Earnings Per Share

9 Months Ended

Sep. 30, 2011

3. Earnings per Share

Basic earnings per share is computed by dividing net income attributable to PowerSecure International, Inc. common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share attributable to PowerSecure International, Inc. common stockholders is computed using the weighted average number of common shares outstanding and, when dilutive, potential common shares from stock options and warrants using the treasury stock method. Diluted earnings per share excludes the impact of potential common shares related to stock options and warrants in periods in which we reported a loss from continuing operations or in which the option or warrant exercise price is greater than the average market price of our common stock during the period because the effect would be antidilutive. A total of 388,000 common shares issuable upon the exercise of in-the-money stock options were excluded from the diluted weighted average number of shares outstanding for the three months ended September 30, 2010 because their effect was antidilutive to our loss from continuing operations for that period.

The following table sets forth the calculation of basic and diluted earnings per share attributable to PowerSecure International, Inc. common stockholders:


		Three Months Ended					Nine Months Ended
		September 30,					September 30,
		2011		2010			2011		2010

Income (loss) from continuing operations	$	972	$	(287	)	$	17,324	$	1,444
Income from discontinued operations		-		777			5,636		1,587

Net income	$	972	$	490		$	22,960	$	3,031

Basic weighted-average common
shares outstanding in period		18,966		18,640			18,848		17,942
Add dilutive effects of stock
options and warrants		197		-			274		505
Diluted weighted-average common
shares outstanding in period		19,163		18,640			19,122		18,447

Basic earnings per common share:
Income from continuing operations	$	0.05	$	(0.01	)	$	0.92	$	0.08
Income from discontinued operations		0.00		0.04			0.30		0.09
Basic earnings per common share	$	0.05	$	0.03		$	1.22	$	0.17

Diluted earnings per common share:
Income from continuing operations	$	0.05	$	(0.01	)	$	0.91	$	0.08
Income from discontinued operations		0.00		0.04			0.29		0.08

Diluted earnings per common share	$	0.05	$	0.03		$	1.20	$	0.16