Calculation of Earnings Per Share

6 Months Ended

Dec. 01, 2018

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) income were based on the following amounts (in thousands, except per share amounts):

	Three Months Ended
	December 1, 2018						December 2, 2017
	Basic			Diluted			Basic			Diluted
Numerator for Basic and Diluted EPS:
Net (loss) income from continuing operations	$	(304	)	$	(304	)	$	172		$	172
Less dividends:
Common stock		658			658			647			647
Class B common stock		112			112			116			116
Undistributed losses	$	(1,074	)	$	(1,074	)	$	(591	)	$	(591	)
Common stock undistributed losses	$	(916	)	$	(916	)	$	(501	)	$	(501	)
Class B common stock undistributed losses		(158	)		(158	)		(90	)		(90	)
Total undistributed losses	$	(1,074	)	$	(1,074	)	$	(591	)	$	(591	)
Income from discontinued operations	$	—		$	—		$	1,496		$	1,496
Less dividends:
Common stock		—			—			647			647
Class B common stock		—			—			116			116
Undistributed earnings	$	—		$	—		$	733		$	733
Common stock undistributed earnings	$	—		$	—		$	622		$	622
Class B common stock undistributed earnings		—			—			111			111
Total undistributed earnings	$	—		$	—		$	733		$	733
Net (loss) income	$	(304	)	$	(304	)	$	1,668		$	1,668
Less dividends:
Common stock		658			658			647			647
Class B common stock		112			112			116			116
Undistributed (losses) earnings	$	(1,074	)	$	(1,074	)	$	905		$	905
Common stock undistributed (losses) earnings	$	(916	)	$	(916	)	$	768		$	768
Class B common stock undistributed (losses) earnings		(158	)		(158	)		137			137
Total undistributed (losses) earnings	$	(1,074	)	$	(1,074	)	$	905		$	905
Denominator for Basic and Diluted EPS:
Common stock weighted average shares		10,952			10,952			10,755			10,755
Class B common stock weighted average shares, and shares under if-converted method for diluted EPS		2,097			2,097			2,137			2,137
Effect of dilutive securities
Dilutive stock options					—						34
Denominator for diluted EPS adjusted for weighted average shares and assumed conversions					13,049						12,926
Net (loss) income from continuing operations per share:
Common stock	$	(0.02	)	$	(0.02	)	$	0.01		$	0.01
Class B common stock	$	(0.02	)	$	(0.02	)	$	0.01		$	0.01
Income from discontinued operations per share:
Common stock	$	—		$	—		$	0.12		$	0.12
Class B common stock	$	—		$	—		$	0.11		$	0.11
Net (loss) income per share:
Common stock	$	(0.02	)	$	(0.02	)	$	0.13		$	0.13
Class B common stock	$	(0.02	)	$	(0.02	)	$	0.12		$	0.12

Note: Common stock options that were anti-dilutive and not included in diluted earnings per common share for the second quarter of fiscal 2019 were 117.

	Six Months Ended
	December 1, 2018						December 2, 2017
	Basic			Diluted			Basic			Diluted
Numerator for Basic and Diluted EPS:
Income from continuing operations	$	127		$	127		$	60		$	60
Less dividends:
Common stock		1,306			1,306			1,290			1,290
Class B common stock		228			228			231			231
Undistributed losses	$	(1,407	)	$	(1,407	)	$	(1,461	)	$	(1,461	)
Common stock undistributed losses	$	(1,198	)	$	(1,200	)	$	(1,239	)	$	(1,239	)
Class B common stock undistributed losses		(209	)		(207	)		(222	)		(222	)
Total undistributed losses	$	(1,407	)	$	(1,407	)	$	(1,461	)	$	(1,461	)
Income from discontinued operations	$	—		$	—		$	1,496		$	1,496
Less dividends:
Common stock		—			—			1,290			1,290
Class B common stock		—			—			231			231
Undistributed losses	$	—		$	—		$	(25	)	$	(25	)
Common stock undistributed losses	$	—		$	—		$	(21	)	$	(21	)
Class B common stock undistributed losses		—			—			(4	)		(4	)
Total undistributed losses	$	—		$	—		$	(25	)	$	(25	)
Net income	$	127		$	127		$	1,556		$	1,556
Less dividends:
Common stock		1,306			1,306			1,290			1,290
Class B common stock		228			228			231			231
Undistributed (losses) earnings	$	(1,407	)	$	(1,407	)	$	35		$	35
Common stock undistributed (losses) earnings	$	(1,198	)	$	(1,200	)	$	30		$	30
Class B common stock undistributed (losses) earnings		(209	)		(207	)		5			5
Total undistributed (losses) earnings	$	(1,407	)	$	(1,407	)	$	35		$	35
Denominator for basic and diluted EPS:
Common stock weighted average shares		10,890			10,890			10,734			10,734
Class B common stock weighted average shares, and shares under if-converted method for diluted EPS		2,114			2,114			2,137			2,137
Effect of dilutive securities
Dilutive stock options					163						30
Denominator for diluted EPS adjusted for weighted average shares and assumed conversions					13,167						12,901
Income from continuing operations per share:
Common stock	$	0.01		$	0.01		$	—		$	—
Class B common stock	$	0.01		$	0.01		$	—		$	—
Income from discontinued operations per share:
Common stock	$	—		$	—		$	0.12		$	0.12
Class B common stock	$	—		$	—		$	0.11		$	0.11
Net income per share:
Common stock	$	0.01		$	0.01		$	0.12		$	0.12
Class B common stock	$	0.01		$	0.01		$	0.11		$	0.11