NOTE F – INCOME PER SHARE

Basic net income per common share available to common shareholders is based on the weighted-average number of common shares outstanding. For periods in which we have net income, we base diluted net earnings per share on the weighted-average number of common shares outstanding and dilutive potential common shares, such as dilutive employee stock options.

The numerator in calculating both basic and diluted income per common share for each period is the same as net income. The denominator is based on the number of common shares as shown in the following table:

 

For the three months ended March 31, 2012, the effect of our 264,750 outstanding stock options, 105,708 outstanding warrants, and 168,500 outstanding stock appreciation rights was not included in the computation of diluted earnings per share as their effect was anti-dilutive.

For the three months ended March 31, 2011, the effect of our 295,125 outstanding stock options, 105,708 outstanding warrants, and 81,000 outstanding stock appreciation rights was not included in the computation of diluted earnings per share as their effect was anti-dilutive.