Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 27, 2020 | Oct. 25, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 27, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Title of 12(b) Security | Common Stock, $0.01 par value | |
Trading Symbol | PBPB | |
Security Exchange Name | NASDAQ | |
Entity Registrant Name | Potbelly Corporation | |
Entity Central Index Key | 0001195734 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Current Fiscal Year End Date | --12-27 | |
Entity Filer Category | Accelerated Filer | |
Entity Shell Company | false | |
Entity Bankruptcy Proceedings, Reporting Current | true | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 24,212,000 | |
Entity File Number | 001-36104 | |
Entity Tax Identification Number | 36-4466837 | |
Entity Address, Address Line One | 111 N. Canal Street | |
Entity Address, Address Line Two | Suite 850 | |
Entity Address, City or Town | Chicago | |
Entity Address, State or Province | IL | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Postal Zip Code | 60606 | |
City Area Code | 312 | |
Local Phone Number | 951-0600 | |
Document Quarterly Report | true | |
Document Transition Report | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 27, 2020 | Dec. 29, 2019 |
Current assets | ||
Cash and cash equivalents | $ 23,407 | $ 18,806 |
Accounts receivable, net of allowances of $65 and $202 as of September 27, 2020 and December 29, 2019, respectively | 4,575 | 4,257 |
Inventories | 2,724 | 3,473 |
Prepaid expenses and other current assets | 5,372 | 5,687 |
Total current assets | 36,078 | 32,223 |
Property and equipment, net | 64,852 | 79,032 |
Right-of-use assets for operating leases | 196,070 | 211,988 |
Indefinite-lived intangible assets | 3,404 | 3,404 |
Goodwill | 2,222 | 2,222 |
Deferred expenses, net and other assets | 4,178 | 4,010 |
Total assets | 306,804 | 332,879 |
Current liabilities | ||
Accounts payable | 5,429 | 3,886 |
Accrued expenses | 20,008 | 20,569 |
Short-term operating lease liabilities | 35,434 | 29,319 |
Total current liabilities | 60,871 | 53,774 |
Long-term debt | 22,386 | |
Long-term operating lease liabilities | 195,681 | 206,726 |
Other long-term liabilities | 5,775 | 3,210 |
Total liabilities | 284,713 | 263,710 |
Commitments and contingencies (Note 10) | ||
Equity | ||
Common stock, $0.01 par value—authorized 200,000 shares; outstanding 24,212 and 23,638 shares as of September 27, 2020 and December 29, 2019, respectively | 338 | 331 |
Additional paid-in-capital | 438,140 | 435,278 |
Treasury stock, held at cost, 9,612 and 9,465 shares as of September 27, 2020, and December 29, 2019, respectively | (113,266) | (112,680) |
Accumulated deficit | (303,050) | (254,081) |
Total stockholders’ equity | 22,162 | 68,848 |
Non-controlling interest | (71) | 321 |
Total equity | 22,091 | 69,169 |
Total liabilities and equity | $ 306,804 | $ 332,879 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Sep. 27, 2020 | Dec. 29, 2019 |
Statement Of Financial Position [Abstract] | ||
Allowances on accounts receivable | $ 65 | $ 202 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, authorized | 200,000,000 | 200,000,000 |
Common stock, outstanding | 24,212,000 | 23,638,000 |
Treasury stock, shares | 9,612,000 | 9,465,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 27, 2020 | Sep. 29, 2019 | Sep. 27, 2020 | Sep. 29, 2019 | |
Revenues | ||||
Total revenues | $ 72,663 | $ 104,238 | $ 216,415 | $ 307,955 |
Sandwich shop operating expenses | ||||
Labor and related expenses | 25,809 | 32,430 | 78,090 | 96,517 |
Occupancy expenses | 13,904 | 14,850 | 43,581 | 44,457 |
Other operating expenses | 12,126 | 13,274 | 35,881 | 37,235 |
General and administrative expenses | 9,821 | 11,192 | 28,094 | 34,709 |
Depreciation expense | 4,699 | 5,365 | 15,110 | 16,486 |
Pre-opening costs | 16 | 64 | 26 | |
Impairment, loss on disposal of property and equipment and shop closures | 1,721 | 1,714 | 9,602 | 5,077 |
Total expenses | 88,801 | 106,381 | 271,425 | 316,289 |
Loss from operations | (16,138) | (2,143) | (55,010) | (8,334) |
Interest expense, net | 268 | 28 | 730 | 95 |
Loss before income taxes | (16,406) | (2,171) | (55,740) | (8,429) |
Income tax expense (benefit) | (2,917) | 66 | (6,585) | 13,931 |
Net loss | (13,489) | (2,237) | (49,155) | (22,360) |
Net income (loss) attributable to non-controlling interest | (77) | 118 | (191) | 300 |
Net loss attributable to Potbelly Corporation | $ (13,412) | $ (2,355) | $ (48,964) | $ (22,660) |
Net loss per common share attributable to common stockholders: | ||||
Basic | $ (0.56) | $ (0.10) | $ (2.06) | $ (0.95) |
Diluted | $ (0.56) | $ (0.10) | $ (2.06) | $ (0.95) |
Weighted average shares outstanding: | ||||
Basic | 23,957 | 23,740 | 23,792 | 23,927 |
Diluted | 23,957 | 23,740 | 23,792 | 23,927 |
Product [Member] | ||||
Revenues | ||||
Total revenues | $ 72,189 | $ 103,560 | $ 215,013 | $ 305,619 |
Sandwich shop operating expenses | ||||
Cost of goods sold, excluding depreciation | 20,721 | 27,540 | 61,003 | 81,782 |
Franchise Royalties And Fees [Member] | ||||
Revenues | ||||
Total revenues | $ 474 | $ 678 | $ 1,402 | $ 2,336 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment [Member]Revision of Prior Period, Adjustment [Member] | Common Stock [Member] | Treasury Stock [Member] | Additional Paid-in-Capital [Member] | Accumulated Deficit [Member] | Accumulated Deficit [Member]Cumulative Effect, Period of Adoption, Adjustment [Member]Revision of Prior Period, Adjustment [Member] | Non-Controlling Interest [Member] |
Beginning balance at Dec. 30, 2018 | $ 95,533 | $ 330 | $ (108,372) | $ 432,771 | $ (229,558) | $ 362 | ||
Beginning balance, common shares at Dec. 30, 2018 | 24,143 | |||||||
Cumulative impact (ASU 2016-02 (Topic 842) [Member]) at Dec. 30, 2018 | $ (531) | $ (531) | ||||||
Net income (loss) | (22,360) | (22,660) | 300 | |||||
Stock-based compensation plans | 173 | $ 1 | 172 | |||||
Stock-based compensation plans, shares | 118 | |||||||
Repurchases of common stock | (4,217) | (4,217) | ||||||
Repurchases of common stock, shares | (648) | |||||||
Distributions to non-controlling interest | (336) | (336) | ||||||
Contributions from non-controlling interest | 39 | 39 | ||||||
Treasury shares used for stock-based plans | (35) | (35) | ||||||
Treasury shares used for stock-based plans, shares | (5) | |||||||
Stock-based compensation expense | 1,910 | 1,910 | ||||||
Ending balance at Sep. 29, 2019 | 70,176 | $ 331 | (112,624) | 434,853 | (252,749) | 365 | ||
Ending balance, common shares at Sep. 29, 2019 | 23,608 | |||||||
Beginning balance at Jun. 30, 2019 | 72,876 | $ 331 | (111,874) | 434,407 | (250,394) | 406 | ||
Beginning balance, common shares at Jun. 30, 2019 | 23,768 | |||||||
Net income (loss) | (2,237) | (2,355) | 118 | |||||
Stock-based compensation plans, shares | 2 | |||||||
Repurchases of common stock | (750) | (750) | ||||||
Repurchases of common stock, shares | (162) | |||||||
Distributions to non-controlling interest | (159) | (159) | ||||||
Stock-based compensation expense | 446 | 446 | ||||||
Ending balance at Sep. 29, 2019 | 70,176 | $ 331 | (112,624) | 434,853 | (252,749) | 365 | ||
Ending balance, common shares at Sep. 29, 2019 | 23,608 | |||||||
Beginning balance at Dec. 29, 2019 | $ 69,169 | $ 331 | (112,680) | 435,278 | (254,081) | 321 | ||
Beginning balance, common shares at Dec. 29, 2019 | 23,638 | 23,638 | ||||||
Cumulative impact at Dec. 29, 2019 | $ (254,081) | |||||||
Cumulative impact (ASU 2016-13 (Topic 326) [Member]) at Dec. 29, 2019 | $ (5) | $ (5) | ||||||
Net income (loss) | (49,155) | (48,964) | (191) | |||||
Stock-based compensation plans | $ 6 | (6) | ||||||
Stock-based compensation plans, shares | 591 | |||||||
Shares issued for proxy-related expenses | 389 | $ 1 | 388 | |||||
Shares issued for proxy-related expenses, shares | 130 | |||||||
Distributions to non-controlling interest | (344) | (344) | ||||||
Contributions from non-controlling interest | 143 | 143 | ||||||
Treasury shares used for stock-based plans | (586) | (586) | ||||||
Treasury shares used for stock-based plans, shares | (147) | |||||||
Stock-based compensation expense | 2,480 | 2,480 | ||||||
Ending balance at Sep. 27, 2020 | $ 22,091 | $ 338 | (113,266) | 438,140 | (303,050) | (71) | ||
Ending balance, common shares at Sep. 27, 2020 | 24,212 | 24,212 | ||||||
Beginning balance at Jun. 28, 2020 | $ 34,653 | $ 334 | (112,757) | 436,536 | (289,638) | 178 | ||
Beginning balance, common shares at Jun. 28, 2020 | 23,898 | |||||||
Net income (loss) | (13,489) | (13,412) | (77) | |||||
Stock-based compensation plans | $ 4 | (4) | ||||||
Stock-based compensation plans, shares | 437 | |||||||
Distributions to non-controlling interest | (172) | (172) | ||||||
Treasury shares used for stock-based plans | (509) | (509) | ||||||
Treasury shares used for stock-based plans, shares | (123) | |||||||
Stock-based compensation expense | 1,608 | 1,608 | ||||||
Ending balance at Sep. 27, 2020 | $ 22,091 | $ 338 | $ (113,266) | $ 438,140 | $ (303,050) | $ (71) | ||
Ending balance, common shares at Sep. 27, 2020 | 24,212 | 24,212 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Equity (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 27, 2020 | Sep. 29, 2019 | |
ASU 2016-02 (Topic 842) [Member] | ||
Cumulative impact tax | $ 2 | $ 196 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 27, 2020 | Sep. 29, 2019 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (49,155) | $ (22,360) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation expense | 15,110 | 16,486 |
Noncash lease expense | 20,151 | 21,246 |
Deferred income tax | 14 | 13,804 |
Stock-based compensation expense | 2,480 | 1,910 |
Asset impairment, store closure and disposal of property and equipment | 8,873 | 2,012 |
Other operating activities | 582 | 33 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (281) | (347) |
Inventories | 749 | 165 |
Prepaid expenses and other assets | 49 | 3,565 |
Accounts payable | 1,918 | 763 |
Operating lease liabilities | (10,776) | (23,046) |
Accrued expenses and other liabilities | 2,542 | (4,368) |
Net cash (used in) provided by operating activities: | (7,744) | 9,863 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (8,702) | (9,533) |
Net cash used in investing activities: | (8,702) | (9,533) |
