Earnings per share – Earnings per share are based upon  the weighted average number of shares of common  stock and common stock equivalents outstanding, net  of common stock held in treasury. Earnings per share  is computed using the “treasury stock method” under  the Financial Accounting Standards Board (FASB)  Statement No. 128. Management considers assets to be impaired if the carry- ing value exceeds the undiscounted projected cash flows  from operations. If impairment exists, the assets are writ- ten down to fair value or the projected discounted cash  flows from related operations. As of December 31, 2004,  the Company expects the remaining carrying value of  assets to be recoverable. For the years ended December 31, 2002, 2003 and 2004,  options outstanding for 824,000 shares, 1,195,000 shares,  and 0 shares of common stock have been excluded from  the computation of diluted earnings per share because  their effect was anti-dilutive. Income taxes – Income taxes are accounted for using an  asset and liability approach whereby deferred tax assets  and liabilities are recorded for differences in the financial  reporting bases and tax bases of the Company’s assets  and liabilities (see Note 8). Concentration of credit risk – Financial instruments,  which potentially subject the Company to concentrations  of credit risk, include trade accounts receivable. Credit risk  is limited by the dispersion of the Company’s customers  over various geographic areas, operating primarily in the  electronics manufacturing and distribution industries. The  Company performs on-going credit evaluations of its cus- tomers and generally requires no collateral from its cus- tomers. Historically, credit losses have not been significant. The Company currently maintains substantially all of  its day-to-day operating cash balances with major finan- cial institutions. Cash balances are usually in excess of  Federal and/or foreign deposit insurance limits. Use of estimates – The preparation of financial state- ments in conformity with accounting principles gener- ally accepted in the United States of America requires  that management make estimates and assumptions that  affect the amounts reported in the consolidated financial  statements and accompanying notes. Actual results could  differ materially from those estimates. Stock split – On November 25, 2003, the Company  affected a three-for-two stock split for shareholders of  record as of November 14, 2003 in the form of a 50%  stock dividend. All share and per share amounts in the  accompanying financial statements and footnotes reflect  the effect of this stock split. 33 Year Ended December 31,  2002  2003  2004 Net income for earnings per share computation  $ 5,802,000 $10,095,000  $25,551,000 Basic Weighted average number of common shares outstanding during the year  12,276,899  12,730,808  13,404,276 Basic earnings per share  $ 0.47 $ 0.79  $ 1.91 Diluted Weighted average number of common shares outstanding used in calculating basic earnings per share  12,276,899  12,730,808  13,404,276 Add: additional shares issuable upon exercise of stock options  1,020,591  1,675,246  2,067,162 Weighted average number of common shares used in calculating diluted earnings per share  13,297,490  14,406,054  15,471,438 Diluted earnings per share $ 0.44 $ 0.70 $  1.65