TII NETWORK TECHNOLOGIES, INC.

CIK:0000277928|SEC Filings

Net income per common share

3 Months Ended

Mar. 31, 2012

Note 5 - Net income per common share

Basic earnings per share (“EPS”) is computed by dividing income available to common stockholders (which equals our net income) by the weighted average number of common shares outstanding, and dilutive EPS adds the dilutive effect of stock options and other common stock equivalents. During the three months ended March 31, 2012 and 2011, outstanding options to purchase an aggregate of approximately 1,433,700 and 100,000 shares of common stock, respectively, were excluded from the computation of diluted earnings per share because their inclusion would have been anti-dilutive. Basic weighted average common shares outstanding excludes unvested restricted stock awards.

The following table sets forth the amounts used in the computation of basic and diluted EPS:

	Three months ended March 31,
	2012		2011
Numerator for diluted EPS calculation:
Net income	$	129,000	$	790,000

Denominator for diluted EPS calculation:
Weighted average shares outstanding - Basic		14,140,221		13,774,000
Effect of dilutive stock options		298,472		698,000
Effect of restricted stock awards		35,288		555,000
		14,473,981		15,027,000

Basic EPS	$	0.01	$	0.06

Diluted EPS	$	0.01	$	0.05

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Cash Flows from Operating Activities
Net income	$ 129	$ 790
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	432	499
Share-based compensation	212	189
Provision for excess and obsolete inventory	643	122
Deferred income taxes	44	403
Changes in operating assets and liabilities, net of effects of acquisitions of businesses:
Accounts receivable	890	804
Other receivables	7
Inventories	(191)	(2,319)
Other assets	164	6
Accounts payable and accrued liabilities	(1,257)	534
Net cash provided by operating activities	1,073	1,028
Cash Flows Used in Investing Activities
Net cash paid for the acquisition of F2O	(125)	(717)
Capital expenditures	(341)	(506)
Net cash used in investing activities	(466)	(1,223)
Cash Flows Provided by Financing Activities
Proceeds from exercise of stock options		23
Net cash provided by financing activities		23
Net effect of exchange rate changes on cash	46	(15)
Net increase (decrease) in cash and cash equivalents	653	(187)
Cash and cash equivalents, at beginning of period	3,715	1,635
Cash and cash equivalents, at end of period	4,368	1,448
Supplemental Cash Flow Information
Cash paid during the period for income taxes	$ 70	$ 14

CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Current assets:
Cash	$ 4,368	$ 3,715
Accounts receivable, net of allowance of $156 at March 31, 2012 and $172 at December 31, 2011	8,278	9,069
Other receivable	9	16
Inventories	12,727	13,157
Deferred tax assets, net	3,650	3,659
Other current assets	258	401
Total current assets	29,290	30,017
Property, plant and equipment, net	8,187	8,186
Deferred tax assets, net	5,706	5,741
Intangible assets, net	2,828	2,920
Goodwill	460	460
Total assets	46,471	47,324
Current liabilities:
Accounts payable	5,136	5,742
Accrued liabilities	2,187	2,856
Total current liabilities and total liabilities	7,323	8,598
Commitments and contingencies
Stockholders' equity:
Preferred stock, par value $1.00 per share; 1,000,000 shares authorized; no shares outstanding
Common stock, par value $.01 per share; 30,000,000 shares authorized; 14,882,252 shares issued and 14,864,615 shares outstanding as of March 31, 2012, and 14,682,252 shares issued and 14,664,615 shares outstanding as of December 31, 2011	149	147
Additional paid-in capital	44,928	44,718
Accumulated deficit	(5,841)	(5,970)
Accumulated other comprehensive income - foreign currency translation	193	112
Stockholders' Equity before Treasury Stock, Total	39,429	39,007
Less: Treasury stock, at cost, 17,637 common shares at March 31, 2012 and December 31, 2011	(281)	(281)
Total stockholders' equity	39,148	38,726
Total liabilities and stockholders' equity	$ 46,471	$ 47,324