Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 29, 2019 | Jan. 26, 2020 | Jun. 30, 2019 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 29, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | PBPB | ||
Entity Registrant Name | Potbelly Corporation | ||
Entity Central Index Key | 0001195734 | ||
Current Fiscal Year End Date | --12-29 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 23,638,157 | ||
Entity Public Float | $ 116.7 | ||
Title of 12(b) Security | Common Stock, $0.01 par value | ||
Entity File Number | 001-36104 | ||
Entity Tax Identification Number | 36-4466837 | ||
Entity Address, Address Line One | 111 N. Canal Street | ||
Entity Address, Address Line Two | Suite 850 | ||
Entity Address, City or Town | Chicago | ||
Entity Address, State or Province | IL | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Address, Postal Zip Code | 60606 | ||
City Area Code | 312 | ||
Local Phone Number | 951-0600 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity Interactive Data Current | Yes | ||
Security Exchange Name | NASDAQ | ||
Documents Incorporated by Reference | Portions of the registrant’s definitive proxy statement for its 2020 Annual Meeting to be filed with the Securities and Exchange Commission not later than 120 days after the end of the year covered by this Annual Report are incorporated by reference into Part III of this Annual Report. |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 29, 2019 | Dec. 30, 2018 |
Current assets | ||
Cash and cash equivalents | $ 18,806 | $ 19,775 |
Accounts receivable, net of allowances of $202 and $113 as of December 29, 2019 and December 30, 2018, respectively | 4,257 | 4,737 |
Inventories | 3,473 | 3,482 |
Prepaid expenses and other current assets | 5,687 | 11,426 |
Total current assets | 32,223 | 39,420 |
Property and equipment, net | 79,032 | 87,782 |
Right-of-use assets for operating leases | 211,988 | |
Indefinite-lived intangible assets | 3,404 | 3,404 |
Goodwill | 2,222 | 2,222 |
Deferred income taxes, non-current | 13,385 | |
Deferred expenses, net and other assets | 4,010 | 7,002 |
Total assets | 332,879 | 153,215 |
Current liabilities | ||
Accounts payable | 3,886 | 3,835 |
Accrued expenses | 20,398 | 25,029 |
Short-term operating lease liabilities | 29,319 | |
Accrued income taxes | 171 | 162 |
Total current liabilities | 53,774 | 29,026 |
Deferred rent and landlord allowances | 22,905 | |
Long-term operating lease liabilities | 206,726 | |
Other long-term liabilities | 3,210 | 5,751 |
Total liabilities | 263,710 | 57,682 |
Commitments and contingencies (Note 14) | ||
Equity | ||
Common stock, $0.01 par value—authorized 200,000 shares; outstanding 23,638 and 24,143 shares as of December 29, 2019 and December 30, 2018, respectively | 331 | 330 |
Additional paid-in-capital | 435,278 | 432,771 |
Treasury stock, held at cost, 9,465 and 8,801 shares as of December 29, 2019, and December 30, 2018, respectively | (112,680) | (108,372) |
Accumulated deficit | (254,081) | (229,558) |
Total stockholders’ equity | 68,848 | 95,171 |
Non-controlling interest | 321 | 362 |
Total equity | 69,169 | 95,533 |
Total liabilities and equity | $ 332,879 | $ 153,215 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 29, 2019 | Dec. 30, 2018 |
Statement Of Financial Position [Abstract] | ||
Allowances on accounts receivable | $ 202 | $ 113 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, authorized | 200,000,000 | 200,000,000 |
Common stock, outstanding | 23,638,000 | 24,143,000 |
Treasury stock, shares | 9,465,000 | 8,801,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Revenues | |||
Total revenues | $ 409,707 | $ 422,638 | $ 428,111 |
Sandwich shop operating expenses | |||
Labor and related expenses | 128,403 | 127,962 | 126,337 |
Occupancy expenses | 58,977 | 59,789 | 58,562 |
Other operating expenses | 50,178 | 50,363 | 49,209 |
General and administrative expenses | 47,949 | 46,862 | 44,618 |
Depreciation expense | 22,103 | 23,142 | 25,680 |
Pre-opening costs | 35 | 472 | 1,441 |
Impairment and loss on disposal of property and equipment | 2,932 | 13,567 | 10,761 |
Total expenses | 418,903 | 433,240 | 430,034 |
Loss from operations | (9,196) | (10,602) | (1,923) |
Interest expense | 199 | 142 | 124 |
Loss before income taxes | (9,395) | (10,744) | (2,047) |
Income tax expense (benefit) | 14,190 | (2,195) | 4,643 |
Net loss | (23,585) | (8,549) | (6,690) |
Net income attributable to non-controlling interest | 407 | 329 | 266 |
Net loss attributable to Potbelly Corporation | $ (23,992) | $ (8,878) | $ (6,956) |
Net loss per common share attributable to common stockholders: | |||
Basic | $ (1.01) | $ (0.35) | $ (0.28) |
Diluted | $ (1.01) | $ (0.35) | $ (0.28) |
Weighted average shares outstanding: | |||
Basic | 23,850 | 25,173 | 25,045 |
Diluted | 23,850 | 25,173 | 25,045 |
Product [Member] | |||
Revenues | |||
Total revenues | $ 406,688 | $ 419,426 | $ 424,932 |
Sandwich shop operating expenses | |||
Cost of goods sold, excluding depreciation | 108,326 | 111,083 | 113,426 |
Franchise Royalties And Fees [Member] | |||
Revenues | |||
Total revenues | $ 3,019 | $ 3,212 | $ 3,179 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Equity (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 29, 2019 | Dec. 30, 2018 | |
ASU 2014-09 (Topic 606) [Member] | ||
Cumulative impact tax | $ 250 | |
ASU 2016-02 (Topic 842) [Member] | ||
Cumulative impact tax | $ 196 |
Consolidated Statements of Equi
Consolidated Statements of Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock [Member] | Treasury Stock [Member] | Warrants [Member] | Additional Paid-in-Capital [Member] | Accumulated Deficit [Member] | Non-Controlling Interest [Member] |
Beginning balance at Dec. 25, 2016 | $ 124,236 | $ 309 | $ (72,321) | $ 909 | $ 407,622 | $ (213,034) | $ 751 |
Beginning balance, common shares at Dec. 25, 2016 | 25,139 | ||||||
Net income (loss) | (6,690) | (6,956) | 266 | ||||
Stock-based compensation plans | 6,487 | $ 7 | 6,480 | ||||
Stock-based compensation plans, shares | 697 | ||||||
Exercise of stock warrants | $ 1,972 | $ 2 | $ (909) | 2,879 | |||
Exercise of stock warrants, shares | 653 | 242 | |||||
Repurchases of common stock | $ (12,941) | (12,941) | |||||
Repurchases of common stock, shares | (1,078) | ||||||
Distributions to non-controlling interest | (513) | (513) | |||||
Contributions from non-controlling interest | 11 | 11 | |||||
Stock-based compensation expense | 4,676 | 4,676 | |||||
Ending balance at Dec. 31, 2017 | 117,238 | $ 318 | (85,262) | 421,657 | (219,990) | 515 | |
Ending balance, common shares at Dec. 31, 2017 | 25,000 | ||||||
Net income (loss) | (8,549) | (8,878) | 329 | ||||
Cumulative impact | ASU 2014-09 (Topic 606) [Member] | (690) | (690) | |||||
Stock-based compensation plans | $ 8,244 | $ 12 | 8,232 | ||||
Stock-based compensation plans, shares | 1,112 | ||||||
Exercise of stock warrants, shares | 993 | ||||||
Treasury shares used for stock-based plans | $ (194) | (194) | |||||
Treasury shares used for stock-based plans, shares | (16) | ||||||
Repurchases of common stock | (22,916) | (22,916) | |||||
Repurchases of common stock, shares | (1,953) | ||||||
Distributions to non-controlling interest | (580) | (580) | |||||
Contributions from non-controlling interest | 98 | 98 | |||||
Stock-based compensation expense | 2,882 | 2,882 | |||||
Ending balance at Dec. 30, 2018 | $ 95,533 | $ 330 | (108,372) | 432,771 | (229,558) | 362 | |
Ending balance, common shares at Dec. 30, 2018 | 24,143 | 24,143 | |||||
Net income (loss) | $ (23,585) | (23,992) | 407 | ||||
Cumulative impact | ASU 2016-02 (Topic 842) [Member] | (531) | (531) | |||||
Stock-based compensation plans | $ 173 | $ 1 | 172 | ||||
Stock-based compensation plans, shares | 159 | ||||||
Exercise of stock warrants, shares | 22 | ||||||
Treasury shares used for stock-based plans | $ (91) | (91) | |||||
Treasury shares used for stock-based plans, shares | (16) | ||||||
Repurchases of common stock | (4,217) | (4,217) | |||||
Repurchases of common stock, shares | (648) | ||||||
Distributions to non-controlling interest | (523) | (523) | |||||
Contributions from non-controlling interest | 75 | 75 | |||||
Stock-based compensation expense | 2,335 | 2,335 | |||||
Ending balance at Dec. 29, 2019 | $ 69,169 | $ 331 | $ (112,680) | $ 435,278 | $ (254,081) | $ 321 | |
Ending balance, common shares at Dec. 29, 2019 | 23,638 | 23,638 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities: | |||
Net income (loss) | $ (23,585) | $ (8,549) | $ (6,690) |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
Depreciation expense | 22,103 | 23,142 | 25,680 |
Noncash lease expense | 27,853 | ||
Deferred income tax | 13,808 | (3,016) | 6,096 |
Deferred rent and landlord allowances | (82) | 1,911 | |
Stock-based compensation expense | 2,335 | 2,882 | 4,676 |
Excess tax deficiency from stock-based compensation | 1,089 | 2,112 | |
Asset impairment, store closure and disposal of property and equipment | 2,989 | 13,762 | 10,947 |
Amortization of debt issuance costs | 55 | 37 | 37 |
Changes in operating assets and liabilities: | |||
Accounts receivable, net | 480 | 100 | (650) |
Inventories | 9 | 43 | (160) |
Prepaid expenses and other assets | 5,917 | (694) | (3,190) |
Accounts payable | (249) | 177 | 286 |
Operating lease liabilities | (29,725) | ||
Accrued expenses and other liabilities | (3,822) | 2,097 | 764 |
Net cash provided by operating activities | 18,168 | 30,988 | 41,819 |
Cash flows from investing activities: | |||
Purchases of property and equipment | (14,365) | (21,395) | (34,684) |
Net cash used in investing activities | (14,365) | (21,395) | (34,684) |
Cash flows from financing activities: | |||
Treasury stock repurchase | (4,217) | (22,916) | (12,941) |
Debt issuance costs | (189) | ||
Proceeds from exercise of stock options | 173 | 8,244 | 6,487 |
Proceeds from exercise of stock warrants | 1,972 | ||
Employee taxes on certain stock-based payment arrangements | (91) | (194) | |
Contributions from non-controlling interest | 75 | 98 | 11 |
Distributions to non-controlling interest | (523) | (580) | (513) |
Net cash used in financing activities | (4,772) | (15,348) | (4,984) |
Net increase (decrease) in cash and cash equivalents | (969) | (5,755) | 2,151 |
Cash and cash equivalents at beginning of period | 19,775 | 25,530 | 23,379 |
Cash and cash equivalents at end of period | 18,806 | 19,775 | 25,530 |
Supplemental cash flow information: | |||
Income taxes paid | 187 | 250 | 1,656 |
Interest paid | 108 | 110 | 94 |
Supplemental non-cash investing and financing activities: | |||
Unpaid liability for purchases of property and equipment | $ 1,198 | $ 751 | $ 1,741 |
Organization and Other Matters
Organization and Other Matters | 12 Months Ended |
Dec. 29, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization and Other Matters | (1) 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 or operates more than 400 company-owned shops in the United States as of December 29, 2019. Additionally, Potbelly franchisees operate over 40 shops domestically. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 29, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | (2) Summary of Significant Accounting Policies (a) Principles of Consolidation The 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 (“LLC”); seven of LLC’s wholly owned subsidiaries and LLC’s seven joint ventures, collectively, the “Company.” All intercompany balances and transactions have been eliminated in consolidation. For consolidated joint ventures, non-controlling interest represents a non-controlling partner’s share of the assets, liabilities and operations related to the seven joint venture investments. The Company has ownership interests ranging from 51-80% in these consolidated joint ventures. The Company does not have any components of other comprehensive income (loss) recorded within its consolidated financial statements, and, therefore, does not separately present a statement of comprehensive income (loss) in its consolidated financial statements. (b) Reporting Period The Company uses a 52/53-week fiscal year that ends on the last Sunday of the calendar year. Approximately every five or six years a 53rd week is added. Fiscal years 2019, 2018 and 2017 consisted of 52, 52 and 53 weeks, respectively. (c) Segment Reporting The Company owns and operates Potbelly Sandwich Shop concepts in the United States. The Company also has domestic franchise operations of Potbelly Sandwich Shops concepts. The Company’s chief operating decision maker (the “CODM”) is its Chief Executive Officer. As the CODM reviews financial performance and allocates resources at a consolidated level on a recurring basis, the Company has one operating segment and one reportable segment. (d) Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America U.S. GAAP (e) Fair Value Measurements The Company applies fair value accounting for all financial assets and liabilities and nonfinancial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities that are required to be recorded at fair value, the Company assumes the highest and best use of the asset by market participants in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions, and credit risk. The Company applies the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels, and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: • Level 1 — Quoted prices in active markets for identical assets or liabilities. • Level 2 — Observable inputs other than quoted prices in active markets for identical assets or liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3 — Inputs that are both unobservable and significant to the overall fair value measurement reflect an entity’s estimates of assumptions that market participants would use in pricing the asset or liability. (f) Financial Instruments The Company records all financial instruments at cost, which is the fair value at the date of transaction. The amounts reported in the consolidated balance sheets for cash and cash equivalents, accounts receivable, accounts payable and all other current liabilities approximate their fair value because of the short-term maturities of these instruments. (g) Cash and Cash Equivalents The Company considers all highly liquid investment instruments with an original maturity of three months or less when purchased to be cash equivalents. The Company maintains its cash in bank deposit accounts that, at times, may exceed federally insured limits; however, the Company has not experienced any losses in these accounts. The Company believes it is not exposed to any significant credit risk. These are valued within the fair value hierarchy as Level 1 measurements. (h) Accounts Receivable, net Accounts receivable, net consists of amounts owed from credit card processors, customers, third-party delivery platforms, vendors and other miscellaneous receivables. (i) Inventories Inventories, which consist of food products, paper goods and supplies, and promotional items, are valued at the lower of cost (first-in, first-out) or net realizable value. No adjustment is deemed necessary to reduce inventory to the lower of cost or net realizable value due to the rapid turnover and high utilization of inventory. (j) Property and Equipment Property and equipment acquired is recorded at cost less accumulated depreciation. Property and equipment is depreciated based on the straight-line method over the estimated useful lives, generally ranging