Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2024 | Jul. 28, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2024 | |
Document Transition Report | false | |
Entity File Number | 001-36104 | |
Entity Registrant Name | Potbelly Corporation | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 36-4466837 | |
Entity Address, Address Line One | 111 N. Canal Street | |
Entity Address, Address Line Two | Suite 325 | |
Entity Address, City or Town | Chicago | |
Entity Address, State or Province | IL | |
Entity Address, Postal Zip Code | 60606 | |
City Area Code | 312 | |
Local Phone Number | 951-0600 | |
Title of 12(b) Security | Common Stock, $0.01 par value | |
Trading Symbol | PBPB | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 29,945,387 | |
Entity Central Index Key | 0001195734 | |
Document Fiscal Year Focus | 2024 | |
Current Fiscal Year End Date | --12-29 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Current assets | ||
Cash and cash equivalents | $ 8,322 | $ 33,788 |
Accounts receivable, net of allowances of $20 and $26 as of June 30, 2024 and December 31, 2023, respectively | 8,973 | 7,960 |
Inventories | 3,353 | 3,516 |
Prepaid expenses and other current assets | 7,445 | 7,828 |
Total current assets | 28,093 | 53,092 |
Property and equipment, net | 46,730 | 45,087 |
Right-of-use assets for operating leases | 137,199 | 144,390 |
Indefinite-lived intangible assets | 3,404 | 3,404 |
Goodwill | 2,053 | 2,056 |
Restricted cash | 749 | 749 |
Deferred tax assets | 30,976 | 0 |
Deferred expenses, net and other assets | 5,406 | 3,681 |
Total assets | 254,610 | 252,460 |
Current liabilities | ||
Accounts payable | 9,216 | 9,927 |
Accrued expenses | 30,149 | 35,377 |
Short-term operating lease liabilities | 23,539 | 24,525 |
Current portion of long-term debt | 0 | 1,250 |
Total current liabilities | 62,904 | 71,078 |
Long-term debt, net of current portion | 4,000 | 19,168 |
Long-term operating lease liabilities | 133,222 | 142,050 |
Other long-term liabilities | 6,782 | 6,070 |
Total liabilities | 206,908 | 238,367 |
Commitments and contingencies (Note 12) | ||
Equity | ||
Common stock, $0.01 par value—authorized 200,000 shares; outstanding 29,944 and 29,364 shares as of June 30, 2024 and December 31, 2023, respectively | 397 | 389 |
Warrants | 1,745 | 2,219 |
Additional paid-in-capital | 467,550 | 462,583 |
Treasury stock, held at cost, 10,354 and 10,077 shares as of June 30, 2024, and December 31, 2023, respectively | (119,538) | (116,701) |
Accumulated deficit | (301,852) | (333,797) |
Total stockholders’ equity | 48,302 | 14,693 |
Non-controlling interest | (600) | (600) |
Total equity | 47,702 | 14,093 |
Total liabilities and equity | $ 254,610 | $ 252,460 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, net of allowances | $ 20 | $ 26 |
Common stock (in USD per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 200,000 | 200,000 |
Common stock, outstanding (in shares) | 29,944 | 29,364 |
Treasury stock (in shares) | 10,354 | 10,077 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 25, 2023 | Jun. 30, 2024 | Jun. 25, 2023 | |
Revenues | ||||
Total revenues | $ 119,697 | $ 126,623 | $ 230,850 | $ 244,893 |
Sandwich shop operating expenses, excluding depreciation | ||||
Food, beverage and packaging costs | 31,306 | 34,903 | 60,576 | 67,523 |
Labor and related expenses | 32,313 | 37,866 | 64,566 | 74,368 |
Occupancy expenses | 12,543 | 13,083 | 24,257 | 26,393 |
Other operating expenses | 21,264 | 20,925 | 41,093 | 41,409 |
Franchise support, rent and marketing expenses | 3,001 | 1,215 | 5,538 | 1,806 |
General and administrative expenses | 11,866 | 11,695 | 23,413 | 21,664 |
Depreciation expense | 3,016 | 2,887 | 6,027 | 5,857 |
Pre-opening costs | 96 | 33 | 96 | 55 |
Loss on Franchise Growth Acceleration Initiative activities | 28 | 14 | 161 | 963 |
Impairment, loss on disposal of property and equipment and shop closures | 145 | 658 | 886 | 1,703 |
Total operating expenses | 115,578 | 123,279 | 226,613 | 241,741 |
Income from operations | 4,119 | 3,344 | 4,237 | 3,152 |
Interest expense, net | 181 | 1,011 | 545 | 1,678 |
Loss on extinguishment of debt | 0 | 0 | 2,376 | 239 |
Income before income taxes | 3,938 | 2,333 | 1,316 | 1,235 |
Income tax expense (benefit) | (30,982) | (48) | (30,931) | 57 |
Net income | 34,920 | 2,381 | 32,247 | 1,178 |
Net income attributable to non-controlling interest | 208 | 165 | 302 | 288 |
Net income attributable to Potbelly Corporation | $ 34,712 | $ 2,216 | $ 31,945 | $ 890 |
Net income per common share attributable to common stockholders: | ||||
Basic (in USD per share) | $ 1.16 | $ 0.08 | $ 1.07 | $ 0.03 |
Diluted (in USD per share) | $ 1.13 | $ 0.07 | $ 1.04 | $ 0.03 |
Weighted average shares outstanding: | ||||
Basic (in shares) | 29,926 | 29,199 | 29,903 | 29,053 |
Diluted (in shares) | 30,714 | 30,088 | 30,842 | 29,776 |
Sandwich shop sales, net | ||||
Revenues | ||||
Total revenues | $ 115,536 | $ 124,709 | $ 223,113 | $ 241,656 |
Franchise royalties, fees and rent income | ||||
Revenues | ||||
Total revenues | $ 4,161 | $ 1,914 | $ 7,737 | $ 3,237 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Treasury Stock | Warrants | Additional Paid-In- Capital | Accumulated Deficit | Non- Controlling Interest |
Beginning balance (in shares) at Dec. 25, 2022 | 28,819 | ||||||
Beginning balance at Dec. 25, 2022 | $ 4,273 | $ 384 | $ (115,388) | $ 2,566 | $ 455,831 | $ (338,916) | $ (204) |
Net income (loss) | (1,204) | (1,327) | 123 | ||||
Shares issued under equity compensation plan (in shares) | 70 | ||||||
Shares issued under equity compensation plan | (337) | $ 1 | (337) | (1) | |||
Proceeds from exercise of warrants (in shares) | 159 | ||||||
Proceeds from exercise of warrants | 865 | $ 1 | (313) | 1,177 | |||
Distributions to non-controlling interest | (152) | (152) | |||||
Stock-based compensation expense | 911 | 911 | |||||
Ending balance (in shares) at Mar. 26, 2023 | 29,048 | ||||||
Ending balance at Mar. 26, 2023 | 4,356 | $ 386 | (115,725) | 2,253 | 457,918 | (340,243) | (233) |
Beginning balance (in shares) at Dec. 25, 2022 | 28,819 | ||||||
Beginning balance at Dec. 25, 2022 | 4,273 | $ 384 | (115,388) | 2,566 | 455,831 | (338,916) | (204) |
Net income (loss) | 1,178 | ||||||
Ending balance (in shares) at Jun. 25, 2023 | 29,309 | ||||||
Ending balance at Jun. 25, 2023 | 7,201 | $ 389 | (116,497) | 2,219 | 459,351 | (338,027) | (234) |
Beginning balance (in shares) at Mar. 26, 2023 | 29,048 | ||||||
Beginning balance at Mar. 26, 2023 | 4,356 | $ 386 | (115,725) | 2,253 | 457,918 | (340,243) | (233) |
Net income (loss) | 2,381 | 2,216 | 165 | ||||
Shares issued under equity compensation plan (in shares) | 243 | ||||||
Shares issued under equity compensation plan | (771) | $ 3 | (772) | (2) | |||
Proceeds from exercise of warrants (in shares) | 18 | ||||||
Proceeds from exercise of warrants | 96 | $ 0 | (34) | 130 | |||
Distributions to non-controlling interest | (166) | (166) | |||||
Stock-based compensation expense | 1,305 | 1,305 | |||||
Ending balance (in shares) at Jun. 25, 2023 | 29,309 | ||||||
Ending balance at Jun. 25, 2023 | $ 7,201 | $ 389 | (116,497) | 2,219 | 459,351 | (338,027) | (234) |
Beginning balance (in shares) at Dec. 31, 2023 | 29,364 | 29,364 | |||||
Beginning balance at Dec. 31, 2023 | $ 14,093 | $ 389 | (116,701) | 2,219 | 462,583 | (333,797) | (600) |
Net income (loss) | (2,673) | (2,767) | 94 | ||||
Shares issued under equity compensation plan (in shares) | 81 | ||||||
Shares issued under equity compensation plan | (665) | $ 3 | (665) | (3) | |||
Proceeds from exercise of warrants (in shares) | 240 | ||||||
Proceeds from exercise of warrants | 1,309 | $ 2 | (474) | 1,781 | |||
Distributions to non-controlling interest | (179) | (179) | |||||
Stock-based compensation expense | 1,771 | 1,771 | |||||
Ending balance (in shares) at Mar. 31, 2024 | 29,685 | ||||||
Ending balance at Mar. 31, 2024 | $ 13,656 | $ 394 | (117,366) | 1,745 | 466,132 | (336,564) | (685) |
Beginning balance (in shares) at Dec. 31, 2023 | 29,364 | 29,364 | |||||
Beginning balance at Dec. 31, 2023 | $ 14,093 | $ 389 | (116,701) | 2,219 | 462,583 | (333,797) | (600) |
Net income (loss) | $ 32,247 | ||||||
Ending balance (in shares) at Jun. 30, 2024 | 29,944 | 29,944 | |||||
Ending balance at Jun. 30, 2024 | $ 47,702 | $ 397 | (119,538) | 1,745 | 467,550 | (301,852) | (600) |
Beginning balance (in shares) at Mar. 31, 2024 | 29,685 | ||||||
Beginning balance at Mar. 31, 2024 | 13,656 | $ 394 | (117,366) | 1,745 | 466,132 | (336,564) | (685) |
Net income (loss) | 34,920 | 34,712 | 208 | ||||
Shares issued under equity compensation plan (in shares) | 345 | ||||||
Shares issued under equity compensation plan | (1,469) | $ 3 | (1,469) | (3) | |||
Distributions to non-controlling interest | (123) | (123) | |||||
Stock-based compensation expense | 1,421 | 1,421 | |||||
Repurchases of common stock (in shares) | (86) | ||||||
Repurchases of common stock | $ (703) | (703) | |||||
Ending balance (in shares) at Jun. 30, 2024 | 29,944 | 29,944 | |||||
Ending balance at Jun. 30, 2024 | $ 47,702 | $ 397 | $ (119,538) | $ 1,745 | $ 467,550 | $ (301,852) | $ (600) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 | Jun. 25, 2023 | |
Cash flows from operating activities: | ||
Net income | $ 32,247 | $ 1,178 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation expense | 6,027 | 5,857 |
Noncash lease expense | 12,568 | 12,386 |
Deferred income tax | (31,251) | (81) |
Stock-based compensation expense | 3,192 | 2,216 |
Asset impairment, loss on disposal of property and equipment and shop closures | 463 | 1,061 |
Loss on Franchise Growth Acceleration Initiative activities | 162 | 936 |
Loss on extinguishment of debt | 2,376 | 224 |
Other operating activities | 130 | 209 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (1,035) | (1,862) |
