Note 9 Earnings Per Share

3 Months Ended

Sep. 28, 2014

Earnings Per Share [Abstract]

Note 9 Earnings Per Share

9. EARNINGS PER SHARE

We have adopted the guidance of the Financial Accounting Standards Board (FASB) for determining whether instruments granted in share-based payment transactions are participating securities. The guidance requires that all outstanding unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (such as restricted stock awards granted by us) be considered participating securities. Because restricted stock awards are participating securities, we are required to apply the two-class method of computing basic and diluted earnings per share (the “Two-Class Method”).

Basic earnings per share (“EPS”) is determined using the Two-Class Method and is computed by dividing earnings attributable to the Company’s common shareholders by the weighted-average shares outstanding during the period. The Two-Class Method is an earnings allocation formula that determines EPS for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings. Diluted EPS includes the dilutive effect of securities, if any, and reflects the more dilutive EPS amount calculated using the treasury stock method or the Two-Class Method. Due to our net losses in the three and nine month periods ended September 28, 2014 and the nine month period ended September 29, 2013, no dilutive securities were considered in those periods.

There were 2,020,588 outstanding stock options at September 29, 2013 that were not included in the calculation of EPS for the three month period ended September 29, 2013 because the effect would be anti-dilutive. No outstanding stock options were included in the calculation of EPS for the three and nine month periods ended September 28, 2014, or for the nine month period ended September 29, 2013.