from three to five years for furniture and fixtures, computer equipment, computer software, and machinery and equipment. Leasehold improvements are depreciated over the shorter of their estimated useful lives or the related lease life, generally 10 to 15 years. For leases with renewal periods at the Company’s option, the Company determines the expected lease period based on whether the renewal of any options are reasonably assured at the inception of the lease. Direct costs and expenditures for refurbishments and improvements that significantly add to the productive capacity or extend the useful life of an asset are capitalized, whereas the costs of repairs and maintenance are expensed when incurred. Capitalized costs are recorded as part of the asset to which they relate, primarily to leasehold improvements, and such costs are amortized over the asset’s useful life. When assets are retired or sold, the asset cost and related accumulated depreciation are removed from the consolidated balance sheet and any gain or loss is recorded in the consolidated statement of operations. (k) Indefinite-Lived Intangible Assets The Company reviews indefinite-lived intangible assets, which includes goodwill and tradenames, annually at fiscal year-end for impairment or more frequently if events or circumstances indicate that the carrying value may not be recoverable. An impaired asset is written down to its estimated fair value based on the most recent information available. The Company assesses the fair values of its intangible assets, and its reporting unit for goodwill testing purposes, using an income-based approach. Under the income approach, fair value is based on the present value of estimated future cash flows. The income approach is dependent on a number of factors, including forecasted revenues and expenses, appropriate discount rates and other variables. The annual impairment review utilizes the estimated fair value of the intangible assets and the overall reporting unit and compares the estimated fair values to the carrying values as of the testing date. If the carrying value of these intangible assets or the reporting unit exceeds the fair values, the Company would then use the fair values to measure the amount of any required impairment charge. No impairment charge was recognized for intangible assets for any of the fiscal periods presented. (l) Pre-opening Costs Pre-opening costs consist of costs incurred prior to opening a new shop and are made up primarily of travel, employee payroll and training costs incurred prior to the shop opening, as well as occupancy costs incurred from when the Company takes site possession to shop opening. Shop pre-opening costs are expensed as incurred. (m) Advertising Expenses Advertising costs are expensed as incurred and are included in general and administrative expenses in the consolidated statements of operations. Advertising expenses were $4.1 million, $4.3 million and $3.4 million in fiscal years 2019, 2018 and 2017, respectively. (n) Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are attributed to differences between financial statement and income tax reporting. Deferred tax assets, net of any valuation allowances, represent the future tax return consequences of those differences and for operating loss and tax credit carryforwards, which will be deductible when the assets are recovered. Deferred tax assets are reduced by a valuation allowance if it is deemed more likely than not that some or all of the deferred tax assets will not be realized. In making this assessment of the realizability of deferred tax assets, the Company considers all positive and negative evidence as to whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. The Company considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Deferred tax liabilities are recognized for temporary differences that will be taxable in future years’ tax returns. The Company accounts for uncertain tax positions under current accounting guidance, which prescribes a minimum probability threshold that a tax position must meet before a financial statement benefit is recognized. The minimum threshold is defined as a tax position that is more likely than not to be sustained upon examination by tax authorities, based on the technical merits of the position. The tax benefit to be recognized is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. (o) Stock-Based Compensation The Company has granted stock options under its 2004 Equity Incentive Plan (the “2004 Plan”), 2013 Long-Term Incentive Plan (the “2013 Plan”) and 2019 Long-Term Incentive Plan (the “2019 Plan”), as amended (the “2019 Plan” and together with the 2013 Plan and 2004 Plan, the “Plans”) and restricted stock units (“RSUs”) under its 2013 Plan and 2019 Plan. The Plans permit the granting of awards to employees and non-employee officers, consultants, agents, and independent contractors of the Company in the form of stock appreciation rights, stock awards and units, and stock options. The Plans give broad powers to the Company’s board of directors to administer and interpret the Plans, including the authority to select the individuals to be granted options and rights and to prescribe the particular form and conditions of each option to be granted. On May 16, 2019, the Company’s stockholders approved the 2019 Plan and, in connection therewith, all equity awards made after that date were made under the 2019 Plan. All remaining shares of common stock reserved for issuance under the 2013 Plan are available for issuance under the 2019 Plan and no future awards will be made under the 2013 Plan. The Company accounts for its stock-based compensation in accordance with Accounting Standards Codification (“ASC”) 718, Stock Based Compensation RSUs. For the Company’s non-employee directors, the Company records stock compensation expense on the grant date of the RSUs. The Company awards performance share units (“PSUs”) to eligible employees; the PSUs are subject to service and performance vesting conditions. The PSUs will vest based on the Company’s achievement of certain targets related to adjusted EBITDA and same store sales goals. The PSUs will vest fully on the third anniversary of the grant date. The quantity of shares that will vest ranges from 0% to 200% of the targeted number of shares. If the defined minimum targets are not met, then no shares will vest. (p) Leases The Company determines if an arrangement is a lease at inception of the arrangement. The Company leases retail shops, warehouse, and office space under operating leases. The Company’s 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 the Company’s option, the Company determines the expected lease period based on whether the renewal of any options are reasonably assured at the inception of the lease. Operating leases result in the Company recording a right-of-use asset and lease liability on the balance sheet. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized at the lease commencement date, which is the date we take possession of the property. Operating lease liabilities represent the present value of lease payments not yet paid. Operating right-of-use assets represent the operating lease liability adjusted for prepayments or accrued lease payments, initial direct costs, lease incentives, and impairment of operating lease assets. In determining the present value of lease payments not yet paid, the Company estimates its incremental secured borrowing rates corresponding to the maturities of its leases. As we have no outstanding debt nor committed credit facilities, secured or otherwise, we estimate this rate based on prevailing financial market conditions, comparable company and credit analysis, and management judgment. Our leases typically contain rent escalations over the lease term and lease expense is recognized on a straight-line basis over the lease term. Tenant incentives used to fund leasehold improvements are recognized when earned and reduce right-of-use assets related to the lease. The tenant incentives are amortized through the right-of-use asset as reductions of rent expense over the lease term. Related to the adoption of Topic 842, our policy elections were as follows: Separation of lease and non-lease components We elected this expedient to account for lease and non-lease components as a single component for our entire population of operating lease assets. Short-term policy We have elected the short-term lease recognition exemption for all applicable classes of underlying assets. Short-term disclosures include only those leases with a term greater than one month and 12 months or less, and expense is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less, that do not include an option to purchase the underlying asset that we are reasonably certain to exercise, are not recorded on the balance sheet. Operating leases are included in right-of-use assets for operating leases, short-term operating lease liabilities, and long-term operating lease liabilities on the Company’s Consolidated Balance Sheets. (q) Revenue Recognition Revenue from retail shops is presented net of discounts and recognized when food and beverage products are tendered at the point of sale. 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. The company adopted ASC 606 as January 1, 2018 using the modified retrospective method applied to contracts that were not completed as of the date of adoption. 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, which is recognized by the Company 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. The Company recognized gift card breakage income, which is recorded within gross sales in the consolidated statements of operations. The Company earns an initial franchise fee, a franchise development agreement fee and ongoing royalty fees under the Company’s 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. The Company records 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 the Company are recorded as deferred revenue in the consolidated balance sheet and amortized over the life of the franchise development agreement. Royalty fees are based on a percentage of sales and are recorded as revenue as the fees are earned and become receivable from the franchisee. (r) Impairment of Long-Lived Assets The Company assesses potential impairments to its long-lived assets, which includes property and equipment and right-of-use assets for operating leases, whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. Assets are grouped at the individual shop-level for the purposes of the impairment assessment because a shop represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. Recoverability of an asset group is measured by a comparison of the carrying amount of an asset group to its estimated forecasted shop cash flows expected to be generated by the asset group. If the carrying amount of the asset group exceeds its estimated forecasted shop cash flows, an impairment charge is recognized as the amount by which the carrying amount of the asset exceeds the fair value of the asset group. The fair value of the shop assets is determined using the income approach. Key inputs to this approach include forecasted shop cash flows, discount rate, and estimated market rent, which are all classified as Level 3 inputs. See “Fair Value Measurements” above for a definition of Level 3 inputs. At transition of adoption to ASC 842, the Company impaired $0.7 million of pre-tax right-of-use assets related to previously impaired shops. This amount is recorded, net of tax, as an opening reduction to retained earnings. After performing periodic reviews of the company-operated shops during each quarter of 2019, 2018 and 2017, it was determined that indicators of impairment were present for certain shops as a result of continued underperformance. The Company performed an impairment analysis for these shops and recorded impairment charges of $2.6 million, $13.4 million, and $10.6 million for the fiscal years 2019, 2018, and 2017, respectively, which is included in impairment and loss on disposal of property and equipment in the consolidated statements of operations. Assets recognized or disclosed at fair value on the consolidated financial statements on a nonrecurring basis included items such as leasehold improvements, property and equipment, right-of-use assets for operating leases, goodwill, and other intangible assets. These assets are measured at fair value if determined to be impaired. (s) Recent Accounting Pronouncements On December 31, 2018, the Company adopted Accounting Standards Update (ASU) 2016-02, “Leases (Topic 842),” along with related clarifications and improvements. This pronouncement requires lessees to recognize a liability for lease obligations, which represents the discounted obligation to make future lease payments, and a corresponding right-of-use asset on the balance sheet. The guidance requires disclosure of key information about leasing arrangements that is intended to give financial statement users the ability to assess the amount, timing, and potential uncertainty of cash flows related to leases. We elected the optional transition method to apply the standard as of the effective date and therefore, prior period amounts have not been adjusted and continue to be reported in accordance with our historical accounting under previous lease guidance. The adoption of Topic 842 had a material impact on the consolidated balance sheets and an immaterial impact on the consolidated statements of operations, consolidated statements of equity and consolidated statements of cash flows. Our practical expedients were as follows: Implications as of December 31, 2018 Practical expedient package We have not reassessed whether any expired or existing contracts are, or contain, leases. We have not reassessed the lease classification for any expired or existing leases. We have not reassessed initial direct costs for any expired or existing leases. Hindsight practical expedient We have not elected the hindsight practical expedient, which permits the use of hindsight when determining lease term and impairment of operating lease assets. The impact on the consolidated balance sheet is as follows: Adjustments Due December 30, to the Adoption of December 31, 2018 Topic 842 2018 Assets Current assets Cash and cash equivalents $ 19,775 $ — $ 19,775 Accounts receivable, net of allowances of $113 as of December 30, 2018 4,737 — 4,737 Inventories 3,482 — 3,482 Prepaid expenses and other current assets 11,426 — 11,426 Total current assets 39,420 — 39,420 Property and equipment, net 87,782 — 87,782 Right-of-use assets for operating leases — 232,477 232,477 Indefinite-lived intangible assets 3,404 — 3,404 Goodwill 2,222 — 2,222 Deferred income taxes, noncurrent 13,385 195 13,580 Deferred expenses, net and other assets 7,002 — 7,002 Total assets $ 153,215 $ 232,672 $ 385,887 Liabilities and Equity Current liabilities Accounts payable $ 3,835 $ — $ 3,835 Accrued expenses (1) 25,029 (1,124 ) 23,905 Short-term operating lease liabilities — 28,826 28,826 Accrued income taxes 162 — 162 Total current liabilities 29,026 27,702 56,728 Deferred rent and landlord allowances (1) 22,905 (22,905 ) — Long-term operating lease liabilities — 228,406 228,406 Other long-term liabilities 5,751 — 5,751 Total liabilities 57,682 233,203 290,885 Stockholders’ equity Common stock, $0.01 par value—authorized 200,000 shares; outstanding 24,143 shares as of December 30, 2018 330 — 330 Additional paid-in-capital 432,771 — 432,771 Treasury stock, held at cost, 8,801 shares as of December 30, 2018 (108,372 ) — (108,372 ) Accumulated deficit (2) (229,558 ) (531 ) (230,089 ) Total stockholders’ equity 95,171 (531 ) 94,640 Non-controlling interest 362 — 362 Total stockholders' equity 95,533 (531 ) 95,002 Total liabilities and equity $ 153,215 $ 232,672 $ 385,887 (1) Adjustment to reclassify deferred rent and tenant improvement allowance to right-of-use assets for operating leases upon the adoption of Topic 842. (2) The Company recorded a net reduction of $0.5 million to opening accumulated deficit as of December 31, 2018, due to the cumulative impact of adopting Topic 842. In June 2016, the FASB issued Accounting Standard Update No. 2016-13, Financial Instruments—Credit Losses (Topic 326) |
