Net Income (Loss) Per Share

9 Months Ended

Sep. 30, 2020

Note 3. Net Income (Loss) Per Share

Basic net income (loss) per share is calculated by dividing net income (loss) by the weighted average shares of common stock outstanding for the period. Diluted net income (loss) per share is calculated by dividing net income (loss) by the weighted average shares of common stock outstanding for the period plus amounts representing the dilutive effect of securities that are convertible into common stock. The Company calculates diluted income (loss) per common share using the treasury stock method.

The following table presents the computation of net income (loss) per share (in thousands except per share data):

	Three months ended September 30,						Nine months ended September 30,
	2020			2019			2020			2019
Numerator:
Net income (loss)	$	(261	)	$	(135	)	$	(2,199	)	$	863
Denominator:
Weighted average common shares outstanding - basic		9,710			9,711			9,694			9,678
Plus dilutive effect of potential common shares		—			—			—			405
Weighted average common shares outstanding - diluted		9,710			9,711			9,694			10,083
Net income (loss) per share:
Basic	$	(0.03	)	$	(0.01	)	$	(0.23	)	$	0.09
Diluted	$	(0.03	)	$	(0.01	)	$	(0.23	)	$	0.09

Diluted weighted average common shares outstanding for the nine months ended September 30, 2019 includes 3,000 warrants and 402,000 options.

Potentially dilutive securities (in common stock equivalent shares) not included in the calculation of diluted net income (loss) per share because to do so would be anti-dilutive are as follows (in thousands):

	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
Stock options and restricted stock		1,451		721		1,622		457
Warrants outstanding		3		51		51		—
Total		1,454		772		1,673		457