Inventories | 169 | 281 |
Prepaid expenses and other assets | (900) | (240) |
Accounts payable | (522) | (1,222) |
Operating lease liabilities | (14,540) | (13,707) |
Accrued expenses and other liabilities | (5,236) | 4,786 |
Net cash provided by operating activities: | 3,850 | 12,022 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (8,687) | (7,281) |
Proceeds from sale of refranchised shops and other assets | 227 | 1,362 |
Net cash used in investing activities: | (8,460) | (5,919) |
Cash flows from financing activities: | ||
Payment of debt issuance costs | (623) | (2,204) |
Proceeds from exercise of warrants | 1,309 | 961 |
Employee taxes on certain stock-based payment arrangements | (1,710) | (976) |
Distributions to non-controlling interest | (302) | (318) |
Principal payments made for Term Loan | 0 | (625) |
Treasury Stock repurchase | (703) | 0 |
Net cash (used in) provided by financing activities: | (20,856) | 13,288 |
Net (decrease) increase in cash and cash equivalents and restricted cash | (25,466) | 19,391 |
Cash and cash equivalents and restricted cash at beginning of period | 34,537 | 15,619 |
Cash and cash equivalents and restricted cash at end of period | 9,071 | 35,010 |
Supplemental cash flow information: | ||
Income taxes paid | 553 | 245 |
Interest paid | 493 | 1,446 |
Supplemental non-cash investing and financing activities: | ||
Unpaid liability for purchases of property and equipment | 803 | 1,035 |
Unpaid liability for employee taxes on certain stock-based payment arrangements | 424 | 149 |
Revolving Credit Facility - WinTrust Bank | ||
Cash flows from financing activities: | ||
Borrowings under Credit Facilities and Term Loan | 7,000 | 0 |
Repayments of Credit Facilities and Term Loan | (3,000) | 0 |
Term Loan | ||
Cash flows from financing activities: | ||
Borrowings under Credit Facilities and Term Loan | 0 | 25,000 |
Repayments of Credit Facilities and Term Loan | (22,827) | 0 |
Revolving Credit Facility - JP Morgan | ||
Cash flows from financing activities: | ||
Borrowings under Credit Facilities and Term Loan | 0 | 14,600 |
Repayments of Credit Facilities and Term Loan | $ 0 | $ (23,150) |
Organization and Other Matters
Organization and Other Matters | 6 Months Ended |
Jun. 30, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Other Matters | Organization and Other Matters Business Potbelly Corporation, a Delaware corporation, together with its subsidiaries (collectively referred to as the "Company," "Potbelly," "we," "us" or "our"), owns and operates 345 company-operated shops in the United States as of June 30, 2024. Additionally, Potbelly franchisees operate 84 shops domestically. Basis of Presentation The unaudited condensed consolidated financial statements and notes herein should be read in conjunction with the audited consolidated financial statements of Potbelly and its subsidiaries and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2023. The unaudited condensed consolidated financial statements included herein have been prepared by us without audit, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the "SEC") regarding interim financial reporting. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP") have been condensed or omitted pursuant to the SEC rules and regulations. In the opinion of management, the accompanying condensed consolidated financial statements contain all adjustments necessary to present fairly the financial position, results of operations and cash flows for the interim periods reported within. The condensed consolidated statements of operations for the interim periods presented herein are not necessarily indicative of the results to be expected for the full year. We do not have any components of other comprehensive income recorded within our consolidated financial statements and therefore, do not separately present a statement of comprehensive income in our condensed consolidated financial statements. Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts of Potbelly; its wholly-owned subsidiary, Potbelly Illinois, Inc. (“PII”); PII’s wholly-owned subsidiaries, Potbelly Franchising, LLC and Potbelly Sandwich Works, LLC (“PSW”); seven of PSW’s wholly-owned subsidiaries and PSW’s six joint ventures, collectively, the “Company.” All intercompany balances and transactions have been eliminated in consolidation. For our six consolidated joint ventures, "non-controlling interest" represents the non-controlling partner’s share of the assets, liabilities and operations related to the joint venture investments. Potbelly has ownership interests ranging from 51-80% in these consolidated joint ventures. Fiscal Year We use a 52/53-week fiscal year that ends on the last Sunday of the calendar period. Approximately every five or six years a 53rd week is added. Fiscal year 2024 consists of 52 weeks and fiscal year 2023 consisted of 53 weeks. The year to date periods ended June 30, 2024 and June 25, 2023 each consisted of 26 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 In November 2023, the Financial Accounting Standard Board ("FASB") issued guidance to expand annual and interim disclosure requirements for reportable segments, primarily through additional disclosures on segment expenses. We will adopt the accounting guidance in our Annual Report on Form 10-K for the year ended December 29, 2024. We do not anticipate the updated standard will have a material impact on our financial statement disclosures. In December 2023, the FASB issued guidance to enhance transparency of income tax disclosures. The updated guidance requires additional disclosures on income tax rate reconciliation and income taxes paid, among other things. We will adopt the accounting guidance in our Annual Report on Form 10-K for the year ended December 28, 2025. We are currently evaluating the impact that the updated standard will have on our financial statement disclosures. |
Restricted Cash
Restricted Cash | 6 Months Ended |
Jun. 30, 2024 | |
Cash and Cash Equivalents [Abstract] | |
Restricted Cash | Restricted Cash As of June 30, 2024, we had restricted cash related to funds held in a money market account as collateral for letters of credit to certain lease agreements. The reconciliation of cash and cash equivalents and restricted cash presented in the condensed consolidated balance sheets to the total amount shown in our condensed consolidated statements of cash flows is as follows: June 30, December 31, Reconciliation of cash, cash equivalents and restricted cash: Cash and cash equivalents $ 8,322 $ 33,788 Restricted cash, noncurrent 749 749 Total cash, cash equivalents and restricted cash shown on statement of cash flows $ 9,071 $ 34,537 |
Revenue
Revenue | 6 Months Ended |
Jun. 30, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue We primarily earn revenue at a point in time for sandwich shop sales, which can occur in person at a shop, through our online or app platform, or through a third-party platform. Sales taxes collected from customers are excluded from revenues and the obligation is included in accrued liabilities until the taxes are remitted to the appropriate taxing authorities. We have other revenue generating activities where revenue is generally recognized over time, as outlined below. For the quarter and year to date ended June 30, 2024, revenue recognized from all revenue sources on point in time sales was $119.1 million and $229.7 million, respectively, and revenue recognized from sales over time was $0.6 million and $1.1 million, respectively. For the quarter and year to date ended June 25, 2023, revenue recognized from all revenue sources on point in time sales was $125.8 million and $243.7 million, respectively, and revenue recognized from sales over time was $0.8 million and $1.2 million, respectively. Franchise Royalties and Fees We earn an initial franchise fee, a franchise development agreement fee and ongoing royalty fees and support fees under our franchise agreements. Initial franchise fees are considered highly dependent upon and interrelated with the franchise right granted in the franchise agreement. As such, these franchise fees are recognized over the contractual term of the franchise agreement. We record a contract liability for the unearned portion of the initial franchise fees. Franchise development agreement fees represent the exclusivity rights for a geographical area paid by a third party to develop Potbelly shops for a certain period of time. Franchise development agreement fee payments received by us are recorded in the condensed consolidated balance sheets as accrued expenses or other long-term liabilities, and amortized over the term of the franchise agreement once the shops are opened. These franchise fees are considered highly dependent upon and interrelated with the franchise right granted in the franchise agreement. Royalty fees and Brand Fund contributions are based on a percentage of sales and are recorded as revenue as they are earned and become receivable from the franchisee. Other support fees, which primarily include fees for software and technology, are recorded as revenue as the fees are earned and the service is provided to the franchise. Revenue from support fees are recognized gross of the related expenses since we are the principal in the arrangement to provide those services. Gift Card Redemptions / Breakage Revenue Potbelly sells gift cards to customers, records the sale as a contract liability and recognizes the associated revenue as the gift card is redeemed. A portion of these gift cards are not redeemed by the customer ("breakage"), which is recognized as revenue as a percentage of customers gift card redemptions. The expected breakage amount recognized is determined by a historical data analysis on gift card redemption patterns. We recognize gift card breakage income within sandwich