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Earnings Per Share
 3 Months Ended
Mar. 31, 2012
Earnings Per Share
6.             Earnings Per Share

The Company reports earnings per share in accordance with Accounting Standards Codification (“ASC”) 260, Earnings Per Share, which establishes standards for computing and presenting earnings per share. Basic earnings per share is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding and the number of dilutive potential common share equivalents during the period. Under the treasury stock method, unexercised “in-the-money” stock options are assumed to be exercised at the beginning of the period or at issuance, if later. The assumed proceeds are then used to purchase common shares at the average market price during the period.
 
Basic and diluted earnings per share for the three months ended March 31, 2012 and 2011 are as follows: 
 
   
Three months ended March 31,
  
   
2012
    
2011
  
Shares used in the calculation of Basic earnings per share
     13,162,824       12,688,819  
Effect of dilutive securities:
                
Stock options, SARs, RSAs, and shares held in escrow
     927,122       1,055,891  
Diluted shares used in the calculation of earnings per share
     14,089,946       13,744,710  

In connection with the acquisition of Anika Therapeutics S.r.l. (“Anika S.r.l.”) on December 30, 2009, the Company issued 1,981,192 shares of its common stock of which 500,000 of these shares remain in escrow at March 31, 2012. These 500,000 shares are included in the diluted potential common shares but are excluded from the basic earnings per share calculation. See Note 10 for additional information relative to this item.

Equity awards of 380,551 and 979,438 shares were outstanding for the three months ended March 31, 2012 and 2011, respectively, but were not included in the computation of diluted earnings per share because the awards’ impact on earnings per share was anti-dilutive.