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4. Basic and Diluted Net Income (Loss) Per Share
Basic net income (loss) per share is computed by dividing net income (loss) by the weighted-average number of shares of common stock outstanding during the period. Diluted net income (loss) per share is computed by dividing net earnings by the weighted-average number of shares of common stock outstanding during the period and the number of additional shares of common stock that would have been outstanding if potentially dilutive securities had been issued. Potentially dilutive securities include warrants and stock options and other shares issuable under our 2000 Employee Stock Purchase Plan (ESPP). The dilutive effect of potentially dilutive securities is reflected in diluted earnings per share by application of the treasury stock method. Under the treasury stock method, an increase in the fair market value of our common stock can result in a greater dilutive effect from potentially dilutive securities.
The following table sets forth the computation of basic and diluted net income (loss) per share (in thousands except per share amounts):
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|
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Three Months Ended
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Nine Months Ended
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|
|
|
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September 30,
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September 30,
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|
|
|
|
2011
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|
2010
|
|
2011
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|
2010
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|
|
Numerator:
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|
|
|
|
|
|
|
|
|
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Net income (loss)
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|
$
|
(17,931
|
)
|
$
|
50,433
|
|
$
|
(60,186
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)
|
$
|
55,129
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator - Basic:
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|
|
|
|
|
|
|
|
|
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Weighted-average common shares outstanding
|
|
71,226
|
|
52,127
|
|
60,660
|
|
52,022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator - Diluted:
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|
|
|
|
|
|
|
|
|
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Weighted-average common shares outstanding
|
|
71,226
|
|
52,127
|
|
60,660
|
|
52,022
|
|
|
Dilutive effect of stock options, shares under ESPP and warrant
|
|
|
|
642
|
|
|
|
514
|
|
|
Weighted-average shares outstanding and dilutive common stock equivalents
|
|
71,226
|
|
52,769
|
|
60,660
|
|
52,536
|
|
|
|
|
|
|
|
|
|
|
|
|
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Net income (loss) per common share:
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|
|
|
|
|
|
|
|
|
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Basic
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|
$
|
(0.25
|
)
|
$
|
0.97
|
|
$
|
(0.99
|
)
|
$
|
1.06
|
|
|
Diluted
|
|
$
|
(0.25
|
)
|
$
|
0.96
|
|
$
|
(0.99
|
)
|
$
|
1.05
|
|
During the periods presented, we had securities outstanding that could potentially dilute basic net income (loss) per share, but were excluded from the computation of diluted net income (loss) per share, as their effect would have been antidilutive. These securities consist of the following (in thousands):
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|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
|
Options to purchase common shares
|
|
11,785
|
|
7,484
|
|
11,785
|
|
7,139
|
|
|
Warrant to purchase common shares
|
|
200
|
|
|
|
200
|
|
|
|
|
Shares issuable related to ESPP
|
|
32
|
|
|
|
32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,017
|
|
7,484
|
|
12,017
|
|
7,139
|
|