shop sales, net in the condensed consolidated statements of operations. We recognized gift card breakage income of $0.2 million and $0.5 million for the quarter and year to date ended June 30, 2024, respectively. For the quarter and year to date ended June 25, 2023, we recognized gift card breakage income of $0.2 million and $0.4 million, respectively. Loyalty Program We offer a customer loyalty program for customers using the Potbelly Perks application at the point of sale. In January 2024, we enhanced our Potbelly Perks program to provide more reward options and flexibility for members. Under the original program, the customer would earn 10 points for every dollar spent, and the customer would earn a free entrée after earning 1,000 points. Once a customer earned a free entrée, that entrée reward expires after 30 days. Under the enhanced program, Potbelly Perks members will earn 10 or more coins, the equivalent of points under the legacy program, for every dollar they spend. The number of coins earned per dollar is dependent on each member's annual spend with Potbelly. Coins can be redeemed for a variety of items across the Potbelly menu. The coins expire one year after they are earned. The change in program did not have a material impact on our financial statements. We defer revenue associated with the estimated selling price of points and coins earned by Potbelly Perks members towards free entrées as they are earned, and a corresponding deferred revenue liability is established in accrued expenses. The deferral is based on the estimated value of the unredeemed points and rewards. The estimated value and the estimated redemption rates are based on a historical data analysis of loyalty reward redemptions. Estimated breakage is recognized in net shop sandwich sales in the consolidated statement of operations. When points and coins are redeemed, we recognize revenue for the redeemed product and reduce accrued expenses. Contract Liabilities We record current and noncurrent contract liabilities in accrued expenses and other long-term liabilities, respectively, for initial franchise fees, gift cards, and loyalty programs. We have no other contract liabilities or contract assets recorded. The opening and closing balances of our current and noncurrent contract liabilities from contracts with customers were as follows: Current Contract Liability Noncurrent Contract Liability Beginning balance as of December 31, 2023 $ 8,028 $ 4,397 Ending balance as of June 30, 2024 8,229 5,701 Increase in contract liability $ 201 $ 1,304 The aggregate value of remaining performance obligations on outstanding contracts was $13.9 million as of June 30, 2024. We expect to recognize revenue related to contract liabilities as follows, which may vary based upon franchise activity as well as gift card and loyalty program redemption patterns: Years Ending Amount 2024 $ 5,752 2025 2,231 2026 869 2027 605 2028 683 Thereafter 3,789 Total revenue recognized $ 13,929 For the quarter and year to date ended June 30, 2024, the amount of revenue recognized related to the December 31, 2023 liability ending balance was $1.9 million and $4.3 million, respectively. For the quarter and year to date ended June 25, 2023, the amount of revenue recognized related to the December 25, 2022 liability ending balance was $0.6 million and $2.0 million, respectively. This revenue is related to the recognition of gift card redemptions and upfront franchise fees. For the quarters ended June 30, 2024 and June 25, 2023, we did not recognize any revenue from obligations satisfied (or partially satisfied) in prior periods. Contract Costs Deferred contract costs, which include sales commissions and market planning costs, totaled $1.1 million and $0.9 million as of June 30, 2024 and December 31, 2023, respectively. For the quarter and year to date ended June 30, 2024, amortization expense for deferred costs was $42 thousand and $68 thousand, respectively. For the quarter and year to date ended June 25, 2023, amortization expense for deferred costs was $9 thousand and $36 thousand, respectively. There was no impairment loss in relation to the costs capitalized for the periods presented. |
Fair Value Measurement
Fair Value Measurement | 6 Months Ended |
Jun. 30, 2024 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | Fair Value Measurement The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and all other current liabilities approximate fair values due to the short maturities of these balances. We apply fair value accounting for all financial assets and liabilities and nonfinancial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities that are required to be recorded at fair value, we assume the highest and best use of the asset by market participants in which we would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions, and credit risk. We apply the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels, and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: • Level 1 — Quoted prices in active markets for identical assets or liabilities. • Level 2 — Observable inputs other than quoted prices in active markets for identical assets or liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3 — Inputs that are both unobservable and significant to the overall fair value measurement reflect an entity’s estimates of assumptions that market participants would use in pricing the asset or liability. The following table presents information about our financial assets that were measured at fair value on a recurring basis and indicates the level of the fair value hierarchy used to determine such fair values: June 30, December 31, Assets - Level 1 Money market funds $ — $ 6,398 Financial assets measured at fair value on recurring basis $ — $ 6,398 The book value of the long-term and short-term debt under the Credit Agreement, which is further discussed in Note 8, was considered to approximate its fair value as of June 30, 2024, as the interest rates are considered in line with current market rates. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis Assets recognized or disclosed at fair value on the condensed consolidated financial statements on a nonrecurring basis include items such as leasehold improvements, property and equipment, operating lease assets, goodwill, and other intangible assets. These assets are measured at fair value if determined to be impaired. We assess potential impairments to our long-lived assets, which includes property and equipment and lease right-of-use assets, on a quarterly basis or whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. Shop-level assets and right-of-use assets are grouped at the individual shop-level for the purpose of the impairment assessment. Recoverability of an asset group is measured by a comparison of the carrying amount of an asset group to its estimated undiscounted future cash flows expected to be generated by the asset group. If the carrying amount of the asset group exceeds its estimated undiscounted future cash flows, an impairment charge is recognized as the amount by which the carrying amount of the asset group exceeds the fair value of the asset group. The fair value of the shop assets is determined using the discounted future cash flow method of anticipated cash flows through the shop’s lease-end date using fair value measurement inputs classified as Level 3. The fair value of right-of-use assets is estimated using market comparative information for similar properties. Level 3 inputs are derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. After performing a periodic review of our shops during the quarter and year to date ended June 30, 2024, it was determined that indicators of impairment were present for certain shops as a result of continued underperformance. We performed an impairment analysis related to these shops and recorded impairment charges of $0.4 million and $0.6 million for the quarter and year to date ended June 30, 2024, respectively. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2024 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings 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. The following table summarizes the earnings per share calculation: For the Quarter Ended For the Year to Date Ended June 30, June 25, June 30, June 25, Net income attributable to Potbelly Corporation $ 34,712 $ 2,216 $ 31,945 $ 890 Weighted average common stock outstanding-basic 29,926 29,199 29,903 29,053 Plus: Effect of potentially dilutive stock-based compensation awards 425 467 499 360 Plus: Effect of potential warrant exercise 363 422 440 363 Weighted average common shares outstanding-diluted 30,714 30,088 30,842 29,776 Income per share available to common stockholders-basic $ 1.16 $ 0.08 $ 1.07 $ 0.03 Income per share available to common stockholders-diluted $ 1.13 $ 0.07 $ 1.04 $ 0.03 Potentially dilutive shares that are considered anti-dilutive: Shares 457 433 223 633 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2024 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes 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. We regularly assess the need for a valuation allowance related to our deferred tax assets, which includes consideration of both positive and negative evidence related to the likelihood of realization of such deferred tax assets to determine, based on the weight of the available evidence, whether it is more likely than not that some or all of our deferred tax assets will not be realized. In our assessment, we consider recent financial operating results, projected future taxable income, the reversal of existing taxable differences, and tax planning strategies. We recorded a full valuation allowance against our net deferred tax assets during the first quarter of 2019, and until the quarter ended June 30, 2024, we have continued to maintain a full valuation allowance because it was been deemed more likely than not that the deferred tax assets would not be realized. As of the quarter ended June 30, 2024, based on all available positive and negative evidence, including taxable income generated in recent periods and forecasts of taxable income in future periods, we concluded that it was more likely than not that we will be able to utilize our U.S. federal and state deferred tax assets, except for a portion related to certain states where the allowable carryforward period is expected to limit our ability to fully utilize them. As a result of this, we released the valuation allowance for all of our U.S. federal deferred tax assets and a portion of our state deferred tax assets during the quarter ended June 30, 2024, resulting in an income tax benefit of $31.3 million. In determining the amount of deferred tax assets that are more likely than not to be realized, we evaluated the potential to realize the assets through future taxable income and the reversal of existing taxable temporary differences. Based on this analysis, we retained a valuation allowance of $0.1 million as of June 30, 2024. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2024 | |
