Note 6. EARNINGS (LOSS) PER SHARE

12 Months Ended

Dec. 31, 2012

Earnings Per Share [Text Block]

Note 6.  EARNINGS (LOSS) PER SHARE

The consolidated financial statements include basic and diluted earnings (loss) per share. Diluted per share information is calculated by considering the impact of potential common stock on the weighted average shares outstanding. Potential common stock consists of (a) incremental shares that would be available for issuance upon the assumed exercise of stock options “in the money” based on the average stock price for the respective period and (b) convertible preferred shares accounted for using the “if converted” basis, which assumes their conversion to common stock at a ratio of 16.6:1, pursuant to the terms of the Recapitalization, as defined and described in Note 8. The basic and diluted earnings per share (“EPS”) calculations are as follows:

	For the Years Ended December 31,
	2012			2011
	(Amounts in Thousands,
	except per share amounts)
Loss from continuing operations	$	(13,276	)	$	(7,199	)
Discontinued operations		(1,830	)		12,006
Net (loss) income	$	(15,106	)	$	4,807
Average common shares outstanding - Basic		7,951			7,951
Dilutive effect of convertible preferred stock		-			18,859
Average common shares outstanding - Diluted		7,951			26,810
Per share amount - Basic:
Loss from continuing operations	$	(1.67	)	$	(0.91	)
Discontinued operations		(0.23	)		1.51
Net (loss) income	$	(1.90	)	$	0.60
Per share amount - Diluted:
Loss from continuing operations	$	(1.67	)	$	(0.27	)
Discontinued operations		(0.23	)		0.45
Net (loss) income	$	(1.90	)	$	0.18

As of December 31, 2012, no options were in the money and 18,000 options were out of the money. As of December 31, 2011, no options were in-the-money and 38,000 options were out-of-the money.  At December 31, 2012 and 2011, 1,131,551 convertible preferred shares were outstanding, which are in total convertible into 18,859,183 shares of Katy common stock. Convertible preferred shares were not included in the calculation of diluted earnings (loss) per share for the year ended December 31, 2012 because of their anti-dilutive impact as a result of the Company’s net loss position.