Computation of Earnings Per Common Share

6 Months Ended

Jul. 31, 2021

Earnings Per Share [Abstract]

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 31, 2021		July 25, 2020		July 31, 2021		July 25, 2020
Net income available to common stockholders (numerator)	$	18,165	$	37,024	$	19,063	$	4,606
Weighted-average number of common shares (denominator)	30,431,143		31,750,547		30,553,381		31,677,012
Basic earnings per common share	$	0.60	$	1.17	$	0.62	$	0.15
Weighted-average number of common shares	30,431,143		31,750,547		30,553,381		31,677,012
Potential shares of common stock arising from stock options, and unvested restricted share units	441,363		377,551		532,604		270,334
Total shares-diluted (denominator)	30,872,506		32,128,098		31,085,985		31,947,346
Diluted earnings per common share	$	0.59	$	1.15	$	0.61	$	0.14
Anti-dilutive weighted shares excluded from the calculation of earnings per common share:
Stock-based awards	226,894		367,191		88,613		371,068
0.75% convertible senior notes due 2021(1) (2)	601,349		1,586,404		601,349		2,873,465
Warrants(1) (2)	601,349		1,586,404		601,349		2,873,465
Total	1,429,592		3,539,999		1,291,311		6,117,998

(1) Under the treasury stock method, the 2021 Convertible Notes (as defined in Note 13) 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 three and six months ended July 31, 2021 and July 25, 2020; therefore, there was no dilutive impact on earnings per common share for these periods. The warrants associated with our 2021 Convertible 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 offering of the 2021 Convertible 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 2021 Convertible Notes and offsetting any potential cash payments in excess of the principal amount of the 2021 Convertible 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 2021 Convertible 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 2021 Convertible Notes, warrant transactions, and hedge transactions.

In connection with the purchase of $401.7 million of the 2021 Convertible Notes in fiscal 2021 and $25.0 million in fiscal 2020, we unwound convertible note hedge transactions and warrants proportionately to the number of 2021 Convertible Notes, resulting in a decrease in the number of excluded weighted shares.