Cash flows from financing activities: | ||
Borrowings under credit facility | 49,786 | |
Repayments under credit facility | (37,400) | |
Proceeds from paycheck protection program loan | 10,000 | |
Payment of debt issuance costs | (553) | (40) |
Proceeds from exercise of stock options | 173 | |
Employee taxes on certain stock-based payment arrangements | (585) | (35) |
Treasury stock repurchases | (4,147) | |
Distributions to non-controlling interest | (344) | (337) |
Contributions from non-controlling interest | 143 | 39 |
Net cash provided by (used in) financing activities: | 21,047 | (4,347) |
Net increase (decrease) in cash and cash equivalents | 4,601 | (4,017) |
Cash and cash equivalents at beginning of period | 18,806 | 19,775 |
Cash and cash equivalents at end of period | 23,407 | 15,758 |
Supplemental cash flow information: | ||
Income taxes paid | 240 | 180 |
Interest paid | 468 | 66 |
Supplemental non-cash investing and financing activities: | ||
Unpaid liability for purchases of property and equipment | $ 350 | $ 433 |
Organization and Other Matters
Organization and Other Matters | 9 Months Ended |
Sep. 27, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization and Other Matters | (1) Organization and Other Matters Business Potbelly Corporation (the “Company” or “Potbelly”), through its wholly owned subsidiaries, owns and operates more than 400 company-owned shops in the United States. Additionally, Potbelly franchisees operate over 40 shops in the United States. Basis of Presentation The unaudited condensed consolidated financial statements and notes herein should be read in conjunction with the audited consolidated financial statements of Potbelly Corporation and its subsidiaries and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 29, 2019. The unaudited condensed consolidated financial statements included herein have been prepared by the Company without audit, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to the SEC rules and regulations. In the opinion of management, all adjustments, which are of a normal and recurring nature (except as otherwise noted), that are necessary to present fairly the Company’s balance sheet as of September 27, 2020 and December 29, 2019, its statement of operations for the 13 and 39 weeks ended September 27, 2020 and September 29, 2019, the statement of equity for the 13 and 39 weeks ended September 27, 2020 and September 29, 2019, and its statement of cash flows for the 39 weeks ended September 27, 2020 and September 29, 2019 have been included. The consolidated statements of operations for the interim periods presented herein are not necessarily indicative of the results to be expected for the full year. Beginning with the third quarter of 2020, shop closure and lease termination expenses are being presented within impairment, loss on disposal of property and equipment and shop closures on the condensed consolidated statements of operations. Prior to the third quarter of 2020, shop closure and lease termination expenses were presented within general and administrative expenses. Prior period amounts have been reclassified to conform to the current presentation. This reclassification had no impact on the loss from operations, balance sheets or statements of cash flows. The Company does not have any components of other comprehensive income recorded within its consolidated financial statements and therefore, does not separately present a statement of comprehensive income in its condensed consolidated financial statements. COVID-19 On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus ("COVID-19") and the risks to the international community as the virus spreads globally. On March 11, 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally. In response to the pandemic, many states and jurisdictions in which we operate have issued stay-at-home orders and other measures aimed at slowing the spread of the coronavirus. We initially closed the vast majority of our dining rooms and shifted to off-premise operations only, and we experienced a sudden and drastic decrease in revenues. Nearly all of our shops have reopened their dining rooms with restrictions, such as social distancing and limited capacities, to ensure the health and safety of our guests and employees. We continue to follow guidance from local authorities in determining the appropriate restrictions to put in place for each shop, including the suspension or reduction of in-shop dining if required due to changes in the pandemic response in each jurisdiction. The disruption in operations and reduction in revenues have led the Company to consider the impact of the COVID-19 pandemic on the recoverability of its assets, including property and equipment, right-of-use assets for operating leases, goodwill and intangible assets, and others. Due to the impact of the COVID-19 pandemic, the Company evaluated its goodwill, intangible assets, and long-lived assets, which includes property and equipment and right-of-use assets for operating leases for impairment. T he Company did not record any impairment to its goodwill or indefinite-lived intangible assets during the 13 and 39 weeks ended September 27, 2020. T he ultimate severity and longevity of the COVID-19 pandemic is unknown, and therefore, it is possible that impairments could be identified in future periods, and such amounts could be material. See Note 3 for further details. The Company recognized an income tax benefit of $6.7 million during 2020 primarily due to the impact of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) which enables the Company to obtain a tax refund from the carryback of net operating losses (“NOLs”) and a refund of prior alternative minimum tax (“AMT”) credits. The Company received $6.0 million of this refund during the third quarter of 2020 and expects to receive the remaining $0.7 million before the end of the current year. See Note 5 for further details. To preserve financial flexibility, the Company borrowed the $39.8 million of available capacity under its revolving credit facility on March 17, 2020. The Company subsequently repaid $27.4 million of these borrowings through the third quarter of 2020. On August 10, 2020, the Company entered into a loan agreement with Harvest Small Business Finance, LLC in the aggregate amount of $10.0 million pursuant to the Paycheck Protection Program (“PPP”) under the CARES Act. As of September 27, 2020, the Company had total liquidity of $50.8 million, consisting of cash and cash equivalents and amounts available on its revolving credit facility. See Note 7 for further details. The full impact of the COVID-19 outbreak continues to evolve as of the date of this report. Due to the rapid development and fluidity of this situation, the Company cannot determine the ultimate impact that the COVID-19 pandemic will have on its consolidated financial condition, liquidity, and future results of operations, and therefore any prediction as to the ultimate impact on the Company’s consolidated financial condition, liquidity, and future results of operations is uncertain. P rinciples of Consolidation The unaudited condensed consolidated financial statements include the accounts of Potbelly Corporation; its wholly owned subsidiary, Potbelly Illinois, Inc. (“PII”); PII’s wholly owned subsidiaries, Potbelly Franchising, LLC and Potbelly Sandwich Works, LLC (“PSW”); seven of PSW’s wholly owned subsidiaries and PSW’s 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. Fiscal Year The Company uses a 52/53-week fiscal year that ends on the last Sunday of the calendar period. Approximately every five or six years a 53rd week is added. Fiscal year 2020 and 2019 both consist of 52 weeks. The fiscal quarters ended September 27, 2020 and September 29, 2019 each consisted of 13 weeks. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and the disclosure of contingent assets and liabilities. Significant estimates include amounts for long-lived assets and income taxes. Actual results could differ from those estimates. Recent Accounting Pronouncements On December 30, 2019, the Company adopted Accounting Standard Update No. 2016-13, Financial Instruments—Credit Losses (Topic 326) |
Revenue
Revenue | 6 Months Ended |
Jun. 28, 2020 | |
Revenue From Contract With Customer [Abstract] | |
Revenue | (2) Revenue The Company primarily earns revenue at a point in time for sandwich shop sales which can occur in person at the shop, over our online or app platforms, or through a third-party platform. Revenue is recorded 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 upfront franchise fees, gift card redemptions and breakage. For the 13 and 39 weeks ended September 27, 2020, revenue recognized from all revenue sources on point in time sales was $72.5 million and $216.0 million, respectively, and revenue recognized from sales over time was $0.1 million and $0.4 million, respectively. For the 13 and 39 weeks ended September 29, 2019, revenue recognized from all revenue sources on point in time sales was $103.9 million and $307.2 million, respectively, and revenue recognized from sales over time was $0.4 million and $0.8 million, respectively. Franchise Revenue Potbelly licenses intellectual property and trademarks to franchisees through franchise agreements. As part of these franchise agreements, Potbelly receives an upfront payment 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 upfront franchise payments. 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. Loyalty Program During the second quarter of 2020, the Company implemented a new customer loyalty program for customers using the Potbelly Perks application at the point of sale. The customer will typically earn 10 points for every dollar spent, and the customer will earn a free entrée after earning 1,000 points. The Company defers revenue associated with the estimated selling price of points earned by Potbelly Perks members towards free entrées as each point is earned, and a corresponding liability is established in deferred revenue. The deferral is based on the estimated value of the product for which the reward is expected to be redeemed, net of estimated unredeemed points. Once a customer earns a free entrée, that entrée reward will expire after 30 days. Any point in a customer’s account that does not go toward earning a full entrée will expire a year after the point is earned. When points are redeemed, the Company recognizes revenue for the redeemed product and reduces deferred revenue. Contract Liabilities As described above, the Company records current and noncurrent contract liabilities for upfront franchise fees, gift cards and the loyalty program. 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 30, 2019 $ (1,594 ) $ (2,054 ) Ending balance as of September 27, 2020 (2,627 ) (1,786 ) Increase (decrease) in contract liability $ 1,033 $ (268 ) The aggregate value of remaining performance obligations on outstanding contracts was $4.4 million as of September 27, 2020. 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 $ 820 2021 1,565 2022 303 2023 219 2024 188 Thereafter 1,318 Total revenue recognized $ 4,413 For the 13 and 39 week s ended September 27, 2020, the amount of revenue recognized related to the December 30, 2019 liability ending balance was $0.1 million and $0.9 million, respectively. For the 13 and 39 weeks ended September 29, 2019, the amount of revenue recognized related to the December 31, 2018 liability ending balance was $0.2 million and $1.7 million, respectively. This revenue related to the recognition of gift card redemptions and upfront franchise fees. For the 13 and 39 weeks ended September 27, 2020 and September 29, 2019, the Company did not recognize any revenue from obligations satisfied (or partially satisfied) in prior periods. |