Revenue
Revenue | 12 Months Ended |
Dec. 29, 2019 | |
Revenue From Contract With Customer [Abstract] | |
Revenue | (3) Revenue Potbelly primarily earns revenue at a point in time through sales at our sandwich shop locations and records such revenue net of sales-related taxes collected from customers. The payment on these sales is due at the time of the customer’s purchase. The Company also receives royalties from franchisees on their respective sales, which are recognized at the point in time the sale is made and invoiced weekly. Potbelly also records revenue from sales over time related to initial franchise fees, gift card redemptions and breakage. For the fiscal year ended December 29, 2019, revenue recognized from all revenue sources on point in time sales was $408.8 million, and revenue recognized from sales over time was $0.9 million. For the fiscal year ended December 30, 2018, revenue recognized from all revenue sources on point in time sales was $421.8 million, and revenue recognized from sales over time was $0.8 million. Franchise Revenue Potbelly licenses intellectual property and trademarks to franchisees through franchise agreements. As part of these franchise agreements, Potbelly receives an initial franchise fee from the franchisee, which the Company recognizes over the term of the franchise agreement. The Company records a contract liability for the unearned portion of the initial franchise fees. 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, which is recognized by the Company 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. The Company recognized gift card breakage income of $0.2 million, $0.3 million and $0.4 million for the fiscal years ended 2019, 2018 and 2017, respectively, which is recorded within net sandwich shop sales in the consolidated statements of operations Contract Liabilities As described above, the Company records current and noncurrent contract liabilities for initial franchise fees as well as gift cards. There are no other contract liabilities or contract assets recorded by the Company. The opening and closing balances of the Company’s current and noncurrent contract liabilities from contracts with customers were as follows: Current Contract Liability Noncurrent Contract Liability (Thousands) (Thousands) Beginning balance as of December 31, 2018 $ (2,184 ) $ (1,631 ) Ending balance as of December 29, 2019 (1,594 ) (2,054 ) Decrease in contract liability $ (590 ) $ 423 The aggregate value of remaining performance obligations on outstanding contracts was $3.6 million as of December 29, 2019. The decrease in the liability during the 52 weeks ended December 29, 2019 was a result of gift card redemptions offset by purchases of new gift cards and recognition of franchise fees. The Company expects 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: Years Ending Amount 2020 $ 1,272 2021 325 2022 222 2023 201 2024 166 Thereafter 1,462 Total revenue recognized $ 3,648 For the 52 weeks ended December 29, 2019, the amount of revenue recognized related to the December 31, 2018 liability ending balance was $2.2 million. For the 52 weeks ended December 30, 2018, the amount of revenue recognized related to the January 1, 2018 liability ending balance was $2.1 million. This revenue related to the recognition of gift card redemptions and upfront franchise fees. For the year ended December 29, 2019 and December 30, 2018, the Company did not recognize any revenue from obligations satisfied (or partially satisfied) in prior periods. |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 12 Months Ended |
Dec. 29, 2019 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | (4) Earnings (Loss) Per Share Basic earnings (loss) per common share attributable to common stockholders are calculated using the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per common share attributable to common stockholders is computed by dividing the income 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 year ended December 29, 2019, the Company had a loss per share, therefore, shares were excluded for potential stock option exercises. The following table summarizes the earnings (loss) per share calculation (in thousands): Fiscal Year 2019 2018 2017 Net loss attributable to Potbelly Corporation $ (23,992 ) $ (8,878 ) $ (6,956 ) Weighted average common shares outstanding-basic 23,850 25,173 25,045 Plus: Effect of potential stock options exercise — — — Weighted average common shares outstanding-diluted 23,850 25,173 25,045 Loss per share available to common stockholders- basic $ (1.01 ) $ (0.35 ) $ (0.28 ) Loss per share available to common stockholders- diluted $ (1.01 ) $ (0.35 ) $ (0.28 ) Potentially dilutive shares that are considered anti-dilutive: Shares 2,334 2,499 3,376 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 29, 2019 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment | (5) Property and Equipment Property and equipment, net consisted of the following (in thousands): December 29, December 30, 2019 2018 Leasehold improvements $ 171,586 $ 169,300 Machinery and equipment 49,943 48,606 Furniture and fixtures 34,325 33,177 Computer equipment and software 38,881 35,159 Construction in progress 2,615 1,938 297,350 288,180 Less: Accumulated depreciation (218,318 ) (200,398 ) $ 79,032 $ 87,782 |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 29, 2019 | |
Accrued Liabilities Current [Abstract] | |
Accrued Expenses | (6) Accrued Expenses Accrued expenses consisted of the following (in thousands): December 29, December 30, 2019 2018 Accrued labor and related expenses $ 7,403 $ 10,324 Deferred gift card revenue 1,415 1,821 Accrued occupancy expenses 2,010 2,309 Deferred rent—current — 1,250 Accrued corporate and shop expenses 1,859 1,446 Accrued utilities 1,137 1,304 Accrued sales and use tax 2,063 3,001 Accrued construction 293 147 Accrued contract termination costs (a) — 392 Accrued legal and professional fees 716 128 Accrued other 3,502 2,907 Total $ 20,398 $ 25,029 (a) The Company incurs expenses associated with exit activity for certain signed lease agreements, which are recognized in general and administrative expenses. December 29, December 30, 2019 2018 Accrued contract termination costs—beginning balance $ 392 $ 27 Contract termination costs incurred 3,449 1,461 Contract termination costs settled and paid (3,841 ) (1,096 ) Accrued contract termination costs—ending balance $ — $ 392 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 29, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | (7) Income Taxes Income (loss) before income taxes for the Company’s domestic and foreign operations was as follows (in thousands): Fiscal Year 2019 2018 2017 Domestic operations $ (9,790 ) $ (11,381 ) $ (2,513 ) Foreign operations 395 637 466 Total $ (9,395 ) $ (10,744 ) $ (2,047 ) Income tax expense (benefit) consisted of the following (in thousands): Fiscal Year 2019 2018 2017 Federal: Current $ 159 $ (339 ) $ (3,728 ) Deferred 9,379 (1,644 ) 8,792 9,538 (1,983 ) 5,064 State and Local: Current 227 73 150 Deferred 4,425 (305 ) (584 ) 4,652 (232 ) (434 ) Foreign: Current — 20 13 — 20 13 Income tax expense (benefit) $ 14,190 $ (2,195 ) $ 4,643 Income tax expense (benefit) differed from the amounts computed by applying the U.S. federal income tax rates to income (loss) before income taxes as a result of the following (in thousands): Fiscal Year 2019 2018 2017 U.S. federal statutory tax 21.0 % 21.0 % 35.0 % Computed “expected” tax expense (benefit) $ (1,973 ) $ (2,256 ) $ (716 ) Increase (reduction) resulting from: Valuation allowance 16,116 - - Minority interest (107 ) (87 ) (105 ) Permanent differences 425 220 96 State and local income taxes, net of federal income tax effect (361 ) (436 ) 5 FICA and other tax credits (504 ) (522 ) (502 ) Equity compensation 577 1,089 2,112 Adjustments (106 ) (252 ) (93 ) Tax rate change 123 49 3,846 $ 14,190 $ (2,195 ) $ 4,643 On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) was enacted into law making significant changes to the U.S. tax code, including: (1) reducing the U.S. federal corporate tax rate from 35 percent to 21 percent; (2) implementing bonus depreciation that will allow for full expensing of qualified property; (3) implementing limitations on the deductibility of certain executive compensation; and (4) changing rules related to uses and limitations of net operating loss carryforwards created in tax years beginning after December 31, 2017. Due to the adoption of ASU 2016-09 in 2017, all excess tax benefits and deficiencies are recognized as income tax expense in the Company’s Consolidated Statement of Operations. The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities reflected in the consolidated balance sheets are presented below (in thousands): December 29, December 30, 2019 2018 Deferred tax assets: Net operating loss carryforwards $ 3,721 $ 576 Accrued liabilities 848 1,449 Deferred revenue 423 543 Stock-based compensation 2,516 2,685 Property and equipment 4,568 5,037 Operating lease liabilities 62,313 — Deferred rent — 4,373 Tax credits and charitable contribution carryforwards 1,538 981 Gross deferred tax assets 75,927 15,644 Valuation allowance (16,116 ) — Net deferred tax assets 59,811 15,644 Deferred tax liabilities: Prepaids (492 ) (466 ) Right-of-use asset for operating leases (57,717 ) — Intangible assets (1,162 ) (1,075 ) Smallwares (533 ) (566 ) Other (134 ) (152 ) Total deferred tax liabilities (60,038 ) (2,259 ) Net deferred tax liabilities $ (227 ) $ 13,385 The Company regularly assesses the need for a valuation allowance related to its 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 its deferred tax assets will not be realized. In its assessment, the Company considers recent financial operating results, projected future taxable income, the reversal of existing taxable differences, and tax planning strategies. During its assessment for the first quarter of 2019, the Company estimated it would be in a three-year cumulative loss position as of December 29, 2019. Therefore, the Company determined based on the available evidence that a full valuation allowance against its net deferred tax assets was required. As a result of this valuation allowance, the Company did not provide for an income tax benefit on the pre-tax loss recorded for the year ended December 29, 2019. This accounting treatment has no effect on the Company’s ability to utilize deferred tax assets to reduce future cash tax payments. The Company will continue to assess the likelihood of the realization of its deferred tax assets and the valuation allowance will be adjusted accordingly. As of December 29, 2019, the Company has a valuation allowance related to its deferred tax assets of $16.1 million. As of December 30, 2018, the Company had no valuation allowance recorded based on management’s assessment of the amount that its deferred tax assets were more likely than not to be realized. In accordance with its accounting policy, the Company recognizes accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense. As of December 29, 2019 and December 30, 2018, the Company had no interest or penalties accrued. As of December 29, 2019 and December 30, 2018, the Company had no uncertain tax positions. The tax years prior to 2015 are generally closed for examination by the United States Internal Revenue Service. However, certain of these tax years are open for examination as a result of net operating losses generated in these years and utilized in subsequent years. The Company’s last IRS examination was for the 2014 tax year; no IRS audits are currently ongoing. |
Leases
Leases | 12 Months Ended |
Dec. 29, 2019 | |
Leases [Abstract] | |
Leases | (8) Leases Operating lease term and discount rate were as follows: December 29, 2019 Weighted average remaining lease term (years) 8.52 Weighted average discount rate 7.95 % Certain of the Company’s 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): Fiscal Year Classification 2019 Operating lease cost Occupancy and general and administrative expenses $ 45,604 Variable lease cost Occupancy and general and administrative expenses 13,692 Total lease cost $ 59,296 Supplemental disclosures of cash flow information relating to leases is as follows (in thousands): Fiscal Year 2019 Operating cash flows rent paid for operating lease liabilities $ 47,335 Operating right-of-use assets obtained in exchange for new operating lease liabilities 15,765 Reduction in operating right-of-use assets due to lease terminations $ (6,506 ) As of December 29, 2019, the Company has additional operating lease payments related to shops not yet open of $2.8 million. These operating leases will commence during the next fiscal year with an average lease term of 11 years. Maturities of lease liabilities were as follows at December 29, 2019 (in thousands): Operating Leases 2020 $ 46,581 2021 43,639 2022 38,096 2023 33,512 2024 30,427 Thereafter 141,456 Total lease payments 333,711 Less: imputed interest (97,666 ) Present value of lease liabilities $ 236,045 As previously disclosed in our 2018 Annual Report on Form 10-K and under the previous lease accounting, maturities of lease liabilities were as follows at December 30, 2018 (in thousands): Operating Leases 2019 $ 47,918 2020 45,828 2021 41,497 2022 36,120 2023 31,060 Thereafter 138,928 Total minimum lease payments $ 341,351 |
Debt and Credit Facilities
Debt and Credit Facilities | 12 Months Ended |
Dec. 29, 2019 | |
Debt Disclosure [Abstract] | |
Debt and Credit Facilities | (9) Debt and Credit Facilities Credit facility On August 7, 2019, the Company entered into a second amended and restated revolving credit facility agreement (the "Credit Agreement") with JPMorgan Chase Bank, N.A. (“JPMorgan”) that expires in July 2022. The Credit Agreement amends and restates that certain amended and restated revolving credit facility agreement, dated as of December 9, 2015, and amended on May 3, 2019 (collectively, the "Prior Credit Agreement") with JPMorgan. The Credit Agreement provides, among other things, for a revolving credit facility in a maximum principal amount $40 million, with possible future increases of up to $20 million under an expansion feature. Borrowings under the credit facility generally bear interest at the Company’s option at either (i) a eurocurrency rate determined by reference to the applicable LIBOR rate plus a margin ranging from 1.25% to 1.75% or (ii) a prime rate as announced by JP Morgan plus a margin ranging from 0.00% to 0.50%. The applicable margin is determined based upon the Company’s consolidated total leverage ratio. On the last day of each calendar quarter, the Company is required to pay a commitment fee of 0.20% per annum in respect of any unused commitments under the credit facility. So long as certain total leverage ratios, EBITDA thresholds and minimum liquidity requirements are met and no default or event of default has occurred or would result, there is no limit on the “restricted payments” (primarily distributions and equity repurchases) that the Company may make, provided that proceeds of the loans under the Credit Agreement may not be used for purposes of making restricted payments. As of the year ended December 29, 2019, the Company had no amounts outstanding under the Credit Agreement. |
