QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or Other Jurisdiction of Incorporation) | (IRS Employer Identification Number) | |||||||
(Address of Principal Executive Offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
(Nasdaq Global Select Market) |
Large accelerated filer | o | x | ||||||||||||
Non-accelerated filer | o | Smaller reporting company | ||||||||||||
Emerging growth company |
Page | ||||||||
March 26, 2023 | December 25, 2022 | ||||||||||
Assets | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable, net of allowances of $ | |||||||||||
Inventories | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Assets classified as held-for-sale | |||||||||||
Total current assets | |||||||||||
Property and equipment, net | |||||||||||
Right-of-use assets for operating leases | |||||||||||
Indefinite-lived intangible assets | |||||||||||
Goodwill | |||||||||||
Restricted cash | |||||||||||
Deferred expenses, net and other assets | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities and equity | |||||||||||
Current liabilities | |||||||||||
Accounts payable | $ | $ | |||||||||
Accrued expenses | |||||||||||
Short-term operating lease liabilities | |||||||||||
Current portion of long-term debt | |||||||||||
Total current liabilities | |||||||||||
Long-term debt, net of current portion | |||||||||||
Long-term operating lease liabilities | |||||||||||
Other long-term liabilities | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies (Note 11) | |||||||||||
Equity | |||||||||||
Common stock, $ | |||||||||||
Warrants | |||||||||||
Additional paid-in-capital | |||||||||||
Treasury stock, held at cost, | ( | ( | |||||||||
Accumulated deficit | ( | ( | |||||||||
Total stockholders’ equity | |||||||||||
Non-controlling interest | ( | ( | |||||||||
Total equity | |||||||||||
Total liabilities and equity | $ | $ |
For the Quarter Ended | |||||||||||
March 26, 2023 | March 27, 2022 | ||||||||||
Revenues | |||||||||||
Sandwich shop sales, net | $ | $ | |||||||||
Franchise royalties, fees and rent income | |||||||||||
Total revenues | |||||||||||
Expenses | |||||||||||
Sandwich shop operating expenses, excluding depreciation | |||||||||||
Food, beverage and packaging costs | |||||||||||
Labor and related expenses | |||||||||||
Occupancy expenses | |||||||||||
Other operating expenses | |||||||||||
Franchise support, rent and marketing expenses | |||||||||||
General and administrative expenses | |||||||||||
Depreciation expense | |||||||||||
Pre-opening costs | |||||||||||
Loss on Franchise Growth Acceleration Initiative activities | |||||||||||
Impairment, loss on disposal of property and equipment and shop closures | |||||||||||
Total expenses | |||||||||||
Loss from operations | ( | ( | |||||||||
Interest expense, net | |||||||||||
Loss on extinguishment of debt | |||||||||||
Loss before income taxes | ( | ( | |||||||||
Income tax expense | |||||||||||
Net loss | ( | ( | |||||||||
Net income attributable to non-controlling interest | |||||||||||
Net loss attributable to Potbelly Corporation | $ | ( | $ | ( | |||||||
Net loss per common share attributable to common stockholders: | |||||||||||
Basic | $ | ( | $ | ( | |||||||
Diluted | $ | ( | $ | ( | |||||||
Weighted average shares outstanding: | |||||||||||
Basic | |||||||||||
Diluted |
Common Stock | Treasury Stock | Warrants | Additional Paid-In- Capital | Accumulated Deficit | Non- Controlling Interest | Total Equity (Deficit) | ||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 26, 2021 | $ | $ | ( | $ | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||
Shares issued under equity compensation plan | ( | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Distributions to non-controlling interest | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Balance at March 27, 2022 | $ | $ | ( | $ | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||||||||||||||||
Balance at December 25, 2022 | $ | $ | ( | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||
Shares issued under equity compensation plan | ( | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Proceeds from exercise of warrants | — | ( | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Distributions to non-controlling interest | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Balance at March 26, 2023 | $ | $ | ( | $ | $ | $ | ( | $ | ( | $ |
For the Quarter Ended | |||||||||||
March 26, 2023 | March 27, 2022 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net loss | $ | ( | $ | ( | |||||||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||
Depreciation expense | |||||||||||
Noncash lease expense | |||||||||||
Deferred income tax | |||||||||||
Stock-based compensation expense | |||||||||||
Asset impairment, loss on disposal of property and equipment and shop closures | |||||||||||
Loss on Franchise Growth Acceleration Initiative activities | |||||||||||
Loss on extinguishment of debt | |||||||||||
Other operating activities | |||||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable, net | ( | ( | |||||||||
Inventories | |||||||||||
Prepaid expenses and other assets | ( | ||||||||||
Accounts payable | ( | ||||||||||
Operating lease liabilities | ( | ( | |||||||||
Accrued expenses and other liabilities | ( | ( | |||||||||
Net cash used in operating activities: | ( | ( | |||||||||
Cash flows from investing activities: | |||||||||||
Purchases of property and equipment | ( | ( | |||||||||
Proceeds from sale of refranchised shops | |||||||||||
Net cash used in investing activities: | ( | ( | |||||||||
Cash flows from financing activities: | |||||||||||
Borrowings under Term Loan | |||||||||||
Principal payments made for Term Loan | ( | ||||||||||
Borrowings under revolving credit facility | |||||||||||
Repayments under revolving credit facility | ( | ( | |||||||||
Payment of debt issuance costs | ( | ( | |||||||||
Proceeds from exercise of warrants | |||||||||||
Employee taxes on certain stock-based payment arrangements | ( | ( | |||||||||
Distributions to non-controlling interest | ( | ( | |||||||||
Net cash provided by financing activities: | |||||||||||
Net increase (decrease) in cash and cash equivalents and restricted cash | ( | ||||||||||
Cash and cash equivalents and restricted cash at beginning of period | |||||||||||
Cash and cash equivalents and restricted cash at end of period | $ | $ | |||||||||
Supplemental cash flow information: | |||||||||||
Income taxes paid | $ | $ | |||||||||
Interest paid | $ | $ | |||||||||
Supplemental non-cash investing and financing activities: | |||||||||||
Unpaid liability for purchases of property and equipment | $ | $ | |||||||||
Unpaid liability for employee taxes on certain stock-based payment arrangements | $ | $ |
March 26, | December 26, | |||||||||||||
2023 | 2022 | |||||||||||||
Reconciliation of cash, cash equivalents and restricted cash: | ||||||||||||||
Cash and cash equivalents | $ | $ | ||||||||||||
Restricted cash, noncurrent | ||||||||||||||
Total cash, cash equivalents and restricted cash shown on statement of cash flows | $ | $ |
Current Contract Liability | Noncurrent Contract Liability | ||||||||||
(Thousands) | (Thousands) | ||||||||||
Beginning balance as of December 25, 2022 | $ | $ | |||||||||
Ending balance as of March 26, 2023 | |||||||||||
Increase (Decrease) in contract liability | $ | ( | $ |
Years Ending | Amount | |||||||
2023 | $ | |||||||
2024 | ||||||||
2025 | ||||||||
2026 | ||||||||
2027 | ||||||||
Thereafter | ||||||||
Total revenue recognized | $ |
For the Quarter Ended | |||||||||||
March 26, 2023 | March 27, 2022 | ||||||||||
Net loss attributable to Potbelly Corporation | $ | ( | $ | ( | |||||||
Weighted average common stock outstanding-basic | |||||||||||
Plus: Effect of potentially dilutive stock-based compensation awards | |||||||||||
Plus: Effect of potential warrant exercise | |||||||||||
Weighted average common shares outstanding-diluted | |||||||||||
Loss per share available to common stockholders-basic | $ | ( | $ | ( | |||||||
Loss per share available to common stockholders-diluted | $ | ( | $ | ( | |||||||
Potentially dilutive shares that are considered anti-dilutive: | |||||||||||
Shares |
March 26, 2023 | March 27, 2022 | ||||||||||
Weighted average remaining lease term (years) | |||||||||||
Weighted average discount rate | % | % |
For the Quarter Ended | ||||||||||||||
Classification | March 26, 2023 | March 27, 2022 | ||||||||||||
Operating lease cost | Occupancy, General and administrative expenses and Franchise support, rent and marketing expenses | |||||||||||||
Variable lease cost | Occupancy and Franchise support, rent and marketing expenses | |||||||||||||
Total lease cost |
For the Quarter Ended | |||||||||||
March 26, 2023 | March 27, 2022 | ||||||||||
