BASIC AND DILUTED EARNINGS PER SHARE

6 Months Ended

Jun. 30, 2012

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
	June 30,			July 2,		June 30,		July 2,
	2012			2011		2012		2011
Net income (loss)	$	(177,000	)	$	2,027,000	$	1,031,000	$	2,799,000
Basic weighted number of average shares outstanding	12,877,000			12,822,000		12,880,000		12,827,000
Incremental shares from assumed issuances of stock options and restricted stock awards	—			39,000		48,000		46,000
Diluted weighted average number of shares outstanding	12,877,000			12,861,000		12,928,000		12,873,000
Net income (loss) per share - Basic	$	(0.01	)	$	0.16	$	0.08	$	0.22
- Diluted	$	(0.01	)	$	0.16	$	0.08	$	0.22

Options and unvested restricted common shares of 1,277,340 were excluded from the computation of diluted loss per share for the 26-week period ended June 30, 2012 due to the net loss incurred by the Company.

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 ended July 2, 2011, due to contingent restricted shares not meeting their performance goals.

Options to purchase 681,675 and 706,675 common shares were excluded from the computation of diluted earnings per share for the 13-week periods ended June 30, 2012 and July 2, 2011, respectively, due to the anti-dilutive effect caused by the exercise price exceeding the average market price. Unvested restricted common shares of 457,550 and 194,329 were excluded from the computation of diluted earnings per share for the 13-week periods ended June 30, 2012 and July 2, 2011, respectively, due to contingent restrictive shares not meeting their performance goals.