Net Income Per Share

9 Months Ended

Sep. 30, 2011

Net Income Per Share

Net Income Per Share

Note 2.  Net Income Per Share

Basic net income per share is calculated by dividing net income for the period by the weighted-average number of common shares outstanding for the period without consideration of potential common shares. Diluted net income per share is calculated by dividing net income by the weighted-average number of common shares outstanding for the period and dilutive potential common shares for the period determined using the treasury-stock method. The following table is a reconciliation of the numerator and denominator used in the calculation of basic and diluted net income per share:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2011		2010		2011		2010
	(In thousands)
Numerator:
Net income	$	3,225	$	3,670	$	5,287	$	2,603
Denominator:
Weighted-average shares of common stock outstanding used in the calculation of basic net income per share	29,491		28,832		29,311		28,784
Effect of dilutive securities:
Options to purchase common stock	1,267		752		1,318		841
Restricted stock units	50		—		32		—
	1,317		752		1,350		841
Weighted-average shares of common stock outstanding used in the calculation of diluted net income per share	30,808		29,584		30,661		29,625

Options to purchase approximately 1.2 million and 1.1 million weighted-average shares of the Company’s common stock were outstanding during the three and nine months ended September 30, 2011, respectively, but are not included in the computation of diluted net income per share because the options’ exercise prices were greater than the average market price of the Company’s common stock during these periods; therefore, their effect is anti-dilutive. Options to purchase approximately 4.2 million and 4.0 million weighted-average shares of the Company’s common stock were outstanding during the three and nine months ended September 30, 2010, respectively, but were not included in the computation of diluted net income per share because the options’ exercise prices were greater than the average market price of the Company’s common stock during these periods; therefore, their effect is anti-dilutive.

Comprehensive Income

The Company currently reports comprehensive income and its components as part of total stockholders’ equity.

	Three Months Ended September 30,						Nine Months Ended September 30,
	2011			2010			2011			2010
	(In thousands)
Net income	$	3,225		$	3,670		$	5,287		$	2,603
Change in unrealized loss on marketable securities available for sale	(70		)	(3		)	(32		)	(9		)
Comprehensive income	$	3,155		$	3,667		$	5,255		$	2,594