Earnings (Loss) Per Share

9 Months Ended

Sep. 30, 2012

Earnings (Loss) Per Share

4. Earnings (Loss) Per Share

The Company reports earnings (loss) per share in accordance with Accounting Standards Codification Topic 260, “Earnings Per Share,” which establishes standards for computing and presenting earnings per share. Basic earnings (loss) per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income available to common shareholders by the weighted-average number of common shares and dilutive common share equivalents then outstanding. Potential common share equivalents consist of restricted stock awards and the incremental common shares issuable upon the exercise of stock options and warrants. Under the treasury stock method, unexercised “in-the-money” stock options are assumed to be exercised at the beginning of the period or at issuance, if later. The assumed proceeds are then used to purchase common shares at the average market price during the period. Share-based payment awards that entitle their holders to receive non-forfeitable dividends before vesting are considered participating securities and are included in the calculation of basic and diluted earnings per share. Common share equivalents were not included in the net loss per share computation for the nine-month period ended September 30, 2011 because their effect is anti-dilutive.

Basic and diluted weighted average shares outstanding were as follows:

	Three months ended September 30,				Nine months ended September 30,
	2012		2011		2012		2011
Weighted average common shares		30,948,062		30,796,797		30,841,344		30,800,510
Dilutive common stock options		308,211		137,035		290,405		—
Weighted average common shares, assuming dilution		31,256,273		30,933,832		31,131,749		30,800,510

At September 30, 2012, there were outstanding options to purchase 2,625,690 shares of the Company’s common stock at a weighted average exercise price of $4.11 per share. For the three and nine-month periods ended September 30, 2012, 1,431,600 and 1,602,000 options to purchase shares of the Company’s common stock, respectively, were excluded from the calculation of diluted earnings per share because the exercise prices of the stock options were greater than or equal to the average price of the common shares, and were therefore anti-dilutive.

At September 30, 2011, there were outstanding options to purchase 2,719,100 shares of the Company’s common stock at a weighted average exercise price of $4.09 per share. For the three-month period ended September 30, 2011, 2,046,700 options to purchase shares of the Company’s common stock were excluded from the calculation of diluted earnings per share because the exercise prices of the stock options were greater than or equal to the average price of the common shares, and were therefore anti-dilutive. For the nine-month period ended September 30, 2011, all such outstanding options have been excluded from the calculation of diluted earnings per share because their effect would be anti-dilutive.