NET INCOME PER SHARE

Basic net income per share is computed by dividing net income by weighted average number of common shares outstanding for the period (excluding outstanding stock options and shares subject to repurchase). Diluted net income per share is computed using the weighted-average number of common shares outstanding for the period plus the potential effect of dilutive securities which are convertible into common shares (using the treasury stock method), except in cases in which the effect would be anti-dilutive. The following is a reconciliation of the numerators and denominators used in computing basic and diluted net income per share (in thousands except per share amount):

	Three Months Ended June 30,					Six Months Ended June 30,
	2018			2017		2018			2017
Numerator:
Net income (loss)	$	(2,096	)	$	189	$	(2,520	)	$	706
Denominator:
Basic weighted-average common shares outstanding		31,962			32,111		32,065			32,051
Effect of dilutive options and restricted stock		-			1,277		-			1,440
Diluted weighted average shares outstanding		31,962			33,388		32,065			33,491

Net income (loss) per share - Basic	$	(0.07	)	$	0.01	$	(0.08	)	$	0.02
Net income (loss) per share - Diluted	$	(0.07	)	$	0.01	$	(0.08	)	$	0.02

For the

three

and

six

months ended

June 30, 2018,

there are

potential dilutive common shares included in the computation of diluted net income (loss) per share because there was a net loss for both periods.

The following table sets forth potential shares of common stock that are

not

included in the diluted net income per share calculation above because to do so would be anti-dilutive for the periods indicated (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Outstanding options		-		102		-		79
Nonvested restricted stock units		-		13		-		4
Employee Stock Purchase Plan		-		27		-		29
Total		-		142		-		112