Earnings Per Share

6 Months Ended

Jun. 27, 2020

Basic earnings per share (“EPS”) is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted EPS is computed by dividing net income by the weighted average common shares outstanding for the period and includes the dilutive impact of potential new common shares issuable upon vesting and exercise of stock options, vesting of restricted stock units, and assumed conversion of $402.5 million of aggregate principal amount of the 2025 Notes. Potential shares of common stock are excluded from the computation of diluted EPS if their effect is anti-dilutive.

We have the intent to settle the principal amount of the 2025 Notes in cash upon conversion, and to pay the conversion premium in cash or stock at our option; potentially dilutive common shares related to the 2025 Notes will be determined by applying the treasury stock method. See Note 4. “Long-term Debt” for more information on the 2025 Notes.

The shares underlying the conversion option of the 2025 Notes will not have an impact on our diluted EPS when net income is reported until the average market price of our common stock exceeds the conversion price of $31.17 per share. In addition to the shares underlying the conversion option, outstanding options and unvested RSUs were also excluded from the computation of dilutive EPS since their effect would be anti-dilutive due to our net loss position for the three and six months ended June 27, 2020.

A reconciliation of the numerators and denominators of the basic and diluted EPS calculations is as follows:


	Three Months Ended							Six Months Ended
In thousands, except EPS	June 27, 2020			June 29, 2019		June 27, 2020		June 29, 2019
Net income (loss)	$	(43,833)		$	10,257	$	(34,091)	$	27,686
Weighted average shares outstanding for basic EPS	80,325			78,318		80,226		78,262
Effect of dilutive securities:
Stock options	—			3,059		—		3,135
Restricted stock	—			47		—		40
Weighted average shares outstanding for diluted EPS	80,325		—	81,424		80,226		81,437
Basic EPS	$	(0.55)		$	0.13	$	(0.42)	$	0.35
Diluted EPS	$	(0.55)		$	0.13	$	(0.42)	$	0.34
Anti-dilutive options, RSUs outstanding excluded from EPS	2,458			391		2,512		391