Travelzoo 2010 Annual Report Download - page 73

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The following table sets forth the calculation of basic and diluted net income (loss) per share (in thousands,
except per share amounts):
2010 2009 2008
Year Ended December 31,
Net income (loss):
Net income from continuing operations, net of tax............. $13,157 $ 6,418 $ 5,913
Loss from discontinued operations, net of tax ................ — (1,233) (10,029)
Net income (loss) ..................................... $13,157 $ 5,185 $ (4,116)
Weighted average common shares ......................... 16,444 16,408 14,273
Effect of dilutive securities — stock options ................. 9 8 1,917
Diluted weighted average common shares ................... 16,453 16,416 16,190
Basic net income (loss) per share from:
Continuing operations .................................. $ 0.80 $ 0.39 $ 0.41
Discontinued operations ................................ $ — $ (0.08) $ (0.70)
Net income (loss) ..................................... $ 0.80 $ 0.32 $ (0.29)
Diluted net income (loss) per share from:
Continuing operations .................................. $ 0.80 $ 0.39 $ 0.37
Discontinued operations ................................ $ — $ (0.08) $ (0.62)
Net income (loss) ..................................... $ 0.80 $ 0.32 $ (0.25)
Options to purchase 75,000 and 300,000 shares of common stock have been excluded from the computation of
diluted net income (loss) per share for the years ended December 31, 2010 and December 31, 2009 respectively, as
their effect was anti-dilutive. All options outstanding as of December 31, 2008 were included in the computation of
diluted net income (loss) per share for the years ended December 31, 2008.
(d) Use of Estimates
Management of the Company has made a number of estimates and assumptions relating to the reporting of
assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities to prepare these
financial statements in conformity with accounting principles generally accepted in the United States of America.
Actual results could differ materially from those estimates.
(e) Property and Equipment
Property and equipment are stated at cost less accumulated depreciation. Additions, improvements and major
renewals are capitalized. Maintenance, repairs and minor renewals are expensed as incurred. The Company also
includes in fixed assets the capitalized cost of internal-use software and website development, including software
used to upgrade and enhance its website and processes supporting the Company’s business in accordance with the
framework established by the FASB accounting guidance for accounting for the cost of computer software
developed or obtained for internal use and accounting for website development costs. Costs incurred in the planning
stage and operating stage are expensed as incurred while costs incurred in the application development stage and
infrastructure development stage are capitalized, assuming such costs are deemed to be recoverable.
46
TRAVELZOO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)