Quarterly report pursuant to Section 13 or 15(d)

Basic and Diluted Earnings Per Share

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Basic and Diluted Earnings Per Share
6 Months Ended
Oct. 31, 2015
Basic and Diluted Earnings Per Share

2. Basic and Diluted Earnings Per Share

Accounting Standards Codification 260, Earnings Per Share, requires companies to treat unvested share-based payment awards that have non-forfeitable rights to dividends prior to vesting as a separate class of securities in calculating earnings per share. We have granted and expect to continue to grant to certain employees under our restricted stock agreements, grants that contain non-forfeitable rights to dividends. Such grants are considered participating securities. Therefore, we are required to apply the two-class method in calculating earnings per share. The two-class method of computing earnings per share is an earnings allocation formula that determines earnings per share for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. The dilutive effect of participating securities is calculated using the more dilutive of the treasury method or the two-class method.

Basic earnings per common share was computed using the two-class method by dividing basic net earnings attributable to common stockholders by the weighted-average number of common shares outstanding. Diluted earnings per common share was computed using the two-class method by dividing diluted net earnings attributable to common stockholders by the weighted-average number of common shares outstanding plus dilutive common equivalent shares. Dilutive common equivalent shares include all in-the-money outstanding options or other contracts to issue common stock as if they were exercised or converted. The application of the two-class method did not have a material impact on the earnings per share calculation for the three and six months ended October 31, 2014.

During the three and six months ended October 31, 2015 and 2014, all shares of outstanding options were included in the computation of diluted earnings per share. During the three and six months ended October 31, 2015, restricted stock awards of 0.5 million were outstanding but not included in the computation of diluted earnings per share because they were anti-dilutive.

The following table summarizes basic and diluted earnings per common share attributable to common stockholders:

 

     Three Months Ended
October 31,
     Six Months Ended
October 31,
 
     2015      2014      2015      2014  
     (in thousands, except per share data)  

Net income

   $ 17,971       $ 25,403       $ 41,053       $ 39,936   

Less: distributed and undistributed earnings to nonvested restricted stockholders

     167         —           390         —     
  

 

 

    

 

 

    

 

 

    

 

 

 

Basic net earnings attributable to common stockholders

     17,804         25,403         40,663         39,936   

Add: undistributed earnings to nonvested restricted stockholders

     118         —           292         —     

Less: reallocation of undistributed earnings to nonvested restricted stockholders

     117         —           289         —     
  

 

 

    

 

 

    

 

 

    

 

 

 

Diluted net earnings attributable to common stockholders

   $ 17,805       $ 25,403       $ 40,666       $ 39,936   
  

 

 

    

 

 

    

 

 

    

 

 

 

Weighted-average common shares outstanding:

           

Basic weighted-average number of common shares outstanding

     49,981         49,082         49,737         48,893   

Effect of dilutive securities:

           

Restricted stock

     330         554         433         710   

Stock options

     49         104         58         117   

ESPP

     2         —           5         —     
  

 

 

    

 

 

    

 

 

    

 

 

 

Diluted weighted-average number of common shares outstanding

     50,362         49,740         50,233         49,720   
  

 

 

    

 

 

    

 

 

    

 

 

 

Net earnings per common share:

           

Basic earnings per share

   $ 0.36       $ 0.52       $ 0.82       $ 0.82   
  

 

 

    

 

 

    

 

 

    

 

 

 

Diluted earnings per share

   $ 0.35       $ 0.51       $ 0.81       $ 0.80