Net (Loss) Income Per Share

Net (loss) income per share, basic, is computed based on the weighted-average number of common shares outstanding for the period, including consideration of the two-class method with respect to certain of the Company’s other equity securities (see below). Net (loss) income, diluted, is computed based on the weighted-average number of common and potentially dilutive common equivalent shares outstanding for the period, also with consideration given to the two-class method.

The dilutive effect of stock warrants was determined using the “treasury stock” method, whereby exercise was assumed at the beginning of the reporting period and proceeds from such exercise were assumed to be used to purchase the Company’s Class A common stock at the average market price during the period. The dilutive effect of stock options is also determined using the “treasury stock” method, whereby proceeds from such exercise, unamortized compensation on share-based awards, and excess tax benefits arising in connection with share-based compensation are assumed to be used to purchase the common stock at the average market price during the period.

The Notes and Preferred Stock were convertible into shares of Class A common stock. Both of these securities included rights whereby, upon payment of dividends or other distributions to Class A common stockholders, the Notes and Preferred Stock would participate ratably in such distributions based on the number of common shares into which such securities were convertible at that time. Because of these rights, the Notes and Preferred Stock were considered to be participating securities requiring the use of the two-class method for the computation of earnings per share. For the dilutive computation, under the two-class method, determination of whether the Notes and Preferred Stock were dilutive was based on the application of the “if-converted” method. Although the Notes and Preferred Stock were fully converted and represented Class A common shares outstanding as of January 29, 2011, they were included in the computation of diluted earnings for fiscal 2010, with respect to the period they were outstanding prior to conversion. For the fiscal 2010, the effect of the Notes and Preferred Stock was not dilutive to the computation of diluted earnings per share.

While the Company historically has paid no cash dividends, participants in the Company’s equity compensation plans who were granted restricted stock and performance shares are allowed to receive cash dividends paid on unvested restricted stock and unvested performance shares. The Company’s unvested restricted stock and unvested performance shares also qualify as participating securities and are included in the computation of earnings per share pursuant to the two-class method. For the dilutive computation, under the two-class method, determination of whether the unvested share-based payment awards are dilutive is based on the application of the “treasury stock” method and whether the performance criteria has been met. In fiscal 2012, 2011, and 2010, the effect of the unvested share-based payment awards was anti-dilutive to the computation of diluted earnings per share.

The two-class method requires allocation of undistributed earnings per share among the common stock, Notes, Preferred Stock and unvested share-based payment awards based on the dividend and other distribution participation rights under each of these securities. However, losses are not allocated to these participating securities. The following table summarizes the allocation of undistributed earnings among common stock and other participating securities using the two-class method and reconciles the weighted average common shares used in the computation of basic and diluted earnings per share (in thousands, except share data):



	Fiscal 2012							Fiscal 2011					Fiscal 2010
	Net Loss			Shares	Per Share Amount			Net Income			Shares	Per Share Amount	Net Income			Shares	Per Share Amount
Basic earnings per share:
Net (loss) income	$	(113,231	)					$	15,082				$	12,570
Less: Undistributed earnings allocable to participating securities	—							(393		)			(274		)
Basic earnings per share	$	(113,231	)	88,705,289	$	(1.28	)	$	14,689		92,713,516	0.16	$	12,296		99,255,952	$	0.12
Diluted earnings per share:
Net (loss) income	$	(113,231	)					$	15,082				$	12,570
Less: Undistributed earnings allocable to participating securities	—							(393		)			(274		)
Effect of dilutive securities				—							48,561					156,865
Diluted earnings per share	$	(113,231	)	88,705,289	$	(1.28	)	$	14,689		92,762,077	0.16	$	12,296		99,412,817	$	0.12

The computations of diluted earnings per share excluded the following potentially dilutive securities exercisable or convertible into Class A common stock for the periods indicated because their effect would not have been dilutive.



	Fiscal 2012	Fiscal 2011	Fiscal 2010
Stock options outstanding	1,531,976	2,917,591	3,081,036
Performance share and nonvested restricted stock awards	879,406	2,482,877	1,629,114
Stock issuable upon conversion of secured convertible notes	—	—	495,727
Stock issuable upon conversion of preferred stock	—	—	84,091
Total	2,411,382	5,400,468	5,289,968