Leases [Abstract] | |
Leases | Leases We determine if an arrangement is a lease at inception of the arrangement. We lease retail shops, warehouse and office space under operating leases. Our leases generally have terms of ten years and most include options to extend the leases for additional five-year periods. For leases with renewal periods at our option, we determine the expected lease period based on whether the renewal of any options are reasonably assured at the inception of the lease. In addition, we lease certain properties from third parties that we sublease to franchisees. We remain primarily liable to the landlord for the performance of all obligations in the event that the sublessee does not perform its obligations under the lease. All of our subleases are classified as operating leases with fixed and variable income. Lessee Disclosures The gains and losses recognized upon lease terminations are recorded in impairment, loss on disposal of property and equipment and shop closures in the condensed consolidated statement of operations. The right-of use assets, liabilities and gains/losses recognized upon termination of lease contracts were as follows (in thousands, except for number of leases terminated): For the Year to Date Ended June 30, June 25, Leases terminated 1 — Lease termination fees $ 200 — Right-of-use assets derecognized upon lease termination $ 416 — Lease liabilities derecognized upon lease termination $ 506 — Loss recognized upon lease termination $ (110) $ — The weighted average operating lease term and discount rate were as follows: June 30, June 25, Weighted average remaining lease term (years) 6.25 6.35 Weighted average discount rate 9.79 % 8.44 % Certain of our operating lease agreements include variable payments that are passed through by the landlord, such as common area maintenance and real estate taxes, as well as variable payments based on percentage rent for certain of our shops. Pass-through charges and payments based on percentage rent are included within variable lease cost. The components of lease cost were as follows, which are included in occupancy, general and administrative and franchise support, rent and marketing expense: For the Quarter Ended For the Year to Date Ended June 30, June 25, June 30, June 25, Operating lease cost $ 9,635 $ 9,982 $ 19,473 20,175 Variable lease cost 4,241 3,824 $ 7,570 7,364 Short-term lease cost 71 62 $ 172 157 Total lease cost $ 13,947 $ 13,868 $ 27,215 27,696 Supplemental disclosures of cash flow information related to leases were as follows: For the Quarter Ended For the Year to Date Ended June 30, June 25, June 30, June 25, Operating cash flows rent paid for operating lease liabilities $ 11,086 $ 10,508 $ 21,834 $ 21,206 Operating right-of-use assets obtained in exchange for new operating lease liabilities $ 8,178 $ 1,368 $ 9,360 $ 4,252 Reduction in operating right-of-use assets due to lease modifications $ 2,331 $ 859 $ 3,007 $ 859 Maturities of lease liabilities were as follows as of June 30, 2024: Operating Leases Remainder of 2024 $ 17,748 2025 40,586 2026 36,713 2027 31,076 2028 24,486 2029 19,024 Thereafter 46,536 Total lease payments 216,169 Less: imputed interest (59,408) Present value of lease liabilities $ 156,761 As of June 30, 2024, we had no significant real estate leases entered into that had not yet commenced. Lessor Disclosures The components of lease income were as follows (amount in thousands, except number of subleases): For the Quarter Ended For the Year to Date Ended June 30, June 25, June 30, June 25, Number of subleases 34 8 34 8 Operating lease income $ 949 $ 480 $ 1,960 $ 600 Variable lease income 449 25 814 38 Franchise rent income (a) $ 1,398 $ 505 $ 2,774 $ 638 ______________________________ (a) Amounts included in franchise royalties, fees and rent income in the condensed consolidated statement of operations. We incurred $1.4 million and $2.8 million in expenses during the quarter and year to date ended June 30, 2024, respectively, associated with these leases, which are included in franchise support, rent and marketing expenses in the condensed consolidated statement of operations from the inception of the related sublease agreements. We incurred $0.6 million and $0.7 million in expenses during the quarter and year to date ended June 25, 2023, respectively, associated with these leases. Future expected fixed sublease payments from franchisees to Potbelly were as follows at June 30, 2024: Operating Leases Remainder of 2024 $ 2,049 2025 4,006 2026 3,104 2027 2,094 2028 1,703 Thereafter 3,881 Total sublease payments $ 16,837 |
Leases | Leases We determine if an arrangement is a lease at inception of the arrangement. We lease retail shops, warehouse and office space under operating leases. Our leases generally have terms of ten years and most include options to extend the leases for additional five-year periods. For leases with renewal periods at our option, we determine the expected lease period based on whether the renewal of any options are reasonably assured at the inception of the lease. In addition, we lease certain properties from third parties that we sublease to franchisees. We remain primarily liable to the landlord for the performance of all obligations in the event that the sublessee does not perform its obligations under the lease. All of our subleases are classified as operating leases with fixed and variable income. Lessee Disclosures The gains and losses recognized upon lease terminations are recorded in impairment, loss on disposal of property and equipment and shop closures in the condensed consolidated statement of operations. The right-of use assets, liabilities and gains/losses recognized upon termination of lease contracts were as follows (in thousands, except for number of leases terminated): For the Year to Date Ended June 30, June 25, Leases terminated 1 — Lease termination fees $ 200 — Right-of-use assets derecognized upon lease termination $ 416 — Lease liabilities derecognized upon lease termination $ 506 — Loss recognized upon lease termination $ (110) $ — The weighted average operating lease term and discount rate were as follows: June 30, June 25, Weighted average remaining lease term (years) 6.25 6.35 Weighted average discount rate 9.79 % 8.44 % Certain of our operating lease agreements include variable payments that are passed through by the landlord, such as common area maintenance and real estate taxes, as well as variable payments based on percentage rent for certain of our shops. Pass-through charges and payments based on percentage rent are included within variable lease cost. The components of lease cost were as follows, which are included in occupancy, general and administrative and franchise support, rent and marketing expense: For the Quarter Ended For the Year to Date Ended June 30, June 25, June 30, June 25, Operating lease cost $ 9,635 $ 9,982 $ 19,473 20,175 Variable lease cost 4,241 3,824 $ 7,570 7,364 Short-term lease cost 71 62 $ 172 157 Total lease cost $ 13,947 $ 13,868 $ 27,215 27,696 Supplemental disclosures of cash flow information related to leases were as follows: For the Quarter Ended For the Year to Date Ended June 30, June 25, June 30, June 25, Operating cash flows rent paid for operating lease liabilities $ 11,086 $ 10,508 $ 21,834 $ 21,206 Operating right-of-use assets obtained in exchange for new operating lease liabilities $ 8,178 $ 1,368 $ 9,360 $ 4,252 Reduction in operating right-of-use assets due to lease modifications $ 2,331 $ 859 $ 3,007 $ 859 Maturities of lease liabilities were as follows as of June 30, 2024: Operating Leases Remainder of 2024 $ 17,748 2025 40,586 2026 36,713 2027 31,076 2028 24,486 2029 19,024 Thereafter 46,536 Total lease payments 216,169 Less: imputed interest (59,408) Present value of lease liabilities $ 156,761 As of June 30, 2024, we had no significant real estate leases entered into that had not yet commenced. Lessor Disclosures The components of lease income were as follows (amount in thousands, except number of subleases): For the Quarter Ended For the Year to Date Ended June 30, June 25, June 30, June 25, Number of subleases 34 8 34 8 Operating lease income $ 949 $ 480 $ 1,960 $ 600 Variable lease income 449 25 814 38 Franchise rent income (a) $ 1,398 $ 505 $ 2,774 $ 638 ______________________________ (a) Amounts included in franchise royalties, fees and rent income in the condensed consolidated statement of operations. We incurred $1.4 million and $2.8 million in expenses during the quarter and year to date ended June 30, 2024, respectively, associated with these leases, which are included in franchise support, rent and marketing expenses in the condensed consolidated statement of operations from the inception of the related sublease agreements. We incurred $0.6 million and $0.7 million in expenses during the quarter and year to date ended June 25, 2023, respectively, associated with these leases. Future expected fixed sublease payments from franchisees to Potbelly were as follows at June 30, 2024: Operating Leases Remainder of 2024 $ 2,049 2025 4,006 2026 3,104 2027 2,094 2028 1,703 Thereafter 3,881 Total sublease payments $ 16,837 |
