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Net Income Per Share
 6 Months Ended
Jun. 30, 2012
Net Income Per Share [Abstract]  
Net Income Per Share
Note 7. Net Income Per Share

Basic net income per share is computed using the weighted average number of common shares outstanding during the periods less shares of common stock subject to repurchase and non-vested stock awards. Diluted net income per share is computed using the weighted average number of common shares outstanding and potentially dilutive common shares outstanding during the periods. The dilutive effect of outstanding stock options and restricted stock awards is reflected in diluted earnings per share by application of the treasury stock method. Potentially dilutive common shares consist of common shares issuable upon the exercise of stock options and vesting of restricted stock awards. Potentially dilutive common shares are excluded in net loss periods, as their effect would be anti-dilutive.
 
A reconciliation of the numerators and denominators of the basic and diluted net income per share calculations is as follows (in thousands, except per share data):

Three Months Ended
Six Months Ended
June 30,
June 30,
2012
2011
2012
2011
Numerator:
Net income attributable to AXT, Inc.
$
1,299
$
7,062
$
2,934
$
11,270
Less: Preferred stock dividends
(44
)
(44
)
(88
)
(88
)
Net income available to common stockholders
$
1,255
$
7,018
$
2,846
$
11,182
Denominator:
Denominator for basic net income per share - weighted average common shares
32,138
31,831
32,086
31,775
Effect of dilutive securities:
Common stock options
774
1,159
838
1,241
Restricted stock awards
32
103
57
130
Denominator for dilutive net income per common share
 
32,944
33,093
32,81
33,146
Net income attributable to AXT, Inc. per common share:
Basic
$
0.04
$
0.22
$
0.09
$
0.35
Diluted
$
0.04
$
0.21
$
0.09
$
0.34
Options excluded from diluted net income per share as the impact is anti-dilutive
997
418
907
406
Restricted stock excluded from diluted net income per share as the impact is anti-dilutive
14
186
15
186

The 883,000 shares of $0.001 par value Series A preferred stock issued and outstanding as of both June 30, 2012 and December 31, 2011, valued at $3,532,000 are non-voting and non-convertible preferred stock with a 5.0% cumulative annual dividend rate payable when declared by the board of directors and $4 per share liquidation preference over common stock, and must be paid before any distribution is made to common stockholders. These preferred shares were issued to Lyte Optronics, Inc. stockholders in connection with the completion of our acquisition of Lyte Optronics, Inc. on May 28, 1999.