Net Income Per Share

6 Months Ended

Jun. 30, 2011

Net Income Per Share

Net Income Per Share

12. Net Income Per Share

Basic and diluted earnings per share are computed pursuant to the two-class method. The two-class method determines earnings per share for each class of common stock and participating security according to their respective participation rights in undistributed earnings. Unvested restricted stock awards granted to employees are considered participating securities as they receive non-forfeitable rights to cash dividends at the same rate as common stock. In accordance with ASC Topic No. 260, diluted net income per share is calculated using the more dilutive of the following two approaches:

1. Assume exercise of stock options and vesting of restricted stock using the treasury stock method.

2. Assume exercise of stock options using the treasury stock method, but assume participating securities (unvested restricted stock) are not vested and allocate earnings to common shares and participating securities using the two-class method.

For all periods presented, the treasury stock method was used in the computation of diluted net income per share, as the result was more dilutive. The following presents a reconciliation of the numerator and denominator used in the calculation of basic and diluted net income per share (in thousands, except share and per share data):

	Three Months Ended June 30,						Six Months Ended June 30,
	2011			2010			2011			2010
Numerator:
Net income, as reported	$	5,598		$	3,044		$	11,038		$	6,306
Less: net income attributable to participating securities		(96	)		(22	)		(177	)		(40	)
Net income available to common shareholders—basic and diluted	$	5,502		$	3,022		$	10,861		$	6,266
Denominator:
Basic:
Weighted-average shares of common stock outstanding		35,921, 920			34,980,893			35,749,722			34,872,740
Less: weighted-average shares of unvested restricted common stock outstanding		(612,979	)		(253,674	)		(573,566	)		(220,855	)
Weighted-average number of common shares used in computing basic net income per common share		35,308,941			34,727,219			35,176,156			34,651,885
Net income per share applicable to common shareholders—basic	$	0.16		$	0.09		$	0.31		$	0.18
Diluted:
Weighted-average shares of common stock outstanding		35,921,920			34,980,893			35,749,722			34,872,740
Less: weighted-average shares of unvested restricted common stock outstanding		(612,979	)		(253,674	)		(573,566	)		(220,855	)
Weighted-average number of common shares issuable upon exercise of outstanding stock options, based on the treasury stock method		1,330,626			1,207,718			1,345,784			1,203,576
Weighted-average number of restricted stock, based on the treasury stock method		132,948			57,604			116,757			68,616
Weighted-average number of common shares used in computing diluted net income per common share		36,772,515			35,992,541			36,638,697			35,924,077
Net income per share applicable to common shareholders—diluted	$	0.15		$	0.08		$	0.30		$	0.17

The following common share equivalents have been excluded from the computation of diluted weighted-average shares outstanding, as their effect would have been anti-dilutive:

	Three Months Ended June 30,				Six Months Ended June 30,
	2011		2010		2011		2010
Options		1,616,438		1,705,204		1,347,115		1,433,447

The Company excludes options with combined exercise prices, and unvested restricted stock with unamortized fair values that are greater than the average market price for the Company's common stock from the calculation of diluted net income per share because their effect is anti-dilutive.