Debt and Credit Facilities
Debt and Credit Facilities | 6 Months Ended |
Jun. 30, 2024 | |
Debt Disclosure [Abstract] | |
Debt and Credit Facilities | Debt and Credit Facilities The components of long-term debt were as follows: June 30, December 31, Revolving Facility $ 4,000 $ — Term Loan — 22,162 Unamortized debt issuance costs — (1,744) Less: current portion of long-term debt — (1,250) Total long-term debt $ 4,000 $ 19,168 Revolving Facility On February 7, 2024, Potbelly Sandwich Works, LLC entered into a credit agreement (the “Credit Agreement”) with Wintrust Bank, N.A., as administrative agent (the “Agent”), the other loan parties party thereto and the lenders party thereto. The Credit Agreement provides for a revolving loan facility with an aggregate commitment of $30 million (the “Revolving Facility”, the commitments thereunder, the “Revolving Commitments”). Concurrently with entry into the Credit Agreement, we repaid in full and terminated the obligations and commitments of the lenders under a term loan facility described in more detail below. Proceeds from the Revolving Facility will be used for general corporate and working capital purposes. The Revolving Commitments expire on February 7, 2027. Loans under the Credit Agreement will initially bear interest, at our option, at either one-month term secured overnight financing rate ("SOFR") or the base rate plus, in each case, an applicable rate per annum, based upon the Consolidated Adjusted Leverage Ratio (as defined in the Credit Agreement). The applicable rate may vary between 3.75% and 2.75% with respect to borrowings which are based upon the one-month term SOFR and between 2.25% and 1.25% with respect to borrowings which are based upon the base rate. The applicable rate with respect to one-month term SOFR borrowings is 3.25% and the applicable rate with respect to base rate borrowings is 1.75%, based upon ratios calculated in the most recent compliance certificate for the fiscal quarter ending on March 31, 2024. We may prepay the Revolving Commitments at any time and from time to time in whole or in part without premium or penalty, subject to prior notice in accordance with the Credit Agreement. Subject to certain customary exceptions, obligations under the Credit Agreement are guaranteed by the Company and all of the Company’s current and future wholly-owned material domestic subsidiaries and are secured by a first-priority security interest in substantially all of the assets of the Company and its subsidiary guarantors. The Credit Agreement contains customary representations and affirmative and negative covenants. Among other things, these covenants restrict our ability to incur certain indebtedness and liens, undergo certain mergers, consolidations and certain other fundamental changes, make certain investments, make certain dispositions and acquisitions, enter into sale and leaseback transactions, enter into certain swap transactions, make certain restricted payments (including certain payment of dividends, repurchases of stock and payments on certain indebtedness), engage in certain transactions with affiliates, enter into certain types of restricted agreements, make certain changes to its organizational documents and indebtedness, and use the proceeds of the Revolving Commitments for certain non-permitted uses. In addition, the Credit Agreement requires that we maintain compliance with certain minimum fixed charge coverage ratios and maximum consolidated leverage ratios as set forth in the Credit Agreement. The Credit Agreement also contains customary events of default. If an event of default occurs, the Agent and lenders are entitled to take various actions, including the acceleration of amounts due under the Credit Agreement, termination of commitments thereunder and all other actions permitted to be taken by a secured creditor. Since the execution of the Credit Agreement, we have been in compliance with all terms and covenants. Term Loan On February 7, 2023 (the “Closing Date”), we entered into a credit and guaranty agreement (the “Term Loan Credit Agreement”) with Sagard Holdings Manager LP as administrative agent. The Term Loan Credit Agreement provides for a term loan facility with an aggregate commitment of $25 million (the “Term Loan”). Concurrent with entry into the Term Loan Credit Agreement, we repaid in full and terminated the obligations and commitments under our former senior secured credit facility (the “Former Credit Facility”). In connection with entering into the Term Loan Credit Agreement, we paid $2.2 million in debt issuance costs, all of which were capitalized. The remaining proceeds from the Term Loan were used to pay related transaction fees and expenses, and for general corporate purposes. The Term Loan Credit Agreement was scheduled to mature on February 7, 2028. We were required to make principal payments equal to 1.25% of the initial principal of the Term Loan on the last business day of each fiscal quarter. If not previously paid, any remaining principal balance would be due on the maturity date. Loans under the Term Loan Credit Agreement bore interest, at the Company’s option, at either the term SOFR plus 9.25% per annum or base rate plus 8.25% per annum. The Term Loan could be prepaid in agreed-upon minimum principal amounts, subject to prepayment fees equal to (a) if the prepayment occurred on or prior to the one (1) year anniversary of the Closing Date, a customary make-whole amount plus 3.00% of the outstanding principal balance of the Term Loan, (b) if the prepayment occurred after such one (1) year anniversary and prior to the two (2) year anniversary of the Closing Date, 3.00% of the outstanding principal balance of the Term Loan, (c) if the prepayment occurred after such second anniversary of the Closing Date and prior to the three (3) year anniversary of the Closing Date 1.00% of the outstanding principal balance of the Term Loan and (d) thereafter, no prepayment fee. On February 7, 2024, we repaid in full and terminated the obligations and commitments under the Term Loan Credit Agreement. As a result of repaying and terminating the Term Loan, we recognized a loss on extinguishment of debt of $2.4 million for the year to date ended June 30, 2024. Former Credit Facility On August 7, 2019, we entered into a second amended and restated revolving credit facility agreement (the "Former Credit Agreement") with JPMorgan Chase Bank, N.A. (“JPMorgan”). The Former Credit Agreement amends and restates that certain amended and restated revolving credit facility agreement, dated as of December 9, 2015, and amended on May 3, 2019 (collectively, the "Prior Credit Agreement") with JPMorgan. The Former Credit Agreement provided, among other things, for a revolving credit facility in a maximum principal amount $40 million, with possible future increases of up to $20 million under an expansion feature. Borrowings under the credit facility generally bore interest at our option at either (i) a eurocurrency rate determined by reference to the applicable LIBOR rate plus a specified margin or (ii) a prime rate as announced by JP Morgan plus a specified margin. The applicable margin was determined based upon our consolidated total leverage ratio. On the last day of each calendar quarter, we were required to pay a commitment fee of 0.20% per annum in respect of any unused commitments under the credit facility. As disclosed in our Annual Report on Form 10-K for the fiscal year ended December 25, 2022, we subsequently amended the Former Credit Agreement during fiscal years 2020, 2021 and 2022. The Former Credit Agreement provided for a revolving credit facility in a maximum principal amount of $25 million following these amendments. |
Franchise Growth Acceleration I
Franchise Growth Acceleration Initiative | 6 Months Ended |
Jun. 30, 2024 | |
Other Industries [Abstract] | |
Franchise Growth Acceleration Initiative | Franchise Growth Acceleration Initiative The following is a summary of the refranchising activities recorded as a result of the Franchise Growth Acceleration Initiative during the quarter and year to date ended June 30, 2024 and June 25, 2023 (amounts in thousands, except number of shops): For the Quarter Ended For the Year to Date Ended June 30, June 25, June 30, June 25, Number of shops sold to franchisees 1 — 1 8 Proceeds from sale of company-operated shops $ 167 $ — $ 167 $ 100 Net assets sold (188) — (188) (512) Goodwill related to the company-operated shops sold to franchisee (3) — (3) (21) Loss on sale of company-operated shops, net (24) — (24) (433) Adjustment to recognize held-for-sale assets at fair value — — (30) (503) Other expenses (a) (4) (14) (107) (27) Loss on Franchise Growth Acceleration Initiative activities $ (28) $ (14) (161) $ (963) ______________________________ (a) These costs primarily include professional service fees, repairs and maintenance and travel expenses incurred to execute the refranchise transaction. |
Capital Stock
Capital Stock | 6 Months Ended |
Jun. 30, 2024 | |
Equity [Abstract] | |