Operating cash flows rent paid for operating lease liabilities | |||||||||||
Operating right-of-use assets obtained in exchange for new operating lease liabilities | |||||||||||
Reduction in operating right-of-use assets due to lease terminations and modifications |
Operating Leases | |||||
Remainder of 2023 | |||||
2024 | |||||
2025 | |||||
2026 | |||||
2027 | |||||
2028 | |||||
Thereafter | |||||
Total lease payments | |||||
Less: imputed interest | ( | ||||
Present value of lease liabilities |
For the Quarter Ended | |||||||||||
March 26, 2023 | March 27, 2022 | ||||||||||
Number of subleases | |||||||||||
Operating lease income | $ | $ | |||||||||
Variable lease income | |||||||||||
Franchise rent income | $ | $ |
March 26, 2023 | December 25, 2022 | ||||||||||
Revolving credit facility | $ | $ | |||||||||
Term loan credit facility | |||||||||||
Unamortized debt issuance costs | ( | ||||||||||
Less: current portion of long-term debt | ( | ||||||||||
Total long-term debt | $ | $ |
For the Quarter Ended | |||||||||||
March 26, 2023 | March 27, 2022 | ||||||||||
Number of shops sold to franchisees | |||||||||||
Proceeds from sale of company-operated shops | $ | $ | |||||||||
Net assets sold | ( | ||||||||||
Goodwill related to the company-operated shops sold to franchisee | ( | ||||||||||
Loss on sale of company-operated shops, net | ( | ||||||||||
Adjustment to recognize held-for-sale assets at fair value | ( | ||||||||||
Other expenses(a) | ( | ||||||||||
Loss on Franchise Growth Acceleration Initiative activities | $ | ( | $ |
Options | Shares (Thousands) | Weighted Average Exercise Price | Aggregate Intrinsic Value (Thousands) | Weighted Average Remaining Term (Years) | ||||||||||||||||||||||
Outstanding—December 25, 2022 | $ | $ | ||||||||||||||||||||||||
Granted | ||||||||||||||||||||||||||
Exercised | ||||||||||||||||||||||||||
Canceled | ( | |||||||||||||||||||||||||
Outstanding—March 26, 2023 | $ | |||||||||||||||||||||||||
Exercisable—March 26, 2023 | $ | $ |
RSUs | Number of RSUs (Thousands) | Weighted Average Fair Value per Share | ||||||||||||
Non-vested as of December 25, 2022 | $ | |||||||||||||
Granted | ||||||||||||||
Vested | ( | |||||||||||||
Canceled | ( | |||||||||||||
Non-vested as of March 26, 2023 | $ |
PSUs | Number of PSUs (Thousands) | Weighted Average Fair Value per Share | ||||||||||||
Non-vested as of December 25, 2022 | ||||||||||||||
Granted | ||||||||||||||
Vested | ||||||||||||||
Canceled | ( | |||||||||||||
Non-vested as of March 26, 2023 |
Company- Operated | Franchise- Operated | Total Company | |||||||||||||||
Shops as of December 26, 2021 | 397 | 46 | 443 | ||||||||||||||
Shops opened | — | — | — | ||||||||||||||
Shops closed | (3) | — | (3) | ||||||||||||||
Shops refranchised | — | — | — | ||||||||||||||
Shops as of March 27, 2022 | 394 | 46 | 440 | ||||||||||||||
Shops as of December 25, 2022 | 384 | 45 | 429 | ||||||||||||||
Shops opened | — | — | — | ||||||||||||||
Shops closed | (3) | — | (3) | ||||||||||||||
Shops refranchised | (8) | 8 | — | ||||||||||||||
Shops as of March 26, 2023 | 373 | 53 | 426 |
For the Quarter Ended | Increase (Decrease) | Percent Change | |||||||||||||||||||||||||||||||||||||||||||||
March 26, 2023 | % of Revenues | March 27, 2022 | % of Revenues | ||||||||||||||||||||||||||||||||||||||||||||
Revenues | |||||||||||||||||||||||||||||||||||||||||||||||
Sandwich shop sales, net | $ | 116,947 | 98.9 | % | $ | 97,431 | 99.2 | % | $ | 19,516 | 20.0 | % | |||||||||||||||||||||||||||||||||||
Franchise royalties, fees and rent income | 1,323 | 1.1 | 790 | 0.8 | 533 | 67.5 | |||||||||||||||||||||||||||||||||||||||||
Total revenues | 118,270 | 100.0 | 98,221 | 100.0 | 20,049 | 20.4 | |||||||||||||||||||||||||||||||||||||||||
Expenses | |||||||||||||||||||||||||||||||||||||||||||||||
(Percentages stated as a percent of sandwich shop sales, net) | |||||||||||||||||||||||||||||||||||||||||||||||
Sandwich shop operating expenses, excluding depreciation | |||||||||||||||||||||||||||||||||||||||||||||||
Food, beverage and packaging costs | 32,620 | 27.9 | 27,308 | 28.0 | 5,312 | 19.5 | |||||||||||||||||||||||||||||||||||||||||
Labor and related expenses | 36,502 | 31.2 | 33,253 | 34.1 | 3,249 | 9.8 | |||||||||||||||||||||||||||||||||||||||||
Occupancy expenses | 13,310 | 11.4 | 13,845 | 14.2 | (535) | (3.9) | |||||||||||||||||||||||||||||||||||||||||
Other operating expenses | 20,484 | 17.5 | 18,105 | 18.6 | 2,379 | 13.1 | |||||||||||||||||||||||||||||||||||||||||
(Percentages stated as a percent of total revenues) | |||||||||||||||||||||||||||||||||||||||||||||||
Franchise support, rent and marketing expenses | 591 | 0.5 | 120 | 0.1 | 471 | 392.5 | |||||||||||||||||||||||||||||||||||||||||
General and administrative expenses | 9,969 | 8.4 | 8,518 | 8.7 | 1,451 | 17.0 | |||||||||||||||||||||||||||||||||||||||||
Depreciation expense | 2,971 | 2.5 | 3,136 | 3.2 | (165) | (5.3) | |||||||||||||||||||||||||||||||||||||||||
Pre-opening costs | 22 | NM | — | NM | 22 | NM | |||||||||||||||||||||||||||||||||||||||||
Loss on Franchise Growth Acceleration Initiative activities | 949 | 0.8 | — | NM | 949 | NM | |||||||||||||||||||||||||||||||||||||||||
Impairment, loss on disposal of property and equipment and shop closures | 1,045 | 0.9 | 1,319 | 1.3 | (274) | (20.8) | |||||||||||||||||||||||||||||||||||||||||
Total expenses | 118,463 | 100.2 | 105,604 | 107.5 | 12,859 | 12.2 | |||||||||||||||||||||||||||||||||||||||||
Loss from operations | (193) | (0.2) | (7,383) | (7.5) | 7,190 | NM | |||||||||||||||||||||||||||||||||||||||||
Interest expense, net | 667 | 0.6 | 327 | 0.3 | 340 | 104.0 | |||||||||||||||||||||||||||||||||||||||||
Loss on extinguishment of debt | 239 | 0.2 | — | NM | 239 | NM | |||||||||||||||||||||||||||||||||||||||||
Loss before income taxes | (1,099) | (0.9) | (7,710) | (7.8) | 6,611 | NM | |||||||||||||||||||||||||||||||||||||||||
Income tax expense | 105 | NM | 177 | 0.2 | (72) | (40.7) | |||||||||||||||||||||||||||||||||||||||||
Net loss | (1,204) | (1.0) | (7,887) | (8.0) | 6,683 | NM | |||||||||||||||||||||||||||||||||||||||||
Net income attributable to non-controlling interest | 123 | 0.1 | 26 | NM | 97 | 373.1 | |||||||||||||||||||||||||||||||||||||||||
Net loss attributable to Potbelly Corporation | $ | (1,327) | (1.1) | % | $ | (7,913) | (8.1) | % | $ | 6,586 | NM | % | |||||||||||||||||||||||||||||||||||
For the Quarter Ended | |||||||||||||||||||||||||||||||||||||||||||||||
Other Key Performance Indicators | March 26, 2023 | March 27, 2022 | Increase (Decrease) | ||||||||||||||||||||||||||||||||||||||||||||
Comparable store sales | 22.2 | % | 24.4 | % | (2.2) | % | |||||||||||||||||||||||||||||||||||||||||
Shop-level profit margin(1) | 12.0 | % | 5.0 | % | 6.9 | % | |||||||||||||||||||||||||||||||||||||||||
Adjusted EBITDA(1) | $ | 5,560 | $ | (2,279) | $ | 7,839 |
For the Quarter Ended | |||||||||||
March 26, 2023 | March 27, 2022 | ||||||||||
($ in thousands) | |||||||||||
Loss from operations | $ | (193) | $ | (7,383) | |||||||
Less: Franchise royalties, fees and rent income | 1,323 | 790 | |||||||||
Franchise support, rent and marketing expenses | 591 | 120 | |||||||||
General and administrative expenses | 9,969 | 8,518 | |||||||||
Pre-opening costs | 22 | — | |||||||||
Loss on Franchise Growth Acceleration Initiative activities | 949 | — | |||||||||
Depreciation expense | 2,971 | 3,136 | |||||||||
Impairment, loss on disposal of property and equipment and shop closures | 1,045 | 1,319 | |||||||||
Shop-level profit (loss) [Y] | $ | 14,031 | $ | 4,920 | |||||||
Total revenues | $ | 118,270 | $ | 98,221 | |||||||
Less: Franchise royalties, fees and rent income | 1,323 | 790 | |||||||||
Sandwich shop sales, net [X] | $ | 116,947 | $ | 97,431 | |||||||
Shop-level profit (loss) margin [Y÷X] | 12.0 | % | 5.0 | % |
For the Quarter Ended | |||||||||||
March 26, 2023 | March 27, 2022 | ||||||||||
($ in thousands) | |||||||||||
Net loss attributable to Potbelly Corporation | $ | (1,327) | $ | (7,913) | |||||||
Depreciation expense | 2,971 | 3,136 | |||||||||
Interest expense | 667 | 327 | |||||||||
Income tax expense | 105 | 177 | |||||||||
EBITDA | $ | 2,416 | $ | (4,273) | |||||||
Impairment, loss on disposal of property and equipment, and shop closures (a) | 1,045 | 1,319 | |||||||||
Stock-based compensation | 911 | 675 | |||||||||
Loss on extinguishment of debt | 239 | — | |||||||||
Loss on Franchise Growth Acceleration Initiative activities | 949 | — | |||||||||
Adjusted EBITDA | $ | 5,560 | $ | (2,279) |
For the Quarter Ended | |||||||||||
March 26, 2023 | March 27, 2022 | ||||||||||
Net cash provided by (used in): | |||||||||||
Operating activities | $ | (657) | (7,739) | ||||||||
Investing activities | (3,216) | (1,378) | |||||||||
