XML 30 R11.htm IDEA: XBRL DOCUMENT v2.4.0.6
Earnings Per Share
 3 Months Ended
Dec. 01, 2012
Earnings Per Share [Abstract]  
Earnings Per Share

 

NOTE 5 – EARNINGS PER SHARE

 

Basic earnings per common share (EPS) is calculated by dividing net income or loss by the weighted-average number of common shares outstanding for the period.  Diluted EPS is calculated by dividing net income or loss by the weighted-average number of common shares outstanding plus the assumed exercise of all dilutive securities using the treasury stock method or the “if converted” method, as appropriate.  In conjunction with modifications to our management stock loan program in previous periods, we determined that the shares of management stock loan participants that were placed in the escrow account are participating securities because they continue to have equivalent common stock dividend rights.  Accordingly, these management stock loan shares are included in our basic EPS calculation during periods of net income and excluded from the basic EPS calculation in periods of net loss.  Our unvested share-based compensation awards are not entitled to participate in dividends until they vest and are excluded from our EPS calculation.

 

The following table presents the computation of our EPS for the periods indicated (in thousands, except per share amounts):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

 

December 1,

 

 

November 26,

 

 

2012

 

 

2011

Numerator for basic and

 

 

 

 

 

diluted earnings per share:

 

 

 

 

 

Income before income taxes

$
4,693 

 

$
3,074 

Income tax provision

 
(1,796)

 

 
(1,412)

Net income

$
2,897 

 

$
1,662 

 

 

 

 

 

 

Denominator for basic and

 

 

 

 

 

diluted earnings per share:

 

 

 

 

 

Basic weighted average shares

 

 

 

 

 

outstanding(1)

 
18,161 

 

 
17,733 

Effect of dilutive securities:

 

 

 

 

 

Stock options and other

 

 

 

 

 

share-based awards

 
30 

 

 
30 

Common stock warrants

 
1,084 

 

 
235 

Diluted weighted average shares

 

 

 

 

 

outstanding

 
19,275 

 

 
17,998 

 

 

 

 

 

 

EPS Calculations:

 

 

 

 

 

Net income per share:

 

 

 

 

 

Basic

$
0.16 

 

$
0.09 

Diluted

 
0.15 

 

 
0.09 

 

(1)Since we recognized net income for the quarters ended December  1, 2012 and November 26, 2011, basic weighted average shares for those periods include 3.3 million shares of common stock held by management stock loan participants that were placed in escrow.

 

At December 1, 2012 and November 26, 2011, we had approximately 0.7 million stock options outstanding, which were not included in the computation of diluted EPS because the options’ exercise prices were greater than the average market price of our common shares for the respective periods.  Although these shares were not included in our calculation of diluted EPS, these stock options, and other dilutive securities, including performance share-based compensation instruments, may have a dilutive effect on our EPS calculation in future periods if the price of our common stock increases.

 

During the quarter ended December 1, 2012, Knowledge Capital Investment Group (Knowledge Capital) exercised its warrant with respect to 1,000,000 shares on a net settlement basis.  Accordingly, we issued 340,877 shares of our common stock from treasury under the terms of an existing agreement with Knowledge Capital.  Since the common stock warrants expire in March 2013, we expect that additional shares of our common stock will be issued in fiscal 2013 as remaining warrants are exercised.