Capital Stock
Capital Stock | 12 Months Ended |
Dec. 29, 2019 | |
Equity [Abstract] | |
Capital Stock | (10) Capital Stock As of December 29, 2019 and December 30, 2018, the Company had authorized an aggregate of 210,000 thousand shares of capital stock, of which 200,000 thousand shares were designated as common stock and 10,000 thousand shares were designated as preferred stock. As of December 29, 2019, the Company had issued and outstanding 33,103 thousand and 23,638 thousand shares of common stock, respectively. As of December 30, 2018, the Company had issued and outstanding 32,944 thousand and 24,143 thousand shares of common stock, respectively. Common Stock As of December 29, 2019, each share of common stock has the same relative rights and was identical in all respects to each other share of common stock. Each holder of shares of common stock is entitled to one vote for each share held by such holder at all meetings of stockholders. On May 8, 2018, the Company announced that its Board of Directors authorized a stock repurchase program for up to $65.0 million of its outstanding common stock. The program permits the Company, 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. During the fiscal year 2019, the Company repurchased 648 thousand shares of its common stock for approximately $4.2 million under the stock repurchase program. As of December 29, 2019, the remaining dollar value of authorization under the share repurchase program was $37.9 million, which includes commission. Repurchased shares are included as treasury stock in the consolidated balance sheets and the consolidated statements of equity. |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 29, 2019 | |
Postemployment Benefits [Abstract] | |
Employee Benefit Plan | (11) Employee Benefit Plan The Company sponsors a 401(k) profit sharing plan for all employees who are eligible based upon age and length of service. The Company made matching contributions of $0.5 million, $0.4 million, and $0.4 million for fiscal years 2019, 2018 and 2017, respectively. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 29, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation | (12) Stock-Based Compensation Stock-Based Compensation Granted Under the 2019 Long-Term Incentive Plan Stock options and restricted stock units are awarded under the 2019 Long-Term Incentive Plan (the “2019 Plan”) to eligible employees and certain non-employee members of the Board of Directors On May 16, 2019, the Company’s stockholders approved the 2019 Plan and, in connection therewith, all equity awards made after that date were made under the 2019 Plan. On June 10, 2019, the Company registered 1,200 thousand shares of its common stock reserved for issuance under the 2019 Plan. The Amended and Restated 2013 Long-Term Incentive Plan (the “2013 Plan”) had 626 thousand remaining shares of common stock reserved for issuance, which are available for issuance under the 2019 Plan and no future awards will be made under the 2013 Plan. As of December 29, 2019, there have been 209 thousand shares of restricted stock units granted under the 2019 Plan. There were no options or shares of common stock granted under the 2019 Plan. As of December 29, 2019, there are 1,560 thousand shares reserved for future issuance. Stock Options Under the Plans, the number of shares and exercise price of each option are determined by the committee designated by the Company’s Board of Directors. The options granted are generally exercisable within a 10-year period from the date of grant. The company awards options to certain employees including the senior leadership team. A summary of stock option activity is as follows: Options Shares (Thousands) Weighted Average Exercise Price Aggregate Intrinsic Value (Thousands) Weighted Average Remaining Term (Years) Outstanding—December 25, 2016 4,013 $ 10.61 $ 13,455 4.78 Granted 464 12.09 Exercised (653 ) 9.94 Canceled (515 ) 12.18 Outstanding—December 31, 2017 3,309 $ 10.71 $ 7,699 4.90 Granted 203 11.27 Exercised (993 ) 8.30 Canceled (369 ) 13.63 Outstanding—December 30, 2018 2,150 $ 11.49 $ 378 5.13 Granted — — Exercised (22 ) 7.93 Canceled (354 ) 12.45 Outstanding—December 29, 2019 1,774 $ 11.34 $ — 4.33 Exercisable—December 29, 2019 1,546 $ 11.06 $ — 3.83 There were no stock option grants in 2019. The following table reflects the average assumptions utilized in the Black-Scholes option-pricing model to value the options granted for 2018 and 2017: 2018 2017 Risk-free interest rate 3.0 % 2.0 % Expected life (years) 6.25 6.25 Expected dividend yield — — Volatility 35.0 % 36.0 % Weighted average grant date fair value $ 4.52 $ 4.76 The risk-free rate is based on U.S. Treasury rates in effect at the time of the grant with a similar duration of the expected life of the options. The expected life of options granted is derived from the average of the vesting period and the term of the option. The Company has not paid dividends to date (with exception to the one-time dividend paid to stockholders prior to the initial public offering) and does not plan to pay dividends in the near future. 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. For the years ended December 29, 2019, December 30, 2018 and December 31, 2017, the Company recognized stock-based compensation expense related to stock options of $0.8 million, $1.4 million and $3.0 million, respectively. The Company records stock-based compensation expense within general and administrative expenses in the condensed consolidated statements of operations. As of December 29, 2019, unrecognized stock-based compensation expense related to stock options was $0.8 million, which will be recognized through fiscal year 2022. Restricted stock units The Company awards restricted stock units (“RSUs”) to certain employees of the Company and certain non-employee members of its Board of Directors. The Board of Director grants have a vesting schedule of 50% on the first anniversary of the grant date and 50% on the second anniversary of the grant date. The employee grants vest in one-third increments over a three-year period. A summary of RSU activity is as follows: RSUs Number of RSUs (Thousands) Weighted Average Fair Value per Share Non-vested as of December 25, 2016 71 $ 13.43 Granted 241 11.63 Vested (45 ) 13.53 Canceled — — Non-vested as of December 31, 2017 267 $ 11.79 Granted 131 12.12 Vested (121 ) 11.92 Canceled (30 ) 11.05 Non-vested as of December 30, 2018 247 $ 11.99 Granted 402 6.47 Vested (135 ) 11.94 Canceled (51 ) 8.48 Non-vested as of December 29, 2019 463 $ 7.59 For the years ended December 29, 2019, December 30, 2018 and December 31, 2017, the Company recognized stock-based compensation expense related to RSUs of $1.5 million, $1.5 million and $1.7 million, respectively. As of December 29, 2019, unrecognized stock-based compensation expense for RSUs was $1.7 million, which will be recognized though fiscal year 2022. Performance stock units The Company awards performance share units (“PSUs”) to eligible employees; the PSUs are subject to service and performance vesting conditions. In March of 2019 the Company issued 188 thousand PSUs with a grant date fair value of $8.46 per share. The PSUs will vest based on the Company’s achievement of certain targets related to adjusted EBITDA and same store sales goals. The PSUs will vest fully on the third anniversary of the grant date. The quantity of shares that will vest ranges from 0% to 200% of the targeted number of shares. If the defined minimum targets are not met, then no shares will vest. For the year ended December 29, 2019, no expense was recognized related to PSUs. |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 29, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data (Unaudited) | (13) Quarterly Financial Data (Unaudited) The unaudited quarterly information includes all normal recurring adjustments that the Company considers necessary for the fair presentation of the information shown below. The Company’s quarterly results have been and will continue to be affected by the timing of new shop openings and their associated pre-opening costs. As a result of these and other factors, the financial results for any quarter may not be indicative of the results for any future period. The following table presents selected unaudited quarterly financial data for periods indicated (in thousands, except per share data): Fiscal Year 2019 March 31 June 30 September 29 December 29 Total revenues $ 98,087 $ 105,630 $ 104,238 $ 101,752 Loss from operations (4,723 ) (1,468 ) (2,143 ) (862 ) Net loss attributable to Potbelly Corporation (18,439 ) (1,866 ) (2,355 ) (1,332 ) Loss per share attributable to common stockholders-basic (0.76 ) (0.08 ) (0.10 ) (0.06 ) Loss per share attributable to common stockholders-diluted (0.76 ) (0.08 ) (0.10 ) (0.06 ) Fiscal Year 2018 April 1, July 1, September 30 December 30 Total revenues $ 102,917 $ 110,347 $ 106,996 $ 102,378 Income (loss) from operations (2,630 ) 95 (2,697 ) (5,370 ) Loss attributable to Potbelly Corporation (2,194 ) (360 ) (1,961 ) (4,363 ) Loss per share attributable to common stockholders-basic (0.09 ) (0.01 ) (0.08 ) (0.17 ) Loss per share attributable to common stockholders-diluted (0.09 ) (0.01 ) (0.08 ) (0.17 ) |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 29, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | (14) Commitments and Contingencies The Company is 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. The Company accrues 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, the Company’s estimates of the outcomes of these matters and its experience in contesting, litigating and settling other similar matters. In October 2017, plaintiffs filed a purported collective and class action lawsuit (the “Complaint”) in the United States District Court for the Southern District of New York against the Company alleging violations of the Fair Labor Standards Act (FLSA) and New York Labor Law (NYLL). The plaintiffs allege that the Company violated the FLSA and NYLL by not paying overtime compensation to our assistant managers and violated NYLL by not paying spread-of-hours pay. The Complaint was brought as a nationwide “collective action” under the FLSA and as a “class action” under NYLL. Since the filing of the Complaint, the plaintiffs filed a proposed amended complaint removing the NYLL class claim, but adding a proposed Illinois state law class action. In May 2019, the parties participated in a mediation and resolved the claims, which received final court approval on February 4, 2020. All charges related to the claims are reflected in the statement of operations. Many of the food products the Company purchases are subject to changes in the price and availability of food commodities, including, among other things, beef, poultry, grains, dairy and produce. The Company works with its suppliers and uses a mix of forward pricing protocols for certain items including agreements with its supplier on fixed prices for deliveries at a time in the future and agreements on a fixed price with its supplier for the duration of those protocols. The Company also utilizes formula pricing protocols under which the prices the Company pays are based on a specified formula related to the prices of the goods, such as spot prices. The Company’s 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 the normal purchases of the Company’s food products and not for speculative purposes, and as such are not required to be evaluated as derivative instruments. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 29, 2019 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | (a) Principles of Consolidation The 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 (“LLC”); seven of LLC’s wholly owned subsidiaries and LLC’s seven joint ventures, collectively, the “Company.” All intercompany balances and transactions have been eliminated in consolidation. For consolidated joint ventures, non-controlling interest represents a non-controlling partner’s share of the assets, liabilities and operations related to the seven joint venture investments. The Company has ownership interests ranging from 51-80% in these consolidated joint ventures. The Company does not have any components of other comprehensive income (loss) recorded within its consolidated financial statements, and, therefore, does not separately present a statement of comprehensive income (loss) in its consolidated financial statements. |
Reporting Period | (b) Reporting Period The Company uses a 52/53-week fiscal year that ends on the last Sunday of the calendar year. Approximately every five or six years a 53rd week is added. Fiscal years 2019, 2018 and 2017 consisted of 52, 52 and 53 weeks, respectively. |
Segment Reporting | (c) Segment Reporting The Company owns and operates Potbelly Sandwich Shop concepts in the United States. The Company also has domestic franchise operations of Potbelly Sandwich Shops concepts. The Company’s chief operating decision maker (the “CODM”) is its Chief Executive Officer. As the CODM reviews financial performance and allocates resources at a consolidated level on a recurring basis, the Company has one operating segment and one reportable segment. |
Use of Estimates | (d) Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America U.S. GAAP |
Fair Value Measurements | (e) Fair Value Measurements The Company applies fair value accounting for all financial assets and liabilities and nonfinancial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities that are required to be recorded at fair value, the Company assumes the highest and best use of the asset by market participants in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions, and credit risk. The Company applies the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels, and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: • Level 1 — Quoted prices in active markets for identical assets or liabilities. • Level 2 — Observable inputs other than quoted prices in active markets for identical assets or liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3 — Inputs that are both unobservable and significant to the overall fair value measurement reflect an entity’s estimates of assumptions that market participants would use in pricing the asset or liability. |
Financial Instruments | (f) Financial Instruments The Company records all financial instruments at cost, which is the fair value at the date of transaction. The amounts reported in the consolidated balance sheets for cash and cash equivalents, accounts receivable, accounts payable and all other current liabilities approximate their fair value because of the short-term maturities of these instruments. |
