Earnings Per Share and Stockholders' Equity

9 Months Ended

Sep. 28, 2024

Earnings Per Share and Stockholders' Equity

The Company calculates basic earnings per share by dividing net income for the period by the weighted average number of shares of common stock outstanding for the period. For rounding purposes when calculating earnings per share, the Company’s policy is to round down to the whole cent.

The Company calculates diluted earnings per share using the treasury stock method whereby net income for the period is divided by the weighted average number of shares of common stock outstanding for the period including the dilutive effect, if any, of shares of stock associated with unvested share-based grants. However, for share-based grants that vest in whole or in part based on performance metrics, their dilutive effect is included only after the performance metrics have been achieved.

The reconciliations of basic net income and diluted earnings per common share for the three and nine month periods ended September 28, 2024 and September 30, 2023 are as follows:


	Three Months Ended				Nine Months Ended
	September 28, 2024		September 30, 2023		September 28, 2024		September 30, 2023

Net income (in thousands)	$	16,016	$	24,382	$	47,844	$	66,660

Weighted-average shares outstanding - Basic	8,496,383		8,935,851		8,622,616		9,009,812
Dilutive effect of share-based awards	31,927		34,343		24,015		17,646
Weighted-average shares outstanding - Diluted	8,528,310		8,970,194		8,646,631		9,027,458

Basic earnings per share	$	1.88	$	2.72	$	5.54	$	7.39
Diluted earnings per share	$	1.87	$	2.71	$	5.53	$	7.38

During the three and nine months ended September 28, 2024, unvested time-based restricted stock units totaling 6,299 and 1,644, respectively, and unvested performance-based restricted stock units totaling 139,654 for both periods were outstanding but not included in the computation of diluted earnings per share for the respective periods. During the three and nine months ended September 30, 2023, unvested time-based restricted stock units totaling 103,152 and 161,572, respectively, and unvested performance-based restricted stock units totaling 112,252 for both periods were outstanding but not included in the computation of diluted earnings per share for the respective periods. Each restricted stock unit is composed of one unvested share of the Company’s common stock.

The unvested time-based restricted stock units were excluded because they were antidilutive based on their unearned compensation amounts and on the Company’s average stock price during the periods. The unvested performance-based restricted stock units were excluded because their performance metrics had not been achieved as of the end of the respective reporting period.

Repurchases of Common Stock

2023 Authorization

On October 31, 2023, the Company’s board of directors authorized a new share repurchase program for $100 million. Under the new share repurchase program, the Company may repurchase its common stock from time to time, without prior notice, subject to prevailing market conditions and other considerations. Repurchases may be made through a variety of methods, which may include open market purchases, privately negotiated transactions, accelerated share repurchase programs, tender offers or pursuant to a trading plan that may be adopted in accordance with the Securities and Exchange Commission Rule 10b5-1.

During the three and nine months ended September 28, 2024, the Company repurchased 145,548 shares and 297,951 shares, respectively, of its common stock at a weighted-average average price of $103.08 and $100.63, respectively, including broker commissions but excluding federal excise tax on the repurchases, for a total of $15.0 million and $30.0 million, respectively. These amounts are based on trade date activity, while the amounts reported on the Company’s consolidated statements of cash flows for share repurchases are based on settlement date activity. As of September 28, 2024, there remained $61.5 million repurchase capacity under this authorization.

Between September 28, 2024 and October 25, 2024, the Company purchased an additional 43,240 shares of its common stock for $4.6 million at a weighted-average share price of $106.34 per share, including broker commissions but excluding federal excise tax due on the repurchases.

2021/2022 Authorization

On August 23, 2021, the Company’s board of directors approved a stock repurchase program that authorized the Company to repurchase up to $25.0 million of its common stock. On May 3, 2022, the Company’s board of directors increased the share repurchase authorization to $100 million. During the three and nine months ended September 30, 2023, the Company repurchased 216,507 shares and 358,212 shares, respectively, of its common stock under the 2021/2022 authorization at a weighted-average price of $84.93, and $83.52, respectively, including broker commissions but excluding federal excise tax on the repurchases, for total cash of $11.5 million and $29.9 million, respectively. These amounts are based on trade date activity, while the amounts reported on the Company’s consolidated statements of cash flows for share repurchases are based on settlement date activity. During fiscal October 2023, the Company exhausted the remaining available capacity of $3.7 million under the 2021/2022 authorization.