(Loss) Earnings per Share

12 Months Ended

Dec. 29, 2019

(Loss) Earnings per Share

(Loss) Earnings per Share

9. (Loss) Earnings per Share

We compute (loss) earnings per share using the two-class method. The two-class method requires an earnings allocation formula that determines (loss) earnings per share for common stockholders and participating security holders according to dividends declared and participating rights in undistributed earnings. The Series B Preferred Stock and time-based restricted stock awards are participating securities because holders of such shares have non-forfeitable dividend rights and participate in undistributed earnings with common stock. Under the two-class method, total dividends provided to the holders of Series B Preferred Stock, including common dividends and undistributed earnings allocated to participating securities, are subtracted from net income attributable to the Company in determining net income attributable to common

stockholders.  Additionally, any accretion to redemption value is treated as a deemed dividend in the two-class EPS calculation.

Additionally, in accordance with ASC 480, “Distinguishing Liabilities from Equity”, the increase in the redemption value for the noncontrolling interest of one of our prior joint ventures reduced income attributable to common shareholders (and a decrease in redemption value increases income attributable to common shareholders).  This joint venture was divested during 2018 and thus no change in redemption value occurred in 2019 or 2018.  The change in noncontrolling interest redemption value was $1.4 million for the year ended December 31, 2017.  See Note 11 for additional information.  

Basic (loss) earnings per common share are computed by dividing net income attributable to common shareholders by the weighted-average common shares outstanding. Diluted (loss) earnings per common share are computed by dividing the net (loss) income attributable to common shareholders by the diluted weighted average common shares outstanding. Diluted weighted average common shares outstanding consist of basic weighted average common shares outstanding plus weighted average awards outstanding under our equity compensation plans, which are dilutive securities.

The calculations of basic (loss) earnings per common share and diluted (loss) earnings per common share for the years ended December 29, 2019, December 30, 2018 and December 31, 2017 are as follows (in thousands, except per share data):

	2019		2018		2017
Basic (loss) earnings per common share:
Net income attributable to the Company	$	4,866	$	2,474	$	102,292
Preferred stock dividends and accretion		(12,499)		—		—
Change in noncontrolling interest redemption value		—		—		1,419
Net income attributable to participating securities		—		—		(423)
Net (loss) income attributable to common shareholders	$	(7,633)	$	2,474	$	103,288
Basic weighted average common shares outstanding		31,632		32,083		36,083
Basic (loss) earnings per common share	$	(0.24)	$	0.08	$	2.86
Diluted (loss) earnings per common share:
Net (loss) income attributable to common shareholders	$	(7,633)	$	2,474	$	103,288
Weighted average common shares outstanding		31,632		32,083		36,083
Dilutive effect of outstanding equity awards (a)		—		216		439
Diluted weighted average common shares outstanding (b)		31,632		32,299		36,522
Diluted (loss) earnings per common share	$	(0.24)	$	0.08	$	2.83

(a) Shares subject to options to purchase common stock with an exercise price greater than the average market price for the year were not included in the computation of diluted earnings per common share because the effect would have been antidilutive. The weighted average number of shares subject to antidilutive options was 1.2 million in 2018 and 278,000 in 2017.

(b) The Company had 252,530 shares of Series B Preferred Stock outstanding as of December 29, 2019.  For the fully diluted calculation, the Series B Preferred stock dividends were added back to net income attributable to common stockholders.  The Company then applied the if-converted method to calculate dilution on the Series B Preferred Stock, which resulted in 5.0 million additional common shares.  This calculation was anti-dilutive.

See Note 11 for additional information regarding our noncontrolling interests and Note 23 for equity awards, including restricted stock.