6. Net Earnings (Loss) per Share

In accordance with ASC 260-10-45, Share-Based Payment Arrangements and Participating Securities and the Two-Class Method, unvested share-based payment awards that contain rights to receive non-forfeitable dividends are considered participating securities. The Company’s unvested restricted shares and unvested restricted stock units granted prior to July 15, 2015 were considered participating securities. Cash dividends to restricted stock units and performance-based stock units granted on or after July 15, 2015 are not distributed until and except to the extent that the restricted stock units vest, and in the case of performance-based stock units, until and except to the extent that the performance metrics are achieved or are otherwise deemed satisfied. Stock options do not receive cash dividends. As such, these awards are not considered participating securities.

Basic earnings per common share are calculated by dividing the net income, adjusted for income allocated to participating securities, by the weighted average number of common shares outstanding during the period. Diluted net income per common share reflects the dilution that would occur if any potentially dilutive instruments were exercised or converted into common shares. The dilutive effect of participating securities is calculated using the more dilutive of the treasury stock method or two-class method. Other potentially dilutive securities include stock options, restricted stock units granted after July 15, 2015, and performance-based stock units and are included in diluted shares to the extent they are dilutive under the treasury stock method for the applicable periods.

During periods of net loss, no effect is given to the participating securities because they do not share in the losses of the Company. Due to the net loss during the 13 weeks ended July 28, 2018 and July 29, 2017, participating securities in the amounts of 140,840 and 110,386, respectively, were excluded from the calculation of loss per share using the two-class method because the effect would be antidilutive. The Company’s outstanding non-participating securities consisting of dilutive stock options and restricted stock units of 155,018 and 8,417 for the 13 weeks ended July 28, 2018 and July 29, 2017, respectively, were excluded from the calculation of loss per share using the two-class method because the effect would be antidilutive.

The following is a reconciliation of the Company’s basic and diluted loss per share calculation:


	13 weeks ended
	July 28, 2018			July 29, 2017
Numerator for basic loss per share:
Net loss	$	(17,038	)		(10,778	)
Less allocation of dividends to participating securities		(21	)		(11	)

Net loss available to common shareholders	$	(17,059	)		(10,789	)


Numerator for diluted loss per share:
Net loss available to common shareholders	$	(17,059	)		(10,789	)

Denominator for basic and diluted loss per share:
Basic and diluted weighted average common shares		72,686			72,453

Loss per common share:
Basic	$	(0.23	)		(0.15	)
Diluted	$	(0.23	)		(0.15	)