Note 7 - Earnings Per Share

3 Months Ended

Sep. 30, 2014

7. Earnings (Loss) Per Share

Basic earnings (loss) per common share is computed by dividing net earnings (loss) available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings (loss) per common share include the potential dilution that would occur from common shares issuable upon the exercise of outstanding stock options and warrants and the conversion of preferred stock. There is no dilutive effect on earnings (loss) per share during loss periods. As of September 30, 2014, 5,392,529 shares of common stock were issuable upon the conversion or exercise of options, warrants and preferred stock. For the three months ended September 30, 2014 and 2013, there were 1,498,904 and 3,086,366 shares of common stock equivalents, respectively, excluded from the computation of diluted earnings (loss) per share because their effect would have been antidilutive.

The following summarizes the computations of basic and diluted earnings (loss) per common share for the three months ended September 30, 2014 and 2013:

	Three Months Ended September 30,
	2014			2013
Numerator for basic and diluted earnings per share:
Net income from continuing operations	$	605,000		$	108,000
Payment of preferred stock dividends		(28,000	)		(28,000	)
Net income from continuing operations available to common stockholders		577,000			80,000
Loss from discontinued operations, net of tax		(684,000	)		(384,000	)
Loss on disposition of discontinued operations, net of tax		(1,163,000	)		—
Net loss available to common stockholders	$	(1,270,000	)	$	(304,000	)

Weighted average shares used in computing basic net earnings per share:		54,491,296			54,004,743
Effect of dilutive securities		1,718,397			—
Weighted average shares used in computing diluted net earnings per share:		56,209,693			54,004,743

Earnings (loss) per common share attributable to common stockholders – basic
Income from continuing operations per common share	$	0.01		$	—
Loss from discontinued operations per common share		(0.03	)		(0.01	)
Earnings (loss) per common share attributable to common shareholders – basic	$	(0.02	)	$	(0.01	)

Earnings (loss) per common share attributable to common stockholders – diluted
Income from continuing operations per common share	$	0.01		$	—
Loss from discontinued operations per common share		(0.03	)		(0.01	)
Earnings (loss) per common share attributable to common shareholders – diluted	$	(0.02	)	$	(0.01	)

- Definition

The entire disclosure for earnings per share.

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RAND WORLDWIDE INC 10-Q