 2011, approximately 220,000shares of restricted stock were excluded.  For the three months ended June 30, 2010, approximately 13,000 options for shares and 483,000 shares of restricted stock were excluded.  For the six months ended June 30, 2010, approximately 30,000 options for shares and 634,000 shares of restricted stock were excluded. These shares were excluded from shares used in computing diluted net income per share because they would have had an anti-dilutive effect.