Earnings (Loss) Per Share

9 Months Ended

Jun. 27, 2020

EARNINGS (LOSS) PER SHARE

Basic earnings (loss) per share is computed by dividing net income (loss) by the daily weighted average number of common shares outstanding during the applicable period. For the three and nine months ended June 29, 2019, the tangible equity units (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 (loss) per share.

Using the treasury stock method, diluted earnings (loss) 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 the three and nine months ended June 29, 2019 diluted earnings per share, the TEUs were 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 1,187 and 835 weighted common shares have been excluded from the diluted weighted average common shares outstanding calculation for the three months ended June 27, 2020 and June 29, 2019, respectively. Stock options to acquire 1,154 and 812 weighted common shares have been excluded from the diluted weighted average common shares outstanding calculation for the nine months ended June 27, 2020 and June 29, 2019, respectively.

In connection with the pricing of the TEUs, we purchased capped calls. For the three and nine months ended June 29, 2019, the capped calls were not reflected in the calculation of diluted earnings per share as they had not yet settled and, therefore, led to a net reduction in common shares outstanding or anti-dilution. The capped calls were settled in the fourth quarter of fiscal year 2019 in conjunction with the settlement of the TEUs.

Basic and diluted earnings (loss) per share are calculated as follows:



	Three Months Ended				Nine Months Ended
	June 27, 2020		June 29, 2019		June 27, 2020		June 29, 2019
Net income (loss)	$	4,389	$	13,585	$	8,624	$	38,246

Weighted average common shares outstanding	19,229		19,297		19,189		19,255
Effect of dilutive securities
Stock-based compensation	86		223		160		181
Weighted average dilutive common shares outstanding	19,315		19,520		19,349		19,436

Earnings per share
Basic	$	0.23	$	0.70	$	0.45	$	1.99
Diluted	0.23		0.70		0.45		1.97