(

)

Earnings

(

Loss

)

Per Common Share

The Company computes earnings per share using the

two

-class method, which is an earnings allocation formula that determines earnings per share for common stock and participating securities. Restricted stock granted by the Company is considered a participating security since it contains a non-forfeitable right to dividends.

Our potentially dilutive securities include potential common shares related to our stock options and restricted stock. Diluted earnings per share considers the impact of potentially dilutive securities except in periods in which there is a loss because the inclusion of the potential common shares would have an anti-dilutive effect. Diluted earnings per share excludes the impact of common shares related to our stock options in periods in which the option exercise price is greater than the average market price of our common stock for the period. There were

2,735,750

and

1,200,250

potential common shares excluded from diluted earnings per share for the

three

months ended

June

30,

2019

and

July

2018,

respectively. For the

six

months ended

June

30,

2019

and

July 1, 2018,

diluted weighted average common shares do

not

include the impact of any outstanding stock options and unvested compensation-related shares because the effect of these items on diluted net loss would be anti-dilutive.

A reconciliation of the weighted average shares outstanding used in the calculation of basic and diluted income (loss) per common share is as follows (in thousands):

	Three Months Ended						Six Months Ended
	Ju ne 30 ,			Ju ly 1 ,			J une 30 ,			Ju ly 1 ,
	201 9			201 8			2 019			201 8
	(Unaudited)						(Unaudited)
Income (loss) attributable to stockholders:
Net income (loss) as reported	$	1,503		$	814		$	(1,533	)	$	(981	)
Less distributed and undistributed earnings allocable to restricted award holders		(28	)		(32	)		0			0
Less dividends declared attributable to restricted award holders		0			0			0			0
Net income (loss) allocable to common stockholders	$	1,475		$	782		$	(1,533	)	$	(981	)

Income (loss) per common share attributable to stockholders:
Basic	$	0.07		$	0.04		$	(0.07	)	$	(0.05	)
Diluted	$	0.07		$	0.04		$	(0.07	)	$	(0.05	)

Weighted average shares outstanding – basic		20,875			20,541			20,772			20,468
Weighted average additional shares assuming conversion of potential common shares		0			314			0			0
Weighted average shares outstanding – diluted		20,875			20,855			20,772			20,468