BASIC AND DILUTED NET INCOME (LOSS) PER SHARE

9 Months Ended

Sep. 30, 2013

BASIC AND DILUTED NET INCOME (LOSS) PER SHARE

BASIC AND DILUTED NET INCOME (LOSS) PER SHARE

4. BASIC AND DILUTED NET INCOME (LOSS) PER SHARE

Basic net income (loss) per share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding. Common stock equivalents include stock options and warrants. Diluted net income per share is computed by dividing net income by the weighted-average number of dilutive common shares outstanding during the period. Diluted shares outstanding is calculated by adding to the weighted shares outstanding any potential (unissued) shares of common stock from outstanding stock options and warrants based on the treasury stock method.  In periods when a net loss is reported, all common stock equivalents are excluded from the calculation because they would have an anti-dilutive effect, meaning the loss per share would be reduced. Therefore, in periods when a loss is reported there is no difference in basic and diluted loss per share.

Shares used to calculate diluted earnings per share are as follows:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
Numerator:
Net income (loss)	$	(7,251	)	$	(7,745	)	$	(21,879	)	$	13,147
Denominator:
Weighted average number of common shares outstanding	34,516,051			34,243,792			34,435,129			34,188,146
Effect of dilutive securities:
Stock options	—			—			—			82,309
Dilutive potential common shares	—			—			—			82,309
Shares used in calculating diluted earnings per share	34,516,051			34,243,792			34,435,129			34,270,455

The number of shares of potentially dilutive common stock related to options and warrants that were excluded from the calculation of dilutive shares since the inclusion of such shares would be anti-dilutive for the three and nine months ended September 30, 2013 and 2012 are shown below:

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2013	2012	2013	2012
Options	6,195,437	5,665,046	5,675,833	5,413,073
Warrants	4,086	4,086	4,086	4,086
Total	6,199,523	5,669,132	5,679,919	5,417,159