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EARNINGS PER SHARE (EPS)
 6 Months Ended
Jul. 01, 2011
EARNINGS PER SHARE (EPS)  
EARNINGS PER SHARE (EPS)

4.                        EARNINGS PER SHARE (EPS)

 

Basic EPS is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding.  Diluted EPS is computed by dividing net income by the weighted-average number of common shares outstanding and dilutive potential common shares for the period.  Potential common shares include the weighted-average dilutive effects of outstanding stock options using the treasury stock method.

 

The following table sets forth the number of weighted-average shares used to compute basic and diluted EPS:

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

July 1,
2011

 

July 2,
2010

 

July 1,
2011

 

July 2,
2010

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

735,000

 

$

1,258,000

 

$

444,000

 

$

1,650,000

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding

 

7,257,000

 

7,229,000

 

7,254,000

 

7,226,000

 

Effect of dilutive stock options

 

214,000

 

23,000

 

222,000

 

14,000

 

Weighted-average common stock outstanding-diluted

 

7,471,000

 

7,252,000

 

7,476,000

 

7,240,000

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

Basic

 

$

0.10

 

$

0.17

 

$

0.06

 

$

0.23

 

Diluted

 

$

0.10

 

$

0.17

 

$

0.06

 

$

0.23

 

 

For the three and six months ended July 1, 2011, 302,000 options were excluded from the calculation of dilutive potential common shares, compared to 306,000 and 326,000 options for the same periods last year. These options were not included in the computation of dilutive potential common shares because the assumed proceeds per share exceeded the average market price per share for the periods. Accordingly, the inclusion of these options would have been anti-dilutive.