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Net Income per Common Share
 6 Months Ended
Jun. 30, 2013
Net Income per Common Share

3. Net Income per Common Share

The following table sets forth the computation of basic and diluted net income per common share:

 

     Three months ended      Six months ended  
   June 30,      June 30,  
(dollars in thousands, except per share amounts)    2013     2012      2013     2012  

Numerator:

          

Net income

    $ 478      $ 4,505       $ 518      $ 10,791   

Adjustment for interest expense on convertible notes (A)

      (32 )      104         (65 )      212   
  

 

 

    

 

 

     

 

 

    

 

 

  

Net income, as adjusted

    $ 446      $ 4,609       $ 453      $ 11,003   
  

 

 

    

 

 

     

 

 

    

 

 

  

Denominator:

          

Weighted average number of shares of common stock outstanding

      6,940,831        6,863,904         6,934,182        6,856,310   

Weighted average effect of assumed conversion of convertible notes

      428,888        428,888         428,177        428,173   

Weighted average effect of dilutive stock options and other stock compensation

      115,686        172,468         131,766        160,908   
  

 

 

    

 

 

     

 

 

    

 

 

  

Weighted average number of shares of common stock outstanding, as adjusted

      7,485,405        7,465,260         7,494,125        7,445,391   
  

 

 

    

 

 

     

 

 

    

 

 

  

Net income per common share:

          

Net income per common share – Basic

    $ 0.07      $ 0.66       $ 0.07      $ 1.57   
  

 

 

    

 

 

     

 

 

    

 

 

  

Net income per common share – Diluted

    $ 0.06      $ 0.62       $ 0.06      $ 1.48   
  

 

 

    

 

 

     

 

 

    

 

 

  

 

(A) The adjustment for interest expense on convertible notes is net of tax. For the three and six months ended June 30, 2013, the adjustment is a reduction to net income as a result of our annualized effective tax rate for 2013.

We had granted options to purchase 321,000 and 5,000 shares of common stock at an average price of $35.96 and $42.50 for the three months ended June 30, 2013 and 2012, respectively, that were not included in the computation of diluted net income per common share. For the six months ended June 30, 2013 and 2012, we had granted options to purchase 250,000 and 20,000 shares of common stock at an average price of $37.08 and $41.75, respectively, which were excluded from the computation of diluted net income per common share. These outstanding options were not included in the computation of diluted net income per common share because their respective exercise prices were greater than the average market price of our common stock.