DIGITAL LINK CORPORATION STATEMENT OF COMPUTATION OF NET INCOME (LOSS) PER SHARE (In thousands, except per share data, unaudited) Quarter Ended Nine Months Ended September 30, September 30, ----------------- --------------- 1997 1996 1997 1996 ---- ---- ---- ---- Primary: Net income (loss) ..................... $ (615) $ 1,481 $ 2,421 $ 2,890 ======= ======= ======= ======= Weighted average number of shares from: Common shares outstanding .... 9,240 9,149 9,206 9,080 Common equivalent shares from stock options outstanding ............. 0 302 379 337 ------- ------- ------- ------- Common and common equivalent shares used in computing per share amounts ..................... 9,240 9,451 9,585 9,417 ======= ======= ======= ======= Net income (loss) per share ........... $ (0.07) $ 0.16 $ 0.25 $ 0.31 ======= ======= ======= ======= Note: There is no material difference in the computation of net income per share on a fully diluted basis.