EARNINGS PER SHARE

3 Months Ended

Oct. 31, 2024

The following table reconciles net earnings per share for the three months ended October 31, 2024 and 2023:



	Three Months Ended October 31,
	2024		2023
	(In thousands, except per share data)
Reconciliation of net income to net income attributable to common stockholders after assumed conversions:
Net income	$	2,365	$	4,436
Less: Preferred dividends on Series C redeemable preferred stock	(537)		(536)
Net income available to common stockholders	1,828		3,900
Less: Undistributed earnings allocated to participating securities	(1,389)		(2,970)
Net income attributable to common stockholders	$	439	$	930

Effect of dilutive securities:


Undistributed earnings allocated to Series E preferred stock	1,389		2,970
Net income attributable to common stockholders - assuming dilution	$	1,828	$	3,900

Net income per common share - basic	$	0.07	$	0.15

Net income per common share - diluted	$	0.07	$	0.15

Weighted average common shares outstanding - basic	6,256		6,199
Effect of dilutive securities:
Common stock equivalents - Restricted stock and restricted stock shares	38		57


Common stock equivalents - Series E Preferred stock	19,810		19,810
Weighted average common shares outstanding - diluted	26,104		26,066

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 dividends paid to common stockholders, if any, 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 below details certain exclusions from the calculation of diluted net income per share for the three months ended October 31, 2024 and 2023, respectively, as their inclusion would have been antidilutive:

For the three months ended October 31, 2024, $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 October 31, 2023, $0.2 million of interest expense, net of tax impact 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 October 31, 2024, 1.9 million common stock equivalent shares related to 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 October 31, 2023, 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.