Fair Value Measurement
Fair Value Measurement | 9 Months Ended |
Sep. 27, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | (3) Fair Value Measurement The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and all other current liabilities approximate fair values due to the short maturities of these balances. The Company assesses potential impairments to its long-lived assets, which includes property and equipment and lease right-of-use assets, on a quarterly basis or whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. Shop-level assets and right-of-use assets are grouped at the individual shop-level for the purpose of the impairment assessment. Recoverability of an asset group is measured by a comparison of the carrying amount of an asset group to its estimated undiscounted future cash flows expected to be generated by the asset group. If the carrying amount of the asset group exceeds its estimated undiscounted future cash flows, an impairment charge is recognized as the amount by which the carrying amount of the asset group exceeds the fair value of the asset group. The fair value of the shop assets is determined using the discounted future cash flow method of anticipated cash flows through the shop’s lease-end date using fair value measurement inputs classified as Level 3. The fair value of right-of-use assets is estimated using market comparative information for similar properties. Level 3 inputs are derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. After performing a periodic review of the Company’s shops during the 13 and 39 weeks ended September 27, 2020, it was determined that indicators of impairment were present for certain shops as a result of continued underperformance. The Company performed an impairment analysis related to these shops and recorded an impairment charge of $1.2 million and $8.0 million for the 13 and 39 weeks ended September 27, 2020, respectively, primarily driven by the expected impact of the COVID-19 pandemic on future cash flows. T he ultimate severity and longevity of the COVID-19 pandemic is unknown, and therefore, it is possible that impairments could be identified in future periods, and such amounts could be material. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis Assets recognized or disclosed at fair value on the consolidated financial statements on a nonrecurring basis include items such as leasehold improvements, property and equipment, operating lease assets, goodwill, and other intangible assets. These assets are measured at fair value if determined to be impaired. 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. Due to the impact of the COVID-19 pandemic to the global economy, including but not limited to, the volatility of the Company's stock price as well as that of its competitors, declining sales at the Company's restaurants and the challenging environment for the restaurant industry generally, the Company determined that there were indicators of potential impairment of its goodwill and indefinite-lived intangible assets during the first quarter of 2020. As such, the Company performed an impairment assessment for both goodwill and indefinite lived intangible assets and concluded that the fair value of these assets exceeded their carrying values. The Company has not recorded any impairment to its goodwill or indefinite-lived intangible assets during the 13 and 39 weeks ended September 27, 2020. T he ultimate severity and longevity of the COVID-19 pandemic is unknown, and therefore, it is possible that impairments could be identified in future periods, and such amounts could be material. |
Loss Per Share
Loss Per Share | 9 Months Ended |
Sep. 27, 2020 | |
Earnings Per Share [Abstract] | |
Loss Per Share | (4) Loss Per Share Basic and diluted income per common share attributable to common stockholders are calculated using the weighted average number of common shares outstanding for the period. Diluted income 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 13 and 39 weeks ended September 27, 2020, and September 29, 2019, the Company had a loss per share, and therefore potentially dilutive shares were excluded from the calculation. The following table summarizes the loss per share calculation: For the 13 Weeks Ended For the 39 Weeks Ended September 27, September 29, September 27, September 29, 2020 2019 2020 2019 Net loss attributable to Potbelly Corporation $ (13,412 ) $ (2,355 ) $ (48,964 ) $ (22,660 ) Weighted average common shares outstanding-basic 23,957 23,740 23,792 23,927 Plus: Effect of potential stock options exercise — — — — Weighted average common shares outstanding-diluted 23,957 23,740 23,792 23,927 Loss per share available to common stockholders-basic $ (0.56 ) $ (0.10 ) $ (2.06 ) $ (0.95 ) Loss per share available to common stockholders-diluted $ (0.56 ) $ (0.10 ) $ (2.06 ) $ (0.95 ) Potentially dilutive shares that are considered anti-dilutive: Common share options 3,015 2,333 2,769 2,366 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 28, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | (5) Income Taxes On March 27, 2020, the CARES Act was enacted into law. The CARES Act is a tax and spending package intended to provide economic relief to address the impact of the COVID-19 pandemic. The CARES Act includes several significant business tax provisions that, among other things, would eliminate the taxable income limit for certain NOLs and allow businesses to carry back NOLs arising in 2018, 2019, and 2020 to the five prior tax years, accelerate refunds of previously generated corporate AMT credits, loosen the business interest limitation under section 163(j), and fix the qualified improvement property regulations in the 2017 Tax Cuts and Jobs Act. As a result of the CARES Act, the Company estimates that it will be able to obtain a tax refund of $6.7 million from the carryback of NOLs and a refund of prior AMT credits. The Company received $6.0 million of this refund as of September 27, 2020. The Company expects to receive the remaining $0.7 million before the end of the current year. The interim tax provision is determined using an estimated annual effective tax rate and is adjusted for discrete taxable events that occur during the quarter. The Company recognized an income tax benefit of $3.7 million during the first quarter of 2020 due to the anticipated impact of the CARES Act discussed above and an additional $3.0 million benefit during the third quarter of 2020 due to additional guidance on the CARES Act and the finalization of the Company’s 2019 federal tax return. 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. The Company recorded a full valuation allowance against its net deferred tax assets during the first quarter of 2019, resulting in a non-cash charge to income tax expense of $13.6 million. The Company continued to maintain a valuation allowance against all of its deferred tax assets as of September 27, 2020. The Company did not provide for an income tax benefit on its pre-tax loss for the 13 and 39 weeks ended September 27, 2020 and September 29, 2019. The Company assesses the likelihood of the realization of its deferred tax assets each quarter and the valuation allowance is adjusted accordingly. |
Leases
Leases | 9 Months Ended |
Sep. 27, 2020 | |
Leases [Abstract] | |