Financing activities | 14,599 | 4,257 | |||||||||
Net increase (decrease) in cash | $ | 10,726 | $ | (4,860) |
Period | Total Number of Shares Purchased (1) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Program (2) | Maximum Value of Shares that May Yet be Purchased Under the Program (2) | ||||||||||||||||||||||
December 26, 2022 - January 22, 2023 | 3 | $ | 7.47 | — | $ | 37,982 | ||||||||||||||||||||
January 23, 2023 - February 19, 2023 | 1 | $ | 7.99 | — | $ | 37,982 | ||||||||||||||||||||
February 20, 2023 - March 26, 2023 | 37 | $ | 8.19 | — | $ | 37,982 | ||||||||||||||||||||
Total number of shares purchased: | 41 | — |
Exhibit No. | Description | |||||||
31.1 | ||||||||
31.2 | ||||||||
32.1 | ||||||||
101.INS | Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. | |||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document | |||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
POTBELLY CORPORATION | |||||||||||
Date: May 4, 2023 | By: | /s/ Steven Cirulis | |||||||||
Steven Cirulis | |||||||||||
Chief Financial Officer | |||||||||||
(Principal Financial Officer) |
Date: May 4, 2023 | By: | /s/ Robert D. Wright | ||||||
Robert D. Wright | ||||||||
Chief Executive Officer and President | ||||||||
(Principal Executive Officer) |
Date: May 4, 2023 | By: | /s/ Steven Cirulis | ||||||
Steven Cirulis | ||||||||
Chief Financial Officer | ||||||||
(Principal Financial Officer) |
Date: May 4, 2023 | By: | /s/ Robert D. Wright | ||||||
Robert D. Wright | ||||||||
Chief Executive Officer and President | ||||||||
(Principal Executive Officer) | ||||||||
Date: May 4, 2023 | By: | /s/ Steven Cirulis | ||||||
Steven Cirulis | ||||||||
Chief Financial Officer | ||||||||
(Principal Financial Officer) |
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Mar. 26, 2023 |
Dec. 25, 2022 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Accounts receivable, net of allowances | $ 28 | $ 16 |
Common stock (in USD per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, outstanding (in shares) | 29,048,000 | 28,819,000 |
Treasury stock (in shares) | 9,966,000 | 9,924,000 |
Assets classified as held-for-sale | $ 1,248 | $ 0 |
Restricted cash | $ 749 | $ 0 |
Organization and Other Matters |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 26, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Other Matters | Organization and Other Matters Business Potbelly Corporation, a Delaware corporation, together with its subsidiaries (collectively referred to as "the Company", "Potbelly", "we", "us" or "our"), owns and operates 373 company-owned shops in the United States as of March 26, 2023. Additionally, Potbelly franchisees operate 53 shops domestically. Basis of Presentation The unaudited condensed consolidated financial statements and notes herein should be read in conjunction with the audited consolidated financial statements of Potbelly Corporation and its subsidiaries and the notes thereto included in our Annual Report on Form 10-K for the year ended December 25, 2022. The unaudited condensed consolidated financial statements included herein have been prepared by us without audit, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the "SEC") regarding interim financial reporting. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP") have been condensed or omitted pursuant to the SEC rules and regulations. In the opinion of management, all adjustments, which are of a normal and recurring nature (except as otherwise noted), that are necessary to present fairly our balance sheet as of March 26, 2023 and December 25, 2022, our statement of operations for the quarter ended March 26, 2023 and March 27, 2022, the statement of equity for the quarter ended March 26, 2023 and March 27, 2022, and our statement of cash flows for the quarter ended March 26, 2023 and March 27, 2022 have been included. The condensed consolidated statements of operations for the interim periods presented herein are not necessarily indicative of the results to be expected for the full year. We do not have any components of other comprehensive income recorded within our consolidated financial statements and therefore, do not separately present a statement of comprehensive income in our condensed consolidated financial statements. Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts of Potbelly Corporation; its wholly owned subsidiary, Potbelly Illinois, Inc. (“PII”); PII’s wholly owned subsidiaries, Potbelly Franchising, LLC and Potbelly Sandwich Works, LLC (“PSW”); seven of PSW’s wholly owned subsidiaries and PSW’s six joint ventures, collectively, the “Company.” All intercompany balances and transactions have been eliminated in consolidation. For our six consolidated joint ventures, "non-controlling interest" represents the non-controlling partner’s share of the assets, liabilities and operations related to the joint venture investments. Potbelly has ownership interests ranging from 51-80% in these consolidated joint ventures. Fiscal Year We use a 52/53-week fiscal year that ends on the last Sunday of the calendar period. Approximately every five or six years a 53rd week is added. Fiscal year 2023 consists of 53 weeks and fiscal year 2022 consists of 52 weeks. The fiscal quarters ended March 26, 2023 and March 27, 2022 each consisted of 13 weeks. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and the disclosure of contingent assets and liabilities. Significant estimates include amounts for long-lived assets and income taxes. Actual results could differ from those estimates. Franchise Growth Acceleration Initiative On March 2, 2022, we announced our Franchise Growth Acceleration Initiative, which included a plan to grow our franchise units domestically through multi-unit shop development area agreements, which may include refranchising certain company-operated shops. Deals for refranchised shops will include commitments for developing new shops to fully penetrate existing markets for which we collect development agreement fees from the franchisee. All gains and losses recognized on sales of shops and other expenses incurred to execute a refranchising transaction are included in Loss on Franchising Growth Acceleration Initiative activities in the condensed consolidated statement of operations. Development agreement fees received are recorded in the consolidated balance sheets as accrued expenses or other long-term liabilities, and amortized over the term of the franchise agreement once the shops are opened. During the first quarter of 2023, we executed our first refranchising transaction, which is further discussed in Note 8. Restricted Cash As of March 26, 2023, we had restricted cash related to funds held in a money market account as collateral for letters of credit to certain lease agreements. The reconciliation of cash and cash equivalents and restricted cash presented in the condensed consolidated balance sheets to the total amount shown in our condensed consolidated statements of cash flows is as follows:
Potbelly Brand Fund We maintain the Potbelly Brand Fund (the "Brand Fund") for the purpose of collecting and administering funds to be used for advertising, customer research, marketing technology, agencies, and other activities that promote the Potbelly brand in order to deliver sales at our shops. Company-operated and franchised shops both contribute to the Brand Fund based on a percentage of sales. Beginning in the first quarter of fiscal year 2022, we manage these advertising and marketing expenses through the Brand Fund using the funds contributed by our shops. We manage these funds separately from our general operating expenses, but we are not obligated to maintain the funds in separate accounts or entities. We may spend more or less in any fiscal period than the amounts contributed to the Brand Fund, and we may choose to roll over any unused contributions to the following fiscal period or return them to our shops. Brand Fund contributions made by company-operated shops are eliminated from the consolidated financial statements. Franchisee contributions are included within franchise royalties and fees in the condensed consolidated statements of operations. Expenses incurred by the Brand Fund are recorded to company-operated and franchised shops based on a percentage of sales. Company-operated Brand Fund expense is included within other operating expenses in our condensed consolidated statements of operations. Franchisee Brand Fund expense is presented within franchise support, rent and marketing expenses in our condensed consolidated statements of operations. Recent Accounting Pronouncements We reviewed all recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a significant impact on the condensed consolidated financial statements.
