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Earnings Per Share
 6 Months Ended
Jun. 30, 2011
Earnings Per Share  
Earnings Per Share

3. Earnings Per Share

Basic earnings per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share reflects the potential dilution that could occur assuming vesting, conversion or exercise of all dilutive unexercised stock options and restricted stock. The dilutive effect of stock options was determined using the treasury stock method. Stock options are not included in the computation of diluted earnings per share when the stock option exercise price of an individual grant exceeds the average market price for the period. At June 30, 2010 and 2011, all issued and outstanding stock options were included in the calculation.

 

Set forth below is a reconciliation of shares used to compute earnings per share (in thousands):

 

     For the three months
ended June 30,		      For the six months
ended June 30,		  
     2010      2011      2010      2011  

Weighted average shares outstanding used to compute basic net income per share

      13,563         11,692         13,580         12,215   

Incremental shares issuable upon the assumed exercise of stock options

      41         15         41         16   

Unvested restricted stock

      100         30         95         32   
  

 

 

     

 

 

     

 

 

     

 

 

  

Shares used to compute diluted earnings per share

      13,704         11,737         13,716         12,263   
  

 

 

     

 

 

     

 

 

     

 

 

  

The decrease in weighted average shares outstanding during the three and six months ended June 30, 2011 is due primarily to stock repurchases by the Company.