Leases | (6) Leases We determine if a contract contains a lease at inception. The Company leases retail shops, warehouse and office space under operating leases. 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 lease assets and liabilities are recognized at the lease commencement date. Operating lease liabilities represent the present value of lease payments not yet paid. Operating lease assets represent our right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs, lease incentives, and impairment of operating lease assets. To determine the present value of lease payments not yet paid, we estimate incremental secured borrowing rates corresponding to the maturities of the leases. The Company estimates this rate based on prevailing financial market conditions, comparable company and credit analysis, and management judgment. We recognize expense for these leases on a straight-line basis over the lease term. Additionally, tenant incentives used to fund leasehold improvements are recognized when earned and reduce our right-of-use asset related to the lease. These are amortized through the right-of-use asset as reductions of expense over the lease term. As a res ult of COVID-19, the Company suspended the paymen t of rent on the majority of its leases in April 2020 and has been in discussions with landlords regarding the restructuring of those leases in light of various contractual and legal defenses. The Company entered into 169 and 276 amendments with our respecti ve landlords during the 13 and 39 weeks ended September 27 , 2020. Under these agreements, certain rent payments will be abated, deferred or modified without penalty for various periods, generally covering two to four months of rent payments. In April 2020, the Financial Accounting Standards Board issued guidance allowing entities to make a policy election whether to account for lease concessions related to the COVID-19 pandemic as lease modifications. The election applies to any lessor-provided lease concession related to the impact of the COVID-19 pandemic, provided the concession does not result in a substantial increase in the rights of the lessor or in the obligations of the lessee. D uring the 13 and 39 weeks ended September 27 , 2020, we received concessions from certain landlords in the form of rent deferrals and abatements which were not substantial, and we have elected to not account for these rent concessions as lease modifications. During the 13 and 39 weeks ended September 27, 2020, the Company terminated the leases for 17 and 25 company-owned shops, respectively, which will be permanently closed. The Company incurred $1.5 million and $2.2 million, respectively, in lease termination fees related to these leases for the 13 and 39 weeks ended September 27, 2020. Upon termination of leases during the 13 weeks ended September 27, 2020, the Company derecognized ROU assets of $8.0 million and lease liabilities of $9.0 million that resulted in a net gain of $1.0 million that is recorded in impairment, loss on disposal of property and equipment and shop closures. Upon termination of leases during the 39 weeks ended September 27, 2020, the Company derecognized ROU assets of $12.9 million and lease liabilities of $14.3 million that resulted in a net gain of $1.4 million that is recorded in impairment, loss on disposal of property and equipment and shop closures. Upon termination of leases during the 13 weeks ended September 29, 2019, the Company derecognized ROU asset of $0.7 million and lease liabilities of $0.8 million that resulted in a net gain of $0.1 million that is recorded in impairment, loss on disposal of property and equipment and shop closures. Upon termination of leases during the 39 weeks ended September 29, 2019, the Company derecognized ROU asset of $6.5 million and lease liabilities of $7.5 million that resulted in a net gain of $1.0 million that is recorded in impairment, loss on disposal of property and equipment and shop closures. Operating lease term and discount rate were as follows: September 27, September 29, 2020 2019 Weighted average remaining lease term (years) 8.02 8.59 Weighted average discount rate 7.89 % 8.00 % 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: 13 weeks ended 39 weeks ended September 27, September 29, September 27, September 29, Classification 2020 2019 2020 2019 Operating lease cost Occupancy and General and administrative expenses 11,112 11,187 34,699 33,793 Variable lease cost Occupancy 2,879 3,277 9,119 10,430 Total lease cost $ 13,991 $ 14,464 $ 43,818 $ 44,223 Supplemental disclosures of cash flow information related to leases were as follows: 13 weeks ended 39 weeks ended September 27, September 29, September 27, September 29, 2020 2019 2020 2019 Operating cash flows rent paid for operating lease liabilities 10,693 11,762 24,200 35,488 Operating right-of-use assets obtained in exchange for new operating lease liabilities 5,264 4,745 18,800 8,402 Reduction in operating right-of-use assets due to lease terminations (7,973 ) (659 ) (12,855 ) (6,506 ) As of September 27, 2020, the Company had no real estate leases entered into that had not yet commenced. Maturities of lease liabilities were as follows as of September 27, 2020: Operating Leases Remainder of 2020 15,588 2021 47,643 2022 40,459 2023 35,972 2024 33,338 2025 31,232 Thereafter 112,177 Total lease payments 316,409 Less: imputed interest (85,294 ) Present value of lease liabilities $ 231,115 |
Debt and Credit Facilities
Debt and Credit Facilities | 9 Months Ended |
Sep. 27, 2020 | |
Debt Disclosure [Abstract] | |
Debt and Credit Facilities | (7) Debt and Credit Facilities The components of long-term debt were as follows: September 27, December 29, 2020 2019 Revolving credit facility $ 12,386 $ - Paycheck Protection Program loan 10,000 - Total long-term debt $ 22,386 $ - Revolving 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 On March 17, 2020, the Company fully borrowed the available capacity of $39.8 million under the Credit Agreement as a precautionary measure in order to increase its cash position and preserve financial flexibility in light of current uncertainty in the global markets resulting from the COVID-19 pandemic. In accordance with the terms of the Credit Agreement, the proceeds from these borrowings may in the future be used for working capital, general corporate or other permitted purposes. The Credit Agreement was subsequently amended as of May 15, 2020 (the “Credit Agreement Amendment”) to, among other things (i) change the maturity date from July 31, 2022 to March 31, 2022; (ii) eliminate the $20.0 million expansion feature; (iii) amend the interest rate to the Company’s option at either (a) a eurocurrency rate determined by reference to the applicable LIBOR rate with a 1.00% floor plus a margin of 5.00% or (b) a prime rate as announced by JP Morgan plus 4.00%; (iv) amend the commitment fee to 1.00% per annum in respect of any unused commitments under the credit facility; (v) implement additional restrictions on restricted payments, acquisitions and other indebtedness; and (vi) implement additional financial covenants. Per the terms of the Credit Agreement Amendment, the Company repaid $15.0 million of its outstanding borrowing at the signing of the Credit Agreement Amendment, and may re-borrow this $15.0 million when its cash balance held by JP Morgan declines below $28.0 million. Lastly, the Company was required to pay a fee of 1% of the outstanding loan balance after the signing of the Credit Agreement Amendment. On July 17, 2020, the Company entered into Amendment No. 2 (the “Second Amendment”) to the Credit Agreement to, among other things: (i) revise its financial covenants; (ii) decrease the aggregate amount of loan commitment available under the Credit Agreement from $40.0 million to $30.0 million after March 31, 2021 and (iii) decrease the interest rate to the Company’s option at either (a) a eurocurrency rate determined by reference to the applicable LIBOR rate with a 1.00% floor plus a margin of 4.75% or (b) a prime rate as announced by JP Morgan plus 2.25%. Per the terms of the Second Amendment, the Company repaid $14.5 million of its outstanding borrowing at the signing of the Second Amendment, and may reborrow the entire amount available under the credit facility when its cash balance held by JP Morgan declines below $10.0 million in total. The Second Amendment includes financial covenants that require the Company to (i) maintain periodic minimum liquidity levels through February 28, 2022 ranging from $15.0 million to $30.0 million and (ii) maintain monthly minimum adjusted EBITDA thresholds for specified computation periods through February 28, 2022 ranging from ($18.0) million to $8.3 million. On August 19, 2020, the Company entered into Amendment No. 3 (the “Third Amendment”) to the Credit Agreement to permit the Company to incur indebtedness in the form of a loan agreement with Harvest Small Business Finance, LLC in the aggregate amount of $10.0 million pursuant to the PPP under the CARES Act and (ii) revise financial covenants for the impact of the PPP proceeds. As of September 27, 2020, the Company had $12.4 million outstanding under the Credit Agreement. There were no borrowings outstanding as of September 29, 2019. The Company is currently in compliance with all debt covenants as of September 27, 2020. Paycheck Protection Program Loan On August 10, 2020, PSW, an indirect subsidiary of the Company, entered into a loan agreement with Harvest Small Business Finance, LLC in the aggregate amount of $10.0 million (the “Loan”), pursuant to the PPP under the CARES Act. The Loan was necessary to support the ongoing operations of the Company due to the economic uncertainty resulting from the COVID-19 pandemic and lack of access to alternative sources of liquidity. The Loan is scheduled to mature five years from the date on which PSW applies for loan forgiveness under the CARES Act, bears interest at a rate of 1% per annum and is subject to the terms and conditions applicable to loans administered by the U.S. Small Business Administration under the CARES Act. The PPP provides that the use of the Loan amount shall be limited to certain qualifying expenses and may be partially or wholly forgiven in accordance with the requirements set forth in the CARES Act. The Company intends to use all of the PPP proceeds toward qualifying expenses and pursue forgiveness of the Loan amount, but it is not able to determine the likelihood or the amount of forgiveness that will be obtained. The Company has recorded the amount of the Loan as long-term debt in its condensed consolidated balance sheet as of September 27, 2020 and related interest has been recorded to interest expense on its condensed consolidated statement of operations for the 13 weeks ended September 27, 2020. |
Capital Stock
Capital Stock | 9 Months Ended |
Sep. 27, 2020 | |
Equity [Abstract] | |
