During the quarter ended December 27, 1997, the Company adopted the Financial
Accounting Standards Board's Statement No. 128 (FASB 128), "Earnings per Share."
The new standard required the Company to change the method used to compute net income per
share and to restate all prior periods. The new requirement includes a calculation of
"basic" net income per share, which excludes the dilutive effect of stock
options. Basic net income per share is computed by dividing net income available to common
stockholders by the weighted average number of common shares outstanding during the
period. In computing diluted net income per share, the average stock price for the period
is used in determining the number of shares assumed to be purchased from the exercise of
stock options. Diluted earnings per share is computed using the weighted average common
and dilutive common equivalent shares outstanding, plus other dilutive shares which are
not common equivalent shares.
The computation of basic net income per share for all years presented is derived from
the information on the face of the income statement, and there are no reconciling items in
either the numerator or denominator. Additionally, there are no reconciling items in the
numerator used to compute diluted net income per share. The total shares used in the
denominator of the diluted net income per share calculation includes 6,269,000, 6,859,000
and 7,863,000 incremental common shares attributable to outstanding options for fiscal
years 1998, 1997 and 1996, respectively.
The shares issuable upon conversion of long-term debt to equity, approximately 4.9
million shares, were not included in the calculation of diluted net income per share as
their inclusion would have had an anti-dilutive effect for all periods presented. In
addition, outstanding options to purchase approximately 1.9 million, 1.0 million and 0.6
million shares, for the fiscal years 1998, 1997 and 1996, respectively, under the
Company's Stock Option Plan were not included in the treasury stock calculation to derive
diluted income per share as their inclusion would have had an anti-dilutive effect.
Return to Notes to Consolidated Financial Statements