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Revenue |
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Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue | Revenue We primarily earn revenue at a point in time for sandwich shop sales, which can occur in person at the shop, over our online or app platform, or through a third-party platform. Sales taxes collected from customers are excluded from revenues and the obligation is included in accrued liabilities until the taxes are remitted to the appropriate taxing authorities. We have other revenue generating activities outlined below. For the quarter ended March 26, 2023, revenue recognized from all revenue sources on point in time sales was $117.9 million, and revenue recognized from sales over time was $0.4 million. For the quarter ended March 27, 2022, revenue recognized from all revenue sources on point in time sales was $97.9 million and revenue recognized from sales over time was $0.3 million. Franchise Revenue, including Rent Income We earn an initial franchise fee, a franchise development agreement fee and ongoing fees for royalties and Brand Fund contributions under our franchise agreements. Initial franchise fees are considered highly dependent upon and interrelated with the franchise right granted in the franchise agreement. As such, these franchise fees are recognized over the contractual term of the franchise agreement. We record a contract liability for the unearned portion of the initial franchise fees. Franchise development agreement fees represent the exclusivity rights for a geographical area paid by a third party to develop Potbelly shops for a certain period of time. Franchise development agreement fee payments received by us are recorded in the consolidated balance sheets as accrued expenses or other long-term liabilities, and amortized over the term of the franchise agreement once the shops are opened. Royalties and Brand Fund contributions are based on a percentage of sales and are recorded as revenue as they are earned and become receivable from the franchisee. We also earn rent income from properties leased by Potbelly and subleased to franchisees. Rent income is recognized on a straight-line basis over the operating lease terms. See Note 6 for further detail. Gift Card Redemptions / Breakage Revenue Potbelly sells gift cards to customers, records the sale as a contract liability and recognizes the associated revenue as the gift card is redeemed. A portion of these gift cards are not redeemed by the customer ("breakage"), which is recognized as revenue as a percentage of customers gift card redemptions. The expected breakage amount recognized is determined by a historical data analysis on gift card redemption patterns. We recognize gift card breakage income within net sandwich shop sales in the consolidated statements of operations. We recognized gift card breakage income of $0.2 million and $0.2 million for the quarter ended March 26, 2023 and March 27, 2022, respectively, which is recorded within net sandwich shop sales in our condensed consolidated statements of operations. Loyalty Program We offer a customer loyalty program for customers using the Potbelly Perks application at the point of sale. The customer will typically earn 10 points for every dollar spent, and the customer will earn a free entrée after earning 1,000 points. We defer revenue associated with the estimated selling price of points earned by Potbelly Perks members towards free entrées as each point is earned, and a corresponding liability is established in deferred revenue. The deferral is based on the estimated value of the product for which the reward is expected to be redeemed, net of estimated unredeemed points. Once a customer earns a free entrée, that entrée reward will expire after 30 days. Any point in a customer’s account that does not go toward earning a full entrée will expire after the customer's account has been inactive for a year. The breakage amount recognized is estimated based on a historical data analysis of loyalty reward redemptions and is recognized in net shop sandwich sales in the consolidated statement of operations. When points are redeemed, we recognize revenue for the redeemed product and reduce accrued expenses. Contract Liabilities We record current and noncurrent contract liabilities in accrued expenses and other long-term liabilities, respectively, for initial franchise fees, gift cards, and loyalty programs. We have no other contract liabilities or contract assets recorded. The opening and closing balances of our current and noncurrent contract liabilities from contracts with customers were as follows:
The aggregate value of remaining performance obligations on outstanding contracts was $8.8 million as of March 26, 2023. We expect to recognize revenue related to contract liabilities as follows (in thousands), which may vary based upon franchise activity as well as gift card redemption patterns:
For the quarter ended March 26, 2023, the amount of revenue recognized related to the December 25, 2022 liability ending balance was $1.3 million. For quarter ended March 27, 2022, the amount of revenue recognized related to the December 26, 2021 liability ending balance was $1.1 million. This revenue is related to the recognition of gift card redemptions and upfront franchise fees. For the quarter ended March 26, 2023 and March 27, 2022, we did not recognize any revenue from obligations satisfied (or partially satisfied) in prior periods.
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Fair Value Measurement |
3 Months Ended |
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Mar. 26, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | Fair Value Measurement The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and all other current liabilities approximate fair values due to the short maturities of these balances. The book value of the long-term and short-term debt under the Credit Agreement, which is further discussed in Note 7, is considered to approximate its fair value as of March 26, 2023 as the interest rates are considered in line with current market rates. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis Assets recognized or disclosed at fair value on the consolidated financial statements on a nonrecurring basis include items such as leasehold improvements, property and equipment, operating lease assets, goodwill, and other intangible assets. These assets are measured at fair value if determined to be impaired. We assess potential impairments to our long-lived assets, which includes property and equipment and lease right-of-use assets, on a quarterly basis or whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. Shop-level assets and right-of-use assets are grouped at the individual shop-level for the purpose of the impairment assessment. Recoverability of an asset group is measured by a comparison of the carrying amount of an asset group to its estimated undiscounted future cash flows expected to be generated by the asset group. If the carrying amount of the asset group exceeds its estimated undiscounted future cash flows, an impairment charge is recognized as the amount by which the carrying amount of the asset group exceeds the fair value of the asset group. The fair value of the shop assets is determined using the discounted future cash flow method of anticipated cash flows through the shop’s lease-end date using fair value measurement inputs classified as Level 3. The fair value of right-of-use assets is estimated using market comparative information for similar properties. Level 3 inputs are derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. After performing a periodic review of our shops during the quarter ended March 26, 2023, it was determined that indicators of impairment were present for certain shops as a result of continued underperformance. We performed an impairment analysis related to these shops and recorded an impairment charge of $0.7 million for the quarter ended March 26, 2023.
