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Earnings Per Share

12 Months Ended

Sep. 28, 2019

Basic earnings per share is computed by dividing net income by the daily weighted average number of common shares outstanding during the applicable period. In fiscal years 2018 and 2017, the TEUs were 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.

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 805, 584 and 726 weighted common shares have been excluded from the diluted weighted shares outstanding calculation for fiscal years 2019, 2018 and 2017, respectively.

In connection with the pricing of the TEUs, we purchased capped calls. The capped calls were settled in the fourth quarter of fiscal year 2019 and have been reflected in the calculation of diluted earnings in fiscal year 2019. See Note 12 for additional information on our equity instruments.

Basic and diluted earnings per share were calculated as follows:



	2019		2018		2017
Net income	$	43,067	$	61,328	$	25,084

Weighted average common shares outstanding	19,258		19,163		19,040
Effect of dilutive securities
Stock-based compensation	189		130		97
Weighted average dilutive common shares outstanding	19,447		19,293		19,137

Earnings per share
Basic	$	2.24	$	3.20	$	1.32
Diluted	$	2.21	$	3.18	$	1.31