Calculation of Earnings Per Share

3 Months Ended

Aug. 27, 2022

6. 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 common stock cash dividends.

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. 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 common stock cash dividends.

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

	Three Months Ended
	August 27, 2022				August 28, 2021
	Basic		Diluted		Basic		Diluted
Numerator for Basic and Diluted EPS:
Net income	$	6,324	$	6,324	$	2,635	$	2,635
Less dividends:
Common stock		709		709		673		673
Class B common stock		110		110		113		113
Undistributed earnings	$	5,505	$	5,505	$	1,849	$	1,849

Common stock undistributed earnings	$	4,755	$	4,788	$	1,582	$	1,588
Class B common stock undistributed earnings		750		717		267		261
Total undistributed earnings	$	5,505	$	5,505	$	1,849	$	1,849

Denominator for Basic and Diluted EPS:
Common stock weighted average shares		11,715		11,715		11,194		11,194
Effect of dilutive securities
Dilutive stock options				616				273
Denominator for diluted EPS adjusted for weighted average shares and assumed conversion				12,331				11,467
Class B commons stock weighted average shares and shares under if-converted method for diluted EPS		2,053		2,053		2,097		2,097

Net income per share:
Common stock	$	0.47	$	0.45	$	0.20	$	0.20
Class B common stock	$	0.42	$	0.40	$	0.18	$	0.18

Note: There were no common stock options that were antidilutive in the first quarter of fiscal 2023 and fiscal 2022.