Note 7 - Income Per Share

3 Months Ended

Mar. 31, 2017

(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
	March 31,
	2017		2016
Weighted average common shares outstanding, basic		7,216		7,173
Weighted average common equivalent shares due to stock options and RSUs		81		80
Weighted average common shares outstanding, diluted		7,297		7,253

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

March

31,

2017

and

2016

, the number of stock awards excluded from the computation of diluted earnings per share for this reason was

35,193

and

54,969,

respectively.