Note 10 - Earnings Per Share

9 Months Ended

Oct. 31, 2015

10. Earnings per share

Basic net income (loss) per share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding for the fiscal period. Diluted net loss per share is the same as basic net loss per share as the inclusion of potentially issuable shares is anti-dilutive. Diluted net income per share is computed by adjusting outstanding shares, assuming any dilutive effects of stock incentive awards calculated using the treasury stock method. Under the treasury stock method, an increase in the fair market value of our common stock results in a greater dilutive effect from outstanding stock options, restricted stock units and stock purchase rights. Additionally, the exercise of employee stock options and stock purchase rights and the vesting of restricted stock units results in a further dilutive effect on net income per share.

The following table sets forth the basic and diluted net income (loss) per share computed for the three and nine months ended October 31, 2015 and November 1, 2014 (in thousands, except per share amounts):

	Three Months Ended					Nine Months Ended
	October 31 , 201 5		November 1 , 201 4			October 31 , 201 5		November 1 , 201 4
Numerator:
Net income (loss), as reported	$	6,435	$	(557	)	$	6,349	$	(18,091	)
Denominator:
Weighted-average common shares outstanding - basic		36,046		34,790			35,670		34,578
Dilutive effect of employee stock plans		739		-			845		-
Weighted-average common shares outstanding - diluted		36,785		34,790			36,515		34,578
Net income (loss) per share - basic	$	0.18	$	(0.02	)	$	0.18	$	(0.52	)
Net income (loss) per share - diluted	$	0.17	$	(0.02	)	$	0.17	$	(0.52	)

The weighted-average number of shares outstanding used in the computation of basic and diluted net income (loss) per share does not include the effect of the following potential outstanding shares of common stock. The effects of these potentially outstanding shares were not included in the calculation of basic and diluted net income (loss) per share because the effect would have been anti-dilutive (in thousands):

	Three Months Ended				Nine Months Ended
	October 31 , 201 5		November 1 , 201 4		October 31 , 201 5		November 1 , 201 4
Stock options		2,380		3,933		2,415		3,947
Restricted stock units and awards		412		738		151		463