EARNINGS (LOSS) PER SHARE

12 Months Ended

Dec. 31, 2014

EARNINGS (LOSS) PER SHARE [Abstract]

EARNINGS (LOSS) PER SHARE

Note 6. EARNINGS (LOSS) PER SHARE

The consolidated financial statements include basic and diluted earnings (loss) per share. Diluted per share information is calculated by considering the impact of potential common stock on the weighted average shares outstanding. Potential common stock consists of (a) incremental shares that would be available for issuance upon the assumed exercise of stock options “in the money” based on the average stock price for the respective period and (b) convertible preferred shares accounted for using the “if converted” basis, which assumes their conversion to common stock at a ratio of 16.6:1, pursuant to the terms of the Recapitalization, as defined and described in Note 8. The basic and diluted earnings per share (“EPS”) calculations are as follows:

	For the Years Ended December 31,
	2014		2013
	(Amounts in Thousands,
	except per share amounts)
Income (loss) from continuing operations	$	2,485	$	(1,575	)
Discontinued operations		-		73
Net income (loss)	$	2,485	$	(1,502	)
Average common shares outstanding - Basic		7,951		7,951
Dilutive effect of convertible preferred stock		18,859		7,951
Average common shares outstanding - Diluted		26,810		7,951
Per share amount - Basic:
Continuing operations	$	0.31	$	(0.20	)
Discontinued operations		-		0.01
Net income (loss)	$	0.31	$	(0.19	)
Per share amount - Diluted:
Continuing operations	$	0.09	$	(0.20	)
Discontinued operations		-		0.01
Net income (loss)	$	0.09	$	(0.19	)

As of December 31, 2014, no options were in the money and 6,000 options were out of the money. As of December 31, 2013, no options were in-the-money and 12,000 options were out-of-the money.  At December 31, 2014 and 2013, 1,131,551 convertible preferred shares were outstanding, which are in total convertible into 18,859,183 shares of Katy common stock. Convertible preferred shares were not included in the calculation of diluted earnings (loss) per share for the year ended December 31, 2013 because of their anti-dilutive impact as a result of the Company’s net loss position.