NET INCOME PER SHARE

Basic net income per share is computed by dividing net income by the 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 that 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					Nine Months
	Ended September 30,					Ended September 30,
	2018			2017		2018			2017
Numerator:
Net income (loss)	$	(2,082	)	$	590	$	(4,602	)	$	1,297
Denominator:
Basic weighted-average common shares outstanding		32,184			32,078		32,105			32,060
Effect of dilutive options and restricted stock		-			891		-			1,257
Diluted weighted average shares outstanding		32,184			32,969		32,105			33,317

Net income (loss) per share - Basic	$	(0.06	)	$	0.02	$	(0.14	)	$	0.04
Net income (loss) per share - Diluted	$	(0.06	)	$	0.02	$	(0.14	)	$	0.04

For the

three

and

nine

months ended

September 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				Nine Months
	Ended September 30,				Ended September 30,
	2018		2017		2018		2017
Outstanding stock options		-		211		-		109
Nonvested restricted stock units		-		15		-		12
Employee Stock Purchase Plan		-		68		-		42
Total		-		294		-		163