Note 3 - Basic and Diluted Shares

6 Months Ended

Jun. 30, 2017

3.	BASIC AND DILUTED SHARES

Basic and diluted weighted-average shares outstanding for the periods ended

June 30, 2017

and

2016

were as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2017		2016		2017		2016

Basic and diluted		18,982,871		18,928,999		18,968,176		18,903,643
Potentially dilutive		27,500		26,873		27,500		26,873

Basic net income per share is computed by dividing net income by the weighted-average number of common shares outstanding. Diluted net income per share is computed similar to basic net income per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares from share-based compensation arrangements had been issued.

Potentially dilutive shares arise from non-qualified stock options to purchase common stock and non-vested restricted stock. The treasury stock method is applied to determine the number of potentially dilutive shares for non-vested restricted stock and stock options assuming that the shares of non-vested restricted stock are issued for an amount based on the grant date market price of the shares and that the outstanding stock options are exercised.