NET INCOME PER SHARE

The Company has two classes of common stock. Class A common stock is entitled to cash dividends as declared 54% greater than those paid on Class B common stock. Shares of Class B common stock are convertible on a share-for-share basis for Class A common stock at any time.

The Company utilizes the two-class method of computing and presenting net income per share. The two-class method is an earnings allocation formula that calculates basic and diluted net income per share for each class of common stock separately based on dividends declared and participation rights in undistributed earnings. Under the two-class method, Class A common stock is assumed to receive a 54% greater participation in undistributed earnings than Class B common stock, in accordance with the classes' respective dividend rights. Unvested share-based payment awards that contain nonforfeitable rights to dividends are treated as participating securities and therefore included in computing net income per share using the two-class method.

Diluted net income per share for Class A common stock is calculated utilizing the if-converted method, which assumes the conversion of all shares of Class B common stock to Class A common stock on a share-for-share basis, as this method is more dilutive than the two-class method. Diluted net income per share for Class B common stock does not assume conversion of Class B common stock to shares of Class A common stock.

The tables below reconcile the numerators and denominators of basic and diluted net income per share for all periods presented.



	13 Weeks Ended
	October 27, 2018
	Class A			Class B
Numerator:
Net income allocated, basic	$	4,739		$	1,361
Conversion of Class B to Class A shares	1,361			—
Effect of share-based compensation on allocated net income	—			—
Net income allocated, diluted	$	6,100		$	1,361

Denominator:
Weighted average shares outstanding, basic	9,732			4,304
Conversion of Class B to Class A shares	4,304			—
Dilutive effect of share-based compensation	—			—
Weighted average shares outstanding, diluted	14,036			4,304

	13 Weeks Ended
	October 28, 2017
	Class A			Class B
Numerator:
Net income allocated, basic	$	2,277		$	655
Conversion of Class B to Class A shares	655			—
Effect of share-based compensation on allocated net income	(1		)	(1		)
Net income allocated, diluted	$	2,931		$	654

Denominator:
Weighted average shares outstanding, basic	9,722			4,304
Conversion of Class B to Class A shares	4,304			—
Dilutive effect of share-based compensation	—			—
Weighted average shares outstanding, diluted	14,026			4,304

Outstanding stock options to purchase Class A shares of 278 and 380 were excluded from the calculation of diluted net income per share at October 27, 2018 and October 28, 2017, respectively, as a result of their anti-dilutive effect. In addition, 340 and 369 non-vested restricted Class A shares, which are considered participating securities, and their allocated net income were excluded from the diluted net income per share calculation at October 27, 2018 and October 28, 2017, respectively, due to their anti-dilutive effect.