| Net Income per Share | Net Income per Share
The Company calculates net income per share using
the two-class
The Class A Common Stock has no voting rights, except
(1) as required by law, (2) for the election of
Class A Directors, and (3) that the approval of the
holders of the Class A Common Stock is required for
(a) certain future authorizations or issuances of additional
securities which have rights senior to Class A Common Stock,
(b) certain alterations of rights or terms of the Class A
or Class B Common Stock as set forth in the Articles of
Organization of the Company, (c) other amendments of the
Articles of Organization of the Company, (d) certain mergers
or consolidations with, or acquisitions of, other entities, and
(e) sales or dispositions of any significant portion of the
Company’s assets.
The Class B Common Stock has full voting rights, including the
right to (1) elect a majority of the members of the
Company’s Board of Directors and (2) approve all
(a) amendments to the Company’s Articles of
Organization, (b) mergers or consolidations with, or
acquisitions of, other entities, (c) sales or dispositions of
any significant portion of the Company’s assets, and
(d) equity-based and other executive compensation and other
significant corporate matters. The Company’s Class B
Common Stock is not listed for trading. Each share of the
Class B Common Stock is freely convertible into one share of
Class A Common Stock, upon request of the respective
Class B holder, and participates equally in dividends.
The Company’s unvested share-based payment awards include
unvested shares (1) issued under the Company’s
investment share program, which permits employees who have been
with the Company for at least one year to purchase shares of
Class A Common Stock and to purchase those shares at a
discount ranging from 20% to 40% below market value based on years
of employment starting after two years of employment, and
(2) awarded as restricted stock awards at the discretion of
the Company’s Board of Directors. The investment shares and
restricted stock awards generally vest over five years in equal
number of shares. The unvested shares participate equally in
dividends. See Note K for a discussion of the current year unvested
stock awards and issuances.
Included in the computation of net income per diluted common share
are dilutive outstanding stock options that are vested or expected
to vest. At its discretion, the Board of Directors grants stock
options to senior management and certain key employees. The terms
of the employee stock options are determined by the Board of
Directors at the time of grant. To date, stock options granted to
employees vest over various service periods and/or based on the
attainment of certain performance criteria and generally expire
after ten years. The Company also grants stock options to
its non-employee re-election non-employee
Net Income per Common Share - Basic
The following table sets forth the computation of basic net income
per share using the two-class
Thirteen weeks ended Twenty-six weeks ended
June 30, July 1, June 30, July 1,
(in thousands,
except (in thousands,
except
Net income $ 23,535 $ 29,125 $ 32,845 $ 34,836
Allocation of net income for basic:
Class A Common Stock $ 17,290 $ 21,603 $ 24,187 $ 25,812
Class B Common Stock 6,020 7,360 8,400 8,829
Unvested participating shares 225 162 258 195
$ 23,535 $ 29,125 $ 32,845 $ 34,836
Weighted average number of shares for basic:
Class A Common Stock 8,667 9,092 8,690 9,161
Class B Common Stock* 3,018 3,097 3,018 3,134
Unvested participating shares 112 68 93 69
11,797 12,257 11,801 12,364
Net income per share for basic:
Class A Common Stock $ 1.99 $ 2.38 $ 2.78 $ 2.82
Class B Common Stock $ 1.99 $ 2.38 $ 2.78 $ 2.82
* Change in Class B Common Stock
resulted from the conversion of 79,000 shares to Class A
Common Stock on October 31, 2017 with the ending number of
shares reflecting the weighted average for the period.
Net Income per Common Share - Diluted
The Company calculates diluted net income per share for common
stock using the more dilutive of (1) the treasury stock
method, or (2) the two-class
The following table sets forth the computation of diluted net
income per share, assuming the conversion of all Class B
Common Stock into Class A Common Stock and using
the two-class
Thirteen weeks ended
June 30, 2018 July 1, 2017
Earnings to Common EPS Earnings to Common EPS
(in thousands, except per share data)
As reported - basic $ 17,290 8,667 $ 1.99 $ 21,603 9,092 $ 2.38
Add: effect of dilutive potential common shares
Share-based awards
— 102
— 155
Class B Common Stock 6,020 3,018 7,360 3,097
Net effect of unvested participating shares 2
— 2
—
Net income per common share - diluted $ 23,312 11,787 $ 1.98 $ 28,965 12,344 $ 2.35
Twenty-six
June 30, 2018 July 1, 2017
Earnings to Common EPS Earnings to Common EPS
(in thousands,
except per share data)
As reported - basic $ 24,187 8,690 $ 2.78 $ 25,812 9,161 $ 2.82
Add: effect of dilutive potential common shares
Share-based awards
— 101
— 135
Class B Common Stock 8,400 3,018 8,829 3,134
Net effect of unvested participating shares 2
— 2
—
Net income per common share - diluted $ 32,589 11,809 $ 2.76 $ 34,643 12,430 $ 2.79
During the thirteen and twenty-six twenty-six twenty-six twenty-six
Of the performance-based stock options to purchase approximately
63,000 shares of Class A Common Stock that were excluded from
computing diluted net income per common share as of June 30,
2018, 31,000 shares were granted in 2016 to two key employees. The
vesting of these shares requires annual depletions, or sales by
Distributors to retailers, of certain of the Company’s brands
to attain various thresholds during the period from 2017 to 2023.
5,000 shares were granted in 2017 to executive officers and the
vesting of these shares requires annual depletions to attain
certain thresholds in 2019. The remaining 27,000 shares were
granted in 2018 to executive officers and one key employee and the
vesting of these shares requires annual net revenue to attain
certain thresholds in 2019. |
