Earnings Per Share

9 Months Ended

Sep. 30, 2013

Earnings Per Share

3. Earnings Per Share. Basic earnings (loss) per share for each period are computed using the weighted average number of common shares outstanding during such period. Unvested restricted shares are excluded from outstanding shares for purposes of this calculation. Diluted earnings per share are computed using the weighted average number of common and potentially dilutive securities outstanding during the period. Potentially dilutive securities consist of the incremental common shares issuable upon the exercise of stock options and unvested restricted shares (using the treasury stock method). However, unvested restricted shares are excluded from this computation. Other potentially dilutive securities are excluded from the computation if their effect is anti-dilutive. For the three months ended September 30, 2013, options to purchase 107,000 shares of our common stock and 357,593 restricted shares were excluded from the computation of diluted earnings per share. For the three months ended September 30, 2012, options to purchase 263,000 shares of common stock and 317,001 restricted shares were excluded from the computation of diluted earnings per share. These options and restricted shares were excluded because either (i) their respective exercise prices were greater than the average market price of the Company’s common stock during these periods, or (ii) the inclusion, in the calculation of common stock equivalents under the Treasury method, of the unvested compensation expense attributable to those options or restricted shares would have been anti-dilutive. For the nine months ended September 30, 2013, options to purchase 107,000 shares of common stock and 357,593 restricted shares were excluded from the computation of diluted earnings per share. All of the Company’s common shares issuable on exercise of stock options and all unvested restricted shares were excluded from the computation of diluted earnings per share for the first nine months of 2012, because the Company incurred a net loss in that period and, as a result, the inclusion of those securities would have been anti-dilutive.

The table which follows sets forth the manner in which diluted earnings (loss) per common share for the three and nine month periods ended September 30, 2013 and 2012 were calculated.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
	(In thousands)
Numerator:
Net earnings (loss)	$	487	$	307	$	645	$	(534	)
Denominator:
Weighted average shares outstanding(1)		4,712		4,607		4,679		4,590
Dilutive effect of stock options and non-vested restricted shares		92		57		81		—
Denominator for diluted net earnings (loss) per share		4,804		4,664		4,760		4,590

(1) Does not include unvested restricted shares.