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Computation of Basic and Diluted Net Income (Loss) Per Common Share
 6 Months Ended
Jun. 29, 2013
Computation of Basic and Diluted Net Income (Loss) Per Common Share

 

8. Computation of Basic and Diluted Net Income (Loss) Per Common Share

Basic net income per share is computed by dividing net income for the period by the weighted average number of shares outstanding during the period.

Diluted net income per share is computed as follows:

In periods of net income from continuing operations, diluted net income per share is computed by dividing net income for the period by the weighted average number of shares, plus the weighted average common stock equivalents outstanding during the period, which includes 1,000,000 shares of common stock issuable upon conversion of 500,000 shares of convertible Series A Preferred Stock. In June 2013, the Series A Preferred Stock was converted into 1,000,000 shares of common stock. The Company excludes options from the computation of diluted weighted average shares outstanding if the exercise price of the options is greater than the average market price of the shares because the inclusion of these options would be anti-dilutive to earnings per share. Accordingly, for the three months ended June 29, 2013 and June 30, 2012, respectively, stock options to purchase 539,230 and 921,241 shares were excluded from the computation of diluted weighted average shares outstanding. For the six months ended June 29, 2013 and June 30, 2012, respectively, stock options to purchase 574,656 and 880,371 shares were excluded from the computation of diluted weighted average shares outstanding.

In periods of net loss from continuing operations, the basic and diluted weighted average shares of common stock and common stock equivalents are the same because inclusion of common stock equivalents would be anti-dilutive.

A reconciliation of the numerator and denominator of basic and diluted net income (loss) per common share is provided as follows :

 

 

Three Months Ended

 

 

Six Months Ended

 

(in thousands, except per share amounts) 

June 29,
2013

 

  

June 30,
2012

 

 

June 29,
2013

 

  

June 30,
2012

 

Numerator:

 

 

 

  

 

 

 

 

 

 

 

  

 

 

 

Income from continuing operations             

$

  415

  

  

$

  397

  

 

$

  1,289

  

  

$

  132

  

Income (loss) from discontinued operations             

  

  0

  

  

 

(61

) 

 

  

  0

  

  

 

  1,809

  

Net income             

$

  415

  

  

$

  336

  

 

$

  1,289

  

  

$

  1,941

  

 

 

 

 

  

 

 

 

 

 

 

 

  

 

 

 

Denominator:

 

 

 

  

 

 

 

 

 

 

 

  

 

 

 

Weighted average shares of common stock (basic)             

 

  8,824

 

  

 

  8,983

  

 

 

  8,668

 

  

 

  8,958

  

Effect of dilutive preferred shares             

 

  792

 

  

 

  1,000

  

 

 

  895

 

  

 

  1,000

  

Effect of dilutive stock options             

 

  273

 

  

 

  262

  

 

 

  267

 

  

 

  277

  

Effect of dilutive contingent shares             

  

  116

  

  

 

  41

  

 

  

  73

  

  

 

  35

  

Weighted average shares of common stock (diluted)             

  

  10,005

  

  

 

  10,286

  

 

  

  9,903

  

  

 

  10,270

  

 

 

 

 

  

 

 

 

 

 

 

 

  

 

 

 

Per share data:

 

 

 

  

 

 

 

 

 

 

 

  

 

 

 

Basic income per share:

 

 

 

  

 

 

 

 

 

 

 

  

 

 

 

Income before discontinued operations             

$

  0.05

  

  

$

  0.04

  

 

$

  0.15

  

  

$

  0.01

  

Discontinued operations             

  

  0.00

  

  

 

  0.00

  

 

  

  0.00

  

  

 

  0.21

  

Net income             

$

  0.05

  

  

$

  0.04

  

 

$

  0.15

  

  

$

  0.22

  

 

 

 

 

  

 

 

 

 

 

 

 

  

 

 

 

Diluted income (loss) per share:

 

 

 

  

 

 

 

 

 

 

 

  

 

 

 

Income before discontinued operations             

 

  0.04

 

  

 

  0.04

  

 

 

  0.13

 

  

 

  0.01

  

Discontinued operations             

  

  0.00

  

  

 

(0.01

) 

 

  

  0.00

  

  

 

  0.18

  

Net income             

$

  0.04

  

  

$

  0.03

  

 

$

  0.13

  

  

$

  0.19