Capital Stock | (8) Capital Stock 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. For the 13 and 39 weeks ended September 27, 2020, the Company did not repurchase any shares of its common stock. In light of the COVID-19 pandemic, the Company does not have plans to repurchase any common stock under its stock repurchase program at this time. For the 13 and 39 weeks ended September 29, 2019, the Company repurchased 162,162 shares and 647,821 shares of its common stock for approximately $0.7 million and $4.2 million, respectively, under the stock repurchase program, including cost and commission, in open market transactions. Repurchased shares are included as treasury stock in the condensed consolidated balance sheets and the condensed consolidated statements of equity. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 27, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation | (9) Stock-Based Compensation Stock options The Company has awarded stock options to certain of its employees and certain non-employee members of its Board of Directors. The grants generally vest over a four-year A summary of stock option activity for the 39 weeks ended September 27, 2020 is as follows: Options Shares (Thousands) Weighted Average Exercise Price Aggregate Intrinsic Value (Thousands) Weighted Average Remaining Term (Years) Outstanding—December 29, 2019 1,774 $ 11.34 $ — 4.33 Granted — — Exercised — — Canceled (165 ) (12.35 ) Outstanding—September 27, 2020 1,609 11.23 $ — 3.31 Exercisable—September 27, 2020 1,556 $ 11.18 $ — 3.18 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 13 weeks ended September 27, 2020, the Company recognized stock-based compensation credit of $0.1 million due to forfeiture credits. For the 39 weeks ended September 27, 2020, the Company recognized stock-based compensation expense related to stock options of $0.2 million. For the 13 and 39 weeks ended September 29, 2019, the Company recognized stock-based compensation expense related to stock options of $0.1 million and $0.7 million, respectively. As of September 27, 2020, unrecognized stock-based compensation expense for stock options was $0.2 million, which will be recognized through fiscal year 2022. The Company records stock-based compensation expense within general and administrative expenses in the condensed consolidated statements of operations. Restricted stock units The Company awards restricted stock units (“RSUs”) to certain of its employees 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 A summary of RSU activity for the 39 weeks ended September 27, 2020 is as follows: RSUs Number of RSUs (Thousands) Weighted Average Fair Value per Share Non-vested as of December 29, 2019 463 $ 7.59 Granted 1,574 3.13 Vested (201 ) 2.87 Canceled (430 ) 3.87 Non-vested as of September 27, 2020 1,406 $ 3.68 Performance stock units The Company awards performance share units (“PSUs”) to certain of its employees. The PSUs have certain vesting conditions based upon the Company’s financial performance or the Company’s stock price. The Company has granted PSUs that are subject to service and market vesting conditions. The fair market value was established using a Monte Carlo simulation model. Participants are entitled to receive a specified number of shares of the Company’s common stock contingent on the Company's achievement of a stock return on the Company's common stock. The PSUs may vest during a performance period of five years. Compensation expense for these awards is being amortized over an average expected service period or earlier based on when vesting conditions are met. For the 13 and 39 weeks ended September 27, 2020, the Company recognized stock-based compensation expense for PSUs with market vesting conditions of $0.7 million. A summary of activity for PSUs with market vesting conditions for the 39 weeks ended September 27, 2020 is as follows: PSUs Number of PSUs (Thousands) Weighted Average Fair Value per Share Non-vested as of December 29, 2019 — $ — Granted 1,475 1.43 Vested (391 ) 4.20 Canceled (332 ) 1.50 Non-vested as of September 27, 2020 752 $ 1.42 The Company also previously granted PSUs that 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 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. As of September 27, 2020, there were 45 thousand PSUs with performance vesting conditions outstanding with a grant date fair value of $8.46 per share. For the 13 and 39 weeks ended September 27, 2020 and September 29, 2019, no expense was recognized related to PSUs with performance vesting conditions. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 27, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | (10) 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. In the opinion of management, the amount of ultimate liability with respect to those actions should not have a material adverse impact on the Company’s financial position or results of operations and cash flows . |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 27, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | (11) Related Party Transactions On May 10, 2020, the Company entered into a Settlement Agreement (the “Settlement Agreement”) with Intrinsic Investment Holdings, LLC, the Vann A. Avedisian Trust U/A 8/29/85, Vann A. Avedisian, KGT Investments, LLC, The Khimji Foundation, Mahmood Khimji, Bryant L. Keil and Neil Luthra (the foregoing, collectively with each of their respective affiliates, the “Vann Group”). In connection with the Settlement Agreement with the Vann Group, the Company issued 130,000 shares of common stock (including 41,311 shares issued to the Vann A. Avedisian Trust U/A 8/29/85, 43,571 shares issued to KGT Investments, LLC and 45,118 shares issued to The Khimji Foundation) to reimburse the Vann Group for its documented out-of-pocket costs, fees and expenses incurred in connection with the Settlement Agreement. The Company recorded expense of $0.4 million within general and administrative expenses related to the issuance of these shares. Based on a report of Schedule 13D filed by the Vann Group on August 17, 2020, the Vann Group beneficially owns 2.69% of the common stock of the Company. |
Organization and Other Matters
Organization and Other Matters (Policies) | 9 Months Ended |
Sep. 27, 2020 | |
Accounting Policies [Abstract] | |
Business | Business Potbelly Corporation (the “Company” or “Potbelly”), through its wholly owned subsidiaries, owns and operates more than 400 company-owned shops in the United States. Additionally, Potbelly franchisees operate over 40 shops in the United States. |
Basis of Presentation | Basis of Presentation The unaudited condensed consolidated financial statements and notes herein should be read in conjunction with the audited consolidated financial statements of Potbelly Corporation and its subsidiaries and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 29, 2019. The unaudited condensed consolidated financial statements included herein have been prepared by the Company without audit, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to the SEC rules and regulations. In the opinion of management, all adjustments, which are of a normal and recurring nature (except as otherwise noted), that are necessary to present fairly the Company’s balance sheet as of September 27, 2020 and December 29, 2019, its statement of operations for the 13 and 39 weeks ended September 27, 2020 and September 29, 2019, the statement of equity for the 13 and 39 weeks ended September 27, 2020 and September 29, 2019, and its statement of cash flows for the 39 weeks ended September 27, 2020 and September 29, 2019 have been included. The consolidated statements of operations for the interim periods presented herein are not necessarily indicative of the results to be expected for the full year. Beginning with the third quarter of 2020, shop closure and lease termination expenses are being presented within impairment, loss on disposal of property and equipment and shop closures on the condensed consolidated statements of operations. Prior to the third quarter of 2020, shop closure and lease termination expenses were presented within general and administrative expenses. Prior period amounts have been reclassified to conform to the current presentation. This reclassification had no impact on the loss from operations, balance sheets or statements of cash flows. The Company does not have any components of other comprehensive income recorded within its consolidated financial statements and therefore, does not separately present a statement of comprehensive income in its condensed consolidated financial statements. |
COVID-19 | COVID-19 On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus ("COVID-19") and the risks to the international community as the virus spreads globally. On March 11, 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally. In response to the pandemic, many states and jurisdictions in which we operate have issued stay-at-home orders and other measures aimed at slowing the spread of the coronavirus. We initially closed the vast majority of our dining rooms and shifted to off-premise operations only, and we experienced a sudden and drastic decrease in revenues. Nearly all of our shops have reopened their dining rooms with restrictions, such as social distancing and limited capacities, to ensure the health and safety of our guests and employees. We continue to follow guidance from local authorities in determining the appropriate restrictions to put in place for each shop, including the suspension or reduction of in-shop dining if required due to changes in the pandemic response in each jurisdiction. The disruption in operations and reduction in revenues have led the Company to consider the impact of the COVID-19 pandemic on the recoverability of its assets, including property and equipment, right-of-use assets for operating leases, goodwill and intangible assets, and others. Due to the impact of the COVID-19 pandemic, the Company evaluated its goodwill, intangible assets, and long-lived assets, which includes property and equipment and right-of-use assets for operating leases for impairment. T he Company did not record any impairment to its goodwill or indefinite-lived intangible assets during the 13 and 39 weeks ended September 27, 2020. T he ultimate severity and longevity of the COVID-19 pandemic is unknown, and therefore, it is possible that impairments could be identified in future periods, and such amounts could be material. See Note 3 for further details. The Company recognized an income tax benefit of $6.7 million during 2020 primarily due to the impact of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) which enables the Company to obtain a tax refund from the carryback of net operating losses (“NOLs”) and a refund of prior alternative minimum tax (“AMT”) credits. The Company received $6.0 million of this refund during the third quarter of 2020 and expects to receive the remaining $0.7 million before the end of the current year. See Note 5 for further details. To preserve financial flexibility, the Company borrowed the $39.8 million of available capacity under its revolving credit facility on March 17, 2020. The Company subsequently repaid $27.4 million of these borrowings through the third quarter of 2020. On August 10, 2020, the Company entered into a loan agreement with Harvest Small Business Finance, LLC in the aggregate amount of $10.0 million pursuant to the Paycheck Protection Program (“PPP”) under the CARES Act. As of September 27, 2020, the Company had total liquidity of $50.8 million, consisting of cash and cash equivalents and amounts available on its revolving credit facility. See Note 7 for further details. The full impact of the COVID-19 outbreak continues to evolve as of the date of this report. Due to the rapid development and fluidity of this situation, the Company cannot determine the ultimate impact that the COVID-19 pandemic will have on its consolidated financial condition, liquidity, and future results of operations, and therefore any prediction as to the ultimate impact on the Company’s consolidated financial condition, liquidity, and future results of operations is uncertain. |
