Note 7 - Income Per Share

9 Months Ended

Sep. 30, 2016

(7)	Income Per Share

Basic income per share is based on the weighted average number of shares of common stock outstanding. Diluted income per share is based upon the weighted average number of common shares outstanding and dilutive common stock equivalent shares outstanding during each period.

The weighted average number of shares used to compute basic and diluted net income per share consisted of the following (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Weighted average common shares outstanding, basic		7,225		7,131		7,213		7,108
Weighted average common equivalent shares due to stock options and RSUs		87		99		81		104
Weighted average common shares outstanding, diluted		7,312		7,230		7,294		7,212

The computation of diluted earnings per share excludes the effect of the potential exercise of stock awards, including stock options, when the average market price of the common stock is lower than the exercise price of the related options during the period. These outstanding stock awards are not included in the computation of diluted income per share because the effect would be antidilutive. For the three-month periods ended September 30, 2016 and 2015, the number of stock awards excluded from the computation of diluted earnings per share for this reason was 35,193 and 65,193, respectively. For the nine-month periods ended September 30, 2016 and 2015, the number of stock awards excluded from the computation of diluted earnings per share for this reason was 52,377 and 82,719, respectively.