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Earnings Per Share
 9 Months Ended
Sep. 30, 2012
Earning Loss Per Share [Abstract]  
Earnings Per Share [Text Block]

Note 5 – Earnings Per Share

 

The Company is required, in periods in which it has net income, to calculate basic earnings per share (“EPS”) using the two-class method. The two-class method is required because the Company’s Class N preferred shares, each of which is convertible to 40 common shares, have the right to receive dividends or dividend equivalents should the Company declare dividends on its common stock. Under the two-class method, earnings for the period are allocated on a pro-rata basis to the common and preferred stockholders. The weighted-average number of common and preferred shares outstanding during the period is then used to calculate basic EPS for each class of shares.

 

In periods in which the Company has a net loss, basic loss per share is calculated by dividing the loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period. The two-class method is not used, because the preferred stock does not participate in losses.

 

Options are included in the calculation of diluted earnings per share, since they are assumed to be exercised, except when their effect would be anti-dilutive. For the nine months ended September 30, 2012, the Company had a net loss and therefore diluted EPS was not calculated. For the nine months ending September 30, 2011, 66,350 of 3,181,198 options outstanding were excluded.

 

Basic and diluted EPS were calculated using the following:

 

   

Three Months Ended

 September 30,

    

Nine Months Ended

 September 30,

  
(In thousands, except per share amounts)   2012     2011     2012     2011  
                         
Net income (loss)   $ (1,000 )   $ 860     $ (1,031 )   $ 4,589  
Less:  income allocated to preferred stockholders     —       (1 )     —       (4 )
Net income (loss) allocated to common stockholders   $ (1,000 )   $ 859     $ (1,031 )   $ 4,585  
                                 
Weighted average shares for basic EPS     28,593       27,088       28,072       26,739  
Add:  incremental shares from assumed conversions of stock options     —       293       —       251  
Weighted average shares for diluted EPS     28,593       27,381       28,072       26,990  
                                 
Basic and diluted earnings (loss) per share attributable to common stockholders   $ (0.03 )   $ 0.03     $ (0.04 )   $ 0.17