Net Income Per Share

9 Months Ended

Oct. 01, 2011

Net Income Per Share

Net Income Per Share

12.  Net Income Per Share

Our restricted stock awards subject to repurchase and settled in shares of common stock upon vesting have non-forfeitable rights to receive dividends on an equal basis with common stock and therefore are considered participating securities. Under the two-class method, basic and diluted net income per common share are determined by calculating net income per share for common stock and participating securities based on participation rights in undistributed earnings. Dilutive net income per common share also considers the dilutive effect of the in-the-money stock options, restricted stock units, and the dilutive effect of the senior subordinated convertible notes, calculated using the treasury stock method. Under the if-converted method, the amount of assumed proceeds from unexercised stock options, restricted stock units and the dilutive effect of the senior subordinated convertible notes includes the amount of unrecognized compensation cost attributable to future services, assumed proceeds from the exercise of the options, and the incremental income tax benefit or liability that would be recorded in additional-paid-in capital when the award becomes deductible.

Basic and diluted income per common share attributable to common shareholders under the two-class method were calculated as follows:

	Three Months Ended						Nine Months Ended
	October 1, 2011			October 2, 2010			October 1, 2011			October 2, 2010
	(in thousands, except per share data)
Basic net income per common share calculation
Income from continuing operations	$	18,989		$	15,480		$	57,230		$	46,381
Income from continuing operations allocated to participating securities	(24		)	(86		)	(108		)	(310		)
Income from continuing operations attributable to common shareholders	$	18,965		$	15,394		$	57,122		$	46,071
Loss from discontinued operations	$	(1,031	)	$	(1,183	)	$	(1,031	)	$	(3,697	)
Loss from discontinued operations allocated to participating securities	1			7			2			25
Loss from discontinued operations attributable to common shareholders	$	(1,030	)	$	(1,176	)	$	(1,029	)	$	(3,672	)
Net income	$	17,958		$	14,297		$	56,199		$	42,684
Net income allocated to participating securities	(23		)	(79		)	(106		)	(285		)
Net income attributable to common shareholders	$	17,935		$	14,218		$	56,093		$	42,399
Weighted average number of common shares used to compute basic income per common share	59,763			58,138			58,630			57,473
Basic net income per common share
Continuing operations	$	0.32		$	0.26		$	0.97		$	0.80
Discontinued operations	(0.02		)	(0.02		)	(0.02		)	(0.06		)
Total	$	0.30		$	0.24		$	0.95		$	0.74

	Three Months Ended						Nine Months Ended
	October 1, 2011			October 2, 2010			October 1, 2011			October 2, 2010
	(in thousands, except per share data)
Diluted net income per common share calculation
Income from continuing operations	$	18,989		$	15,480		$	57,230		$	46,381
Interest expense on senior subordinated convertible notes (after tax)	—			1,812			2,718			5,312
Income from continuing operations for diluted share calculation	18,989			17,292			59,948			51,693
Income from continuing operations allocated to participating securities	(22		)	(84		)	(100		)	(302		)
Income from continuing operations attributable to common shareholders	$	18,967		$	17,208		$	59,848		$	51,391
Loss from discontinued operations	$	(1,031	)	$	(1,183	)	$	(1,031	)	$	(3,697	)
Loss from discontinued operations allocated to participating securities	1			7			1			25
Loss from discontinued operations attributable to common shareholders	$	(1,030	)	$	(1,176	)	$	(1,030	)	$	(3,672	)
Net income	$	17,958		$	14,297		$	56,199		$	42,684
Interest expense on senior subordinated convertible notes (after tax)	—			1,812			2,718			5,312
Net income for diluted share calculation	17,958			16,109			58,917			47,996
Net income allocated to participating securities	(21		)	(77		)	(99		)	(277		)
Net income attributable to common shareholders	$	17,937		$	16,032		$	58,818		$	47,719
Weighted average number of common shares used to compute basic net income per common share attributable to common shares	59,763			58,138			58,630			57,473
Dilutive effect of stock-based compensation plans	903			1,303			898			1,502
Dilutive effect on conversion of senior subordinated convertible notes	—			7,171			3,778			7,241
Weighted average number of common shares used to compute diluted net income per common share	60,666			66,612			63,306			66,216
Diluted net income per common share
Continuing operations	$	0.31		$	0.26		$	0.95		$	0.78
Discontinued operations	(0.02		)	(0.02		)	(0.02		)	(0.06		)
Total	$	0.29		$	0.24		$	0.93		$	0.72

The weighted average unvested restricted stock awards outstanding were 75,090 and 323,582 for the three months ended October 1, 2011 and October 2, 2010, respectively.  The weighted average unvested restricted stock awards outstanding were 110,521 and 386,808 for the nine months ended October 1, 2011 and October 2, 2010, respectively.

Potential common share equivalents excluded where the inclusion would be anti-dilutive are as follows:

	Three Months Ended		Nine Months Ended
	October 1, 2011	October 2, 2010	October 1, 2011	October 2, 2010
	(in thousands)
Options to purchase shares not included in the computation of diluted income per share because their inclusion would be anti-dilutive	637	33	840	344