Net Income Per Share

6 Months Ended

Jun. 28, 2022

Net Income Per Share

Net Income Per Share

11.  Net Income Per Share

Basic net income per share is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding during the period, reduced by unvested restricted stock awards. At June 28, 2022 and June 29, 2021, 2.4 million and 2.1 million shares, respectively, of restricted stock issued were unvested and, therefore, excluded from the calculation of basic earnings per share for the fiscal periods ended on those dates.

Diluted net income per share is computed by dividing net income available to common stockholders by the weighted-average number of common stock equivalents outstanding for the period. Common stock equivalents for the Notes are determined by application of the if-converted method, and common stock equivalents for outstanding stock options and restricted stock are determined by the application of the treasury stock method.

Holders of our Series A Convertible Preferred Stock, par value $0.01 per share (the “Series A preferred stock”) participated in dividends on an as-converted basis when declared on common stock. As a result, our Series A preferred stock met the definition of a participating security which required us to apply the two-class method to compute both basic and diluted net income per share. The two-class method is an earnings allocation formula that treats participating securities as having rights to earnings that would otherwise have been available to common stockholders. In addition, as our Series A preferred stock was a participating security, we were

required to calculate diluted net income per share under the if-converted method in addition to the two-class method and utilize the most dilutive result.

	Thirteen		Thirteen		Twenty-Six		Twenty-Six
	Weeks Ended		Weeks Ended		Weeks Ended		Weeks Ended
	June 28, 2022		June 29, 2021		June 28, 2022		June 29, 2021
	(In thousands, except per share data)
Basic net income per common share:
Net income	$	25,656	$	33,715	$	48,819	$	37,583
Dividends on Series A preferred stock		—		(13,591)		—		(18,661)
Undistributed earnings allocated to Series A preferred stock		—		(3,051)		—		(3,123)
Net income available to common stockholders		25,656		17,073		48,819		15,799
Basic weighted-average shares outstanding		50,387		45,471		50,360		44,830
Basic net income per common share	$	0.51	$	0.38	$	0.97	$	0.35
Diluted net income per common share:
Net income available to common stockholders		25,656		17,073		48,819		15,799
Reallocation of undistributed earnings to Series A preferred stock		—		73		—		65
Net income available to common stockholders for diluted earnings per share		25,656		17,146		48,819		15,864
Basic weighted-average shares outstanding		50,387		45,471		50,360		44,830
Dilutive effect of equity awards (1)		542		1,306		606		1,145
Diluted weighted-average shares outstanding		50,929		46,777		50,966		45,975
Diluted net income per common share	$	0.50	$	0.37	$	0.96	$	0.35

(1) Shares of common stock equivalents related to outstanding stock options and restricted stock of 3.1 million and 0.9 million as of June 28, 2022 and June 29, 2021, respectively, were excluded from the diluted calculation due to their anti-dilutive effect. No shares of common stock equivalents related to the Notes were included in the diluted calculation due to their anti-dilutive effect.