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Computation of Earnings per Share
 6 Months Ended
Jun. 30, 2011
Earnings Per Share [Abstract]  
Computation of Earnings per Share

D)
Computation of Earnings per Share. Basic earnings per share is computed by dividing net income or loss by the weighted average number of common shares outstanding. Diluted earnings per share is computed by dividing net income or loss by the weighted average number of common shares outstanding plus additional common shares that would have been outstanding if dilutive potential common shares had been issued. For the purposes of this calculation, stock options are considered common stock equivalents in periods in which they have a dilutive effect. Stock options that are anti-dilutive are excluded from the calculation.

Net income per share is calculated as follows (in thousands, except per share data):

Three Months Ended
June 30,
Six Months Ended
June 30,
2011
2010
2011
2010
Net income (loss)
$ (267 ) $ (148 ) $ 323 $ (126 )
Weighted average common shares outstanding
20,700 19,927 20,461 19,920
Additional dilutive common stock equivalents
- - 360 -
Diluted shares outstanding
20,700 19,927 20,821 19,920
Net income (loss) per share – basic
$ (0.01 ) $ (0.01 ) $ 0.02 $ (0.01 )
Net income (loss) per share – diluted
$ (0.01 ) $ (0.01 ) $ 0.02 $ (0.01 )

For the three month periods ended June 30, 2011 and 2010 potential common stock equivalents of 286,803 and 5,843, respectively, were not included in the per share calculation for diluted EPS, because we had a net loss and the effect of their inclusion would be anti-dilutive. For the six month period ended June 30, 2010 potential common stock equivalents of 7,345 were not included in the per share calculation for diluted EPS, because we had a net loss and the effect of their inclusion would be anti-dilutive.

For the three month periods ended June 30, 2011 and 2010, options to purchase 2,927,451 and 5,046,766 shares of common stock, respectively, were outstanding, but were not included in the computation of diluted EPS because the options’ exercise prices were greater than the average market price of the common stock and thus would be anti-dilutive. For the six month periods ended June 30, 2011 and 2010, options to purchase 2,322,772 and 5,046,766 shares of common stock, respectively, were outstanding, but were not included in the computation of diluted EPS because the options’ exercise prices were greater than the average market price of the common stock and thus would be anti-dilutive.