CALCULATION OF EARNINGS PER SHARE

3 Months Ended

Aug. 27, 2016

Loss per share:

CALCULATION OF EARNINGS PER SHARE

10.  CALCULATION OF EARNINGS PER SHARE

We have authorized 17,000,000 shares of common stock, and 3,000,000 shares of Class B common stock. The Class B common stock has 10 votes per share and has transferability restrictions; however, Class B common stock may be converted into common stock on a share-for-share basis at any time. With respect to dividends and distributions, shares of common stock and Class B common stock rank equally and have the same rights, except that Class B common stock cash dividends are limited to 90% of the amount of Class A common stock cash dividends.

In accordance with ASC 260-10, Earnings Per Share (“ASC 260”), our Class B common stock is considered a participating security requiring the use of the two-class method for the computation of basic and diluted earnings per share. The two-class computation method for each period reflects the cash dividends paid per share for each class of stock, plus the amount of allocated undistributed earnings per share computed using the participation percentage which reflects the dividend rights of each class of stock. Basic and diluted earnings per share were computed using the two-class method as prescribed in ASC 260. The shares of Class B common stock are considered to be participating convertible securities since the shares of Class B common stock are convertible on a share-for-share basis into shares of common stock and may participate in dividends with common stock according to a predetermined formula which is 90% of the amount of Class A common stock cash dividends. 

The earnings per share (“EPS”) presented in our unaudited consolidated statements of comprehensive loss are based on the following amounts (in thousands, except per share amounts):

	For the Three Months Ended
	August 27, 2016						August 29, 2015
		Basic			Diluted			Basic			Diluted
Numerator for Basic and Diluted EPS:
Net loss	$	(2,850	)	$	(2,850	)	$	(1,399	)	$	(1,399	)
Less dividends:
Common stock		641			641			690			690
Class B common stock		116			116			116			116
Undistributed losses	$	(3,607	)	$	(3,607	)	$	(2,205	)	$	(2,205	)
Common stock undistributed losses	$	(3,057	)	$	(3,057	)	$	(1,888	)	$	(1,888	)
Class B common stock undistributed losses		(550	)		(550	)		(317	)		(317	)
Total undistributed losses	$	(3,607	)	$	(3,607	)	$	(2,205	)	$	(2,205	)
Denominator for basic and diluted EPS:
Common stock weighted average shares		10,703			10,703			11,486			11,486
Class B common stock weighted average shares, and shares under if-converted method for diluted EPS		2,141			2,141			2,141			2,141
Effect of dilutive securities
Dilutive stock options					—						—
Denominator for diluted EPS adjusted for weighted average shares and assumed conversions					12,844						13,627
Net loss per share:
Common stock	$	(0.23	)	$	(0.23	)	$	(0.10	)	$	(0.10	)
Class B common stock	$	(0.20	)	$	(0.20	)	$	(0.10	)	$	(0.10	)

Note: Common stock options that were anti-dilutive and not included in diluted earnings per common share for the first quarter of fiscal 2017 and fiscal 2016 were 838 and 888, respectively.