EARNINGS PER SHARE

3 Months Ended

Mar. 31, 2012

Notes to Financial Statements

Note 9. EARNINGS PER SHARE

Basic earnings per share is calculated based on the weighted average number of common shares outstanding during each period.  Diluted earnings per share is calculated based on these same weighted average shares outstanding plus the effect of potential shares issuable upon assumed exercise of stock options based on the treasury stock method.  Potential shares issuable upon the exercise of stock options are excluded from the calculation of diluted earnings per share to the extent their effect would be anti-dilutive.

The following table sets forth the computation of basic and diluted earnings per share:

	Three Months Ended
	March 31, 2012			March 31, 2011
(in thousands except per share data)
Numerator for basic and diluted earnings per share:
Net income (loss)	$	(1,677	)	$	532
Denominator for basic earnings per share-
weighted-average shares		8,765			9,031
Employee stock options and awards		-			203
Denominator for diluted earnings per share-
adjusted weighted-average shares and assumed conversions of stock options		8,765			9,234
Basic and diluted earnings per share:
Total basic earnings per share	$	(0.19	)	$	0.06
Total diluted earnings per share	$	(0.19	)	$	0.06

The computation for the three months ended March 31, 2012 and March 31, 2011 excludes 682,981 and 147,555 options, respectively, to purchase common stock as their effect is anti-dilutive.