Cash and Cash Equivalents | (g) Cash and Cash Equivalents The Company considers all highly liquid investment instruments with an original maturity of three months or less when purchased to be cash equivalents. The Company maintains its cash in bank deposit accounts that, at times, may exceed federally insured limits; however, the Company has not experienced any losses in these accounts. The Company believes it is not exposed to any significant credit risk. These are valued within the fair value hierarchy as Level 1 measurements. |
Accounts Receivable, net | (h) Accounts Receivable, net Accounts receivable, net consists of amounts owed from credit card processors, customers, third-party delivery platforms, vendors and other miscellaneous receivables. |
Inventories | (i) Inventories Inventories, which consist of food products, paper goods and supplies, and promotional items, are valued at the lower of cost (first-in, first-out) or net realizable value. No adjustment is deemed necessary to reduce inventory to the lower of cost or net realizable value due to the rapid turnover and high utilization of inventory. |
Property and Equipment | (j) Property and Equipment Property and equipment acquired is recorded at cost less accumulated depreciation. Property and equipment is depreciated based on the straight-line method over the estimated useful lives, generally ranging from three to five years for furniture and fixtures, computer equipment, computer software, and machinery and equipment. Leasehold improvements are depreciated over the shorter of their estimated useful lives or the related lease life, generally 10 to 15 years. For leases with renewal periods at the Company’s option, the Company determines the expected lease period based on whether the renewal of any options are reasonably assured at the inception of the lease. Direct costs and expenditures for refurbishments and improvements that significantly add to the productive capacity or extend the useful life of an asset are capitalized, whereas the costs of repairs and maintenance are expensed when incurred. Capitalized costs are recorded as part of the asset to which they relate, primarily to leasehold improvements, and such costs are amortized over the asset’s useful life. When assets are retired or sold, the asset cost and related accumulated depreciation are removed from the consolidated balance sheet and any gain or loss is recorded in the consolidated statement of operations. |
Indefinite-Lived Intangible Assets | (k) Indefinite-Lived Intangible Assets The Company reviews indefinite-lived intangible assets, which includes goodwill and tradenames, annually at fiscal year-end for impairment or more frequently if events or circumstances indicate that the carrying value may not be recoverable. An impaired asset is written down to its estimated fair value based on the most recent information available. The Company assesses the fair values of its intangible assets, and its reporting unit for goodwill testing purposes, using an income-based approach. Under the income approach, fair value is based on the present value of estimated future cash flows. The income approach is dependent on a number of factors, including forecasted revenues and expenses, appropriate discount rates and other variables. The annual impairment review utilizes the estimated fair value of the intangible assets and the overall reporting unit and compares the estimated fair values to the carrying values as of the testing date. If the carrying value of these intangible assets or the reporting unit exceeds the fair values, the Company would then use the fair values to measure the amount of any required impairment charge. No impairment charge was recognized for intangible assets for any of the fiscal periods presented. |
Pre-opening Costs | (l) Pre-opening Costs Pre-opening costs consist of costs incurred prior to opening a new shop and are made up primarily of travel, employee payroll and training costs incurred prior to the shop opening, as well as occupancy costs incurred from when the Company takes site possession to shop opening. Shop pre-opening costs are expensed as incurred. |
Advertising Expenses | (m) Advertising Expenses Advertising costs are expensed as incurred and are included in general and administrative expenses in the consolidated statements of operations. Advertising expenses were $4.1 million, $4.3 million and $3.4 million in fiscal years 2019, 2018 and 2017, respectively. |
Income Taxes | (n) Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are attributed to differences between financial statement and income tax reporting. Deferred tax assets, net of any valuation allowances, represent the future tax return consequences of those differences and for operating loss and tax credit carryforwards, which will be deductible when the assets are recovered. Deferred tax assets are reduced by a valuation allowance if it is deemed more likely than not that some or all of the deferred tax assets will not be realized. In making this assessment of the realizability of deferred tax assets, the Company considers all positive and negative evidence as to whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. The Company considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Deferred tax liabilities are recognized for temporary differences that will be taxable in future years’ tax returns. The Company accounts for uncertain tax positions under current accounting guidance, which prescribes a minimum probability threshold that a tax position must meet before a financial statement benefit is recognized. The minimum threshold is defined as a tax position that is more likely than not to be sustained upon examination by tax authorities, based on the technical merits of the position. The tax benefit to be recognized is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. |
Stock-Based Compensation | (o) Stock-Based Compensation The Company has granted stock options under its 2004 Equity Incentive Plan (the “2004 Plan”), 2013 Long-Term Incentive Plan (the “2013 Plan”) and 2019 Long-Term Incentive Plan (the “2019 Plan”), as amended (the “2019 Plan” and together with the 2013 Plan and 2004 Plan, the “Plans”) and restricted stock units (“RSUs”) under its 2013 Plan and 2019 Plan. The Plans permit the granting of awards to employees and non-employee officers, consultants, agents, and independent contractors of the Company in the form of stock appreciation rights, stock awards and units, and stock options. The Plans give broad powers to the Company’s board of directors to administer and interpret the Plans, including the authority to select the individuals to be granted options and rights and to prescribe the particular form and conditions of each option to be granted. On May 16, 2019, the Company’s stockholders approved the 2019 Plan and, in connection therewith, all equity awards made after that date were made under the 2019 Plan. All remaining shares of common stock reserved for issuance under the 2013 Plan are available for issuance under the 2019 Plan and no future awards will be made under the 2013 Plan. The Company accounts for its stock-based compensation in accordance with Accounting Standards Codification (“ASC”) 718, Stock Based Compensation RSUs. For the Company’s non-employee directors, the Company records stock compensation expense on the grant date of the RSUs. The Company awards performance share units (“PSUs”) to eligible employees; the PSUs are subject to service and performance vesting conditions. The PSUs will vest based on the Company’s achievement of certain targets related to adjusted EBITDA and same store sales goals. The PSUs will vest fully on the third anniversary of the grant date. The quantity of shares that will vest ranges from 0% to 200% of the targeted number of shares. If the defined minimum targets are not met, then no shares will vest. |
Leases | (p) Leases The Company determines if an arrangement is a lease at inception of the arrangement. The Company leases retail shops, warehouse, and office space under operating leases. The Company’s 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 the Company’s option, the Company determines the expected lease period based on whether the renewal of any options are reasonably assured at the inception of the lease. Operating leases result in the Company recording a right-of-use asset and lease liability on the balance sheet. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized at the lease commencement date, which is the date we take possession of the property. Operating lease liabilities represent the present value of lease payments not yet paid. Operating right-of-use assets represent the operating lease liability adjusted for prepayments or accrued lease payments, initial direct costs, lease incentives, and impairment of operating lease assets. In determining the present value of lease payments not yet paid, the Company estimates its incremental secured borrowing rates corresponding to the maturities of its leases. As we have no outstanding debt nor committed credit facilities, secured or otherwise, we estimate this rate based on prevailing financial market conditions, comparable company and credit analysis, and management judgment. Our leases typically contain rent escalations over the lease term and lease expense is recognized on a straight-line basis over the lease term. Tenant incentives used to fund leasehold improvements are recognized when earned and reduce right-of-use assets related to the lease. The tenant incentives are amortized through the right-of-use asset as reductions of rent expense over the lease term. Related to the adoption of Topic 842, our policy elections were as follows: Separation of lease and non-lease components We elected this expedient to account for lease and non-lease components as a single component for our entire population of operating lease assets. Short-term policy We have elected the short-term lease recognition exemption for all applicable classes of underlying assets. Short-term disclosures include only those leases with a term greater than one month and 12 months or less, and expense is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less, that do not include an option to purchase the underlying asset that we are reasonably certain to exercise, are not recorded on the balance sheet. Operating leases are included in right-of-use assets for operating leases, short-term operating lease liabilities, and long-term operating lease liabilities on the Company’s Consolidated Balance Sheets. |
Revenue Recognition | (q) Revenue Recognition Revenue from retail shops is presented net of discounts and recognized when food and beverage products are tendered at the point of sale. 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. The company adopted ASC 606 as January 1, 2018 using the modified retrospective method applied to contracts that were not completed as of the date of adoption. 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, which is recognized by the Company 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. The Company recognized gift card breakage income, which is recorded within gross sales in the consolidated statements of operations. The Company earns an initial franchise fee, a franchise development agreement fee and ongoing royalty fees under the Company’s 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. The Company records 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 the Company are recorded as deferred revenue in the consolidated balance sheet and amortized over the life of the franchise development agreement. Royalty fees are based on a percentage of sales and are recorded as revenue as the fees are earned and become receivable from the franchisee. |
Impairment of Long-Lived Assets | (r) Impairment of Long-Lived Assets The Company assesses potential impairments to its long-lived assets, which includes property and equipment and right-of-use assets for operating leases, whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. Assets are grouped at the individual shop-level for the purposes of the impairment assessment because a shop represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. Recoverability of an asset group is measured by a comparison of the carrying amount of an asset group to its estimated forecasted shop cash flows expected to be generated by the asset group. If the carrying amount of the asset group exceeds its estimated forecasted shop cash flows, an impairment charge is recognized as the amount by which the carrying amount of the asset exceeds the fair value of the asset group. The fair value of the shop assets is determined using the income approach. Key inputs to this approach include forecasted shop cash flows, discount rate, and estimated market rent, which are all classified as Level 3 inputs. See “Fair Value Measurements” above for a definition of Level 3 inputs. At transition of adoption to ASC 842, the Company impaired $0.7 million of pre-tax right-of-use assets related to previously impaired shops. This amount is recorded, net of tax, as an opening reduction to retained earnings. After performing periodic reviews of the company-operated shops during each quarter of 2019, 2018 and 2017, it was determined that indicators of impairment were present for certain shops as a result of continued underperformance. The Company performed an impairment analysis for these shops and recorded impairment charges of $2.6 million, $13.4 million, and $10.6 million for the fiscal years 2019, 2018, and 2017, respectively, which is included in impairment and loss on disposal of property and equipment in the consolidated statements of operations. Assets recognized or disclosed at fair value on the consolidated financial statements on a nonrecurring basis included items such as leasehold improvements, property and equipment, right-of-use assets for operating leases, goodwill, and other intangible assets. These assets are measured at fair value if determined to be impaired. |
