BASIC AND DILUTED EARNINGS PER SHARE

6 Months Ended

Jul. 02, 2011

BASIC AND DILUTED EARNINGS PER SHARE

BASIC AND DILUTED EARNINGS PER SHARE

3. BASIC AND DILUTED EARNINGS PER SHARE

Basic earnings (loss) per share has been computed based upon the weighted average of common shares outstanding. Diluted earnings (loss) per share also includes the dilutive effect of potential common shares (dilutive stock options and unvested restricted stock awards) outstanding during the period. Income (loss) per common share has been computed as follows:

	26-Weeks Ended					13-Weeks Ended
	July 2,		July 3,			July 2,		July 3,
	2011		2010			2011		2010
Net income (loss)	$	2,027,000	$	(3,184,000	)	$	2,799,000	$	897,000
Basic weighted number of average shares outstanding	12,822,000		12,771,000			12,827,000		12,771,000
Incremental shares from assumed issuances of stock options and restricted stock awards	39,000		—			46,000		38,000
Diluted weighted average number of shares outstanding	12,861,000		12,771 ,000			12,873,000		12,809,000
Net income (loss) per share - Basic	$	0.16	$	(0.25	)	$	0.22	$	0.07
- Diluted	$	0.16	$	(0.25	)	$	0.22	$	0.07

Options to purchase 726,675 common shares were excluded from the computation of diluted earnings per share for the 26-week period ended July 2, 2011, due to the anti-dilutive effect caused by the exercise price exceeding the average market price. Unvested restricted common shares of 194,329 were excluded from the computation of diluted earnings per share for the 26-week period July 2, 2011, due to contingent restricted shares not meeting their performance goals.

Options and unvested restricted common shares of 926,338 were excluded from the computation of diluted loss per share for the 26-week period ended July 3, 2010, because of the net loss incurred by the Company.

Options to purchase 706,675 common shares were excluded from the computation of diluted earnings per share for the 13-week periods ended July 2, 2011 and July 3, 2010, due to the anti-dilutive effect caused by the exercise price exceeding the average market price. Unvested restricted common shares of 194,329 and 71,333 were excluded from the computation of diluted earnings per share for the 13-week periods ended July 2, 2011 and July 3, 2010, respectively, due to contingent restrictive shares not meeting their performance goals.