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Earnings (Loss) Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings (Loss) Per Share | Earnings (Loss) Per ShareBasic and diluted income (loss) per common share attributable to common stockholders are calculated using the weighted average number of common shares outstanding for the period. Diluted income (loss) per common share attributable to common stockholders is computed by dividing the income (loss) allocated to common stockholders by the weighted average number of fully diluted common shares outstanding. In periods of a net loss, no potential common shares are included in diluted shares outstanding as the effect is anti-dilutive. For the quarters ended March 26, 2023 and March 27, 2022, we had a loss per share, and therefore potentially dilutive shares were excluded from the calculation. The following table summarizes the loss per share calculation:
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Income Taxes |
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Mar. 26, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income TaxesThe interim tax provision is determined using an estimated annual effective tax rate and is adjusted for discrete taxable events that occur during the quarter. We regularly assess the need for a valuation allowance related to our deferred tax assets, which includes consideration of both positive and negative evidence related to the likelihood of realization of such deferred tax assets to determine, based on the weight of the available evidence, whether it is more-likely-than-not that some or all of our deferred tax assets will not be realized. In our assessment, we consider recent financial operating results, projected future taxable income, the reversal of existing taxable differences, and tax planning strategies. We recorded a full valuation allowance against our net deferred tax assets during the first quarter of 2019, resulting in a non-cash charge to income tax expense of $13.6 million. We continue to maintain a valuation allowance against all of our deferred tax assets as of March 26, 2023. We did not provide for an income tax benefit on our pre-tax income (loss) for the quarter ended March 26, 2023 and March 27, 2022. We assess the likelihood of the realization of our deferred tax assets each quarter and the valuation allowance is adjusted accordingly.On August 16, 2022, the Inflation Reduction Act ("IRA") was signed into law. The IRA has not had a material impact on our condensed consolidated financial statements. |
Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases We determine if an arrangement is a lease at inception of the arrangement. We lease retail shops and warehouse and office space under operating leases. Our leases generally have terms of ten years and most include options to extend the leases for additional five-year periods. For leases with renewal periods at our option, we determine the expected lease period based on whether the renewal of any options are reasonably assured at the inception of the lease. In addition, we lease certain properties from third parties that we sublease to franchisees. We remain primarily liable to the landlord for the performance of all obligations in the event that the sublessee does not perform its obligations under the lease. All of our subleases are classified as operating leases with fixed and variable income. Lessee Disclosures We did not terminate any leases during the quarter ended March 26, 2023. Operating lease term and discount rate were as follows:
Certain of our operating lease agreements include variable payments that are passed through by the landlord, such as common area maintenance and real estate taxes, as well as variable payments based on percentage rent for certain of our shops. Pass-through charges and payments based on percentage rent are included within variable lease cost. The components of lease cost were as follows (in thousands):
Supplemental disclosures of cash flow information related to leases were as follows (in thousands):
As of March 26, 2023, we had no real estate leases entered into that had not yet commenced. Maturities of lease liabilities were as follows (in thousands) as of March 26, 2023:
Lessor Disclosures We recognized $0.1 million in franchise rent income, which is included in franchise royalties, fees and rent income in the condensed consolidated statement of operations. We incurred $0.1 million in expenses associated with these leases, which are included in franchise support, rent and marketing expenses in the condensed consolidated statement of operations. The components of lease income were as follows (in thousands):
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Leases | Leases We determine if an arrangement is a lease at inception of the arrangement. We lease retail shops and warehouse and office space under operating leases. Our leases generally have terms of ten years and most include options to extend the leases for additional five-year periods. For leases with renewal periods at our option, we determine the expected lease period based on whether the renewal of any options are reasonably assured at the inception of the lease. In addition, we lease certain properties from third parties that we sublease to franchisees. We remain primarily liable to the landlord for the performance of all obligations in the event that the sublessee does not perform its obligations under the lease. All of our subleases are classified as operating leases with fixed and variable income. Lessee Disclosures We did not terminate any leases during the quarter ended March 26, 2023. Operating lease term and discount rate were as follows:
Certain of our operating lease agreements include variable payments that are passed through by the landlord, such as common area maintenance and real estate taxes, as well as variable payments based on percentage rent for certain of our shops. Pass-through charges and payments based on percentage rent are included within variable lease cost. The components of lease cost were as follows (in thousands):
Supplemental disclosures of cash flow information related to leases were as follows (in thousands):
As of March 26, 2023, we had no real estate leases entered into that had not yet commenced. Maturities of lease liabilities were as follows (in thousands) as of March 26, 2023:
Lessor Disclosures We recognized $0.1 million in franchise rent income, which is included in franchise royalties, fees and rent income in the condensed consolidated statement of operations. We incurred $0.1 million in expenses associated with these leases, which are included in franchise support, rent and marketing expenses in the condensed consolidated statement of operations. The components of lease income were as follows (in thousands):
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Debt and Credit Facilities |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt and Credit Facilities | Debt and Credit Facilities The components of long-term debt were as follows (in thousands):
Term Loan Credit Facility On February 7, 2023 (the “Closing Date”), we entered into a credit and guaranty agreement (the “Credit Agreement”) with Sagard Holdings Manager LP as administrative agent (the “Administrative Agent”). The Credit Agreement provides for a term loan facility with an aggregate commitment of $25 million (the “Term Loan”). Concurrent with entry into the Credit Agreement, we repaid in full and terminated the obligations and commitments under our existing senior secured credit facility (the “Former Credit Facility”). Upon termination of the Former Credit Facility, we recognized a loss on extinguishment of debt of $0.2 million. The remaining proceeds from the Term Loan were used to pay related transaction fees and expenses, and for general corporate purposes. The Credit Agreement is scheduled to mature on February 7, 2028. We are required to make principal payments equal to 1.25% of the initial principal of the Term Loan on the last business day of each fiscal quarter. If not previously paid, any remaining principal balance must be repaid on the maturity date. Loans under the Credit Agreement will initially bear interest, at the Company’s option, at either the term SOFR plus 9.25% per annum or base rate plus 8.25% per annum. As of March 26, 2023, the effective interest rate was 15.07%. We may prepay the Term Loan in agreed-upon minimum principal amounts, subject to prepayment fees equal to (a) if the prepayment occurs on or prior to the one (1) year anniversary of the Closing Date, a customary make-whole amount plus 3.00% of the outstanding principal balance of the Term Loan, (b) if the prepayment occurs after such one (1) year anniversary and prior to the two (2) year anniversary of the Closing Date, 3.00% of the outstanding principal balance of the Term Loan, (c) if the prepayment occurs after such second anniversary of the Closing Date and prior to the three (3) year anniversary of the Closing Date 1.00% of the outstanding principal balance of the Term Loan and (d) thereafter, no prepayment fee. Subject to certain customary exceptions, obligations under the Credit Agreement are guaranteed by the Company and all of the Company’s current and future wholly owned material domestic subsidiaries and are secured by a first-priority security interest in substantially all of the assets of the Company and its subsidiary guarantors. The Credit Agreement contains customary representations and affirmative and negative covenants. Among other things, these covenants restrict the Company’s and certain of its subsidiaries’ ability to incur indebtedness, make certain investments, pay dividends or repurchase stock, and make dispositions and acquisitions. In addition, the Credit Agreement requires that the Company and its wholly-owned subsidiaries maintain certain total net leverage ratios as set forth in the Credit Agreement, an average liquidity amount that shall not be less than $10 million, maximum capital expenditures per year as set forth in the Credit Agreement and fixed charge coverage ratios as set forth in the Credit Agreement. The Credit Agreement also contains customary events of default. If an event of default occurs, the Administrative Agent and lenders are entitled to take various actions, including the acceleration of amounts due under the Credit Agreement, termination of commitments thereunder and all other actions permitted to be taken by a secured creditor. In connection with entering into the Credit Agreement, we paid $2.2 million in debt issuance costs, all of which were capitalized. During the quarter ended March 26, 2023, we amortized $0.1 million of debt issuance costs using the effective interest method, which is included in interest expense in the condensed consolidated statement of operations. As of March 26, 2023, we had $24.7 million outstanding under the Credit Agreement. We are currently in compliance with all financial debt covenants.
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Franchise Growth Acceleration Initiative |
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Other Industries [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Franchise Growth Acceleration Initiative | Franchise Growth Acceleration Initiative On March 2, 2022, we announced our Franchise Growth Acceleration Initiative, which included a plan to grow our franchise units domestically through multi-unit shop development area agreements, which may include refranchising certain company-operated shops. Deals for refranchised shops will include commitments for developing new shops to fully penetrate existing markets for which we collect development agreement fees from the franchisee. The following is a summary of the activities recorded as a result of the Franchise Growth Acceleration initiative during the quarter ended March 26, 2023 and March 27, 2022:
______________________________ (a)These costs primarily include professional service fees and travel expenses incurred to execute the refranchise transaction. Refranchise Transactions On March 6, 2023, we finalized a multi-unit development agreement along with our first refranchising deal in New York City. This agreement included a development commitment for 13 new shops over the next eight years, and the refranchise of eight shops, the ownership of which was fully transferred to the franchisee on March 6, 2023. We recognized a loss of $0.4 million related to the sale of these shops calculated based on the purchase price of the assets held at the company-operated shops less the net assets disposed of, including an allocated portion of goodwill. Assets held-for-sale As of March 26, 2023, we had assets held-for-sale of $1.2 million, primarily consisting of property and equipment held at company-operated shops that we plan to sell within the next year to new or existing franchisees. Long-lived assets that meet the held-for-sale criteria are reported at the lower of their carrying value or fair value less estimated costs to sell. During the quarter ended March 26, 2023, we recorded an adjustment of $0.5 million to recognize the held-for-sale assets at fair value, which is included in loss on Franchising Growth Acceleration Initiative activities in the condensed consolidated statement of operations. The estimated fair value of the assets held-for-sale is based upon Level 2 inputs, which includes a sales agreement.