Recent Accounting Pronouncements | (s) Recent Accounting Pronouncements On December 31, 2018, the Company adopted Accounting Standards Update (ASU) 2016-02, “Leases (Topic 842),” along with related clarifications and improvements. This pronouncement requires lessees to recognize a liability for lease obligations, which represents the discounted obligation to make future lease payments, and a corresponding right-of-use asset on the balance sheet. The guidance requires disclosure of key information about leasing arrangements that is intended to give financial statement users the ability to assess the amount, timing, and potential uncertainty of cash flows related to leases. We elected the optional transition method to apply the standard as of the effective date and therefore, prior period amounts have not been adjusted and continue to be reported in accordance with our historical accounting under previous lease guidance. The adoption of Topic 842 had a material impact on the consolidated balance sheets and an immaterial impact on the consolidated statements of operations, consolidated statements of equity and consolidated statements of cash flows. Our practical expedients were as follows: Implications as of December 31, 2018 Practical expedient package We have not reassessed whether any expired or existing contracts are, or contain, leases. We have not reassessed the lease classification for any expired or existing leases. We have not reassessed initial direct costs for any expired or existing leases. Hindsight practical expedient We have not elected the hindsight practical expedient, which permits the use of hindsight when determining lease term and impairment of operating lease assets. The impact on the consolidated balance sheet is as follows: Adjustments Due December 30, to the Adoption of December 31, 2018 Topic 842 2018 Assets Current assets Cash and cash equivalents $ 19,775 $ — $ 19,775 Accounts receivable, net of allowances of $113 as of December 30, 2018 4,737 — 4,737 Inventories 3,482 — 3,482 Prepaid expenses and other current assets 11,426 — 11,426 Total current assets 39,420 — 39,420 Property and equipment, net 87,782 — 87,782 Right-of-use assets for operating leases — 232,477 232,477 Indefinite-lived intangible assets 3,404 — 3,404 Goodwill 2,222 — 2,222 Deferred income taxes, noncurrent 13,385 195 13,580 Deferred expenses, net and other assets 7,002 — 7,002 Total assets $ 153,215 $ 232,672 $ 385,887 Liabilities and Equity Current liabilities Accounts payable $ 3,835 $ — $ 3,835 Accrued expenses (1) 25,029 (1,124 ) 23,905 Short-term operating lease liabilities — 28,826 28,826 Accrued income taxes 162 — 162 Total current liabilities 29,026 27,702 56,728 Deferred rent and landlord allowances (1) 22,905 (22,905 ) — Long-term operating lease liabilities — 228,406 228,406 Other long-term liabilities 5,751 — 5,751 Total liabilities 57,682 233,203 290,885 Stockholders’ equity Common stock, $0.01 par value—authorized 200,000 shares; outstanding 24,143 shares as of December 30, 2018 330 — 330 Additional paid-in-capital 432,771 — 432,771 Treasury stock, held at cost, 8,801 shares as of December 30, 2018 (108,372 ) — (108,372 ) Accumulated deficit (2) (229,558 ) (531 ) (230,089 ) Total stockholders’ equity 95,171 (531 ) 94,640 Non-controlling interest 362 — 362 Total stockholders' equity 95,533 (531 ) 95,002 Total liabilities and equity $ 153,215 $ 232,672 $ 385,887 (1) Adjustment to reclassify deferred rent and tenant improvement allowance to right-of-use assets for operating leases upon the adoption of Topic 842. (2) The Company recorded a net reduction of $0.5 million to opening accumulated deficit as of December 31, 2018, due to the cumulative impact of adopting Topic 842. In June 2016, the FASB issued Accounting Standard Update No. 2016-13, Financial Instruments—Credit Losses (Topic 326) |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 29, 2019 | |
ASU 2016-02 (Topic 842) [Member] | |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |
Schedule of Impact on Consolidated Balance Sheet | The impact on the consolidated balance sheet is as follows: Adjustments Due December 30, to the Adoption of December 31, 2018 Topic 842 2018 Assets Current assets Cash and cash equivalents $ 19,775 $ — $ 19,775 Accounts receivable, net of allowances of $113 as of December 30, 2018 4,737 — 4,737 Inventories 3,482 — 3,482 Prepaid expenses and other current assets 11,426 — 11,426 Total current assets 39,420 — 39,420 Property and equipment, net 87,782 — 87,782 Right-of-use assets for operating leases — 232,477 232,477 Indefinite-lived intangible assets 3,404 — 3,404 Goodwill 2,222 — 2,222 Deferred income taxes, noncurrent 13,385 195 13,580 Deferred expenses, net and other assets 7,002 — 7,002 Total assets $ 153,215 $ 232,672 $ 385,887 Liabilities and Equity Current liabilities Accounts payable $ 3,835 $ — $ 3,835 Accrued expenses (1) 25,029 (1,124 ) 23,905 Short-term operating lease liabilities — 28,826 28,826 Accrued income taxes 162 — 162 Total current liabilities 29,026 27,702 56,728 Deferred rent and landlord allowances (1) 22,905 (22,905 ) — Long-term operating lease liabilities — 228,406 228,406 Other long-term liabilities 5,751 — 5,751 Total liabilities 57,682 233,203 290,885 Stockholders’ equity Common stock, $0.01 par value—authorized 200,000 shares; outstanding 24,143 shares as of December 30, 2018 330 — 330 Additional paid-in-capital 432,771 — 432,771 Treasury stock, held at cost, 8,801 shares as of December 30, 2018 (108,372 ) — (108,372 ) Accumulated deficit (2) (229,558 ) (531 ) (230,089 ) Total stockholders’ equity 95,171 (531 ) 94,640 Non-controlling interest 362 — 362 Total stockholders' equity 95,533 (531 ) 95,002 Total liabilities and equity $ 153,215 $ 232,672 $ 385,887 (1) Adjustment to reclassify deferred rent and tenant improvement allowance to right-of-use assets for operating leases upon the adoption of Topic 842. (2) The Company recorded a net reduction of $0.5 million to opening accumulated deficit as of December 31, 2018, due to the cumulative impact of adopting Topic 842. |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 29, 2019 | |
Revenue From Contract With Customer [Abstract] | |
Summary of Current and Noncurrent Contract Liabilities from Contracts with Customers | The opening and closing balances of the Company’s current and noncurrent contract liabilities from contracts with customers were as follows: Current Contract Liability Noncurrent Contract Liability (Thousands) (Thousands) Beginning balance as of December 31, 2018 $ (2,184 ) $ (1,631 ) Ending balance as of December 29, 2019 (1,594 ) (2,054 ) Decrease in contract liability $ (590 ) $ 423 |
Summary of Expected Revenue Recognition Related to Contract Liabilities | The Company expects 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: Years Ending Amount 2020 $ 1,272 2021 325 2022 222 2023 201 2024 166 Thereafter 1,462 Total revenue recognized $ 3,648 |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 12 Months Ended |
Dec. 29, 2019 | |
Earnings Per Share [Abstract] | |
Summary of Earnings (Loss) Per Share Calculation | The following table summarizes the earnings (loss) per share calculation (in thousands): Fiscal Year 2019 2018 2017 Net loss attributable to Potbelly Corporation $ (23,992 ) $ (8,878 ) $ (6,956 ) Weighted average common shares outstanding-basic 23,850 25,173 25,045 Plus: Effect of potential stock options exercise — — — Weighted average common shares outstanding-diluted 23,850 25,173 25,045 Loss per share available to common stockholders- basic $ (1.01 ) $ (0.35 ) $ (0.28 ) Loss per share available to common stockholders- diluted $ (1.01 ) $ (0.35 ) $ (0.28 ) Potentially dilutive shares that are considered anti-dilutive: Shares 2,334 2,499 3,376 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 29, 2019 | |
Property Plant And Equipment [Abstract] | |
Components of Property and Equipment, Net | Property and equipment, net consisted of the following (in thousands): December 29, December 30, 2019 2018 Leasehold improvements $ 171,586 $ 169,300 Machinery and equipment 49,943 48,606 Furniture and fixtures 34,325 33,177 Computer equipment and software 38,881 35,159 Construction in progress 2,615 1,938 297,350 288,180 Less: Accumulated depreciation (218,318 ) (200,398 ) $ 79,032 $ 87,782 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 29, 2019 | |
Accrued Liabilities Current [Abstract] | |
Summary of Accrued Expenses | Accrued expenses consisted of the following (in thousands): December 29, December 30, 2019 2018 Accrued labor and related expenses $ 7,403 $ 10,324 Deferred gift card revenue 1,415 1,821 Accrued occupancy expenses 2,010 2,309 Deferred rent—current — 1,250 Accrued corporate and shop expenses 1,859 1,446 Accrued utilities 1,137 1,304 Accrued sales and use tax 2,063 3,001 Accrued construction 293 147 Accrued contract termination costs (a) — 392 Accrued legal and professional fees 716 128 Accrued other 3,502 2,907 Total $ 20,398 $ 25,029 The Company incurs expenses associated with exit activity for certain signed lease agreements, which are recognized in general and administrative expenses. |
Summary of Accrued Contract Termination Costs | Accrued contract termination costs consisted of the following (in thousands): December 29, December 30, 2019 2018 Accrued contract termination costs—beginning balance $ 392 $ 27 Contract termination costs incurred 3,449 1,461 Contract termination costs settled and paid (3,841 ) (1,096 ) Accrued contract termination costs—ending balance $ — $ 392 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 29, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income (Loss) Before Income Taxes | Income (loss) before income taxes for the Company’s domestic and foreign operations was as follows (in thousands): Fiscal Year 2019 2018 2017 Domestic operations $ (9,790 ) $ (11,381 ) $ (2,513 ) Foreign operations 395 637 466 Total $ (9,395 ) $ (10,744 ) $ (2,047 ) |
Components of Income Tax Expense (Benefit) | Income tax expense (benefit) consisted of the following (in thousands): Fiscal Year 2019 2018 2017 Federal: Current $ 159 $ (339 ) $ (3,728 ) Deferred 9,379 (1,644 ) 8,792 9,538 (1,983 ) 5,064 State and Local: Current 227 73 150 Deferred 4,425 (305 ) (584 ) 4,652 (232 ) (434 ) Foreign: Current — 20 13 — 20 13 Income tax expense (benefit) $ 14,190 $ (2,195 ) $ 4,643 |
Reconciliation of Differences Between Federal Statutory and Effective Income (Loss) Tax Rate | Income tax expense (benefit) differed from the amounts computed by applying the U.S. federal income tax rates to income (loss) before income taxes as a result of the following (in thousands): Fiscal Year 2019 2018 2017 U.S. federal statutory tax 21.0 % 21.0 % 35.0 % Computed “expected” tax expense (benefit) $ (1,973 ) $ (2,256 ) $ (716 ) Increase (reduction) resulting from: Valuation allowance 16,116 - - Minority interest (107 ) (87 ) (105 ) Permanent differences 425 220 96 State and local income taxes, net of federal income tax effect (361 ) (436 ) 5 FICA and other tax credits (504 ) (522 ) (502 ) Equity compensation 577 1,089 2,112 Adjustments (106 ) (252 ) (93 ) Tax rate change 123 49 3,846 $ 14,190 $ (2,195 ) $ 4,643 |
Schedule of Deferred Tax Assets and Liabilities | The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities reflected in the consolidated balance sheets are presented below (in thousands): December 29, December 30, 2019 2018 Deferred tax assets: Net operating loss carryforwards $ 3,721 $ 576 Accrued liabilities 848 1,449 Deferred revenue 423 543 Stock-based compensation 2,516 2,685 Property and equipment 4,568 5,037 Operating lease liabilities 62,313 — Deferred rent — 4,373 Tax credits and charitable contribution carryforwards 1,538 981 Gross deferred tax assets 75,927 15,644 Valuation allowance (16,116 ) — Net deferred tax assets 59,811 15,644 Deferred tax liabilities: Prepaids (492 ) (466 ) Right-of-use asset for operating leases (57,717 ) — Intangible assets (1,162 ) (1,075 ) Smallwares (533 ) (566 ) Other (134 ) (152 ) Total deferred tax liabilities (60,038 ) (2,259 ) Net deferred tax liabilities $ (227 ) $ 13,385 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 29, 2019 | |
Leases [Abstract] | |
Operating Lease Term and Discount Rate | Operating lease term and discount rate were as follows: December 29, 2019 Weighted average remaining lease term (years) 8.52 Weighted average discount rate 7.95 % |
Components of Lease Cost | The components of lease cost were as follows (in thousands): Fiscal Year Classification 2019 Operating lease cost Occupancy and general and administrative expenses $ 45,604 Variable lease cost Occupancy and general and administrative expenses 13,692 Total lease cost $ 59,296 |
Supplemental Disclosures of Cash Flow Information Related to Leases | Supplemental disclosures of cash flow information relating to leases is as follows (in thousands): Fiscal Year 2019 Operating cash flows rent paid for operating lease liabilities $ 47,335 Operating right-of-use assets obtained in exchange for new operating lease liabilities 15,765 Reduction in operating right-of-use assets due to lease terminations $ (6,506 ) |
Maturities of Lease Liabilities | Maturities of lease liabilities were as follows at December 29, 2019 (in thousands): Operating Leases 2020 $ 46,581 2021 43,639 2022 38,096 2023 33,512 2024 30,427 Thereafter 141,456 Total lease payments 333,711 Less: imputed interest (97,666 ) Present value of lease liabilities $ 236,045 |
Maturities of Lease Liabilities Under the Previous Lease Accounting | As previously disclosed in our 2018 Annual Report on Form 10-K and under the previous lease accounting, maturities of lease liabilities were as follows at December 30, 2018 (in thousands): Operating Leases 2019 $ 47,918 2020 45,828 2021 41,497 2022 36,120 2023 31,060 Thereafter 138,928 Total minimum lease payments $ 341,351 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 29, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Stock Options Activity Under Plans and Agreement | A summary of stock option activity is as follows: Options Shares (Thousands) Weighted Average Exercise Price Aggregate Intrinsic Value (Thousands) Weighted Average Remaining Term (Years) Outstanding—December 25, 2016 4,013 $ 10.61 $ 13,455 4.78 Granted 464 12.09 Exercised (653 ) 9.94 Canceled (515 ) 12.18 Outstanding—December 31, 2017 3,309 $ 10.71 $ 7,699 4.90 Granted 203 11.27 Exercised (993 ) 8.30 Canceled (369 ) 13.63 Outstanding—December 30, 2018 2,150 $ 11.49 $ 378 5.13 Granted — — Exercised (22 ) 7.93 Canceled (354 ) 12.45 Outstanding—December 29, 2019 1,774 $ 11.34 $ — 4.33 Exercisable—December 29, 2019 1,546 $ 11.06 $ — 3.83 |
Schedule of Average Assumptions to Value Options | There were no stock option grants in 2019. The following table reflects the average assumptions utilized in the Black-Scholes option-pricing model to value the options granted for 2018 and 2017: 2018 2017 Risk-free interest rate 3.0 % 2.0 % Expected life (years) 6.25 6.25 Expected dividend yield — — Volatility 35.0 % 36.0 % Weighted average grant date fair value $ 4.52 $ 4.76 |
Summary of RSU Activity | A summary of RSU activity is as follows: RSUs Number of RSUs (Thousands) Weighted Average Fair Value per Share Non-vested as of December 25, 2016 71 $ 13.43 Granted 241 11.63 Vested (45 ) 13.53 Canceled — — Non-vested as of December 31, 2017 267 $ 11.79 Granted 131 12.12 Vested (121 ) 11.92 Canceled (30 ) 11.05 Non-vested as of December 30, 2018 247 $ 11.99 Granted 402 6.47 Vested (135 ) 11.94 Canceled (51 ) 8.48 Non-vested as of December 29, 2019 463 $ 7.59 |
Quarterly Financial Data (Una_2
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 29, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summary of Unaudited Quarterly Financial Data | The following table presents selected unaudited quarterly financial data for periods indicated (in thousands, except per share data): Fiscal Year 2019 March 31 June 30 September 29 December 29 Total revenues $ 98,087 $ 105,630 $ 104,238 $ 101,752 Loss from operations (4,723 ) (1,468 ) (2,143 ) (862 ) Net loss attributable to Potbelly Corporation (18,439 ) (1,866 ) (2,355 ) (1,332 ) Loss per share attributable to common stockholders-basic (0.76 ) (0.08 ) (0.10 ) (0.06 ) Loss per share attributable to common stockholders-diluted (0.76 ) (0.08 ) (0.10 ) (0.06 ) Fiscal Year 2018 April 1, July 1, September 30 December 30 Total revenues $ 102,917 $ 110,347 $ 106,996 $ 102,378 Income (loss) from operations (2,630 ) 95 (2,697 ) (5,370 ) Loss attributable to Potbelly Corporation (2,194 ) (360 ) (1,961 ) (4,363 ) Loss per share attributable to common stockholders-basic (0.09 ) (0.01 ) (0.08 ) (0.17 ) Loss per share attributable to common stockholders-diluted (0.09 ) (0.01 ) (0.08 ) (0.17 ) |
Organization and Other Matters
Organization and Other Matters - Additional Information (Detail) | Dec. 29, 2019Shop |
