Earnings Per Share

6 Months Ended

Mar. 31, 2018

EARNINGS PER SHARE

Basic earnings per share is computed by dividing net income by the daily weighted average number of common shares outstanding during the applicable period. The TEUs are assumed to be settled at the minimum settlement amount of 1.9841 shares per TEU when calculating weighted-average common shares outstanding for purposes of basic earnings per share.

Using the treasury stock method, diluted earnings per share includes the potentially dilutive effect of common shares issued in connection with outstanding stock-based compensation options and grants. The potentially dilutive effect of common shares issued in connection with outstanding stock options is determined based on the average market price for the period. For diluted earnings per share, the TEUs are assumed to be settled at a conversion factor based on our daily volume-weighted average price per share of our common stock for the 20 consecutive trading days preceding the end of the current fiscal quarter not to exceed 2.3810 shares of common stock per TEU.

Under the treasury stock method, shares associated with certain stock options have been excluded from the diluted weighted average shares outstanding calculation because the exercise of those options would lead to a net reduction in common shares outstanding or anti-dilution. As a result, stock options to acquire 482 and 629 weighted common shares have been excluded from the diluted weighted average common shares outstanding calculation for the three months ended March 31, 2018 and April 1, 2017, respectively. Stock options to acquire 489 and 649 weighted common shares have been excluded from the diluted weighted average common shares outstanding calculation for the six months ended March 31, 2018 and April 1, 2017, respectively.

In connection with the pricing of the TEUs, we purchased Capped Calls. The Capped Calls will not be reflected in the calculation of diluted earnings per share until settled as they are anti-dilutive. See Note 12 for additional information on our equity instruments.

Basic and diluted earnings per share are calculated as follows:



	Three Months Ended				Six Months Ended
	March 31, 2018		April 1, 2017		March 31, 2018		April 1, 2017
Net income	$	8,438	$	7,199	$	41,589	$	8,904

Weighted average common shares outstanding	19,150		19,016		19,137		18,992
Effect of dilutive securities
Stock-based compensation	123		93		121		103
Weighted average dilutive common shares outstanding	19,273		19,109		19,258		19,095

Earnings per share
Basic	$	0.44	$	0.38	$	2.17	$	0.47
Diluted	0.44		0.38		2.16		0.47