Net Income Per Share

9 Months Ended

Sep. 26, 2021

Net Income Per ShareBasic net income per common share is determined by dividing the net income attributed to stockholders by the weighted average number of common shares outstanding during the period presented. Diluted income per share is determined by adjusting the weighted average number of shares of common stock and common stock equivalents outstanding for the dilutive effect of common stock equivalents for the periods presented.

The following table sets forth the computation of basic and diluted income per share attributable to the Company’s common stockholders for the periods presented (in thousands, except shares and per share amounts):


	Three Months Ended				Nine Months Ended
	September 26,		September 27,		September 26,		September 27,
	2021		2020		2021		2020

Numerator:
Net income attributed to PAE Incorporated	$	29,789	$	15,318	$	57,523	$	37,855

Denominator:
Basic weighted average shares	93,122,414		92,070,306		92,949,301		81,323,258
Diluted weighted average shares	95,836,986		93,392,565		95,599,019		82,115,825

Basic income per share	$	0.32	$	0.17	$	0.62	$	0.47
Diluted income per share	$	0.31	$	0.16	$	0.60	$	0.46

The Company has not included the effect of 19,999,985 shares of Common Stock issuable upon the exercise of warrants in the calculation of diluted net income per share for the three months and nine months ended September 26, 2021. Warrants are excluded when the exercise price exceeds the average market value of the Company’s common stock price during the applicable period.

The Company has not included the effect of 4,000,000 Earn-Out Shares in the calculation of basic and diluted net income per share for the three months and nine months ended September 26, 2021. The condition for the issuance of these shares is based on the weighted average closing sale price of the Company’s Class A Common Stock and such condition has not been met as of September 26, 2021.

Unvested RSUs and PSUs will not impact the calculation of basic earnings per share (“EPS”) until vested, in which case they would be included in the total weighted average number of shares. All potential dilutive securities, which include unvested RSUs, are included in the diluted EPS calculation. Unvested PSUs are included in the calculation of diluted EPS to the extent that the performance criteria have been achieved.