Capital Stock | Capital Stock On May 8, 2018, we announced that our Board of Directors authorized a stock repurchase program for up to $65.0 million of our outstanding common stock ("2018 Repurchase Program"). For the quarter and year to date ended June 30, 2024, we did not repurchase any shares of our common stock under the 2018 Repurchase Program. The 2018 Repurchase Program was terminated on May 7, 2024. On May 7, 2024, our Board of Directors authorized a stock repurchase program for up to $20.0 million of our outstanding common stock at any time during the next three years ("2024 Repurchase Program"). This program replaces the 2018 Repurchase Program, which was terminated upon execution of the 2024 Repurchase Program. The program permits us, from time to time, to purchase shares in the open market (including in pre-arranged stock trading plans in accordance with the guidelines specified in Rule 10b5-1 under the Securities and Exchange Act of 1934, as amended (the "Exchange Act") 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. Repurchases may be started or stopped at any time without prior notice depending on market conditions and other factors. For the quarter and year to date ended June 30, 2024, we repurchased 86,445 shares of our common stock under the 2024 Repurchase Program for an aggregate of $0.7 million, 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. On February 9, 2021, we closed on a Securities Purchase Agreement (the "SPA") for the sale by us of 3,249,668 shares of our common stock at a par value of $0.01 per share and the issuance of warrants to purchase 1,299,861 shares of common stock at an exercise price of $5.45 per warrant for gross proceeds of $16.0 million, before deducting placement agent fees and offering expenses of $1.0 million. The warrants are currently exercisable until August 12, 2026. The proceeds received from the SPA were allocated between shares and warrants based on their relative fair values at closing. The warrants were valued utilizing the Black-Scholes method. No warrants were exercised for the quarter ended June 30, 2024. For year to date ended June 30, 2024, 240,187 warrants were exercised at the exercise price of $5.45 per warrant. During the quarter and year to date ended June 25, 2023, 17,505 and 176,272 warrants were exercised at the exercise price of $5.45 per warrant. As of June 30, 2024 and June 25, 2023, we had 883,402 and 1,123,589 warrants outstanding, respectively, that are exercisable through August 12, 2026. On November 3, 2021, we entered into a certain Equity Sales Agreement (the "Sales Agreement") with William Blair & Company, L.L.C., as agent ("William Blair") pursuant to which we may sell shares of our common stock having an aggregate offering price of up to $40.0 million (the "Shares"), from time to time, in our sole discretion, through an "at the market" equity offering program under which William Blair will act as sales agent. As of June 30, 2024, we have not sold any Shares under the Sales Agreement. |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Stock options We have awarded stock options to certain employees including our senior leadership team. The number of options and exercise price of each option is determined by an independent committee designated by our Board of Directors. The options granted are generally exercisable over a 10-year period from the date of the grant. Outstanding options expire on various dates through the year 2028. The range of exercise prices for the outstanding options as of June 30, 2024 is $12.90 and $13.73 per option, and the options generally vest in one-fourth and one-fifth increments over four A summary of stock option activity for the year to date ended June 30, 2024 is as follows: Options Shares Weighted Average Exercise Price Aggregate Intrinsic Value Weighted Average Remaining Term (Years) Outstanding—December 31, 2023 122 $ 13.71 $ — 1.44 Granted — — Exercised — — Canceled (64) 14.21 Outstanding—June 30, 2024 58 $ 13.16 $ — 2.36 Exercisable—June 30, 2024 58 $ 13.16 $ — 2.36 Stock-based compensation related to stock options is measured at the grant date based on the calculated fair value of the award, and is recognized as expense over the requisite employee service period, which is generally the vesting period of the grant with a corresponding increase to additional paid-in capital. We did not recognize stock-based compensation expense related to stock options for the quarter and year to date ended June 30, 2024 or the quarter and year to date ended June 25, 2023. As of June 30, 2024, we had no unrecognized stock-based compensation expense related to stock options. We record stock-based compensation expense within general and administrative expenses in the condensed consolidated statements of operations. Restricted stock units We award restricted stock units ("RSUs") to certain employees and certain non-employee members of our Board of Directors. Grants of RSUs to our Board of Directors fully vest on the first anniversary of the grant date, or upon termination from the Board of Directors for any reason other than for cause, a pro rata portion of the shares vest on the termination date. The employee grants generally vest in one-third increments over a three-year period. A summary of RSU activity for the quarter ended June 30, 2024 is as follows: RSUs Number of RSUs Weighted Average Fair Value per Share Non-vested as of December 31, 2023 801 $ 7.18 Granted 409 10.09 Vested (378) 7.45 Canceled (23) 8.02 Non-vested as of June 30, 2024 809 $ 8.50 For the quarter and year to date ended June 30, 2024, we recognized stock-based compensation expense related to RSUs of $1.1 million and $1.9 million, respectively. For the quarter and year to date ended June 25, 2023, we recognized stock-based compensation expense related to RSUs of $1.0 million and $1.6 million, respectively. As of June 30, 2024, unrecognized stock-based compensation expense for RSUs was $6.1 million, which will be recognized through the second quarter of 2027. Performance stock units We award performance stock units ("PSUs") to certain of our employees. We have PSUs that have certain vesting conditions based upon our stock price and relative stock performance. Because these PSUs are subject to service and market vesting conditions, we determine the fair market value of each grant using a Monte Carlo simulation model. Participants are entitled to receive a specified number of shares of our common stock contingent on achievement of a stock return on our common stock. For the quarter and year to date ended June 30, 2024, we recognized stock-based compensation expense for PSUs with market vesting conditions of $0.4 million and $1.3 million, respectively. For the quarter and year to date ended June 25, 2023, we recognized stock-based compensation expense for PSUs with market vesting conditions of $0.3 million and $0.6 million, respectively. As of June 30, 2024, unrecognized stock-based compensation expense for PSUs was $4.2 million, which will be recognized through the second quarter of 2027. A summary of activity for PSUs with market vesting conditions for the year to date ended June 30, 2024 is as follows: PSUs Number of PSUs Weighted Average Fair Value per Share Non-vested as of December 31, 2023 513 $ 9.59 Granted 212 12.08 Vested (232) 7.11 Canceled — — Non-vested as of June 30, 2024 493 $ 11.83 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies We are subject to legal proceedings, claims and liabilities, such as employment-related claims and slip and fall cases, which arise in the ordinary course of business and are generally covered by insurance. We accrue for such liabilities when it is probable that future costs will be incurred and such costs can be reasonably estimated. Such accruals are based on developments to date, our estimates of the outcomes of these matters and our experience in contesting, litigating and settling other similar matters. In the opinion of management, the amount of ultimate liability with respect to those actions should not have a material adverse impact on our financial position or results of operations and cash flows. Many of the food products we purchase are subject to changes in the price and availability of food commodities, including, among other things, beef, poultry, grains, dairy and produce. We work with our suppliers and use a mix of forward pricing protocols for certain items including agreements with our supplier on fixed prices for deliveries at a time in the future and agreements on a fixed price with our suppliers for the duration of those protocols. We also utilize formula pricing protocols under which the prices we pay are based on a specified formula related to the prices of the goods, such as spot prices. Our use of any forward pricing arrangements varies substantially from time to time and these arrangements tend to cover relatively short periods (i.e., typically twelve months or less). Such contracts are used in normal purchases of our food products and not for speculative purposes, and as such are not required to be evaluated as derivative instruments. During the quarter ended March 31, 2024, we executed a settlement agreement with a third-party software provider. The settlement resulted in a gain of approximately $1.1 million in our consolidated statement of operations which is included in both Labor and Related Expenses and Other Operating Expenses since the settlement related to costs that had previously been reported in those categories. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 25, 2023 | Jun. 30, 2024 | Jun. 25, 2023 | |
Pay vs Performance Disclosure | ||||
Net income attributable to Potbelly Corporation | $ 34,712 | $ 2,216 | $ 31,945 | $ 890 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Jun. 30, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Organization and Other Matters
Organization and Other Matters (Policies) | 6 Months Ended |
Jun. 30, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business | Business |
