Earnings Per Share

9 Months Ended

Jul. 03, 2011

(14) Earnings Per Share

The Company follows the provisions of ASC 260, Earnings Per Share, which requires companies with complex capital structures, such as having two (or more) classes of securities that participate in declared dividends to calculate earnings (loss) per share (“EPS”) utilizing the two-class method. As the holders of the Preferred Stock are entitled to receive dividends with common shares on an as-converted basis, the Preferred Stock has the right to participate in undistributed earnings and must therefore be considered under the two-class method.

The following table sets forth the computation of basic and diluted EPS for the three and nine month periods ended July 3, 2011 and July 4, 2010:


	Three Months						Nine Months
	2011			2010			2011			2010
Income (loss) attributable to common and participating preferred stockholders
Income (loss) from continuing operations	$	187,668		$	(51,618	)	$	105,648		$	(128,166	)
Loss from discontinued operations		—			—			—			(2,735	)

Net income (loss)	$	187,668		$	(51,618	)	$	105,648		$	(130,901	)


Participating shares at end of period:
Common shares outstanding		139,283			139,196			139,283			139,196
Preferred shares (as-converted basis)		43,307			—			43,307			—

Total		182,590			139,196			182,590			139,196


Percentage of income (loss) allocated to:
Common shares		76.3	%		100.0	%		76.3	%		100.0	%
Preferred shares		23.7	%		—			23.7	%		—

Income (loss) attributable to common shares:
Income (loss) from continuing operations	$	143,157		$	(51,618	)	$	80,590		$	(128,166	)
Loss from discontinued operations		—			—			—			(2,735	)

Net income (loss)	$	143,157		$	(51,618	)	$	80,590		$	(130,901	)


Weighted-average common shares outstanding — basic		139,222			131,604			139,207			130,258
Dilutive effect of stock options		70			—			73			—

Weighted-average dilutive shares outstanding		139,292			131,604			139,280			130,258


Basic income (loss) per common share attributable to controlling interest:
Continuing operations	$	1.03		$	(0.39	)	$	0.58		$	(0.98	)
Discontinued operations		—			—			—			(0.02	)

Net income (loss)	$	1.03		$	(0.39	)	$	0.58		$	(1.00	)


Diluted income (loss) per common share attributable to controlling interest:
Continuing operations	$	1.03		$	(0.39	)	$	0.58		$	(0.98	)
Discontinued operations		—			—			—			(0.02	)

Net income (loss)	$	1.03		$	(0.39	)	$	0.58		$	(1.00	)

The number of common shares outstanding used in calculating the weighted average thereof reflects: (i) for periods prior to the June 16, 2010 date of the SB/RH Merger, the number of Spectrum Brands common shares outstanding multiplied by the 1:1 Spectrum Brands share exchange ratio used in the SB/RH Merger and the 4.32 HGI share exchange ratio used in the Spectrum Brands Acquisition, (ii) for the period from June 16, 2010 to the January 7, 2011 date of the Spectrum Brands Acquisition, the number of HGI common shares outstanding plus the 119,910 HGI common shares subsequently issued in connection with the Spectrum Brands Acquisition and (iii) for the period subsequent to and including January 7, 2011, the actual number of HGI common shares outstanding.

At July 3, 2011, there were 43,077 and 351 potential common shares issuable upon the conversion of the Preferred Stock and exercise of stock options, respectively, excluded from the calculation of “Diluted income (loss) per common share attributable to controlling interest” because the as-converted effect of the Preferred Stock would have been anti-dilutive and the exercise prices of the stock options were greater than the average market price of the Company’s common stock during the three and nine month periods ended July 3, 2011. The Preferred Stock had a conversion price of $6.50 and the stock options had a weighted average exercise price of $6.89 per share.

- Definition

The entire disclosure for earnings per share.

+ References+ Details