Kontoor Brands, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

EARNINGS PER SHARE

EARNINGS PER SHARE

9 Months Ended

Sep. 26, 2020

The calculations of basic and diluted earnings per share ("EPS") is based on net income divided by the basic weighted average number of common shares and diluted weighted average number of common shares outstanding, respectively. On May 22, 2019, the Separation from VF was effected through a pro-rata distribution of one share of the Company's common stock for every seven shares of VF common stock held at the close of business on the record date of May 10, 2019. As a result, on May 23, 2019, the Company had 56,647,561 shares of common stock outstanding. This share amount was utilized for the calculations of basic and diluted earnings per share for all periods presented through the Separation date. After the Separation date, actual outstanding shares were used in the calculations of both basic and diluted weighted average number of common shares outstanding.

The following table presents the calculations of basic and diluted EPS:


	Three Months Ended September				Nine Months Ended September

(In thousands, except per share amounts)	2020		2019		2020		2019
Net income	$	60,785	$	14,502	$	24,811	$	67,901
Basic weighted average shares outstanding	57,007		56,694		56,938		56,663
Dilutive effect of stock-based awards	635		707		731		326
Diluted weighted average shares outstanding	57,642		57,401		57,669		56,989
Earnings per share:
Basic earnings per common share	$	1.07	$	0.26	$	0.44	$	1.20
Diluted earnings per common share	$	1.05	$	0.25	$	0.43	$	1.19

A total of 1.6 million and 1.1 million shares related to stock-based awards were excluded from the diluted earnings per share calculations for the three and nine months ended September 2020, respectively, because the effect of their inclusion would have been anti-dilutive. A total of 0.3 million and 0.2 million shares related to stock-based awards were excluded from the diluted earnings per share calculations for the three and nine months ended September 2019, respectively, because the effect of their inclusion would have been anti-dilutive.

For both the three and nine months ended September 2020, a total of 0.4 million shares of performance-based restricted stock units ("PRSUs") were excluded from the calculations of diluted earnings per share as the units were not considered to be contingent outstanding shares. For both the three and nine months ended September 2019, a total of 0.5 million shares of PRSUs were excluded from the calculations of dilutive earnings per share as the units were not considered to be contingent outstanding shares.