Computation Of Basic And Diluted Net Income Per Common Share

9 Months Ended

Oct. 01, 2011

Computation Of Basic And Diluted Net Income Per Common Share [Abstract]

Computation Of Basic And Diluted Net Income Per Common Share

9. Computation of Basic and Diluted Net Income 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 by dividing net income for the period by the weighted average number of shares, plus common stock equivalents outstanding during the period which includes 1,000,000 shares of common stock issuable upon the conversion of 500,000 shares of convertible Series A Preferred Stock. Common stock equivalents also include the effect of outstanding dilutive stock options and awards computed using the treasury stock method.

A reconciliation of the numerator and denominator of basic and diluted net income per common share is provided as follows (in thousands, except per share amounts):

	Three Months Ended				Nine Months Ended
	October 1, 2011		October 2, 2010		October 1, 2011		October 2, 2010
Numerator:
Net income	$	349	$	910	$	1,824	$	2,209
Denominator:
Basic weighted average shares outstanding		8,965		8,974		8,963		8,930
Effect of dilutive preferred shares		1,000		1,000		1,000		1,000
Effect of dilutive stock options and awards		276		162		258		170
Effect of dilutive contingent shares		12		12		12		12
Diluted weighted average shares outstanding		10,253		10,148		10,233		10,112
Basic net income per common share	$	0.04	$	0.10	$	0.20	$	0.25
Diluted net income per common share	$	0.03	$	0.09	$	0.18	$	0.22

        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 October 1, 2011 and October 2, 2010, respectively, stock options to purchase 639,246 and 1,004,511 shares were excluded from the computation of diluted weighted average shares outstanding. For the nine months ended October 1, 2011 and October 2, 2010, respectively, stock options to purchase 661,491 and 852,290 shares were excluded from the computation of diluted weighted average shares outstanding.