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Capital Stock |
3 Months Ended |
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Mar. 26, 2023 | |
Equity [Abstract] | |
Capital Stock | Capital StockOn May 8, 2018, we announced that our Board of Directors authorized a stock repurchase program for up to $65.0 million of our outstanding common stock. The program permits us, from time to time, to purchase shares in the open market (including in pre-arranged stock trading plans in accordance with the guidelines specified in Rule 10b5-1 under the Securities and Exchange Act of 1934, as amended) or in privately negotiated transactions. The number of common shares actually repurchased, and the timing and price of repurchases, will depend upon market conditions, SEC requirements and other factors. Purchases may be started or stopped at any time without prior notice depending on market conditions and other factors. For the quarter ended March 26, 2023, we did not repurchase any shares of our common stock under the stock repurchase program. We do not have plans to repurchase any common stock under our stock repurchase program at this time. On February 9, 2021, we closed on a Securities Purchase Agreement (the "SPA") for the sale by us of 3,249,668 shares of our common stock at a par value of $0.01 per share and the issuance of warrants to purchase 1,299,861 shares of common stock at an exercise price of $5.45 per warrant for gross proceeds of $16.0 million, before deducting placement agent fees and offering expenses of approximately $1.0 million. The warrants are initially exercisable commencing August 13, 2021 through their expiration date of August 12, 2026. The proceeds received from the SPA were allocated between shares and warrants based on their relative fair values at closing. The warrants were valued utilizing the Black-Scholes method. During the quarter ended March 26, 2023, 158,767 warrants were exercised at the exercise price of $5.45 per warrant. As of March 26, 2023, we had 1,141,094 warrants outstanding that are exercisable through August 12, 2026. On November 3, 2021, we entered into a certain Equity Sales Agreement (the "Sales Agreement") with William Blair & Company, L.L.C., as agent ("William Blair") pursuant to which we may sell shares of our common stock having an aggregate offering price of up to $40.0 million (the "Shares"), from time to time, in our sole discretion, through an "at the market" equity offering program under which William Blair will act as sales agent. As of March 26, 2023, we have not sold any shares under the Sales Agreement.
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Stock-Based Compensation |
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Mar. 26, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation Stock options We have awarded stock options to certain employees including our senior leadership team. The number of options and exercise price of each option is determined by an independent committee designated by our Board of Directors. The options granted are generally exercisable over a 10-year period from the date of the grant. Outstanding options expire on various dates through the year 2028. The range of exercise prices for the outstanding options as of March 26, 2023 is $9.47 and $20.53 per option, and the options generally vest in one-fourth and one-fifth increments over and five-year periods, respectively. A summary of stock option activity is as follows:
Stock-based compensation related to stock options is measured at the grant date based on the calculated fair value of the award, and is recognized as expense over the requisite employee service period, which is generally the vesting period of the grant with a corresponding increase to additional paid-in capital. We did not recognize stock-based compensation expense related to stock options for the quarter ended March 26, 2023. As of March 26, 2023, we do not have unrecognized stock-based compensation expense related to stock options. We record stock-based compensation expense within general and administrative expenses in the condensed consolidated statements of operations. Restricted stock units We award restricted stock units ("RSUs") to certain employees and certain non-employee members of our Board of Directors. Prior to 2021, the Board of Director grants had a vesting schedule of 50% on the first anniversary of the grant date and 50% on the second anniversary of the grant date. Beginning with the annual grant made in the second quarter of 2021, the Board of Director grants fully vest on the first anniversary of the grant date, or upon termination from the Board of Directors for any reason other than for cause, a pro rata portion of the shares vest on the termination date. The employee grants vest in one-third increments over a three-year period. A summary of RSU activity is as follows:
For the quarter ended March 26, 2023, we recognized stock-based compensation expense related to RSUs of $0.6 million. For the quarter ended March 27, 2022, we recognized stock-based compensation expense related to RSUs of $0.6 million. As of March 26, 2023, unrecognized stock-based compensation expense for RSUs was $4.4 million, which will be recognized through fiscal year 2024. Performance stock units We award performance share units ("PSUs") to certain of our employees. We have PSUs that have certain vesting conditions based upon our stock price and relative stock performance. We also have PSUs that are based solely on stock price. Because these PSUs are subject to service and market vesting conditions, we determine the fair market value of each grant using a Monte Carlo simulation model. Participants are entitled to receive a specified number of shares of our common stock contingent on achievement of a stock return on our common stock. For the quarter ended March 26, 2023, we recognized stock-based compensation expense for PSUs with market vesting conditions of $0.3 million. A summary of activity for PSUs with market vesting conditions for the quarter ended March 26, 2023 is as follows:
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Commitments and Contingencies |
3 Months Ended |
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Mar. 26, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies We are subject to legal proceedings, claims and liabilities, such as employment-related claims and slip and fall cases, which arise in the ordinary course of business and are generally covered by insurance. We accrue for such liabilities when it is probable that future costs will be incurred and such costs can be reasonably estimated. Such accruals are based on developments to date, our estimates of the outcomes of these matters and our experience in contesting, litigating and settling other similar matters. In the opinion of management, the amount of ultimate liability with respect to those actions should not have a material adverse impact on our financial position or results of operations and cash flows. Many of the food products we purchase are subject to changes in the price and availability of food commodities, including, among other things, beef, poultry, grains, dairy and produce. We work with our suppliers and use a mix of forward pricing protocols for certain items including agreements with our supplier on fixed prices for deliveries at a time in the future and agreements on a fixed price with our suppliers for the duration of those protocols. We also utilize formula pricing protocols under which the prices we pay are based on a specified formula related to the prices of the goods, such as spot prices. Our use of any forward pricing arrangements varies substantially from time to time and these arrangements tend to cover relatively short periods (i.e., typically twelve months or less). Such contracts are used in normal purchases of our food products and not for speculative purposes, and as such are not required to be evaluated as derivative instruments.
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Organization and Other Matters (Policies) |
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Mar. 26, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business | BusinessPotbelly Corporation, a Delaware corporation, together with its subsidiaries (collectively referred to as "the Company", "Potbelly", "we", "us" or "our"), owns and operates 373 company-owned shops in the United States as of March 26, 2023. Additionally, Potbelly franchisees operate 53 shops domestically. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation | Basis of Presentation The unaudited condensed consolidated financial statements and notes herein should be read in conjunction with the audited consolidated financial statements of Potbelly Corporation and its subsidiaries and the notes thereto included in our Annual Report on Form 10-K for the year ended December 25, 2022. The unaudited condensed consolidated financial statements included herein have been prepared by us without audit, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the "SEC") regarding interim financial reporting. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP") have been condensed or omitted pursuant to the SEC rules and regulations. In the opinion of management, all adjustments, which are of a normal and recurring nature (except as otherwise noted), that are necessary to present fairly our balance sheet as of March 26, 2023 and December 25, 2022, our statement of operations for the quarter ended March 26, 2023 and March 27, 2022, the statement of equity for the quarter ended March 26, 2023 and March 27, 2022, and our statement of cash flows for the quarter ended March 26, 2023 and March 27, 2022 have been included. The condensed consolidated statements of operations for the interim periods presented herein are not necessarily indicative of the results to be expected for the full year. We do not have any components of other comprehensive income recorded within our consolidated financial statements and therefore, do not separately present a statement of comprehensive income in our condensed consolidated financial statements.
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Principles of Consolidation | Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts of Potbelly Corporation; its wholly owned subsidiary, Potbelly Illinois, Inc. (“PII”); PII’s wholly owned subsidiaries, Potbelly Franchising, LLC and Potbelly Sandwich Works, LLC (“PSW”); seven of PSW’s wholly owned subsidiaries and PSW’s six joint ventures, collectively, the “Company.” All intercompany balances and transactions have been eliminated in consolidation. For our six consolidated joint ventures, "non-controlling interest" represents the non-controlling partner’s share of the assets, liabilities and operations related to the joint venture investments. Potbelly has ownership interests ranging from 51-80% in these consolidated joint ventures.
