EARNINGS PER SHARE

9 Months Ended

Sep. 30, 2011

NOTE 8. EARNINGS PER SHARE (in thousands, except EPS)

We compute basic earnings (loss) per share (“basic EPS”) by dividing net income (loss) by the weighted average number of common shares outstanding for the reporting period. Diluted earnings (loss) per share (“diluted EPS”) gives effect to all dilutive potential shares outstanding (primarily stock options). The following table provides the computation of basic and diluted earnings (loss) per share for the three month and nine month periods ending September 30, 2011 and 2010.

	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except EPS)	2011		2010		2011		2010

Net income (loss)	$	63	$	4	$	984	$	(166	)

Basic weighted average shares outstanding		17,601		17,557		17,592		17,301
Effect of potential dilutive securities		173		199		215		n/a
Diluted weighted average shares outstanding		17,774		17,756		17,807		17,301

Basic EPS	$	-	$	-	$	0.06	$	(0.01	)

Diluted EPS	$	-	$	-	$	0.06	$	(0.01	)

For the nine months ended September 30, 2011 and 2010, options and warrants to purchase approximately 1.3 million shares of common stock were excluded from the computation of diluted earnings (loss) per share because their effects were anti-dilutive.