Earnings Per Share

3 Months Ended

Mar. 28, 2021

7. Earnings Per Share

We compute earnings per share using the two-class method. The two-class method requires an earnings allocation formula that determines earnings per share for common shareholders 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 participating securities and undistributed earnings allocated to participating securities, are subtracted from net income attributable to the Company in determining net income attributable to common shareholders. Additionally, any accretion to the redemption value for the Series B Preferred Stock is treated as a deemed dividend in the two-class EPS calculation.

The calculations of basic and diluted earnings per common share are as follows (in thousands, except per-share data):


	Three Months Ended
	March 28,		March 29,
	2021		2020

Basic earnings per common share
Net income attributable to the Company	$	33,883	$	8,443
Dividends paid to participating securities and accretion		(3,527)		(3,471)
Net income attributable to participating securities		(3,243)		—
Net income attributable to common shareholders	$	27,113	$	4,972

Basic weighted average common shares outstanding		32,756		32,093
Basic earnings per common share	$	0.83	$	0.15

Diluted earnings per common share
Net income attributable to common shareholders	$	27,113	$	4,972

Weighted average common shares outstanding		32,756		32,093
Dilutive effect of outstanding equity awards (a)		334		227
Diluted weighted average common shares outstanding (b)		33,090		32,320
Diluted earnings per common share	$	0.82	$	0.15

(a)	Excludes 18 and 382 equity awards for the three months ended March 28, 2021 and March 29, 2020 respectively, as the effect of including such awards would have been anti-dilutive.

(b)

The Company had 252.5 shares of Series B Preferred Stock outstanding as of March 28, 2021 and March 29, 2020. For the fully diluted calculation, the Series B Preferred stock dividends were added back to net income attributable to common shareholders. 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 for both periods presented and as such was excluded.