Earnings Per Share

6 Months Ended

Jun. 27, 2011

Earnings Per Share

Earnings Per Share

Note 3 — Earnings Per Share

	For the Three Months Ended					For the Six Months Ended
	(in thousands, except share data)					(in thousands, except share data)
	June 27, 2011			June 28, 2010		June 27, 2011			June 28, 2010
Net (loss) income	$	(634	)	$	3,793	$	(2,774	)	$	739
Shares:
Weighted average number of shares outstanding	51,359,889			51,108,465		51,307,084			50,045,292
Dilutive non-vested stock awards	—			215,600		—			215,600
Diluted weighted average number of shares outstanding	51,359,889			51,324,065		51,307,084			50,260,892
Basic earnings per share	$	(0.01	)	$	0.07	$	(0.05	)	$	0.01
Diluted earnings per share	$	(0.01	)	$	0.07	$	(0.05	)	$	0.01

Basic earnings per share is calculated by dividing the net income available to common shareholders by the weighted-average common shares outstanding during each period. Diluted earnings per share (“diluted EPS”) is calculated using income available to common shareholders divided by diluted weighted-average shares of common stock outstanding during each period. Potentially dilutive securities include unvested stock and common stock related to stock options. Diluted EPS considers the impact of potentially dilutive securities except in periods when there is a loss because the inclusion of these securities would have had an anti-dilutive effect. As of June 27, 2011 and June 28, 2010, there were, respectively, 188,800 and 215,600 unvested restricted shares of common stock outstanding and there were no stock options that were in-the-money. The unvested restricted shares of common stock meet the requirement for dilutive securities and were included in the computation of diluted EPS for the periods of net income but excluded for the periods of net loss. The out-of-the-money stock options to purchase 447,228 and 558,114 shares of common stock that were outstanding at June 27, 2011 and June 28, 2010, respectively, do not meet the requirements for participating securities and were not included in the computation of basic and diluted earnings per share. As of June 27, 2011 and June 28, 2010, there were 255,000 and 270,000, respectively, unvested restricted stock units. The unvested restricted stock units do not meet the requirements for participating securities and were not included in the computation of basic and diluted earnings per share.

In the three and six-month periods ended June 28, 2010, the effect on basic and diluted earnings per share attributable to the approximately $5.1 million gain from the sale of the thirteen restaurants to a franchisee in the District of Columbia was net income of $0.10 per basic and diluted common share in each of the periods. Excluding this gain from our net income, we would have realized a net loss per basic common weighted average share outstanding of $0.03 and $0.09 in the three and six-month periods ended June 28, 2010, respectively.