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 and its subsidiaries and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2023. The unaudited condensed consolidated financial statements included herein have been prepared by us without audit, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the "SEC") regarding interim financial reporting. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP") have been condensed or omitted pursuant to the SEC rules and regulations. In the opinion of management, the accompanying condensed consolidated financial statements contain all adjustments necessary to present fairly the financial position, results of operations and cash flows for the interim periods reported within. The condensed consolidated statements of operations for the interim periods presented herein are not necessarily indicative of the results to be expected for the full year. We do not have any components of other comprehensive income recorded within our consolidated financial statements and therefore, do not separately present a statement of comprehensive income in our condensed consolidated financial statements. |
Principles of Consolidation | Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts of Potbelly; its wholly-owned subsidiary, Potbelly Illinois, Inc. (“PII”); PII’s wholly-owned subsidiaries, Potbelly Franchising, LLC and Potbelly Sandwich Works, LLC (“PSW”); seven of PSW’s wholly-owned subsidiaries and PSW’s six joint ventures, collectively, the “Company.” All intercompany balances and transactions have been eliminated in consolidation. For our six consolidated joint ventures, "non-controlling interest" represents the non-controlling partner’s share of the assets, liabilities and operations related to the joint venture investments. Potbelly has ownership interests ranging from 51-80% in these consolidated joint ventures. |
Fiscal Year | Fiscal Year |
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 In November 2023, the Financial Accounting Standard Board ("FASB") issued guidance to expand annual and interim disclosure requirements for reportable segments, primarily through additional disclosures on segment expenses. We will adopt the accounting guidance in our Annual Report on Form 10-K for the year ended December 29, 2024. We do not anticipate the updated standard will have a material impact on our financial statement disclosures. In December 2023, the FASB issued guidance to enhance transparency of income tax disclosures. The updated guidance requires additional disclosures on income tax rate reconciliation and income taxes paid, among other things. We will adopt the accounting guidance in our Annual Report on Form 10-K for the year ended December 28, 2025. We are currently evaluating the impact that the updated standard will have on our financial statement disclosures. |
Revenue | We primarily earn revenue at a point in time for sandwich shop sales, which can occur in person at a shop, through our online or app platform, or through a third-party platform. Sales taxes collected from customers are excluded from revenues and the obligation is included in accrued liabilities until the taxes are remitted to the appropriate taxing authorities. We have other revenue generating activities where revenue is generally recognized over time, as outlined below. Franchise Royalties and Fees We earn an initial franchise fee, a franchise development agreement fee and ongoing royalty fees and support fees under our franchise agreements. Initial franchise fees are considered highly dependent upon and interrelated with the franchise right granted in the franchise agreement. As such, these franchise fees are recognized over the contractual term of the franchise agreement. We record a contract liability for the unearned portion of the initial franchise fees. Franchise development agreement fees represent the exclusivity rights for a geographical area paid by a third party to develop Potbelly shops for a certain period of time. Franchise development agreement fee payments received by us are recorded in the condensed consolidated balance sheets as accrued expenses or other long-term liabilities, and amortized over the term of the franchise agreement once the shops are opened. These franchise fees are considered highly dependent upon and interrelated with the franchise right granted in the franchise agreement. Royalty fees and Brand Fund contributions are based on a percentage of sales and are recorded as revenue as they are earned and become receivable from the franchisee. Other support fees, which primarily include fees for software and technology, are recorded as revenue as the fees are earned and the service is provided to the franchise. Revenue from support fees are recognized gross of the related expenses since we are the principal in the arrangement to provide those services. Gift Card Redemptions / Breakage Revenue Potbelly sells gift cards to customers, records the sale as a contract liability and recognizes the associated revenue as the gift card is redeemed. A portion of these gift cards are not redeemed by the customer ("breakage"), which is recognized as revenue as a percentage of customers gift card redemptions. The expected breakage amount recognized is determined by a historical data analysis on gift card redemption patterns. We recognize gift card breakage income within sandwich shop sales, net in the condensed consolidated statements of operations. We offer a customer loyalty program for customers using the Potbelly Perks application at the point of sale. In January 2024, we enhanced our Potbelly Perks program to provide more reward options and flexibility for members. Under the original program, the customer would earn 10 points for every dollar spent, and the customer would earn a free entrée after earning 1,000 points. Once a customer earned a free entrée, that entrée reward expires after 30 days. Under the enhanced program, Potbelly Perks members will earn 10 or more coins, the equivalent of points under the legacy program, for every dollar they spend. The number of coins earned per dollar is dependent on each member's annual spend with Potbelly. Coins can be redeemed for a variety of items across the Potbelly menu. The coins expire one year after they are earned. The change in program did not have a material impact on our financial statements. We defer revenue associated with the estimated selling price of points and coins earned by Potbelly Perks members towards free entrées as they are earned, and a corresponding deferred revenue liability is established in accrued expenses. The deferral is based on the estimated value of the unredeemed points and rewards. The estimated value and the estimated redemption rates are based on a historical data analysis of loyalty reward redemptions. Estimated breakage is recognized in net shop sandwich sales in the consolidated statement of operations. When points and coins are redeemed, we recognize revenue for the redeemed product and reduce accrued expenses. Contract Liabilities We record current and noncurrent contract liabilities in accrued expenses and other long-term liabilities, respectively, for initial franchise fees, gift cards, and loyalty programs. We have no other contract liabilities or contract assets recorded. |
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. We apply fair value accounting for all financial assets and liabilities and nonfinancial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities that are required to be recorded at fair value, we assume the highest and best use of the asset by market participants in which we would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions, and credit risk. We apply the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels, and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: • Level 1 — Quoted prices in active markets for identical assets or liabilities. • Level 2 — Observable inputs other than quoted prices in active markets for identical assets or liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3 — Inputs that are both unobservable and significant to the overall fair value measurement reflect an entity’s estimates of assumptions that market participants would use in pricing the asset or liability. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis Assets recognized or disclosed at fair value on the condensed 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. |
Restricted Cash (Tables)
Restricted Cash (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of Cash and Cash Equivalents | The reconciliation of cash and cash equivalents and restricted cash presented in the condensed consolidated balance sheets to the total amount shown in our condensed consolidated statements of cash flows is as follows: June 30, December 31, Reconciliation of cash, cash equivalents and restricted cash: Cash and cash equivalents $ 8,322 $ 33,788 Restricted cash, noncurrent 749 749 Total cash, cash equivalents and restricted cash shown on statement of cash flows $ 9,071 $ 34,537 |
Restrictions on Cash and Cash Equivalents | The reconciliation of cash and cash equivalents and restricted cash presented in the condensed consolidated balance sheets to the total amount shown in our condensed consolidated statements of cash flows is as follows: June 30, December 31, Reconciliation of cash, cash equivalents and restricted cash: Cash and cash equivalents $ 8,322 $ 33,788 Restricted cash, noncurrent 749 749 Total cash, cash equivalents and restricted cash shown on statement of cash flows $ 9,071 $ 34,537 |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Current and Noncurrent Contract Liabilities from Contracts with Customers | The opening and closing balances of our current and noncurrent contract liabilities from contracts with customers were as follows: Current Contract Liability Noncurrent Contract Liability Beginning balance as of December 31, 2023 $ 8,028 $ 4,397 Ending balance as of June 30, 2024 8,229 5,701 Increase in contract liability $ 201 $ 1,304 |
