Net Income Per Common Share

6 Months Ended

Jun. 30, 2011

Earnings Per Share [Abstract]

Net Income Per Common Share

NOTE F — Net Income Per Common Share

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

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2011			2010		2011		2010
NUMERATOR
Net income (loss)	$	(1,107	)	$	3,415	$	7,622	$	5,481
DENOMINATOR
Denominator for basic earnings per share — weighted average shares		11,545			11,475		11,503		11,229
Effect of dilutive securities:
Employee stock options		-0-			481		497		518
Denominator for diluted earnings per share — weighted average shares and assumed conversions		11,545			11,956		12,000		11,747
Amounts per common share:
Basic	$	(.10	)	$	.30	$	.66	$	.49
Diluted	$	(.10	)	$	.29	$	.64	$	.47

Basic earnings per common share is computed as net income available to common shareholders divided by the weighted average basic shares outstanding. Diluted earnings per common share is computed as net income available to common shareholders divided by the weighted average diluted shares outstanding.

Pursuant to ASC 260, “Earnings Per Share,” when a loss is reported the denominator of diluted earnings per share cannot be adjusted for the dilutive impact of stock options and awards because doing so will result in anti-dilution. Therefore, for the three months ended June 30, 2011, basic weighted-average shares outstanding are used in calculating diluted earnings per share.

Outstanding stock options with exercise prices greater than the average price of the common shares are anti-dilutive and are not included in the computation of diluted earnings per share. Stock options on 20,000 shares were excluded in the six months ended June 30, 2011, and 206,000 were excluded for the three months and six months ended June 30, 2010 because they were anti-dilutive.