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Fiscal Year | Fiscal Year We use a 52/53-week fiscal year that ends on the last Sunday of the calendar period. Approximately every five or six years a 53rd week is added. Fiscal year 2023 consists of 53 weeks and fiscal year 2022 consists of 52 weeks. The fiscal quarters ended March 26, 2023 and March 27, 2022 each consisted of 13 weeks.
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Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and the disclosure of contingent assets and liabilities. Significant estimates include amounts for long-lived assets and income taxes. Actual results could differ from those estimates. Franchise Growth Acceleration Initiative On March 2, 2022, we announced our Franchise Growth Acceleration Initiative, which included a plan to grow our franchise units domestically through multi-unit shop development area agreements, which may include refranchising certain company-operated shops. Deals for refranchised shops will include commitments for developing new shops to fully penetrate existing markets for which we collect development agreement fees from the franchisee. All gains and losses recognized on sales of shops and other expenses incurred to execute a refranchising transaction are included in Loss on Franchising Growth Acceleration Initiative activities in the condensed consolidated statement of operations. Development agreement fees received are recorded in the consolidated balance sheets as accrued expenses or other long-term liabilities, and amortized over the term of the franchise agreement once the shops are opened. During the first quarter of 2023, we executed our first refranchising transaction, which is further discussed in Note 8. Restricted Cash As of March 26, 2023, we had restricted cash related to funds held in a money market account as collateral for letters of credit to certain lease agreements. The reconciliation of cash and cash equivalents and restricted cash presented in the condensed consolidated balance sheets to the total amount shown in our condensed consolidated statements of cash flows is as follows:
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Potbelly Brand Fund | Potbelly Brand Fund We maintain the Potbelly Brand Fund (the "Brand Fund") for the purpose of collecting and administering funds to be used for advertising, customer research, marketing technology, agencies, and other activities that promote the Potbelly brand in order to deliver sales at our shops. Company-operated and franchised shops both contribute to the Brand Fund based on a percentage of sales. Beginning in the first quarter of fiscal year 2022, we manage these advertising and marketing expenses through the Brand Fund using the funds contributed by our shops. We manage these funds separately from our general operating expenses, but we are not obligated to maintain the funds in separate accounts or entities. We may spend more or less in any fiscal period than the amounts contributed to the Brand Fund, and we may choose to roll over any unused contributions to the following fiscal period or return them to our shops. Brand Fund contributions made by company-operated shops are eliminated from the consolidated financial statements. Franchisee contributions are included within franchise royalties and fees in the condensed consolidated statements of operations. Expenses incurred by the Brand Fund are recorded to company-operated and franchised shops based on a percentage of sales. Company-operated Brand Fund expense is included within other operating expenses in our condensed consolidated statements of operations. Franchisee Brand Fund expense is presented within franchise support, rent and marketing expenses in our condensed consolidated statements of operations.
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Recent Accounting Pronouncements | Recent Accounting PronouncementsWe reviewed all recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a significant impact on the condensed consolidated financial statements. |
Organization, Consolidation and Presentation of Financial Statements (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Cash and Cash Equivalents | The reconciliation of cash and cash equivalents and restricted cash presented in the condensed consolidated balance sheets to the total amount shown in our condensed consolidated statements of cash flows is as follows:
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Revenue (Tables) |
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Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Current and Noncurrent Contract Liabilities from Contracts with Customers | The opening and closing balances of our current and noncurrent contract liabilities from contracts with customers were as follows:
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Summary of Expected Revenue Recognition Related to Contract Liabilities | We expect to recognize revenue related to contract liabilities as follows (in thousands), which may vary based upon franchise activity as well as gift card redemption patterns:
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Earnings (Loss) Per Share (Tables) |
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Summary of Loss Per Share Calculation | The following table summarizes the loss per share calculation:
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Leases (Tables) |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Weighted Average Lease Terms and Discount Rates | Operating lease term and discount rate were as follows:
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Components of Lease Cost | The components of lease cost were as follows (in thousands):
Supplemental disclosures of cash flow information related to leases were as follows (in thousands):
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Maturities of Lease Liabilities | Maturities of lease liabilities were as follows (in thousands) as of March 26, 2023:
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Components of Lease Income | The components of lease income were as follows (in thousands):
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Debt and Credit Facilities (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Component of Long-term Debt | The components of long-term debt were as follows (in thousands):
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Franchise Growth Acceleration Initiative (Tables) |
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Other Industries [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Franchise Growth Acceleration Initiative | The following is a summary of the activities recorded as a result of the Franchise Growth Acceleration initiative during the quarter ended March 26, 2023 and March 27, 2022:
______________________________ (a)These costs primarily include professional service fees and travel expenses incurred to execute the refranchise transaction.
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Stock-Based Compensation (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 26, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Stock Option Activity | A summary of stock option activity is as follows:
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Summary of RSU Activity | A summary of RSU activity is as follows:
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Summary of PSU Activity | A summary of activity for PSUs with market vesting conditions for the quarter ended March 26, 2023 is as follows:
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Organization and Other Matters - Additional Information (Detail) |
3 Months Ended |
---|---|
Mar. 26, 2023
jointVenture
shop
subsidiary
| |
Nature Of Business And Basis Of Presentation [Line Items] | |
Number of shops franchisees operate | 53 |
Number of wholly owned subsidiaries | subsidiary | 7 |
Number of joint ventures | jointVenture | 6 |
Minimum | |
Nature Of Business And Basis Of Presentation [Line Items] | |
Number of shops Potbelly Corporation owns or operates | 373 |
Ownership interest rate | 51.00% |
Maximum | |
Nature Of Business And Basis Of Presentation [Line Items] | |
Ownership interest rate | 80.00% |
Organization and Other Matters - Schedule of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands |
Mar. 26, 2023 |
Dec. 25, 2022 |
Mar. 27, 2022 |
Dec. 26, 2021 |
---|---|---|---|---|
Reconciliation of cash, cash equivalents and restricted cash: | ||||
Cash and cash equivalents | $ 25,596 | $ 15,619 | ||
Restricted cash, noncurrent | 749 | 0 | ||
Total cash, cash equivalents and restricted cash shown on statement of cash flows | $ 26,345 | $ 15,619 | $ 9,493 | $ 14,353 |
Revenue - Additional Information (Detail) |
3 Months Ended | |
---|---|---|
Mar. 26, 2023
USD ($)
point
|
Mar. 27, 2022
USD ($)
|
|
Disaggregation Of Revenue [Line Items] | ||
Amount of revenue recognized | $ 118,270,000 | $ 98,221,000 |
Gift card breakage income | $ 200,000 | 200,000 |
