SHAREHOLDERS' EQUITY

9 Months Ended

Sep. 27, 2020

SHAREHOLDERS’ EQUITY

Changes in the balance of each component of shareholders’ equity during the reporting periods were as follows:


	Thirteen weeks ended						Thirty-nine weeks ended
(in thousands)	September 27, 2020		September 29, 2019		September 27, 2020		September 29, 2019

Common stock shares
Beginning balance	36,052		40,058		38,593		40,054
Purchases and retirement of common stock	(627)		(1,115)		(3,557)		(1,505)
Net issuance under equity plans, including tax benefits	48		(11)		387		355
Stock-based compensation	(23)		—		27		28
Ending balance	35,450		38,932		35,450		38,932

Common stock amount
Beginning balance	$	1	$	1	$	1	$	1
Current period activity	—		—		—		—
Ending balance	1		1		1		1

Retained earnings
Beginning balance	430,525		629,022		639,210		606,087
Net income (loss)	8,795		26,676		(149,867)		54,358
Purchases and retirement of common stock (1)	—		(22,239)		(52,346)		(31,316)
Net issuance under equity plans, including tax benefits	(177)		19		(1,597)		(911)
Stock-based compensation	2,417		2,859		6,762		8,119
Change in accounting standard cumulative-effect adjustment (2)	—		—		(602)		—
Ending balance	441,560		636,337		441,560		636,337

Accumulated other comprehensive loss
Beginning balance, net of tax	(17,765)		(14,016)		(13,238)		(14,649)
Foreign currency translation adjustment	386		(1,657)		(4,141)		(1,024)
Ending balance, net of tax	(17,379)		(15,673)		(17,379)		(15,673)

Total shareholders’ equity ending balance	$	424,182	$	620,665	$	424,182	$	620,665

(1)Under applicable Washington State law, shares purchased are not displayed separately as treasury stock on our Consolidated Balance Sheets and are treated as authorized but unissued shares. It is our accounting policy to first record these purchases as a reduction to our common stock account. Once the common stock account has been reduced to a nominal balance, remaining purchases are recorded as a reduction to our retained earnings. Furthermore, activity in our common stock account related to stock-based compensation is also recorded to retained earnings until such time as the reduction to retained earnings due to stock repurchases has been recovered.

(2)As a result of our adoption of the accounting standard for credit losses, we recognized a cumulative-effect adjustment to retained earnings of $0.6 million in the first quarter of 2020.

Share repurchase plan

On October 16, 2019, our Board of Directors authorized a $100.0 million share repurchase program of our outstanding common stock. The share repurchase program does not obligate us to acquire any particular amount of common stock and does not have an expiration date. We may choose to purchase shares in the open market, from individual holders, through an accelerated share repurchase program or otherwise. As of September 27, 2020, $66.7 million remains available for repurchase of common stock under the existing authorization. The second amendment to our credit agreement prohibits us from repurchasing shares until July 1, 2021.

As part of the existing share repurchase plan, on February 28, 2020 we entered into an accelerated share repurchase (“ASR”) agreement with a third-party financial institution to repurchase $40.0 million of our common stock. Under the ASR agreement, we paid $40.0 million to the financial institution and received an initial delivery of 2,150,538 shares in the first quarter of 2020, which represented 80% of the total shares we expected to receive based on the market price at the time of the initial delivery. This transaction was initiated prior to the medical community’s acknowledgment of the expected severity of the impact COVID-19 would have on the United States.

The final number of shares delivered upon settlement of the agreement was determined by the volume weighted average price of our shares over the term of the ASR agreement, less the agreed-upon discount. On July 2, 2020, we settled our ASR agreement resulting in the receipt of 626,948 additional shares from the third-party financial institution. The total number of shares delivered under the ASR agreement was 2,777,486 with a volume weighted average price over the term of the ASR agreement of $14.40.