EARNINGS PER SHARE

6 Months Ended

Jan. 31, 2024

As discussed in Note 2 - "Basis of Presentation", the Reverse/Forward Stock Split was effective on June 21, 2023. The Company’s shares of outstanding common stock and earnings per share amounts have been retroactively restated for all periods

presented for the Reverse/Forward Stock Split. The following table reconciles net earnings per share for the three and six months ended January 31, 2024 and 2023:


	Successor		Predecessor		Successor		Predecessor
	Three Months Ended January 31,		Three Months Ended January 31,		Six Months Ended January 31,		Six Months Ended January 31,
	2024		2023		2024		2023
	(in thousands, except per share data)
Reconciliation of net income (loss) to net income (loss) attributable to common stockholders after assumed conversions:
Net income (loss)	$	5,346	$	(526)	$	9,782	$	4,431
Less: Preferred dividends on Series C redeemable preferred stock	(537)		(537)		(1,073)		(1,074)
Net income (loss) available to common stockholders	4,809		(1,063)		8,709		3,357
Less: Undistributed earnings allocated to participating securities	(3,661)		—		(6,632)		—
Net income (loss) attributable to common stockholders	$	1,148	$	(1,063)	$	2,077	$	3,357

Effect of dilutive securities:

Dividends on Series C preferred stock	—		—		—		—
Undistributed earnings allocated to Series E preferred stock	3,661		—		6,632		—
Net income (loss) attributable to common stockholders - assuming dilution	$	4,809	$	(1,063)	$	8,709	$	3,357

Net income (loss) per common share - basic	$	0.18	$	(0.16)	$	0.33	$	0.52

Net income (loss) per common share - diluted	$	0.18	$	(0.16)	$	0.33	$	0.52

Weighted average common shares outstanding - basic	6,211		6,448		6,205		6,442
Effect of dilutive securities:
Common stock equivalents - Restricted stock and restricted stock shares	62		—		60		54

Common stock equivalents - Series C Preferred stock	—		—		—		—
Common stock equivalents - Series E Preferred stock	19,810		—		19,810		—
Weighted average common shares outstanding - diluted	26,083		6,448		26,075		6,496

For the three and six months ended January 31, 2024, the Company calculated basic and diluted net income per common share using the two-class method, as the Series E Convertible Preferred Stock meets the definition of a participating security. The two-class method is an allocation formula that determines net income per common share for each share of common stock and Series E Convertible Preferred Stock, a participating security, according to dividends declared and participation rights in undistributed earnings. Under this method, all earnings (distributed and undistributed) are allocated to common shares and Series E Convertible Preferred Stock based on their respective rights to receive dividends. The holders of Series E Convertible Preferred Stock are entitled to participate equally and ratably with the holders of shares of Common Stock in all dividends or other distributions on the shares of Common Stock as if, immediately prior to each record date for payment of dividends or other distributions on the Common Stock, shares of Series E Preferred Stock then outstanding were converted into shares of Common Stock. Basic net income per common share is computed by dividing net income attributable to common stockholders for the period by the weighted average number of common shares outstanding for the period. Net income attributable to common stockholders for the period includes any dividends paid to common stockholders during the period plus a proportionate share of undistributed net income allocable to common stockholders for the period; the proportionate share of undistributed net income allocable to common stockholders for the period is based on the proportionate share of total weighted-average common shares and participating securities outstanding during the period. Diluted net income per common share is computed based on the weighted average number of shares of common stock outstanding during each period, plus potential common shares considered outstanding during the period, as long as the inclusion of such awards is not antidilutive. Potential common shares consist of restricted

common stock (calculated based on the treasury stock method) and shares issuable upon debt or preferred stock conversion (calculated using an as-if converted method), using the more dilutive of either the two-class method or as-converted stock method.

The Company was not required to apply the two-class method during the Predecessor Period as there were no participating securities, and as such, there were no changes to the Predecessor Period other than the retrospective restatement for the Reverse/Forward Stock Split discussed previously.

The below details certain exclusions from the calculation of diluted net income per share, as their inclusion would have been antidilutive:

For the three months ended January 31, 2024, $0.2 million of interest expense, net of tax related to the SPHG Note, and $0.5 million of Series C preferred dividends were excluded from the numerator in the calculation of diluted net income per share as their inclusion would have been antidilutive. For the three months ended January 31, 2024, 2.5 million common stock equivalent shares (including those related to the SPHG Note and the Series C Preferred Stock) were excluded from the denominator in the calculation of diluted net income per share as their inclusion would have been antidilutive.

For the three months ended January 31, 2023 during which the Company recorded a net loss, diluted net loss per share is equal to basic net loss per share because the effect of dilutive securities outstanding is anti-dilutive.

For the six months ended January 31, 2024, $0.5 million of interest expense, net of tax impact related to the SPHG Note, and $1.1 million of Series C preferred dividends were excluded from the numerator in the calculation of diluted net income per share as their inclusion would have been antidilutive. For the six months ended January 31, 2024, 2.5 million common stock equivalent shares (including those related to the SPHG Note and the Series C Preferred Stock) were excluded from the denominator in the calculation of diluted net income per share as their inclusion would have been antidilutive.

For the six months ended January 31, 2023, $1.6 million of interest expense, net of tax impact related to the SPHG Note, and $1.1 million of Series C preferred dividends were excluded from the numerator in the calculation of diluted net income per share as their inclusion would have been antidilutive. For the six months ended January 31, 2023, 2.6 million common stock equivalent shares (including those related to the SPHG Note and the Series C Preferred Stock) were excluded from the denominator in the calculation of diluted net income per share as their inclusion would have been antidilutive.