EARNINGS PER SHARE

3 Months Ended

Mar. 31, 2016

NOTE 3 — EARNINGS PER SHARE

Basic earnings per common share is based only on the average number of shares of Common Stock outstanding for the periods. Diluted earnings per common share reflects the effect of shares of Common Stock issuable upon the exercise of options, unless the effect on earnings is antidilutive.

Diluted earnings per common share is computed using the treasury stock method. Under this method, the aggregate number of shares of common stock outstanding reflects the assumed use of proceeds from the hypothetical exercise of any outstanding options to purchase shares of Common Stock. The average market value for the period is used as the assumed purchase price.

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

	Three months ended
	March 31,
	2016		2015
Numerator:
Numerator for basic and diluted earnings per common share:
Net income from continuing operations	$	66,000	$	373,000
Net income from discontinued operations		12,257,000		408,000
Net income	$	12,323,000	$	781,000

Denominator:
Denominator for basic earnings per share weighted average common shares outstanding		3,601,000		3,589,000
Dilutive securities ⁽¹⁾		177,000		157,000
Denominator for diluted earnings per share weighted average common shares outstanding		3,778,000		3,746,000

⁽¹⁾ Dilutive securities consist of “in the money” stock options.

At March 31, 2016 and 2015, and during the three-month periods ended March 31, 2016 and 2015, there were outstanding stock options whose exercise prices were higher than the average market values of the underlying Common Stock for the period. These options are anti-dilutive and are excluded from the computation of diluted earnings per share. The weighted average of anti-dilutive stock options outstanding was as follows:

	Three months ended
	March 31,
	2016		2015
Weighted average anti-dilutive stock options outstanding		89,000		182,000