Net Income Per Share

3 Months Ended

Mar. 31, 2013

Net Income Per Share [Abstract]

Net Income Per share

10. 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, Earnings Per Share, 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 the periods presented the two-class 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 net income per share and a reconciliation of the denominator used in the calculation of diluted net income per share (in thousands, except share and per share data):

	Three Months Ended March 31,
	2013			2012
Numerator:
Net income, as reported	$	8,616		$	5,720
Less: net income attributable to participating securities		(138	)		(87	)
Net income available to common shareholders—basic	$	8,478		$	5,633
Denominator:
Basic:
Weighted-average shares of common stock outstanding		37,717,140			36,839,767
Less: weighted-average shares of unvested restricted common stock outstanding		(614,633	)		(557,339	)
Weighted-average number of common shares used in computing basic net income per common share		37,102,507			36,282,428
Net income per share applicable to common shareholders—basic	$	0.23		$	0.16

	Three Months Ended March 31,
	2013			2012
Numerator:
Net income available to common shareholders—basic	$	8,478		$	5,633
Add-back: undistributed earnings allocated to unvested shareholders		103			87
Less: undistributed earnings reallocated to unvested shareholders		(100	)		(84	)
Net income available to common shareholders—diluted	$	8,481		$	5,636
Denominator:
Diluted:
Weighted-average shares of common stock outstanding		37,717,140			36,839,767
Less: weighted-average shares of unvested restricted common stock outstanding		(614,633	)		(557,339	)
Weighted-average number of common shares issuable upon exercise of outstanding stock options, based on the treasury stock method		1,382,015			1,324,619
Weighted-average number of common shares used in computing diluted net income per common share		38,484,522			37,607,047
Net income per share applicable to common shareholders—diluted	$	0.22		$	0.15

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 March 31,
	2013		2012
Options		190,861		1,575,517
Unvested restricted stock		67,414		2,063

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.