KinderCare Learning Companies, Inc. Earnings Per Share Disclosure
The reconciliations of basic and diluted net (loss) income per common share for the fiscal years ended January 3, 2026, December 28, 2024, and December 30, 2023 are set forth in the table below (in thousands, except per share data):
|
|
Fiscal Years Ended |
|
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|
|
January 3, 2026 |
|
|
December 28, 2024 |
|
|
December 30, 2023 |
|
|||
Net (loss) income available to common |
|
$ |
(112,880 |
) |
|
$ |
(92,840 |
) |
|
$ |
102,558 |
|
Weighted average number of common shares |
|
|
118,329 |
|
|
|
96,309 |
|
|
|
90,366 |
|
Effect of dilutive securities (1) |
|
|
— |
|
|
|
— |
|
|
|
23 |
|
Weighted average number of common shares |
|
|
118,329 |
|
|
|
96,309 |
|
|
|
90,389 |
|
Net (loss) income per common share: |
|
|
|
|
|
|
|
|
|
|||
Basic (1) |
|
$ |
(0.95 |
) |
|
$ |
(0.96 |
) |
|
$ |
1.13 |
|
Diluted (1) |
|
$ |
(0.95 |
) |
|
$ |
(0.96 |
) |
|
$ |
1.13 |
|
Prior to the amendment to the Company's certificate of incorporation in October 2024 made in connection with the IPO and Common Stock Conversion, vested stock options under the 2022 Plan were contractually participating securities because stock option holders had a non-forfeitable right to receive dividends when the Company exceeds a stated distributable amount. The stated distributable amount was not met prior to the amendment during the fiscal years ended December 28, 2024 and December 30, 2023, and therefore, the stock options were not considered as participating in undistributed earnings in the computation of basic and diluted net (loss) income per common share for the periods. As a result of the amended certificate of incorporation in connection with the IPO, vested stock options are no longer contractually participating securities.
All shares of common stock from stock options and RSUs were excluded from the calculation of diluted net (loss) income per common share as their effect was anti-dilutive due to a net loss available to common shareholders for the fiscal year ended January 3, 2026 and the portion of the fiscal year ended December 28, 2024 that was subsequent to the October 2024 modification to the 2022 Plan, which changed all stock options and RSUs to be share-settled and equity-classified. Prior to the October 2024 modification to the 2022 Plan and subsequent to the February 2023 modification to the 2022 Plan, stock options and RSUs were cash-settled and liability-classified, and therefore, no shares were available to be excluded from the calculation of diluted net (loss) income per common share during those portions of the fiscal years ended December 28, 2024 and December 30, 2023. During the portion of the fiscal year ended December 30, 2023 prior to the February 2023 modification to the 2022 Plan, when stock options and 50% of RSUs were share-settled and equity-classified, 1.6 million shares of common stock from outstanding stock options were excluded from the calculation of diluted net (loss) income per common share as the effect was antidilutive. Refer
to Note 17, Shareholders' Equity and Stock-based Compensation, for further information on the modifications to the 2022 Plan.
About Earnings Per Share Disclosures
The earnings per share disclosure breaks down the calculation from net income to both basic and diluted EPS, revealing the full impact of a company's capital structure on per-share economics. The reconciliation between basic and diluted share counts exposes how many stock options, RSUs, convertible securities, and warrants are potentially dilutive to existing shareholders.
Key signals: a widening gap between basic and diluted shares indicates growing dilution from equity compensation or convertible instruments. Anti-dilutive securities excluded from the diluted calculation deserve attention — they represent latent dilution that will materialize if the stock price rises. Watch for the effect of share buybacks on per-share metrics: EPS growth driven primarily by repurchases rather than income growth signals weakening fundamentals. Compare year-over-year changes in the diluted share count against equity compensation expense to assess whether management is effectively managing dilution.