Earnings Per Share

6 Months Ended

Jul. 02, 2023

EARNINGS PER SHARE

The Company computes basic earnings per share (“EPS”) by dividing net income by the weighted average common shares outstanding, including participating securities outstanding, during the period as discussed below. Diluted EPS reflects the potential dilution beyond shares for basic EPS that could occur if securities or other contracts to issue common stock were exercised, converted into common stock or resulted in the issuance of common stock that would have shared in the Company’s earnings.

The Company includes all unvested stock awards that contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid, in the number of shares outstanding for basic EPS as these awards are considered participating securities. Any unvested stock awards considered non-participating securities are included in diluted EPS calculations when the inclusion of these shares would be dilutive. Unvested share-based awards of restricted stock are paid dividends equally with all other shares of common stock. As a result, the Company includes all outstanding restricted stock awards in the calculation of basic and diluted EPS. Distributed earnings include common stock dividends and dividends earned on unvested share-based payment awards. Undistributed earnings represent earnings that were available for distribution but were not distributed. The following table shows the computation of basic and diluted EPS:


	Three Months Ended				Six Months Ended
	July 2, 2023		July 3, 2022		July 2, 2023		July 3, 2022
	(in thousands, except per share data)
Numerator:
Net income	$	15,797	$	16,818	$	15,083	$	30,111
Less: distributed and undistributed earnings available to participating securities	(189)		(286)		(207)		(470)
Distributed and undistributed earnings available to common shareholders	$	15,608	$	16,532	$	14,876	$	29,641

Denominator:
Weighted average shares outstanding	57,381		58,358		57,279		58,380
Participating securities	693		1,010		798		928
Shares for basic EPS	58,074		59,368		58,077		59,308
Dilutive effect of non-participating securities	96		—		103		—
Shares for diluted EPS	58,170		59,368		58,180		59,308

Basic EPS	$	0.27	$	0.28	$	0.26	$	0.51
Diluted EPS	$	0.27	$	0.28	$	0.26	$	0.51

For the three and six months ended July 2, 2023, 1,476,804 and 1,322,278 non-participating securities, respectively, that could potentially dilute basic EPS in the future, consisting of restricted share units and performance shares, were excluded from the computation of diluted EPS as these securities would have been antidilutive for the respective periods.