Computation of Basic and Diluted Net Income Per Common Share

6 Months Ended

Jun. 28, 2014

Computation of Basic and Diluted Net Income Per Common Share

8. 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 the weighted average common stock equivalents outstanding during the period. 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 28, 2014 and June 29, 2013, respectively, stock options to purchase 123,393 and 539,230 shares were excluded from the computation of diluted weighted average shares outstanding. For the six months ended June 28, 2014 and June 29, 2013, respectively, stock options to purchase 91,448 and 574,656 shares were excluded from the computation of diluted weighted average shares outstanding.

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

	Three Months Ended				Six Months Ended
	June 28, 2014		June 29, 2013		June 28, 2014		June 29, 2013
Numerator:
Net income	$	297	$	415	$	784	$	1,289
Denominator:
Weighted average shares of common stock (basic)		9,922		8,824		9,943		8,668
Effect of dilutive preferred shares		—		792		—		895
Effect of dilutive stock options		312		273		341		267
Effect of dilutive contingent shares		177		116		185		73
Weighted average shares of common stock (diluted)		10,411		10,005		10,469		9,903
Per share data:
Basic income per share	$	0.03	$	0.05	$	0.08	$	0.15
Diluted income per share	$	0.03	$	0.04	$	0.07	$	0.13