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

9 Months Ended

Sep. 29, 2012

Computation of Basic and Diluted Net (Loss) Income Per Common Share [Abstract]

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

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

Basic net income (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of shares outstanding during the period. Diluted net income (loss) per share is computed by dividing net income (loss) 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. In periods of loss from continuing operations, the Company excludes common stock equivalents from the computation of diluted weighted average shares outstanding because their inclusion would be anti-dilutive.

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
	September 29, 2012			October 1, 2011		September 29, 2012			October 1, 2011
Numerator:
(Loss) income from continuing operations	$	(555	)	$	256	$	(423	)	$	1,340
(Loss) income from discontinued operations		(190	)		93		1,619			484
Net (loss) income	$	(745	)	$	349	$	1,196		$	1,824
Denominator:
Weighted average shares of common stock (basic)		9,005			8,965		8,974			8,963
Effect of dilutive preferred shares		0			1,000		0			1,000
Effect of dilutive stock options		0			251		0			250
Effect of dilutive contingent shares		0			37		0			20
Weighted average shares of common stock (diluted)		9,005			10,253		8,974			10,233
Per share data:
Basic (loss) income per share:
(Loss) income before discontinued operations	$	(0.06	)	$	0.03	$	(0.05	)	$	0.15
Discontinued operations		(0.02	)		0.01		0.18			0.05
Net (loss) income	$	(0.08	)	$	0.04	$	0.13		$	0.20
Diluted (loss) income per share:
(Loss) income before discontinued operations		(0.06	)		0.02		(0.05	)		0.13
Discontinued operations		(0.02	)		0.01		0.18			0.05
Net (loss) income	$	(0.08	)	$	0.03	$	0.13		$	0.18

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 September 29, 2012 and October 1, 2011, respectively, stock options to purchase 881,893 and 639,246 shares were excluded from the computation of diluted weighted average shares outstanding. For the nine months ended September 29, 2012 and October 1, 2011, respectively, stock options to purchase 899,809 and 661,491 shares were excluded from the computation of diluted weighted average shares outstanding.