Nature Of Business And Basis Of Presentation [Line Items] | |
Number of shops franchisees operate | 40 |
Minimum [Member] | |
Nature Of Business And Basis Of Presentation [Line Items] | |
Number of shops Potbelly Corporation owns or operates | 400 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Detail) | 1 Months Ended | 12 Months Ended | ||
Mar. 31, 2019 | Dec. 29, 2019USD ($)SubsidiarySegment | Dec. 30, 2018USD ($)JointVenture | Dec. 31, 2017USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | ||||
Number of wholly owned subsidiaries | Subsidiary | 7 | |||
Number of joint ventures | JointVenture | 7 | |||
Number of operating segments | Segment | 1 | |||
Number of reportable segments | Segment | 1 | |||
Recognized impairment for intangible assets | $ 0 | $ 0 | $ 0 | |
Advertising expenses | 4,100,000 | 4,300,000 | 3,400,000 | |
Impairment charges | 2,600,000 | $ 13,400,000 | $ 10,600,000 | |
ASU 2016-02 (Topic 842) [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Operating Lease, Impairment Loss | $ 700,000 | |||
Performance Shares | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Vesting description | The PSUs will vest fully on the third anniversary of the grant date. The quantity of shares that will vest ranges from 0% to 200% of the targeted number of shares. If the defined minimum targets are not met, then no shares will vest. | |||
Minimum [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Ownership interest rate | 51.00% | |||
Minimum [Member] | Performance Shares | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Vesting percentage of targeted number of shares | 0.00% | |||
Minimum [Member] | Computer Software [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Property and equipment estimated useful life | 3 years | |||
Minimum [Member] | Furniture and Fixtures [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Property and equipment estimated useful life | 3 years | |||
Minimum [Member] | Computer Equipment [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Property and equipment estimated useful life | 3 years | |||
Minimum [Member] | Machinery and Equipment [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Property and equipment estimated useful life | 3 years | |||
Minimum [Member] | Leasehold Improvements [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Property and equipment estimated useful life | 10 years | |||
Maximum [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Ownership interest rate | 80.00% | |||
Maximum [Member] | Performance Shares | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Vesting percentage of targeted number of shares | 200.00% | |||
Maximum [Member] | Computer Software [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Property and equipment estimated useful life | 5 years | |||
Maximum [Member] | Furniture and Fixtures [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Property and equipment estimated useful life | 5 years | |||
Maximum [Member] | Computer Equipment [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Property and equipment estimated useful life | 5 years | |||
Maximum [Member] | Machinery and Equipment [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Property and equipment estimated useful life | 5 years | |||
Maximum [Member] | Leasehold Improvements [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Property and equipment estimated useful life | 15 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Impact on Consolidated Balance Sheet (Detail) - USD ($) $ in Thousands | Dec. 29, 2019 | Dec. 31, 2018 | Dec. 30, 2018 | Dec. 31, 2017 | Dec. 25, 2016 |
Current assets | |||||
Cash and cash equivalents | $ 18,806 | $ 19,775 | $ 25,530 | $ 23,379 | |
Accounts receivable, net of allowances of $113 as of December 30, 2018 | 4,257 | 4,737 | |||
Inventories | 3,473 | 3,482 | |||
Prepaid expenses and other current assets | 5,687 | 11,426 | |||
Total current assets | 32,223 | 39,420 | |||
Property and equipment, net | 79,032 | 87,782 | |||
Right-of-use assets for operating leases | 211,988 | ||||
Indefinite-lived intangible assets | 3,404 | 3,404 | |||
Goodwill | 2,222 | 2,222 | |||
Deferred income taxes, non-current | 13,385 | ||||
Deferred expenses, net and other assets | 4,010 | 7,002 | |||
Total assets | 332,879 | 153,215 | |||
Current liabilities | |||||
Accounts payable | 3,886 | 3,835 | |||
Accrued expenses | 20,398 | 25,029 | |||
Short-term operating lease liabilities | 29,319 | ||||
Accrued income taxes | 171 | 162 | |||
Total current liabilities | 53,774 | 29,026 | |||
Deferred rent and landlord allowances | 22,905 | ||||
Long-term operating lease liabilities | 206,726 | ||||
Other long-term liabilities | 3,210 | 5,751 | |||
Total liabilities | 263,710 | 57,682 | |||
Equity | |||||
Common stock, $0.01 par value—authorized 200,000 shares; outstanding 23,638 and 24,143 shares as of December 29, 2019 and December 30, 2018, respectively | 331 | 330 | |||
Additional paid-in-capital | 435,278 | 432,771 | |||
Treasury stock, held at cost, 9,465 and 8,801 shares as of December 29, 2019, and December 30, 2018, respectively | (112,680) | (108,372) | |||
Accumulated deficit | (254,081) | (229,558) | |||
Total stockholders’ equity | 68,848 | 95,171 | |||
Non-controlling interest | 321 | 362 | |||
Total equity | 69,169 | 95,533 | $ 117,238 | $ 124,236 | |
Total liabilities and equity | $ 332,879 | $ 153,215 | |||
ASU 2016-02 (Topic 842) [Member] | |||||
Current assets | |||||
Cash and cash equivalents | $ 19,775 | ||||
Accounts receivable, net of allowances of $113 as of December 30, 2018 | 4,737 | ||||
Inventories | 3,482 | ||||
Prepaid expenses and other current assets | 11,426 | ||||
Total current assets | 39,420 | ||||
Property and equipment, net | 87,782 | ||||
Right-of-use assets for operating leases | 232,477 | ||||
Indefinite-lived intangible assets | 3,404 | ||||
Goodwill | 2,222 | ||||
Deferred income taxes, non-current | 13,580 | ||||
Deferred expenses, net and other assets | 7,002 | ||||
Total assets | 385,887 | ||||
Current liabilities | |||||
Accounts payable | 3,835 | ||||
Accrued expenses | 23,905 | ||||
Short-term operating lease liabilities | 28,826 | ||||
Accrued income taxes | 162 | ||||
Total current liabilities | 56,728 | ||||
Long-term operating lease liabilities | 228,406 | ||||
Other long-term liabilities | 5,751 | ||||
Total liabilities | 290,885 | ||||
Equity | |||||
Common stock, $0.01 par value—authorized 200,000 shares; outstanding 23,638 and 24,143 shares as of December 29, 2019 and December 30, 2018, respectively | 330 | ||||
Additional paid-in-capital | 432,771 | ||||
Treasury stock, held at cost, 9,465 and 8,801 shares as of December 29, 2019, and December 30, 2018, respectively | (108,372) | ||||
Accumulated deficit | (230,089) | ||||
Total stockholders’ equity | 94,640 | ||||
Non-controlling interest | 362 | ||||
Total equity | 95,002 | ||||
Total liabilities and equity | 385,887 | ||||
Adjustments Due to the Adoption of Topic 842 | ASU 2016-02 (Topic 842) [Member] | |||||
Current assets | |||||
Right-of-use assets for operating leases | 232,477 | ||||
Deferred income taxes, non-current | 195 | ||||
Total assets | 232,672 | ||||
Current liabilities | |||||
Accrued expenses | (1,124) | ||||
Short-term operating lease liabilities | 28,826 | ||||
Total current liabilities | 27,702 | ||||
Deferred rent and landlord allowances | (22,905) | ||||
Long-term operating lease liabilities | 228,406 | ||||
Total liabilities | 233,203 | ||||
Equity | |||||
Accumulated deficit | (531) | ||||
Total stockholders’ equity | (531) | ||||
Total equity | (531) | ||||
Total liabilities and equity | $ 232,672 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Impact on Consolidated Balance Sheet (Parenthetical) (Detail) - USD ($) $ / shares in Units, $ in Thousands | Dec. 29, 2019 | Dec. 31, 2018 | Dec. 30, 2018 |
Nature Of Business And Basis Of Presentation [Line Items] | |||
Allowances on accounts receivable | $ 202 | $ 113 | |
Common stock, par value | $ 0.01 | $ 0.01 | |
Common stock, authorized | 200,000,000 | 200,000,000 | |
Common stock, outstanding | 23,638,000 | 24,143,000 | |
Treasury stock, shares | 9,465,000 | 8,801,000 | |
ASU 2016-02 (Topic 842) [Member] | |||
Nature Of Business And Basis Of Presentation [Line Items] | |||
Net reduction to opening accumulated deficit | $ 500 |
Revenue - Additional Informatio
Revenue - Additional Information (Detail) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 29, 2019 | Sep. 29, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 30, 2018 | Sep. 30, 2018 | Jul. 01, 2018 | Apr. 01, 2018 | Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2017 | |
Disaggregation Of Revenue [Line Items] | ||||||||||||
Amount of revenue recognized | $ 101,752,000 | $ 104,238,000 | $ 105,630,000 | $ 98,087,000 | $ 102,378,000 | $ 106,996,000 | $ 110,347,000 | $ 102,917,000 | $ 409,707,000 | $ 422,638,000 | $ 428,111,000 | |
Revenue recognized related to prior periods | 200,000 | 300,000 | $ 400,000 | |||||||||
Aggregate value of remaining performance obligation on outstanding contracts | $ 3,648,000 | 3,648,000 | ||||||||||
Revenue recognized related to prior periods | 0 | 0 | ||||||||||
January 1, 2018 Liability Ending Balance [Member] | ||||||||||||
Disaggregation Of Revenue [Line Items] | ||||||||||||
Amount of revenue recognized | 2,200,000 | 2,100,000 | ||||||||||
Point in Time Sales [Member] | ||||||||||||
Disaggregation Of Revenue [Line Items] | ||||||||||||
Amount of revenue recognized | 408,800,000 | 421,800,000 | ||||||||||
Over Time Sales [Member] | ||||||||||||
Disaggregation Of Revenue [Line Items] | ||||||||||||
Amount of revenue recognized | $ 900,000 | $ 800,000 |
Revenue - Summary of Current an
Revenue - Summary of Current and Noncurrent Contract Liabilities from Contracts with Customers (Detail) $ in Thousands | 12 Months Ended |
Dec. 29, 2019USD ($) | |
Revenue From Contract With Customer [Abstract] | |
Beginning balance of current contract liability | $ (2,184) |
Ending balance of current contract liability | (1,594) |
Decrease in contract liability | (590) |
Beginning balance of noncurrent contract liability | (1,631) |
Ending balance of noncurrent contract liability | (2,054) |
Decrease in contract liability | $ 423 |
Revenue - Summary of Expected R
Revenue - Summary of Expected Revenue Recognition Related to Contract Liabilities (Detail1) $ in Thousands | Dec. 29, 2019USD ($) |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, remaining performance obligations | $ 3,648 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2020-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, remaining performance obligations | $ 1,272 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2021-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, remaining performance obligations | $ 325 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2022-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, remaining performance obligations | $ 222 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2023-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, remaining performance obligations | $ 201 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2024-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, remaining performance obligations | $ 166 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2025-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, remaining performance obligations | $ 1,462 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue - Summary of Expected_2
Revenue - Summary of Expected Revenue Recognition Related to Contract Liabilities (Detail) $ in Thousands | Dec. 29, 2019USD ($) |
Revenue From Contract With Customer [Abstract] | |
Revenue, remaining performance obligations | $ 3,648 |
Earnings (Loss) Per Share - Add
Earnings (Loss) Per Share - Additional Information (Detail) - shares | 12 Months Ended | ||
Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Earnings (Loss) Per Share [Line Items] | |||
Potential common shares included in diluted shares outstanding | 2,334 | 2,499 | 3,376 |
Common Share Options [Member] | |||
Earnings (Loss) Per Share [Line Items] | |||
Potential common shares included in diluted shares outstanding | 0 |
Earnings (Loss) Per Share - Sum
Earnings (Loss) Per Share - Summary of Earnings (Loss) Per Share Calculation (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 29, 2019 | Sep. 29, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 30, 2018 | Sep. 30, 2018 | Jul. 01, 2018 | Apr. 01, 2018 | Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |||||||||||
Net loss attributable to Potbelly Corporation | $ (1,332) | $ (2,355) | $ (1,866) | $ (18,439) | $ (4,363) | $ (1,961) | $ (360) | $ (2,194) | $ (23,992) | $ (8,878) | $ (6,956) |
Weighted average common shares outstanding-basic | 23,850 | 25,173 | 25,045 | ||||||||
Weighted average common shares outstanding-diluted | 23,850 | 25,173 | 25,045 | ||||||||
Loss per share available to common stockholders-basic | $ (0.06) | $ (0.10) | $ (0.08) | $ (0.76) | $ (0.17) | $ (0.08) | $ (0.01) | $ (0.09) | $ (1.01) | $ (0.35) | $ (0.28) |
Loss per share available to common stockholders-diluted | $ (0.06) | $ (0.10) | $ (0.08) | $ (0.76) | $ (0.17) | $ (0.08) | $ (0.01) | $ (0.09) | $ (1.01) | $ (0.35) | $ (0.28) |
Potentially dilutive shares that are considered anti-dilutive | 2,334 | 2,499 | 3,376 |
Property and Equipment - Compon
Property and Equipment - Components of Property and Equipment (Detail) - USD ($) $ in Thousands | Dec. 29, 2019 | Dec. 30, 2018 |
Property Plant And Equipment [Abstract] | ||
Leasehold improvements | $ 171,586 | $ 169,300 |
Machinery and equipment | 49,943 | 48,606 |
Furniture and fixtures | 34,325 | 33,177 |
Computer equipment and software | 38,881 | 35,159 |
Construction in progress | 2,615 | 1,938 |
Property and equipment, gross | 297,350 | 288,180 |
Less: Accumulated depreciation | (218,318) | (200,398) |
Property and equipment, net | $ 79,032 | $ 87,782 |
Accrued Expenses - Summary of A
Accrued Expenses - Summary of Accrued Expenses (Detail) - USD ($) $ in Thousands | Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 |
Accrued Liabilities And Other Liabilities [Abstract] | |||
Accrued labor and related expenses | $ 7,403 | $ 10,324 | |
Deferred gift card revenue | 1,415 | 1,821 | |
Accrued occupancy expenses | 2,010 | 2,309 | |
Deferred rent—current | 1,250 | ||
Accrued corporate and shop expenses | 1,859 | 1,446 | |
Accrued utilities | 1,137 | 1,304 | |
Accrued sales and use tax | 2,063 | 3,001 | |
Accrued construction | 293 | 147 | |
Accrued contract termination costs | 392 | $ 27 | |
Accrued legal and professional fees | 716 | 128 | |
Accrued other | 3,502 | 2,907 | |
Total | $ 20,398 | $ 25,029 |
Accrued Expenses - Summary of_2
Accrued Expenses - Summary of Accrued Contract Termination Costs (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 29, 2019 | Dec. 30, 2018 | |
Accrued Liabilities And Other Liabilities [Abstract] | ||
Accrued contract termination costs—beginning balance | $ 392 | $ 27 |
Contract termination costs incurred | 3,449 | 1,461 |
Contract termination costs settled and paid | $ (3,841) | (1,096) |
Accrued contract termination costs—ending balance | $ 392 |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income (Loss) Before Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Domestic operations | $ (9,790) | $ (11,381) | $ (2,513) |
Foreign operations | 395 | 637 | 466 |
