Earnings Per Share

9 Months Ended

Sep. 30, 2017

2. Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share data):

	Three Months Ended				Nine Months Ended
	September 30, 2017		October 1, 2016		September 30, 2017		October 1, 2016
Net income	$	19,949	$	20,018	$	51,944	$	41,385

Shares used in computing basic earnings per share	42,553		41,614		42,376		41,673

Effect of dilutive securities:
Stock options and other stock-based awards	821		693		818		590
Shares used in computing diluted earnings per share	43,374		42,307		43,194		42,263

Earnings per share:
Basic	$	0.47	$	0.48	$	1.23	$	0.99
Diluted	$	0.46	$	0.47	$	1.20	$	0.98

For the three months ended September 30, 2017 and October 1, 2016 and the nine months ended September 30, 2017 and October 1, 2016, approximately 0.0 million, 0.1 million, 0.0 million and 0.2 million shares, respectively, consisting of restricted stock units (RSUs), market stock units (MSUs) and stock options, were not included in the diluted earnings per share calculation since the shares were anti-dilutive.

The Company intends to settle the principal amount of its convertible senior notes in cash and any excess value in shares in the event of a conversion. Accordingly, shares issuable upon conversion of the principal amount have been excluded from the calculation of diluted earnings per share. If the market value of the notes under certain prescribed conditions exceeds the conversion amount, the excess will be included in the denominator for the computation of diluted earnings per share using the treasury stock method. As of September 30, 2017, no such shares were included in the denominator for the calculation of diluted earnings per share. See Note 7, Debt, to the Condensed Consolidated Financial Statements for additional information.