Principles of Consolidation | P rinciples of Consolidation The unaudited condensed consolidated financial statements include the accounts of Potbelly Corporation; its wholly owned subsidiary, Potbelly Illinois, Inc. (“PII”); PII’s wholly owned subsidiaries, Potbelly Franchising, LLC and Potbelly Sandwich Works, LLC (“PSW”); seven of PSW’s wholly owned subsidiaries and PSW’s 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. |
Fiscal Year | Fiscal Year The Company uses a 52/53-week fiscal year that ends on the last Sunday of the calendar period. Approximately every five or six years a 53rd week is added. Fiscal year 2020 and 2019 both consist of 52 weeks. The fiscal quarters ended September 27, 2020 and September 29, 2019 each consisted of 13 weeks. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and the disclosure of contingent assets and liabilities. Significant estimates include amounts for long-lived assets and income taxes. Actual results could differ from those estimates. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements On December 30, 2019, the Company adopted Accounting Standard Update No. 2016-13, Financial Instruments—Credit Losses (Topic 326) |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Jun. 28, 2020 | |
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 30, 2019 $ (1,594 ) $ (2,054 ) Ending balance as of September 27, 2020 (2,627 ) (1,786 ) Increase (decrease) in contract liability $ 1,033 $ (268 ) |
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 $ 820 2021 1,565 2022 303 2023 219 2024 188 Thereafter 1,318 Total revenue recognized $ 4,413 |
Loss Per Share (Tables)
Loss Per Share (Tables) | 9 Months Ended |
Sep. 27, 2020 | |
Earnings Per Share [Abstract] | |
Summary of Loss Per Share Calculation | The following table summarizes the loss per share calculation: For the 13 Weeks Ended For the 39 Weeks Ended September 27, September 29, September 27, September 29, 2020 2019 2020 2019 Net loss attributable to Potbelly Corporation $ (13,412 ) $ (2,355 ) $ (48,964 ) $ (22,660 ) Weighted average common shares outstanding-basic 23,957 23,740 23,792 23,927 Plus: Effect of potential stock options exercise — — — — Weighted average common shares outstanding-diluted 23,957 23,740 23,792 23,927 Loss per share available to common stockholders-basic $ (0.56 ) $ (0.10 ) $ (2.06 ) $ (0.95 ) Loss per share available to common stockholders-diluted $ (0.56 ) $ (0.10 ) $ (2.06 ) $ (0.95 ) Potentially dilutive shares that are considered anti-dilutive: Common share options 3,015 2,333 2,769 2,366 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 27, 2020 | |
Leases [Abstract] | |
Operating Lease Term and Discount Rate | Operating lease term and discount rate were as follows: September 27, September 29, 2020 2019 Weighted average remaining lease term (years) 8.02 8.59 Weighted average discount rate 7.89 % 8.00 % |
Components of Lease Cost | The components of lease cost were as follows: 13 weeks ended 39 weeks ended September 27, September 29, September 27, September 29, Classification 2020 2019 2020 2019 Operating lease cost Occupancy and General and administrative expenses 11,112 11,187 34,699 33,793 Variable lease cost Occupancy 2,879 3,277 9,119 10,430 Total lease cost $ 13,991 $ 14,464 $ 43,818 $ 44,223 |
Supplemental Disclosures of Cash Flow Information Related to Leases | Supplemental disclosures of cash flow information related to leases were as follows: 13 weeks ended 39 weeks ended September 27, September 29, September 27, September 29, 2020 2019 2020 2019 Operating cash flows rent paid for operating lease liabilities 10,693 11,762 24,200 35,488 Operating right-of-use assets obtained in exchange for new operating lease liabilities 5,264 4,745 18,800 8,402 Reduction in operating right-of-use assets due to lease terminations (7,973 ) (659 ) (12,855 ) (6,506 ) |
Maturities of Lease Liabilities | Maturities of lease liabilities were as follows as of September 27, 2020: Operating Leases Remainder of 2020 15,588 2021 47,643 2022 40,459 2023 35,972 2024 33,338 2025 31,232 Thereafter 112,177 Total lease payments 316,409 Less: imputed interest (85,294 ) Present value of lease liabilities $ 231,115 |
Debt and Credit Facilities (Ta
Debt and Credit Facilities (Tables) | 9 Months Ended |
Sep. 27, 2020 | |
Debt Disclosure [Abstract] | |
Component of Long-term Debt | The components of long-term debt were as follows: September 27, December 29, 2020 2019 Revolving credit facility $ 12,386 $ - Paycheck Protection Program loan 10,000 - Total long-term debt $ 22,386 $ - |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 27, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Stock Option Activity | A summary of stock option activity for the 39 weeks ended September 27, 2020 is as follows: Options Shares (Thousands) Weighted Average Exercise Price Aggregate Intrinsic Value (Thousands) Weighted Average Remaining Term (Years) Outstanding—December 29, 2019 1,774 $ 11.34 $ — 4.33 Granted — — Exercised — — Canceled (165 ) (12.35 ) Outstanding—September 27, 2020 1,609 11.23 $ — 3.31 Exercisable—September 27, 2020 1,556 $ 11.18 $ — 3.18 |
Summary of RSU Activity | A summary of RSU activity for the 39 weeks ended September 27, 2020 is as follows: RSUs Number of RSUs (Thousands) Weighted Average Fair Value per Share Non-vested as of December 29, 2019 463 $ 7.59 Granted 1,574 3.13 Vested (201 ) 2.87 Canceled (430 ) 3.87 Non-vested as of September 27, 2020 1,406 $ 3.68 |
Summary of PSU Activity | A summary of activity for PSUs with market vesting conditions for the 39 weeks ended September 27, 2020 is as follows: PSUs Number of PSUs (Thousands) Weighted Average Fair Value per Share Non-vested as of December 29, 2019 — $ — Granted 1,475 1.43 Vested (391 ) 4.20 Canceled (332 ) 1.50 Non-vested as of September 27, 2020 752 $ 1.42 |
Organization and Other Matter_2
Organization and Other Matters - Additional Information (Detail) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||||||
Jul. 17, 2020USD ($) | Sep. 27, 2020USD ($)ShopJointVenture | Mar. 29, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 29, 2019USD ($) | Sep. 27, 2020USD ($)ShopSubsidiaryJointVenture | Sep. 30, 2019USD ($) | Sep. 29, 2019USD ($) | Dec. 27, 2020USD ($) | Aug. 10, 2020USD ($) | Mar. 27, 2020USD ($) | Mar. 17, 2020USD ($) | Dec. 30, 2019USD ($) | Dec. 29, 2019USD ($) | Dec. 30, 2018USD ($) | |
Nature Of Business And Basis Of Presentation [Line Items] | |||||||||||||||
Number of shops franchisees operate | Shop | 40 | 40 | |||||||||||||
Impairment charge | $ 1,200 | $ 1,500 | $ 8,000 | $ 1,700 | |||||||||||
Income tax expense (benefit) | (2,917) | $ (3,700) | $ 66 | (6,585) | $ 13,931 | ||||||||||
Tax refund from net operating loss carryback | $ 6,700 | ||||||||||||||
Line of credit facility amount borrowed | $ 10,000 | ||||||||||||||
Repayments of borrowing | 37,400 | ||||||||||||||
Cash and cash equivalents | $ 23,407 | $ 15,758 | $ 23,407 | $ 15,758 | $ 18,806 | $ 19,775 | |||||||||
Number of wholly owned subsidiaries | Subsidiary | 7 | ||||||||||||||
Number of joint ventures | JointVenture | 7 | 7 | |||||||||||||
ASU 2016-13 (Topic 326) [Member] | |||||||||||||||
Nature Of Business And Basis Of Presentation [Line Items] | |||||||||||||||
Reduction in accumulated deficit | $ 5 | ||||||||||||||
Revolving Credit Facility [Member] | |||||||||||||||
Nature Of Business And Basis Of Presentation [Line Items] | |||||||||||||||
Repayments of borrowing | $ 14,500 | ||||||||||||||
COVID 19 [Member] | |||||||||||||||
Nature Of Business And Basis Of Presentation [Line Items] | |||||||||||||||
Income tax expense (benefit) | $ 6,700 | ||||||||||||||
Tax refund from net operating loss carryback | $ 6,000 | 6,000 | |||||||||||||
COVID 19 [Member] | Scenario, Forecast [Member] | |||||||||||||||
Nature Of Business And Basis Of Presentation [Line Items] | |||||||||||||||
Tax refund from net operating loss carryback | $ 700 | ||||||||||||||
CARES Act Of 2020 [Member] | |||||||||||||||
Nature Of Business And Basis Of Presentation [Line Items] | |||||||||||||||
Income tax expense (benefit) | (3,000) | ||||||||||||||
Repayments of borrowing | 27,400 | ||||||||||||||
CARES Act Of 2020 [Member] | Revolving Credit Facility [Member] | |||||||||||||||
Nature Of Business And Basis Of Presentation [Line Items] | |||||||||||||||
Line of credit facility amount borrowed | $ 39,800 | ||||||||||||||
Cash and cash equivalents | $ 50,800 | $ 50,800 | |||||||||||||
CARES Act Of 2020 [Member] | Harvest Small Business Finance [Member] | Paycheck Protection Program Loan [Member] | |||||||||||||||
Nature Of Business And Basis Of Presentation [Line Items] | |||||||||||||||
Loan amount | $ 10,000 | ||||||||||||||
Minimum [Member] | |||||||||||||||
Nature Of Business And Basis Of Presentation [Line Items] | |||||||||||||||
Number of shops Potbelly Corporation owns or operates | Shop | 400 | 400 | |||||||||||||
Ownership interest rate | 51.00% | ||||||||||||||
Maximum [Member] | |||||||||||||||
Nature Of Business And Basis Of Presentation [Line Items] | |||||||||||||||
Ownership interest rate | 80.00% |
Revenue - Additional Informatio
