Net Income (Loss) Per Share

6 Months Ended

Jul. 30, 2022

8. Net Income (Loss) Per Share

The following table summarizes the computation of basic and diluted net income (loss) per common share (“EPS”) (in thousands, except share and per share data):


	For the Thirteen Weeks Ended					For the Twenty-Six Weeks Ended
	July 30, 2022		July 31, 2021			July 30, 2022		July 31, 2021
Numerator
Net income (loss) attributable to common shareholders	$	17,805	$	(24,648	)	$	32,220	$	(42,956	)
Denominator
Weighted average number of common shares outstanding		10,120,226		9,895,314			10,093,098		9,780,833
Assumed exercise of warrants		3,810,140		2,555,037			3,809,359		1,277,518
Weighted average common shares, basic		13,930,366		12,450,351			13,902,457		11,058,351
Dilutive effect of stock options and restricted shares		322,063		—			309,311		—
Weighted average common shares, diluted		14,252,429		12,450,351			14,211,768		11,058,351
Net income (loss) per common share, basic	$	1.28	$	(1.98	)	$	2.32	$	(3.88	)
Net income (loss) per common share, diluted	$	1.25	$	(1.98	)	$	2.27	$	(3.88	)

Equity compensation awards are excluded from the diluted earnings per share calculation when their inclusion would have an antidilutive effect such as when the Company has a net loss for the reporting period, or if the assumed proceeds per share of the award is in excess of the related fiscal period’s average price of the Company’s common stock. Accordingly, 136,096 and 148,839 shares for the thirteen and twenty-six weeks ended July 30, 2022 and 77,403 and 104,108 shares for the thirteen and twenty-six weeks ended July 31, 2021, respectively, were excluded from the diluted earnings per share calculation because their inclusion would be antidilutive.

Warrants

As described in Note 5, Debt, on May 31, 2021 the Company chose to issue 272,097 additional shares of common stock to the Priming Lenders. As a result of this choice, the warrants related to the holders of the Subordinated Term Loan became exercisable into 3,820,748 shares of common stock for an aggregate exercise price of $186,000. Also, the warrants liability totaling $73.0 million was reclassed to Additional paid-in capital because from that date they can only be settled by exercise of the warrants into common stock (i.e., cash is no longer a settlement option). Through May 31, 2021, due to increases in the Company’s common stock price, the Company recognized $39.0 million and $59.8 million of non-cash fair value adjustment charges in the condensed consolidated statements of operations and comprehensive income during the thirteen and twenty-six weeks ended July 31, 2021, respectively.

Also, effective May 31, 2021 the warrants have been included in the denominator for both basic and diluted EPS calculations as the exercise of the warrants is near certain because the exercise price is non substantive in relation to the fair value of the common shares to be issued upon exercise.