NET INCOME (LOSS) PER SHARE

Net income (loss) per common share is presented using the two-class method required for participating securities. Concurrent with the closing of the IPO in November 2013, all shares of outstanding preferred stock automatically converted into 60,621,233 shares of the Company's Class B common stock. Prior to the IPO, we considered all holders of preferred stock to be participating securities as they were entitled to receive non-cumulative dividends. Additionally, we consider holders of unvested restricted common stock to be participating securities because of their non-forfeitable rights to dividends, in the event dividends are declared and paid. During the current period, we did not consider the remaining unvested restricted common stock to be participating securities because there would be no change to the reported net income (loss) per share.

Following the completion of the Company's IPO in November 2013, Class A and Class B common stock are the only outstanding equity in the Company. The rights of the holders of Class A and Class B common stock are identical, except with respect to voting and conversion. Each share of Class A common stock is entitled to one vote per share and each share of Class B common stock is entitled to ten votes per share, on all matters that are subject to stockholder vote. Shares of Class B common stock may be converted into Class A common stock at any time at the option of the stockholder, and are automatically converted upon transfer to Class A common stock, subject to certain limited exceptions.

Undistributed earnings allocated to participating securities are subtracted from net income in determining net income attributable to Class A and Class B common stockholders. Net losses are not allocated to the participating securities as holders of preferred stock and unvested restricted common stock do not have a contractual obligation to share in the losses of the Company. Undistributed earnings are calculated as net income (loss) less distributed earnings, accretion of convertible preferred stock, and current period convertible preferred stock non-cumulative dividends, whether or not declared. Basic net income (loss) per share is computed by dividing net income attributable to Class A and Class B common stockholders by the weighted-average number of shares of Class A and Class B common stock outstanding during the period.

For the calculation of diluted net income (loss), net income attributable to Class A and Class B common stockholders for basic net income is adjusted by the effect of dilutive securities, including awards under our equity compensation plans. Diluted earnings per share attributable to Class A and Class B common stockholders is computed by dividing the resulting net income (loss) attributable to Class A and Class B common stockholders by the weighted-average number of fully diluted Class A and Class B common shares outstanding.

For the three and six months ended June 29, 2014 and June 30, 2013, the computation of basic and diluted net income (loss) per share is presented on a combined basis for Class A and Class B common stock because the results are identical.

The following table presents the calculation of basic and diluted net income (loss) per common share:



	Three Months Ended					Six Months Ended
	June 29, 2014		June 30, 2013			June 29, 2014		June 30, 2013

	(in thousands, except share and per share amounts)
Numerator
Net income	$	7,756	$	4,001		$	4,806	$	2,406
Less: Accretion of convertible redeemable preferred stock	—		(2,531		)	—		(5,062		)
Less: Undistributed earnings attributable to participating securities	—		(1,470		)	—		—
Net income (loss) attributable to Class A and Class B common stockholders	$	7,756	$	—		$	4,806	$	(2,656	)
Denominator
Weighted average shares used to compute basic net income (loss) per Class A and Class B common share	124,423,877		49,891,357			124,177,090		48,156,694
Effect of potentially dilutive securities:
Stock options	8,586,514		—			8,864,658		—
Restricted stock unit awards	56,244		—			60,058		—
Weighted average shares used to compute diluted net income (loss) per Class A and Class B common share	133,066,635		49,891,357			133,101,806		48,156,694
Net income (loss) per share attributable to Class A and Class B common stockholders—basic	$	0.06	$	—		$	0.04	$	(0.06	)
Net income (loss) per share attributable to Class A and Class B common stockholders—diluted	$	0.06	$	—		$	0.04	$	(0.06	)

The following have been excluded from the computation of diluted net income (loss) per share attributable to Class A and Class B common stockholders as their effect would have been antidilutive:



	Three Months Ended		Six Months Ended
	June 29, 2014	June 30, 2013	June 29, 2014	June 30, 2013

Convertible preferred shares	—	60,621,233	—	60,621,233
Unvested restricted common shares	—	4,788,605	—	6,471,744
Stock options	466,008	13,705,378	67,835	13,705,378
Total	466,008	79,115,216	67,835	80,798,355