Earnings (Loss) Per Share

6 Months Ended

Jul. 02, 2023

The Company computes basic earnings (loss) per share (“EPS”) by dividing Net income (loss) attributable to common shares by the weighted average number of common shares outstanding for the period. The Company includes vested RSUs, DSUs, and PSUs that have not been settled in common shares in the basic weighted average number of common shares calculation. The Company’s computation of diluted EPS reflects the potential dilution that could occur if dilutive securities or other obligations to issue common stock were exercised or converted into common stock, which include in-the-money outstanding stock options and RSUs. PSUs are excluded from the calculation of dilutive potential common shares until the performance conditions have been achieved on the basis of the assumption that the end of the reporting period was the end of the contingency period, if such shares issuable are dilutive. Using the treasury stock method, the effect of dilutive securities includes the additional shares of common stock that would have been outstanding based on the assumption that these potentially dilutive securities had been issued. The treasury stock method assumes proceeds from the exercise price of stock options and the unamortized compensation expense of RSUs and stock options are used to repurchase common shares at the average market price during the period, thus reducing the dilutive effect. RSUs and stock options with assumed proceeds per unit above the Company’s average share price for the periods presented are excluded from the diluted EPS calculation because the effect is anti-dilutive.

The following table sets forth the computation of the weighted average number of diluted common shares outstanding for the three and six months ended July 2, 2023 and July 3, 2022:


	Three Months Ended		Six Months Ended
	July 2, 2023	July 3, 2022	July 2, 2023	July 3, 2022
Shares used in the computation of basic earnings per share	45,093,712	45,034,633	45,069,781	44,985,199
Effect of dilutive securities:
Stock options	522,323	635,974	523,413	723,948
RSUs and PSUs	57,512	96,983	59,823	96,908
DSUs	9,429	11,583	8,516	7,999
Shares used in the computation of diluted earnings per share	45,682,976	45,779,173	45,661,533	45,814,054

The diluted earnings per common share calculation for the three months ended July 2, 2023 and July 3, 2022 excluded the effect of 238,178 and 269,177 potential shares of common stock, respectively, because the assumed exercises of a portion of the Company’s employee stock options and RSUs were anti-dilutive. In addition, the diluted earnings per common share calculation for the six months ended July 2, 2023 and July 3, 2022 excluded the anti-dilutive effect of 233,704 and 246,083 potential shares of common stock, respectively.