Earnings per Share

6 Months Ended

Jun. 30, 2016

13. Earnings per Share

Basic earnings (loss) per share is computed using the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed using the weighted average number of common shares and dilutive potential common shares. Dilutive potential common shares include employee stock options and restricted share units and warrants and debt that are convertible into the Company’s common stock.

The following table sets forth the composition of weighted average shares used in the computation of basic and diluted earnings per share (in thousands):

	Three Months Ended June 30,					Six Months Ended June 30,
	2016		2015			2016			2015
Net income (loss)	$	1,343	$	(2,416	)	$	(1,428	)	$	(5,445	)


Basic weighted average number of common shares outstanding	3,848		2,969			3,747			2,901
Effect of stock options, restricted stock units and warrants computed on treasury stock method	896		—			—			—
Effect of convertible debt computed on treasury stock method	5,896		—			—			—

Diluted weighted average number of common shares outstanding	10,640		2,969			3,747			2,901

Because the Company incurred net losses in the six months ended June 30, 2016 and the three and six months ended June 30, 2015, the effect of potentially dilutive securities has been excluded in the computation of diluted loss per share as their impact would be anti-dilutive. Potentially dilutive common stock equivalents excluded were 0.6 million shares during the three months ended June 30, 2015, and 6.9 million and 0.5 million shares during the six months ended June 30, 2016 and 2015, respectively.