Calculation of Basic and Diluted Earnings per Share

6 Months Ended

Jun. 30, 2011

Earnings Per Share [Abstract]

Calculation of Basic and Diluted Earnings per Share

Note 6.   Calculation of Basic and Diluted Earnings per Share

The following table sets forth the computation of basic and diluted earnings per share:

	Three Months				Six Months
(in thousands, except per share amounts)	Ended June 30,				Ended June 30,
		2011		2010		2011		2010
Numerator:
Net Income	$	981	$	470	$	1,656	$	1,054
Preferred Stock Dividends		-		(15)		(15)		(30)
Numerator for basic earnings per share -
income available to common shareholders		981		455		1,641		1,024
Effect of dilutive securities:
6% Convertible Debenture Interest Expense		22		23		44		45
Preferred Stock Dividends		-		-		15		-
Numerator for diluted income per share -
income available to common shareholders
after assumed conversions	$	1,003	$	478	$	1,700	$	1,069
Denominator:
Denominator for basic income per share -
weighted-average shares		2,091		1,897		2,017		1,894
Effect of dilutive securities:
Employee stock options		46		14		40		10
Detachable warrants		577		336		536		242
6% Convertible Debenture		547		566		552		566
Preferred Stock Dividends		32		-		71		-
Dilutive potential common shares		1,202		916		1,199		818
Denominator for diluted income per share -
weighted-average shares and assumed conversions		3,293		2,813		3,216		2,712
Basic income per common share	$	0.47	$	0.24	$	0.81	$	0.54
Diluted income per common share	$	0.30	$	0.17	$	0.53	$	0.39

For the three and six month periods ended June 30, 2010, approximately 111,000 common shares issuable upon conversion of the 200,000 convertible preferred shares were excluded from the calculation of diluted earnings per share as the conversion price was greater than the average market price of the common shares and, therefore, the effect would be antidilutive.

For the three and six month periods ended June 30, 2010, approximately 566,000 shares issuable upon conversion of convertible debentures were excluded from the calculation of diluted earnings per share as the conversion price was greater than the average market price of the common shares and, therefore, the effect would be antidilutive.

For the three and six month periods ended June 30, 2010, approximately 315,000 shares of common stock issuable upon exercise of warrants were excluded from the computation of diluted earnings per share as the effect would be antidilutive.

For the three and six month periods ended June 30, 2011 and 2010, approximately 21,000 and 153,000, respectively, of shares issuable upon exercise of employee stock options were excluded from the computation of diluted earnings per share because the effect would be antidilutive.