Loyalty points earned per dollar spent | point | 10 | |
Cost of loyalty reward (in points) | point | 1,000 | |
Expiration period of loyalty reward | 30 days | |
Aggregate value of remaining performance obligation on outstanding contracts | $ 8,782,000 | |
Revenue recognized related to prior periods | 1,300,000 | 1,100,000 |
Revenue recognized from obligations satisfied (or partially satisfied) in prior periods | 0 | 0 |
Point in time sales | ||
Disaggregation Of Revenue [Line Items] | ||
Amount of revenue recognized | 117,900,000 | 97,900,000 |
Over time sales | ||
Disaggregation Of Revenue [Line Items] | ||
Amount of revenue recognized | $ 400,000 | $ 300,000 |
Revenue - Summary of Current and Noncurrent Contract Liabilities from Contracts with Customers (Detail) $ in Thousands |
3 Months Ended |
---|---|
Mar. 26, 2023
USD ($)
| |
Current Contract Liability | |
Beginning balance | $ 7,008 |
Ending balance | 6,553 |
Increase (Decrease) in contract liability | (455) |
Noncurrent Contract Liability | |
Beginning balance | 1,677 |
Ending balance | 2,229 |
Increase (Decrease) in contract liability | $ 552 |
Fair Value Measurement (Detail) $ in Millions |
3 Months Ended |
---|---|
Mar. 26, 2023
USD ($)
| |
Fair Value Disclosures [Abstract] | |
Impairment charge | $ 0.7 |
Earnings (Loss) Per Share - Additional Information (Detail) |
3 Months Ended |
---|---|
Mar. 27, 2022
shares
| |
Common Share Options | |
Loss Per Share [Line Items] | |
Potential common shares included in diluted shares outstanding (in shares) | 0 |
Earnings (Loss) Per Share - Summary of Loss Per Share Calculation (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 26, 2023 |
Mar. 27, 2022 |
|
Loss Per Share [Line Items] | ||
Net loss attributable to Potbelly Corporation | $ (1,327) | $ (7,913) |
Weighted average common shares outstanding-basic (in shares) | 28,907 | 28,396 |
Plus: Effect of potentially dilutive stock-based compensation awards | 0 | 0 |
Plus: Effect of potential warrant exercise | 0 | 0 |
Weighted average common shares outstanding-diluted (in shares) | 28,907 | 28,396 |
Income (loss) per share available to common stockholders-basic (in USD per share) | $ (0.05) | $ (0.28) |
Income (loss) per share available to common stockholders-diluted (in USD per share) | $ (0.05) | $ (0.28) |
Common share options | ||
Loss Per Share [Line Items] | ||
Potentially dilutive shares that are considered anti-dilutive (in shares) | 2,831 | 1,735 |
Income Taxes - (Detail) $ in Millions |
Mar. 31, 2019
USD ($)
|
---|---|
Income Tax Disclosure [Abstract] | |
Deferred tax assets, valuation allowance | $ 13.6 |
Leases - Additional Information (Detail) |
3 Months Ended | |
---|---|---|
Mar. 26, 2023
USD ($)
store
|
Mar. 27, 2022
USD ($)
|
|
Leases [Abstract] | ||
Operating leases, terms | 10 years | |
Renewal term | 5 years | |
Number of leases terminated | store | 0 | |
Additional operating leases payments related to shops not yet open, amount | $ 0 | |
Total revenues | $ 118,270,000 | $ 98,221,000 |
Leases - Operating Lease Term and Discount Rate (Detail) |
Mar. 26, 2023 |
Mar. 27, 2022 |
---|---|---|
Leases [Abstract] | ||
Weighted average remaining lease term (years) | 6 years 6 months 14 days | 7 years 21 days |
Weighted average discount rate | 8.37% | 8.06% |
Leases - Components of Lease Cost (Detail) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 26, 2023 |
Mar. 27, 2022 |
|
Lessee Lease Description [Line Items] | ||
Total lease cost | $ 13,383 | $ 13,767 |
Occupancy, General and administrative expenses and Franchise support, rent and marketing expenses | ||
Lessee Lease Description [Line Items] | ||
Operating lease cost | 9,842 | 10,305 |
Occupancy and Franchise support, rent and marketing expenses | ||
Lessee Lease Description [Line Items] | ||
Variable lease cost | $ 3,541 | $ 3,462 |
Leases - Supplemental Disclosures of Cash Flow Information Related to Leases (Detail) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 26, 2023 |
Mar. 27, 2022 |
|
Leases [Abstract] | ||
Operating cash flows rent paid for operating lease liabilities | $ 10,698 | $ 10,594 |
Operating right-of-use assets obtained in exchange for new operating lease liabilities | 2,883 | 3,382 |
Reduction in operating right-of-use assets due to lease terminations and modifications | $ 0 | $ 0 |
Leases - Maturities of Lease Liabilities (Detail) $ in Thousands |
Mar. 26, 2023
USD ($)
|
---|---|
Operating Leases | |
Remainder of 2023 | $ 31,133 |
2024 | 40,930 |
2025 | 38,145 |
2026 | 34,247 |
2027 | 28,662 |
2028 | 22,128 |
Thereafter | 46,447 |
Total lease payments | 241,692 |
Less: imputed interest | (57,985) |
Present value of lease liabilities | $ 183,707 |
Leases - Lessor Operating Leases (Details) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 26, 2023
USD ($)
lease
|
Mar. 27, 2022
USD ($)
lease
|
|
Leases [Abstract] | ||
Franchise support, rent and marketing expenses | $ 100 | |
Number of subleases | lease | 8 | 0 |
Operating lease income | $ 120 | $ 0 |
Variable lease income | 14 | 0 |
Franchise rent income | $ 134 | $ 0 |
Debt and Credit Facilities - Component of Long-term Debt (Detail) - USD ($) $ in Thousands |
Mar. 26, 2023 |
Dec. 25, 2022 |
---|---|---|
Debt Instrument [Line Items] | ||
Total long-term debt | $ 21,297 | $ 8,550 |
Unamortized debt issuance costs | (2,141) | 0 |
Less: current portion of long-term debt | (1,250) | 0 |
Revolving credit facility | ||
Debt Instrument [Line Items] | ||
Total long-term debt | 0 | 8,550 |
Term loan credit facility | ||
Debt Instrument [Line Items] | ||
Total long-term debt | $ 24,688 | $ 0 |
Franchise Growth Acceleration Initiative (Details) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 26, 2023
USD ($)
store
|
Mar. 27, 2022
USD ($)
store
|
Mar. 06, 2023
store
|
|
Other Industries [Abstract] | |||
Additional franchises | store | 13 | ||
Number of shops sold to franchisees | store | 8 | 0 | |
Proceeds from sale of company-operated shops | $ 100 | $ 0 | |
Net assets sold | (512) | 0 | |
Goodwill related to the company-operated shops sold to franchisee | (21) | 0 | |
Loss on sale of company-operated shops, net | (433) | 0 | |
Adjustment to recognize held-for-sale assets at fair value | (503) | 0 | |
Other expenses | (13) | 0 | |
Loss on Franchise Growth Acceleration Initiative activities | $ (949) | $ 0 |
Stock-Based Compensation - Summary of Stock Option Activity (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | |
---|---|---|---|
Mar. 26, 2023 |
Jun. 26, 2022 |
Dec. 25, 2022 |
|
Shares (Thousands) | |||
Beginning balance (in shares) | 473 | ||
Granted (in shares) | 0 | ||
Exercised (in shares) | 0 | ||
Canceled (in shares) | (49) | ||
Ending balance (in shares) | 424 | ||
Exercisable (in shares) | 424 | ||
Weighted Average Exercise Price | |||
Outstanding at beginning balance (in USD per share) | $ 12.22 | ||
Granted (in USD per share) | 0 | ||
Exercised (in USD per share) | 0 | ||
Canceled (in USD per share) | 9.52 | ||
Outstanding at ending balance (in USD per share) | 12.53 | ||
Exercisable (in USD per share) | $ 12.53 | ||
Options outstanding aggregate intrinsic value | $ 0 | $ 0 | |
Options exercisable aggregate intrinsic value | $ 0 | ||
Weighted Average Remaining Term (Years) | |||
Options outstanding | 1 year 3 months 7 days | 1 year 5 months 15 days | |
Options exercisable | 1 year 3 months 7 days |
Stock-Based Compensation - Summary of RSU Activity (Detail) - Restricted stock units (RSUs) shares in Thousands |
3 Months Ended |
---|---|
Mar. 26, 2023
$ / shares
shares
| |
Number of RSUs (Thousands) | |
Non-vested beginning balance (in shares) | shares | 908 |
Granted (in shares) | shares | 185 |
Vested (in shares) | shares | (111) |
Canceled (in shares) | shares | (43) |
Non-vested ending balance (in shares) | shares | 939 |
Weighted Average Fair Value per Share | |
Weighted average fair value beginning balance (in USD per share) | $ / shares | $ 4.25 |
Granted (in USD per share) | $ / shares | 5.49 |
Vested (in USD per share) | $ / shares | 8.18 |
Canceled (in USD per share) | $ / shares | 6.31 |
Weighted average fair value ending balance (in USD per share) | $ / shares | $ 4.38 |
Stock-Based Compensation - Summary of PSU Activity (Detail) - Performance stock units shares in Thousands |
3 Months Ended |
---|---|
Mar. 26, 2023
$ / shares
shares
| |
Number of RSUs (Thousands) | |
Non-vested beginning balance (in shares) | shares | 275 |
Granted (in shares) | shares | 92 |
Vested (in shares) | shares | 0 |
Canceled (in shares) | shares | (40) |
Non-vested ending balance (in shares) | shares | 327 |
Weighted Average Fair Value per Share | |
Weighted average fair value beginning balance (in USD per share) | $ / shares | $ 9.34 |
Granted (in USD per share) | $ / shares | 3.63 |
Vested (in USD per share) | $ / shares | 0 |
Canceled (in USD per share) | $ / shares | 6.24 |
Weighted average fair value ending balance (in USD per share) | $ / shares | $ 7.74 |
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