Computation of Earnings Per Common Share

6 Months Ended

Jul. 25, 2020

Computation of Earnings Per Common Share

Computation of Earnings per Common Share

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


	For the Three Months Ended						For the Six Months Ended
	July 25, 2020		July 27, 2019		July 25, 2020		July 27, 2019
Net income available to common stockholders (numerator)	$	37,024	$	29,896	$	4,606	$	44,175

Weighted-average number of common shares (denominator)	31,750,547		31,487,011		31,677,012		31,469,401

Basic earnings per common share	$	1.17	$	0.95	$	0.15	$	1.40

Weighted-average number of common shares	31,750,547		31,487,011		31,677,012		31,469,401
Potential shares of common stock arising from stock options, and unvested restricted share units	377,551		333,285		270,334		333,967
Potential shares of common stock issuable on conversion of 0.75% convertible senior notes due 2021 ⁽¹⁾	—		—		—		—
Total shares-diluted (denominator)	32,128,098		31,820,296		31,947,346		31,803,368

Diluted earnings per common share	$	1.15	$	0.94	$	0.14	$	1.39

Anti-dilutive weighted shares excluded from the calculation of earnings per common share:
Stock-based awards	367,191		276,284		371,068		296,230
0.75% convertible senior notes due 2021^{(1) (2)}	1,586,404		5,005,734		2,873,465		5,005,734
Warrants^{(1) (2)}	1,586,404		5,005,734		2,873,465		5,005,734
Total	3,539,999		10,287,752		6,117,998		10,307,698

⁽¹⁾Under the treasury stock method, our 0.75% convertible senior notes (“Notes”) will have a dilutive impact on earnings per common share if our average stock price for the period exceeds the $96.89 per share conversion price. Our average stock price did not exceed the per share conversion price during the first and second quarters of fiscal 2021; therefore, there was no dilutive impact on earnings per common share for the three and six months ended July 25, 2020. The warrants associated with our Notes will have a dilutive impact on earnings per common share if our average stock price for the period exceeds the $130.43 per share warrant strike price. As our average stock price did not exceed the strike price for the warrants for any of the periods presented, the underlying common shares were anti-dilutive as reflected in the table above.

⁽²⁾ In connection with the purchase of $401.7 million of the convertible senior notes (“Notes”) during the six months ended July 25, 2020, and $25.0 million in fiscal 2020, we unwound convertible note hedge transactions and warrants proportionately to the number of Notes, resulting in a decrease in the number of excluded weighted shares.

In connection with the offering of the Notes, we entered into convertible note hedge transactions with counterparties for the purpose of reducing the potential dilution to common stockholders from the conversion of the notes and offsetting any potential cash payments in excess of the principal amount of the notes. Prior to conversion, the convertible note hedge is not included for purposes of the calculation of earnings per common share as its effect would be anti-dilutive. Upon conversion, the convertible note hedge is expected to offset the dilutive effect of the convertible senior notes when the average stock price for the period is above $96.89 per share. See Note 13, Debt, for additional information related to our convertible senior notes, warrant transactions, and hedge transactions.