Note 17 - Earnings Per Share

12 Months Ended

Jan. 02, 2016

17. Earnings P

er Share

As of January 2014, the company no longer had “participating securities” as defined under ASC 260. As such, the company now calculates its earnings per share using the treasury method. All of the previous participating securities that resulted in the company using the two-class method have become fully vested or have otherwise expired.

In 2013, the company calculated its earnings per share using the two-class method which included an earnings allocation formula that determined earnings per share for each class of common stock according to dividends declared and undistributed earnings for the period. Previously, the company’s reported net earnings were reduced by the amount allocated to participating securities to arrive at the earnings

allocated to common stock shareholders for purposes of calculating earnings per share under the two-class method.

Under the previous two-class method calculation, the dilutive effect of participating securities was calculated using the more dilutive of the treasury stock or the two-class method. The company previously determined the two-class method to be the more dilutive. As such, the earnings allocated to common stock shareholders in the basic earnings per share calculation was adjusted for the reallocation of undistributed earnings to participating securities to arrive at the earnings allocated to common stock shareholders for calculating the diluted earnings per share.

The following table sets forth the computation of basic and diluted earnings per share under the two-class method:

(In thousands, except per share amounts)	201 5		201 4		20 13

Net income as reported	$	82,466	$	99,418	$	88,784
Less: Distributed earnings available to participating securities		—		—		(35	)
Less: Undistributed earnings available to participating securities		—		—		(16	)
Numerator for basic earnings per share —
Undistributed and distributed earnings available to common shareholders	$	82,466	$	99,418	$	88,733
Add: Undistributed earnings allocated to participating securities		—		—		16
Less: Undistributed earnings reallocated to participating securities		—		—		(16	)
Numerator for diluted earnings per share —
Undistributed and distributed earnings available to common shareholders	$	82,466	$	99,418	$	88,733
Denominator for basic earnings per share —
Weighted-average shares		22,565		22,543		22,315
Effect of dilutive securities:
Common stock equivalents		154		184		222
Denominator for diluted earnings per share —
Adjusted for weighted-average shares & assumed conversions		22,719		22,727		22,537
Basic earnings per share	$	3.65	$	4.41	$	3.98
Diluted earnings per share	$	3.63	$	4.37	$	3.94

The following potential shares of common stock attributable to stock options were excluded from the earnings per share calculation because their effect would be anti-dilutive: 113,130 in 2015; 43,693 in 2014; and 96,401 in 2013.