Loss before income taxes | $ (9,395) | $ (10,744) | $ (2,047) |
Income Taxes - Components of In
Income Taxes - Components of Income Tax Expense (Benefit) (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Federal, Current | $ 159 | $ (339) | $ (3,728) |
Federal, Deferred | 9,379 | (1,644) | 8,792 |
Federal, Total | 9,538 | (1,983) | 5,064 |
State and Local, Current | 227 | 73 | 150 |
State and Local, Deferred | 4,425 | (305) | (584) |
State and Local, Total | 4,652 | (232) | (434) |
Foreign, Current | 20 | 13 | |
Foreign, Total | 20 | 13 | |
Income tax expense (benefit) | $ 14,190 | $ (2,195) | $ 4,643 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Differences Between Federal Statutory and Effective Income (Loss) Tax Rate (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
U.S. federal statutory tax | 21.00% | 21.00% | 35.00% |
Computed “expected” tax expense (benefit) | $ (1,973) | $ (2,256) | $ (716) |
Valuation allowance | 16,116 | ||
Minority interest | (107) | (87) | (105) |
Permanent differences | 425 | 220 | 96 |
State and local income taxes, net of federal income tax effect | (361) | (436) | 5 |
FICA and other tax credits | (504) | (522) | (502) |
Equity compensation | 577 | 1,089 | 2,112 |
Adjustments | (106) | (252) | (93) |
Tax rate change | 123 | 49 | 3,846 |
Income tax expense (benefit) | $ 14,190 | $ (2,195) | $ 4,643 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Income Tax [Line Items] | |||
U.S. federal corporate tax rate | 21.00% | 21.00% | 35.00% |
Deferred tax assets, valuation allowance | $ 16,116,000 | ||
Unrecognized tax benefits, income tax penalties and interest accrued | 0 | $ 0 | |
Uncertain tax positions | 0 | 0 | |
Valuation Allowance Tax Credit Carryforward [Member] | |||
Income Tax [Line Items] | |||
Deferred tax assets, valuation allowance | $ 16,100,000 | $ 0 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands | Dec. 29, 2019 | Dec. 30, 2018 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 3,721 | $ 576 |
Accrued liabilities | 848 | 1,449 |
Deferred revenue | 423 | 543 |
Stock-based compensation | 2,516 | 2,685 |
Property and equipment | 4,568 | 5,037 |
Operating lease liabilities | 62,313 | |
Deferred rent | 4,373 | |
Tax credits and charitable contribution carryforwards | 1,538 | 981 |
Gross deferred tax assets | 75,927 | 15,644 |
Valuation allowance | (16,116) | |
Net deferred tax assets | 59,811 | 15,644 |
Deferred tax liabilities: | ||
Prepaids | (492) | (466) |
Right-of-use asset for operating leases | (57,717) | |
Intangible assets | (1,162) | (1,075) |
Smallwares | (533) | (566) |
Other | (134) | (152) |
Total deferred tax liabilities | (60,038) | (2,259) |
Net deferred tax liabilities | $ 227 | $ 13,385 |
Leases - Operating Lease Term a
Leases - Operating Lease Term and Discount Rate (Detail) | Dec. 29, 2019 |
Leases [Abstract] | |
Weighted average remaining lease term (years) | 8 years 6 months 7 days |
Weighted average discount rate | 7.95% |
Leases - Components of Lease Co
Leases - Components of Lease Cost (Detail) $ in Thousands | 12 Months Ended |
Dec. 29, 2019USD ($) | |
Lessee Lease Description [Line Items] | |
Total lease cost | $ 59,296 |
Occupancy and General and Administrative Expenses [Member] | |
Lessee Lease Description [Line Items] | |
Operating lease cost | 45,604 |
Occupancy Expenses [Member] | |
Lessee Lease Description [Line Items] | |
Variable lease cost | $ 13,692 |
Leases - Supplemental Disclosur
Leases - Supplemental Disclosures of Cash Flow Information Related to Leases (Detail) $ in Thousands | 12 Months Ended |
Dec. 29, 2019USD ($) | |
Leases [Abstract] | |
Operating cash flows rent paid for operating lease liabilities | $ 47,335 |
Operating right-of-use assets obtained in exchange for new operating lease liabilities | 15,765 |
Reduction in operating right-of-use assets due to lease terminations | $ (6,506) |
Leases - Additional Information
Leases - Additional Information (Detail) $ in Millions | Dec. 29, 2019USD ($) |
Leases [Abstract] | |
Additional operating leases payments related to shops not yet open, amount | $ 2.8 |
Additional operating leases related to shops not yet commence, average term | 11 years |
Leases - Maturities of Lease Li
Leases - Maturities of Lease Liabilities (Detail) $ in Thousands | Dec. 29, 2019USD ($) |
Operating Leases | |
2020 | $ 46,581 |
2021 | 43,639 |
2022 | 38,096 |
2023 | 33,512 |
2024 | 30,427 |
Thereafter | 141,456 |
Total lease payments | 333,711 |
Less: imputed interest | (97,666) |
Present value of lease liabilities | $ 236,045 |
Leases - Maturities of Lease _2
Leases - Maturities of Lease Liabilities Under the Previous Lease Accounting (Detail) $ in Thousands | Dec. 30, 2018USD ($) |
Operating Leases | |
2019 | $ 47,918 |
2020 | 45,828 |
2021 | 41,497 |
2022 | 36,120 |
2023 | 31,060 |
Thereafter | 138,928 |
Total minimum lease payments | $ 341,351 |
Debt and Credit Facilities - Ad
Debt and Credit Facilities - Additional Information (Detail) - USD ($) | Aug. 07, 2019 | Dec. 29, 2019 |
London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member] | ||
Short Term Debt [Line Items] | ||
Credit facility agreement, interest rate | 1.75% | |
London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member] | ||
Short Term Debt [Line Items] | ||
Credit facility agreement, interest rate | 1.25% | |
JPMorgan Chase Bank, N.A. [Member] | ||
Short Term Debt [Line Items] | ||
Commitment fee, percentage | 0.20% | |
Credit facility agreement, amount outstanding | $ 0 | |
JPMorgan Chase Bank, N.A. [Member] | Prime Rate [Member] | Maximum [Member] | ||
Short Term Debt [Line Items] | ||
Credit facility agreement, interest rate | 0.50% | |
JPMorgan Chase Bank, N.A. [Member] | Prime Rate [Member] | Minimum [Member] | ||
Short Term Debt [Line Items] | ||
Credit facility agreement, interest rate | 0.00% | |
Revolving Credit Facility [Member] | JPMorgan Chase Bank, N.A. [Member] | ||
Short Term Debt [Line Items] | ||
Credit facility agreement, expiration date | Jul. 31, 2022 | |
Credit facility agreement, maximum principal amount | $ 40,000,000 | |
Revolving Credit Facility [Member] | JPMorgan Chase Bank, N.A. [Member] | Maximum [Member] | ||
Short Term Debt [Line Items] | ||
Credit facility agreement, future increases | $ 20,000,000 |
Capital Stock - Additional Info
Capital Stock - Additional Information (Detail) - USD ($) | 12 Months Ended | |||
Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | May 08, 2018 | |
Equity Class Of Treasury Stock [Line Items] | ||||
Capital stock, authorized | 210,000,000 | 210,000,000 | ||
Common stock, authorized | 200,000,000 | 200,000,000 | ||
Preferred stock, authorized | 10,000,000 | 10,000,000 | ||
Common stock, issued | 33,103,000 | 32,944,000 | ||
Common stock, outstanding | 23,638,000 | 24,143,000 | ||
Stock repurchase program, authorized amount | $ 65,000,000 | |||
Common stock repurchased value | $ 4,217,000 | $ 22,916,000 | $ 12,941,000 | |
Remaining dollar value of authorization under the share repurchase program | $ 37,900,000 | |||
Stock Repurchase Program [Member] | ||||
Equity Class Of Treasury Stock [Line Items] | ||||
Common stock shares repurchased | 648,000 | |||
Common stock repurchased value | $ 4,200,000 |
Employee Benefit Plan - Additio
Employee Benefit Plan - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Defined Benefit Plans And Other Postretirement Benefit Plans Disclosures [Abstract] | |||
Contributions made to profit sharing plan | $ 0.5 | $ 0.4 | $ 0.4 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Mar. 31, 2019 | Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | Jun. 10, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock units issued | 402,000 | 131,000 | 241,000 | ||
Stock-based compensation expense | $ 2,335,000 | $ 2,882,000 | $ 4,676,000 | ||
Stock units issued, grant-date fair value | $ 6.47 | $ 12.12 | $ 11.63 | ||
Accounting Standards Update 2016-09 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares of common stock reserved for issuance | 626,000 | ||||
Restricted Stock Units (RSUs) [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense | $ 1,500,000 | $ 1,500,000 | $ 1,700,000 | ||
Unrecognized stock compensation expense | $ 1,700,000 | ||||
Unrecognized stock compensation expense, recognition period | 2022 | ||||
Restricted Stock Units (RSUs) [Member] | Non-Employee Board Of Directors [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting description | The employee grants vest in one-third increments over a three-year period | ||||
Restricted Stock Units (RSUs) [Member] | Share Based Compensation Award Tranche One [Member] | Non-Employee Board Of Directors [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage | 50.00% | ||||
Restricted Stock Units (RSUs) [Member] | Share Based Compensation Award Tranche Two [Member] | Non-Employee Board Of Directors [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage | 50.00% | ||||
Common Share Options [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense | $ 800,000 | $ 1,400,000 | $ 3,000,000 | ||
Unrecognized stock compensation expense | $ 800,000 | ||||
Unrecognized stock compensation expense, recognition period | 2022 | ||||
Performance Shares | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock units issued | 188,000 | ||||
Stock-based compensation expense | $ 0 | ||||
Vesting description | The PSUs will vest fully on the third anniversary of the grant date. The quantity of shares that will vest ranges from 0% to 200% of the targeted number of shares. If the defined minimum targets are not met, then no shares will vest. | ||||
Stock units issued, grant-date fair value | $ 8.46 | ||||
Performance Shares | Maximum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage of targeted number of shares | 200.00% | ||||
Performance Shares | Minimum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage of targeted number of shares | 0.00% | ||||
2019 Long Term Incentive Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares of common stock reserved for issuance | 1,560,000 | ||||
Options granted | 0 | ||||
Exercise price of options outstanding, lower limit | $ 9.37 | ||||
Exercise price of options outstanding, higher limit | $ 20.53 | ||||
2019 Long Term Incentive Plan [Member] | Maximum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Exercisable period from the date of grant | 10 years | ||||
Options issued and outstanding, last expiration date | Dec. 31, 2028 | ||||
Options vesting period | 5 years | ||||
2019 Long Term Incentive Plan [Member] | Minimum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Options vesting period | 4 years | ||||
2019 Long Term Incentive Plan [Member] | Common Stock [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares of common stock reserved for issuance | 1,200,000 | ||||
Issuance of common stock | 0 | ||||
2019 Long Term Incentive Plan [Member] | Restricted Stock Units (RSUs) [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock units issued | 209,000 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock Options Activity Under Plans and Agreement (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | Dec. 25, 2016 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||||
Options outstanding shares, beginning balance | 2,150 | 3,309 | 4,013 | |
Options, granted | 203 | 464 | ||
Options, exercised | (22) | (993) | (653) | |
Options, canceled | (354) | (369) | (515) | |
Options outstanding shares, ending balance | 1,774 | 2,150 | 3,309 | 4,013 |
Options outstanding shares, exercisable | 1,546 | |||
Options outstanding weighted average exercise price, beginning balance | $ 11.49 | $ 10.71 | $ 10.61 | |
Options, weighted average exercise price, granted | 11.27 | 12.09 | ||
Options, weighted average exercise price, exercised | 7.93 | 8.30 | 9.94 | |
Options, weighted average exercise price, canceled | 12.45 | 13.63 | 12.18 | |
Options outstanding weighted average exercise price, ending balance | 11.34 | $ 11.49 | $ 10.71 | $ 10.61 |
Options outstanding weighted average exercise price, exercisable | $ 11.06 | |||
Options outstanding aggregate intrinsic value | $ 378 | $ 7,699 | $ 13,455 | |
Option outstanding weighted average remaining term | 4 years 3 months 29 days | 5 years 1 month 17 days | 4 years 10 months 24 days | 4 years 9 months 10 days |
Options exercisable weighted average remaining term | 3 years 9 months 29 days |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Average Assumptions to Value Options (Detail) - $ / shares | 12 Months Ended | |
Dec. 29, 2019 | Dec. 30, 2018 | |
Share Based Compensation Arrangement By Share Based Payment Award Fair Value Assumptions And Methodology [Abstract] | ||
Risk-free interest rate | 3.00% | 2.00% |
Expected life (years) | 6 years 3 months | 6 years 3 months |
Expected dividend yield | 0.00% | 0.00% |
Volatility | 35.00% | 36.00% |
Weighted average grant date fair value | $ 4.52 | $ 4.76 |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of RSU Activity (Detail) - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |||
Number of RSUs, Non-vested, beginning balance | 247 | 267 | 71 |
Stock units issued | 402 | 131 | 241 |
Number of RSUs, Vested | (135) | (121) | (45) |
Number of RSUs, Canceled | (51) | (30) | |
Number of RSUs, Non-vested, ending balance | shares | 463 | 247 | 267 |
Weighted Average Fair Value per Share, Non-vested, beginning balance | $ 11.99 | $ 11.79 | $ 13.43 |
Weighted Average Fair Value per Share, Granted | 6.47 | 12.12 | 11.63 |
Weighted Average Fair Value per Share, Vested | 11.94 | 11.92 | 13.53 |
Weighted Average Fair Value per Share, Canceled | 8.48 | 11.05 | |
Weighted Average Fair Value per Share, Non-vested, ending balance | $ 7.59 | $ 11.99 | $ 11.79 |
Quarterly Financial Data (Una_3
Quarterly Financial Data (Unaudited) - Summary of Unaudited Quarterly Financial Data (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 29, 2019 | Sep. 29, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 30, 2018 | Sep. 30, 2018 | Jul. 01, 2018 | Apr. 01, 2018 | Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Total revenues | $ 101,752 | $ 104,238 | $ 105,630 | $ 98,087 | $ 102,378 | $ 106,996 | $ 110,347 | $ 102,917 | $ 409,707 | $ 422,638 | $ 428,111 |
Income (Loss) from operations | (862) | (2,143) | (1,468) | (4,723) | (5,370) | (2,697) | 95 | (2,630) | (9,196) | (10,602) | (1,923) |
Net loss attributable to Potbelly Corporation | $ (1,332) | $ (2,355) | $ (1,866) | $ (18,439) | $ (4,363) | $ (1,961) | $ (360) | $ (2,194) | $ (23,992) | $ (8,878) | $ (6,956) |
Basic | $ (0.06) | $ (0.10) | $ (0.08) | $ (0.76) | $ (0.17) | $ (0.08) | $ (0.01) | $ (0.09) | $ (1.01) | $ (0.35) | $ (0.28) |
Diluted | (0.06) | (0.10) | (0.08) | (0.76) | (0.17) | (0.08) | (0.01) | (0.09) | (1.01) | (0.35) | (0.28) |
Loss per share available to common stockholders-basic | (0.06) | (0.10) | (0.08) | (0.76) | (0.17) | (0.08) | (0.01) | (0.09) | (1.01) | (0.35) | (0.28) |
Loss per share available to common stockholders-diluted | $ (0.06) | $ (0.10) | $ (0.08) | $ (0.76) | $ (0.17) | $ (0.08) | $ (0.01) | $ (0.09) | $ (1.01) | $ (0.35) | $ (0.28) |
Commitment and Contingencies -
Commitment and Contingencies - Additional Information (Detail) | Feb. 04, 2020 | Oct. 31, 2017 |
Loss Contingencies [Line Items] | ||
Purported collective and class action lawsuit filed date | October 2017 | |
Subsequent Event [Member] | ||
Loss Contingencies [Line Items] | ||
Purported collective and class action lawsuit approval date | February 4, 2020 |