Calculation of Basic and Diluted Earnings per Share

6 Months Ended

Jun. 30, 2015

Earnings (loss) per common share:

Calculation of Basic and Diluted Earnings per Share

Note 5. Calculation of Basic and Diluted Earnings per Share

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

(in thousands, except per share amounts)	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
Numerator:
Net Income (Loss)	$	(107	)	$	153		$	(297	)	$	860
Numerator for basic earnings (loss) per share - income available to common shareholders		(107	)		153			(297	)		860
Effect of dilutive securities:
Numerator for diluted earnings (loss) per share - income available to common shareholders after assumed conversions	$	(107	)	$	153		$	(297	)	$	860
Denominator:
Denominator for basic earnings (loss) per share - weighted-average shares		3,014			3,014			3,014			3,014
Effect of dilutive securities:
Employee stock options		-			(5	)		-			-
Warrants		-			393			-			393
Dilutive potential common shares		-			388			-			393
Denominator for diluted earnings (loss) per share - weighted-average shares and assumed conversions		3,014			3,402			3,014			3,407
Basic earnings (loss) per common share	$	(0.04	)	$	0.05		$	(0.10	)	$	0.29
Diluted earnings (loss) per common share	$	(0.04	)	$	0.04		$	(0.10	)	$	0.25

For the three and six month periods ended June 30, 2015, approximately 528,000 detachable warrants were excluded from the calculation of diluted earnings per share as the effect would be anti-dilutive. The warrants, issued in May 2009 with our six percent (6%) convertible subordinated debentures, have an exercise price of $2.65 and a maturity date of May 4, 2016.

For the three and six month periods ended June 30, 2015, approximately 146,000 employee stock options were excluded from the calculation of diluted earnings per share as the effect would be anti-dilutive.

For the three and six month periods ended June 30, 2014, approximately 106,000 employee stock options were excluded from the calculation of diluted earnings per share as the exercise price was greater than the market price of the common shares and, therefore, the effect would be anti-dilutive.