Revenue - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 27, 2020 | Sep. 29, 2019 | Sep. 27, 2020 | Sep. 29, 2019 | |
Disaggregation Of Revenue [Line Items] | ||||
Amount of revenue recognized | $ 72,663,000 | $ 104,238,000 | $ 216,415,000 | $ 307,955,000 |
Aggregate value of remaining performance obligation on outstanding contracts | 4,413,000 | 4,413,000 | ||
Revenue recognized related to prior periods | 0 | 0 | 0 | 0 |
January 1, 2018 Liability Ending Balance [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Amount of revenue recognized | 100,000 | 200,000 | 900,000 | 1,700,000 |
Point in Time Sales [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Amount of revenue recognized | 72,500,000 | 103,900,000 | 216,000,000 | 307,200,000 |
Over Time Sales [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Amount of revenue recognized | $ 100,000 | $ 400,000 | $ 400,000 | $ 800,000 |
Revenue - Summary of Current an
Revenue - Summary of Current and Noncurrent Contract Liabilities from Contracts with Customers (Detail) $ in Thousands | 9 Months Ended |
Sep. 27, 2020USD ($) | |
Revenue From Contract With Customer [Abstract] | |
Beginning balance of current contract liability | $ (1,594) |
Ending balance of current contract liability | (2,627) |
Increase (decrease) in contract liability | 1,033 |
Beginning balance of noncurrent contract liability | (2,054) |
Ending balance of noncurrent contract liability | (1,786) |
Increase (decrease) in contract liability | $ (268) |
Revenue - Summary of Expected R
Revenue - Summary of Expected Revenue Recognition Related to Contract Liabilities (Detail1) $ in Thousands | Sep. 27, 2020USD ($) |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, remaining performance obligations | $ 4,413 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2020-10-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, remaining performance obligations | $ 820 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 3 months |
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 | $ 1,565 |
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 | $ 303 |
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 | $ 219 |
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 | $ 188 |
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 | $ 1,318 |
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 | Sep. 27, 2020USD ($) |
Revenue From Contract With Customer [Abstract] | |
Revenue, remaining performance obligations | $ 4,413 |
Fair Value Measurement - Additi
Fair Value Measurement - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 27, 2020 | Sep. 30, 2019 | Sep. 27, 2020 | Sep. 30, 2019 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||
Impairment charge | $ 1.2 | $ 1.5 | $ 8 | $ 1.7 |
COVID 19 [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||
Impact of the COVID 19 pandamic to thr global economy | Due to the impact of the COVID-19 pandemic to the global economy, including but not limited to, the volatility of the Company's stock price as well as that of its competitors, declining sales at the Company's restaurants and the challenging environment for the restaurant industry generally, the Company determined that there were indicators of potential impairment of its goodwill and indefinite-lived intangible assets during the first quarter of 2020. As such, the Company performed an impairment assessment for both goodwill and indefinite lived intangible assets and concluded that the fair value of these assets exceeded their carrying values. The Company has not recorded any impairment to its goodwill or indefinite-lived intangible assets during the 13 and 39 weeks ended September 27, 2020. The ultimate severity and longevity of the COVID-19 pandemic is unknown, and therefore, it is possible that impairments could be identified in future periods, and such amounts could be material. |
Loss Per Share - Additional Inf
Loss Per Share - Additional Information (Detail) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 27, 2020 | Sep. 29, 2019 | Sep. 27, 2020 | Sep. 29, 2019 | |
Common Share Options [Member] | ||||
Loss Per Share [Line Items] | ||||
Potential common shares included in diluted shares outstanding | 0 | 0 | 0 | 0 |
Loss Per Share - Summary of Los
Loss Per Share - Summary of Loss Per Share Calculation (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 27, 2020 | Sep. 29, 2019 | Sep. 27, 2020 | Sep. 29, 2019 | |
Loss Per Share [Line Items] | ||||
Net loss attributable to Potbelly Corporation | $ (13,412) | $ (2,355) | $ (48,964) | $ (22,660) |
Weighted average common shares outstanding-basic | 23,957 | 23,740 | 23,792 | 23,927 |
Weighted average common shares outstanding-diluted | 23,957 | 23,740 | 23,792 | 23,927 |
Loss per share available to common stockholders-basic | $ (0.56) | $ (0.10) | $ (2.06) | $ (0.95) |
Loss per share available to common stockholders-diluted | $ (0.56) | $ (0.10) | $ (2.06) | $ (0.95) |
Common Share Options [Member] | ||||
Loss Per Share [Line Items] | ||||
Potentially dilutive shares that are considered anti-dilutive | 3,015 | 2,333 | 2,769 | 2,366 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 27, 2020 | Mar. 29, 2020 | Sep. 29, 2019 | Sep. 27, 2020 | Sep. 29, 2019 | Dec. 31, 2020 | Mar. 27, 2020 | Mar. 31, 2019 | |
Tax refund from net operating loss carryback | $ 6,700 | |||||||
Income taxes receivable | $ 6,000 | $ 6,000 | ||||||
Income tax expense (benefit) | (2,917) | $ (3,700) | $ 66 | $ (6,585) | $ 13,931 | |||
Deferred tax assets, valuation allowance | $ 13,600 | |||||||
CARES Act Of 2020 [Member] | ||||||||
Income tax expense (benefit) | $ (3,000) | |||||||
Scenario, Forecast [Member] | ||||||||
Income taxes receivable | $ 700 |
Leases - Additional Information
Leases - Additional Information (Detail) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 27, 2020USD ($)Shop | Sep. 29, 2019USD ($) | Sep. 27, 2020USD ($)Shop | Sep. 29, 2019USD ($) | |
Leases [Abstract] | ||||
Number of shop lease terminated | Shop | 17 | 25 | ||
Lease termination fee | $ 1.5 | $ 2.2 | ||
Derecognized right-of-use assets | 8 | $ 0.7 | 12.9 | $ 6.5 |
Derecognized lease liabilities | 9 | 0.8 | 14.3 | 7.5 |
Net gain on termination of lease | 1 | $ 0.1 | 1.4 | $ 1 |
Additional operating leases payments related to shops not yet open, amount | $ 0 | $ 0 |
Leases - Operating Lease Term a
Leases - Operating Lease Term and Discount Rate (Detail) | Sep. 27, 2020 | Sep. 29, 2019 |
Leases [Abstract] | ||
Weighted average remaining lease term (years) | 8 years 7 days | 7 years 10 months 20 days |
Weighted average discount rate | 7.89% | 8.00% |
Leases - Components of Lease Co
Leases - Components of Lease Cost (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 27, 2020 | Sep. 29, 2019 | Sep. 27, 2020 | Sep. 29, 2019 | |
Lessee Lease Description [Line Items] | ||||
Total lease cost | $ 13,991 | $ 14,464 | $ 43,818 | $ 44,223 |
Occupancy and General and Administrative Expenses [Member] | ||||
Lessee Lease Description [Line Items] | ||||
Operating lease cost | 11,112 | 11,187 | 34,699 | 33,793 |
Occupancy Expenses [Member] | ||||
Lessee Lease Description [Line Items] | ||||
Variable lease cost | $ 2,879 | $ 3,277 | $ 9,119 | $ 10,430 |
Leases - Supplemental Disclosur
Leases - Supplemental Disclosures of Cash Flow Information Related to Leases (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 27, 2020 | Sep. 29, 2019 | Sep. 27, 2020 | Sep. 29, 2019 | |
Leases [Abstract] | ||||
Operating cash flows rent paid for operating lease liabilities | $ 10,693 | $ 11,762 | $ 24,200 | $ 35,488 |
Operating right-of-use assets obtained in exchange for new operating lease liabilities | 5,264 | 4,745 | 18,800 | 8,402 |
Reduction in operating right-of-use assets due to lease terminations | $ (7,973) | $ (659) | $ (12,855) | $ (6,506) |
Leases - Maturities of Lease Li
Leases - Maturities of Lease Liabilities (Detail) $ in Thousands | Sep. 27, 2020USD ($) |
Operating Leases | |
Remainder of 2020 | $ 15,588 |
2021 | 47,643 |
2022 | 40,459 |
2023 | 35,972 |
2024 | 33,338 |
2025 | 31,232 |
Thereafter | 112,177 |
Total lease payments | 316,409 |
Less: imputed interest | (85,294) |
Present value of lease liabilities | $ 231,115 |
Debt and Credit Facilities - Co
Debt and Credit Facilities - Component of Long-term Debt (Detail) $ in Thousands | Sep. 27, 2020USD ($) |
Debt Instrument [Line Items] | |
Long-term debt | $ 22,386 |
Revolving Credit Facility [Member] | |
Debt Instrument [Line Items] | |
Long-term debt | 12,386 |
Paycheck Protection Program Loan [Member] | |
Debt Instrument [Line Items] | |
Long-term debt | $ 10,000 |
Debt and Credit Facilities - Ad
Debt and Credit Facilities - Additional Information (Detail) - USD ($) | Aug. 10, 2020 | Aug. 07, 2019 | Jul. 17, 2020 | May 15, 2020 | Sep. 27, 2020 | Sep. 27, 2020 | Sep. 29, 2019 | Mar. 17, 2020 |
Short Term Debt [Line Items] | ||||||||
Line of credit facility amount borrowed | $ 37,400,000 | |||||||
Line of credit facility amount borrowed | $ 10,000,000 | |||||||
February 28, 2022 [Member] | Minimum [Member] | ||||||||
Short Term Debt [Line Items] | ||||||||
Minimum Liquidity Level | 15,000,000 | |||||||
Minimum Building Adjusted EBITDA | (18,000,000) | |||||||
February 28, 2022 [Member] | Maximum [Member] | ||||||||
Short Term Debt [Line Items] | ||||||||
Minimum Liquidity Level | 30,000,000 | |||||||
Minimum Building Adjusted EBITDA | 8,300,000 | |||||||
Credit Agreement Amendment [Member] | ||||||||
Short Term Debt [Line Items] | ||||||||
Upfront fee payable | 1.00% | |||||||
CARES Act Of 2020 [Member] | ||||||||
Short Term Debt [Line Items] | ||||||||
Line of credit facility amount borrowed | $ 27,400,000 | |||||||
London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member] | ||||||||
Short Term Debt [Line Items] | ||||||||
Credit facility agreement, interest rate | 1.75% | 4.75% | ||||||
London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member] | Credit Agreement Amendment [Member] | ||||||||
Short Term Debt [Line Items] | ||||||||
Credit facility agreement, interest rate | 5.00% | |||||||
London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member] | ||||||||
Short Term Debt [Line Items] | ||||||||
Credit facility agreement, interest rate | 1.25% | 1.00% | ||||||
London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member] | Credit Agreement Amendment [Member] | ||||||||
