Note I: Income per Common Share

Net income per share is computed by dividing net income by the daily weighted average number of common shares outstanding during the applicable periods. Diluted net income per share includes the potentially dilutive effect of common shares subject to outstanding stock options using the treasury stock method. Under the treasury stock method, shares subject to certain outstanding stock options have been excluded from the diluted weighted average shares outstanding calculation because the exercise of those options would lead to a net reduction in common shares outstanding. As a result, stock options to acquire 100,196 and 206,467 weighted common shares have been excluded from the diluted weighted shares outstanding for the three-month periods ended September 30, 2017 and 2016, respectively, and 132,247 and 239,399 weighted common shares have been excluded from the diluted weighted shares outstanding for the nine-month periods ended September 30, 2017 and 2016, respectively.

A reconciliation of net income per share is as follows (in thousands except per share data):

	Three-Month Periods Ended September 30,				Nine-Month Periods Ended September 30,
	2017		2016		2017		2016

Numerator:
Net income	$	870	$	469	$	1,390	$	1,370
Denominator:
Weighted average common shares outstanding		5,138		5,059		5,117		5,043
Dilutive potential common shares		13		9		4		2
Shares used in diluted net loss per common share calculations		5,151		5,068		5,121		5,045
Basic net income per common share	$	0.17	$	0.09	$	0.27	$	0.27
Diluted net income per common share	$	0.17	$	0.09	$	0.27	$	0.27