Short Term Debt [Line Items] | ||||||||
Credit facility agreement, interest rate | 1.00% | |||||||
Prime Rate [Member] | Minimum [Member] | ||||||||
Short Term Debt [Line Items] | ||||||||
Credit facility agreement, interest rate | 2.25% | |||||||
JPMorgan Chase Bank, N.A. [Member] | ||||||||
Short Term Debt [Line Items] | ||||||||
Commitment fee, percentage | 0.20% | |||||||
JPMorgan Chase Bank, N.A. [Member] | Credit Agreement Amendment [Member] | ||||||||
Short Term Debt [Line Items] | ||||||||
Credit facility agreement, future increases | $ 20,000,000 | |||||||
Commitment fee, percentage | 1.00% | |||||||
Credit facility agreement, amount outstanding | $ 15,000,000 | |||||||
Line of credit facility amount borrowed | $ 28,000,000 | |||||||
JPMorgan Chase Bank, N.A. [Member] | Maximum [Member] | Credit Agreement Amendment [Member] | ||||||||
Short Term Debt [Line Items] | ||||||||
Credit facility agreement, Maturity date | Mar. 31, 2022 | |||||||
JPMorgan Chase Bank, N.A. [Member] | Minimum [Member] | Credit Agreement Amendment [Member] | ||||||||
Short Term Debt [Line Items] | ||||||||
Credit facility agreement, Maturity date | Jul. 31, 2022 | |||||||
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% | |||||||
JPMorgan Chase Bank, N.A. [Member] | Prime Rate [Member] | Minimum [Member] | Credit Agreement Amendment [Member] | ||||||||
Short Term Debt [Line Items] | ||||||||
Credit facility agreement, interest rate | 4.00% | |||||||
Revolving Credit Facility [Member] | ||||||||
Short Term Debt [Line Items] | ||||||||
Credit facility agreement, maximum principal amount | $ 40,000,000 | |||||||
Credit facility agreement, future increases | 30,000,000 | |||||||
Line of credit facility amount borrowed | $ 14,500,000 | |||||||
Revolving Credit Facility [Member] | CARES Act Of 2020 [Member] | ||||||||
Short Term Debt [Line Items] | ||||||||
Line of credit facility amount borrowed | $ 39,800,000 | |||||||
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] | Credit Agreement Amendment [Member] | ||||||||
Short Term Debt [Line Items] | ||||||||
Line of credit facility amount borrowed | $ 15,000,000 | |||||||
Revolving Credit Facility [Member] | JPMorgan Chase Bank, N.A. [Member] | COVID 19 [Member] | ||||||||
Short Term Debt [Line Items] | ||||||||
Line of credit facility amount borrowed | $ 39,800,000 | |||||||
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 | |||||||
Paycheck Protection Program Loan [Member] | Harvest Small Business Finance [Member] | Loan [Member] | Potbelly Sandwich Works, LLC [Member] | ||||||||
Short Term Debt [Line Items] | ||||||||
Loan amount | $ 10,000,000 | |||||||
Paycheck Protection Program Loan [Member] | CARES Act Of 2020 [Member] | Potbelly Sandwich Works, LLC [Member] | ||||||||
Short Term Debt [Line Items] | ||||||||
Credit facility agreement, interest rate | 1.00% | |||||||
Loan maturity period | 5 years | |||||||
Paycheck Protection Program Loan [Member] | CARES Act Of 2020 [Member] | Harvest Small Business Finance [Member] | Third Credit Agreement Amendment [Member] | ||||||||
Short Term Debt [Line Items] | ||||||||
Line of credit facility amount borrowed | $ 10,000,000 | 10,000,000 | ||||||
Credit facility agreement, amount outstanding | $ 12,400,000 | $ 0 |
Capital Stock - Additional Info
Capital Stock - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 27, 2020 | Sep. 29, 2019 | Sep. 27, 2020 | Sep. 29, 2019 | May 08, 2018 | |
Equity Class Of Treasury Stock [Line Items] | |||||
Stock repurchase program, authorized amount | $ 65,000,000 | ||||
Common stock repurchased value | $ 750,000 | $ 4,217,000 | |||
Stock Repurchase Program [Member] | |||||
Equity Class Of Treasury Stock [Line Items] | |||||
Common stock shares repurchased | 0 | 162,162 | 0 | 647,821 | |
Common stock repurchased value | $ 700,000 | $ 4,200,000 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 27, 2020 | Sep. 29, 2019 | Sep. 27, 2020 | Sep. 29, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Recognized stock-based compensation expense | $ 2,480,000 | $ 1,910,000 | ||
Stock-based compensation expense | 2,480,000 | 1,910,000 | ||
Common Share Options [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock based compensation forfeiture credit | $ 100,000 | |||
Recognized stock-based compensation expense | $ 100,000 | 200,000 | 700,000 | |
Unrecognized stock compensation expense | $ 200,000 | $ 200,000 | ||
Unrecognized stock compensation expense, recognition period | 2022 | |||
Stock-based compensation expense | 100,000 | $ 200,000 | 700,000 | |
Performance Stock Units [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Grants vesting period | 5 years | |||
Share-based Compensation vested outstanding | 45,000 | 45,000 | ||
Stock units issued, grant-date fair value | $ 0.0846 | $ 0.0846 | ||
Performance Stock Units [Member] | Minimum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage of targeted number of shares | 0.00% | |||
Performance Stock Units [Member] | Maximum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage of targeted number of shares | 200.00% | |||
Performance Stock Units [Member] | Market Vesting Conditions [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Recognized stock-based compensation expense | $ 700,000 | $ 700,000 | ||
Stock-based compensation expense | 700,000 | 700,000 | ||
Performance Stock Units [Member] | Performance Vesting Conditions [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Recognized stock-based compensation expense | 0 | 0 | 0 | 0 |
Stock-based compensation expense | $ 0 | 0 | $ 0 | 0 |
Non-Employee Board Of Directors [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting description | 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. | |||
Employee and Non Employee Directors [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Grants vesting period | 4 years | |||
Method used to determine fair value of the options | Black-Scholes option pricing model | |||
Stock options granted | 0 | 0 | ||
Non-Employee Board Of Directors [Member] | Restricted Stock Units (RSUs) [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Grants vesting period | 3 years | |||
Recognized stock-based compensation expense | $ 1,000,000 | 300,000 | $ 1,600,000 | 1,200,000 |
Unrecognized stock compensation expense | 3,100,000 | $ 3,100,000 | ||
Unrecognized stock compensation expense, recognition period | 2023 | |||
Vesting description | The employee grants vest in one-third increments over a three-year period. | |||
Stock-based compensation expense | $ 1,000,000 | $ 300,000 | $ 1,600,000 | $ 1,200,000 |
Non-Employee Board Of Directors [Member] | Restricted Stock Units (RSUs) [Member] | First Anniversary [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 50.00% | |||
Non-Employee Board Of Directors [Member] | Restricted Stock Units (RSUs) [Member] | Second Anniversary [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 50.00% |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock Option Activity (Detail) shares in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 27, 2020$ / sharesshares | Dec. 29, 2019$ / sharesshares | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||
Options outstanding shares, beginning balance | shares | 1,774 | |
Options, canceled | shares | (165) | |
Options outstanding shares, ending balance | shares | 1,609 | 1,774 |
Options outstanding shares, exercisable | shares | 1,556 | |
Options outstanding weighted average exercise price, beginning balance | $ / shares | $ 11.34 | |
Options, weighted average exercise price, canceled | $ / shares | (12.35) | |
Options outstanding weighted average exercise price, ending balance | $ / shares | 11.23 | $ 11.34 |
Options outstanding weighted average exercise price, exercisable | $ / shares | $ 11.18 | |
Option outstanding weighted average remaining term | 3 years 3 months 21 days | 4 years 3 months 29 days |
Options exercisable weighted average remaining term | 3 years 2 months 4 days |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of RSU Activity (Detail) - Restricted Stock Units (RSUs) [Member] shares in Thousands | 9 Months Ended |
Sep. 27, 2020$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares, Non-vested, beginning balance | shares | 463 |
Number of shares, Granted | shares | 1,574 |
Number of shares, Vested | shares | (201) |
Number of shares, Canceled | shares | (430) |
Number of shares, Non-vested, ending balance | shares | 1,406 |
Weighted Average Fair Value per Share, Non-vested, beginning balance | $ / shares | $ 7.59 |
Weighted Average Fair Value per Share, Granted | $ / shares | 3.13 |
Weighted Average Fair Value per Share, Vested | $ / shares | 2.87 |
Weighted Average Fair Value per Share, Canceled | $ / shares | 3.87 |
Weighted Average Fair Value per Share, Non-vested, ending balance | $ / shares | $ 3.68 |
Stock-Based Compensation - Su_3
Stock-Based Compensation - Summary of PSU Activity (Detail) - Performance Stock Units [Member] shares in Thousands | 9 Months Ended |
Sep. 27, 2020$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares, Granted | shares | 1,475 |
Number of shares, Vested | shares | (391) |
Number of shares, Canceled | shares | (332) |
Number of shares, Non-vested, ending balance | shares | 752 |
Weighted Average Fair Value per Share, Granted | $ / shares | $ 1.43 |
Weighted Average Fair Value per Share, Vested | $ / shares | 4.20 |
Weighted Average Fair Value per Share, Canceled | $ / shares | 1.50 |
Weighted Average Fair Value per Share, Non-vested, ending balance | $ / shares | $ 1.42 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) - USD ($) shares in Thousands, $ in Millions | Aug. 17, 2020 | Sep. 27, 2020 | May 10, 2020 |
Related Party Transaction [Line Items] | |||
Shares issued to related parties | 130,000 | ||
Expense related to issuance of shares | $ 0.4 | ||
Vann A. Avedisian Trust [Member] | |||
Related Party Transaction [Line Items] | |||
Shares issued to related parties | 41,311 | ||
Ownership percentage related party | 2.69% | ||
KGT Investments [Member] | |||
Related Party Transaction [Line Items] | |||
Shares issued to related parties | 43,571 | ||
The Khimji Foundation [Member] | |||
Related Party Transaction [Line Items] | |||
Shares issued to related parties | 45,118 |