Summary of Expected Revenue Recognition Related to Contract Liabilities | We expect to recognize revenue related to contract liabilities as follows, which may vary based upon franchise activity as well as gift card and loyalty program redemption patterns: Years Ending Amount 2024 $ 5,752 2025 2,231 2026 869 2027 605 2028 683 Thereafter 3,789 Total revenue recognized $ 13,929 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets Measured on Recurring Basis | The following table presents information about our financial assets that were measured at fair value on a recurring basis and indicates the level of the fair value hierarchy used to determine such fair values: June 30, December 31, Assets - Level 1 Money market funds $ — $ 6,398 Financial assets measured at fair value on recurring basis $ — $ 6,398 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Earnings Per Share [Abstract] | |
Summary of Earnings Per Share Calculation | The following table summarizes the earnings per share calculation: For the Quarter Ended For the Year to Date Ended June 30, June 25, June 30, June 25, Net income attributable to Potbelly Corporation $ 34,712 $ 2,216 $ 31,945 $ 890 Weighted average common stock outstanding-basic 29,926 29,199 29,903 29,053 Plus: Effect of potentially dilutive stock-based compensation awards 425 467 499 360 Plus: Effect of potential warrant exercise 363 422 440 363 Weighted average common shares outstanding-diluted 30,714 30,088 30,842 29,776 Income per share available to common stockholders-basic $ 1.16 $ 0.08 $ 1.07 $ 0.03 Income per share available to common stockholders-diluted $ 1.13 $ 0.07 $ 1.04 $ 0.03 Potentially dilutive shares that are considered anti-dilutive: Shares 457 433 223 633 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Leases [Abstract] | |
Schedule of Gain (Loss) Recognized Upon Termination of Lease Contracts | The right-of use assets, liabilities and gains/losses recognized upon termination of lease contracts were as follows (in thousands, except for number of leases terminated): For the Year to Date Ended June 30, June 25, Leases terminated 1 — Lease termination fees $ 200 — Right-of-use assets derecognized upon lease termination $ 416 — Lease liabilities derecognized upon lease termination $ 506 — Loss recognized upon lease termination $ (110) $ — |
Schedule of Weighted Average Lease Terms and Discount Rates | The weighted average operating lease term and discount rate were as follows: June 30, June 25, Weighted average remaining lease term (years) 6.25 6.35 Weighted average discount rate 9.79 % 8.44 % |
Components of Lease Cost | The components of lease cost were as follows, which are included in occupancy, general and administrative and franchise support, rent and marketing expense: For the Quarter Ended For the Year to Date Ended June 30, June 25, June 30, June 25, Operating lease cost $ 9,635 $ 9,982 $ 19,473 20,175 Variable lease cost 4,241 3,824 $ 7,570 7,364 Short-term lease cost 71 62 $ 172 157 Total lease cost $ 13,947 $ 13,868 $ 27,215 27,696 Supplemental disclosures of cash flow information related to leases were as follows: For the Quarter Ended For the Year to Date Ended June 30, June 25, June 30, June 25, Operating cash flows rent paid for operating lease liabilities $ 11,086 $ 10,508 $ 21,834 $ 21,206 Operating right-of-use assets obtained in exchange for new operating lease liabilities $ 8,178 $ 1,368 $ 9,360 $ 4,252 Reduction in operating right-of-use assets due to lease modifications $ 2,331 $ 859 $ 3,007 $ 859 |
Maturities of Lease Liabilities | Maturities of lease liabilities were as follows as of June 30, 2024: Operating Leases Remainder of 2024 $ 17,748 2025 40,586 2026 36,713 2027 31,076 2028 24,486 2029 19,024 Thereafter 46,536 Total lease payments 216,169 Less: imputed interest (59,408) Present value of lease liabilities $ 156,761 |
Components of Lease Income | The components of lease income were as follows (amount in thousands, except number of subleases): For the Quarter Ended For the Year to Date Ended June 30, June 25, June 30, June 25, Number of subleases 34 8 34 8 Operating lease income $ 949 $ 480 $ 1,960 $ 600 Variable lease income 449 25 814 38 Franchise rent income (a) $ 1,398 $ 505 $ 2,774 $ 638 ______________________________ (a) Amounts included in franchise royalties, fees and rent income in the condensed consolidated statement of operations. |
Maturities of Sublease Payments | Future expected fixed sublease payments from franchisees to Potbelly were as follows at June 30, 2024: Operating Leases Remainder of 2024 $ 2,049 2025 4,006 2026 3,104 2027 2,094 2028 1,703 Thereafter 3,881 Total sublease payments $ 16,837 |
Debt and Credit Facilities (Tab
Debt and Credit Facilities (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Debt Disclosure [Abstract] | |
Component of Long-term Debt | The components of long-term debt were as follows: June 30, December 31, Revolving Facility $ 4,000 $ — Term Loan — 22,162 Unamortized debt issuance costs — (1,744) Less: current portion of long-term debt — (1,250) Total long-term debt $ 4,000 $ 19,168 |
Franchise Growth Acceleration_2
Franchise Growth Acceleration Initiative (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Other Industries [Abstract] | |
Schedule of Franchise Growth Acceleration Initiative | The following is a summary of the refranchising activities recorded as a result of the Franchise Growth Acceleration Initiative during the quarter and year to date ended June 30, 2024 and June 25, 2023 (amounts in thousands, except number of shops): For the Quarter Ended For the Year to Date Ended June 30, June 25, June 30, June 25, Number of shops sold to franchisees 1 — 1 8 Proceeds from sale of company-operated shops $ 167 $ — $ 167 $ 100 Net assets sold (188) — (188) (512) Goodwill related to the company-operated shops sold to franchisee (3) — (3) (21) Loss on sale of company-operated shops, net (24) — (24) (433) Adjustment to recognize held-for-sale assets at fair value — — (30) (503) Other expenses (a) (4) (14) (107) (27) Loss on Franchise Growth Acceleration Initiative activities $ (28) $ (14) (161) $ (963) ______________________________ (a) These costs primarily include professional service fees, repairs and maintenance and travel expenses incurred to execute the refranchise transaction. |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Stock Option Activity | A summary of stock option activity for the year to date ended June 30, 2024 is as follows: Options Shares Weighted Average Exercise Price Aggregate Intrinsic Value Weighted Average Remaining Term (Years) Outstanding—December 31, 2023 122 $ 13.71 $ — 1.44 Granted — — Exercised — — Canceled (64) 14.21 Outstanding—June 30, 2024 58 $ 13.16 $ — 2.36 Exercisable—June 30, 2024 58 $ 13.16 $ — 2.36 |
Summary of RSU Activity | A summary of RSU activity for the quarter ended June 30, 2024 is as follows: RSUs Number of RSUs Weighted Average Fair Value per Share Non-vested as of December 31, 2023 801 $ 7.18 Granted 409 10.09 Vested (378) 7.45 Canceled (23) 8.02 Non-vested as of June 30, 2024 809 $ 8.50 |
Summary of PSU Activity | A summary of activity for PSUs with market vesting conditions for the year to date ended June 30, 2024 is as follows: PSUs Number of PSUs Weighted Average Fair Value per Share Non-vested as of December 31, 2023 513 $ 9.59 Granted 212 12.08 Vested (232) 7.11 Canceled — — Non-vested as of June 30, 2024 493 $ 11.83 |
Organization and Other Matter_2
Organization and Other Matters - Additional Information (Detail) | 6 Months Ended |
Jun. 30, 2024 subsidiary shop jointVenture | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |
Number of shops Potbelly Corporation owns or operates | 345 |
Number of shops franchisees operate | 84 |
Number of wholly owned subsidiaries | subsidiary | 7 |
Number of joint ventures | jointVenture | 6 |
Minimum | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |
Ownership interest rate | 51% |
Maximum | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |
Ownership interest rate | 80% |
Restricted Cash (Details)
Restricted Cash (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 | Jun. 25, 2023 | Dec. 25, 2022 |
Cash and Cash Equivalents [Abstract] | ||||
Cash and cash equivalents | $ 8,322 | $ 33,788 | ||
Restricted cash, noncurrent | 749 | 749 | ||
Total cash, cash equivalents and restricted cash shown on statement of cash flows | $ 9,071 | $ 34,537 | $ 35,010 | $ 15,619 |
Revenue - Additional Informatio
Revenue - Additional Information (Detail) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2024 USD ($) | Jun. 25, 2023 USD ($) | Jun. 30, 2024 USD ($) coin | Jun. 25, 2023 USD ($) | Dec. 31, 2023 USD ($) point | |
Disaggregation Of Revenue [Line Items] | |||||
Total revenues | $ 119,697 | $ 126,623 | $ 230,850 | $ 244,893 | |
Gift card breakage income | 200 | 200 | 500 | 400 | |
Loyalty points earned per dollar spent | point | 10 | ||||
Cost of loyalty reward (in points) | point | 1,000 | ||||
Expiration period of loyalty reward | 30 days | ||||
Aggregate value of remaining performance obligation on outstanding contracts | 13,929 | 13,929 | |||
Amount of revenue recognized | 1,900 | 600 | 4,300 | 2,000 | |
Revenue recognized related to prior periods | 0 | 0 | |||
Deferred contract costs | 1,100 | 1,100 | $ 900 | ||
Amortization expense for deferred costs | 42 | 9 | $ 68 | 36 | |
Minimum | |||||
Disaggregation Of Revenue [Line Items] | |||||
Coins earned per dollar spent | coin | 10 | ||||
Point in time sales | |||||
Disaggregation Of Revenue [Line Items] | |||||
Total revenues | 119,100 | 125,800 | $ 229,700 | 243,700 | |
Over time sales | |||||
Disaggregation Of Revenue [Line Items] | |||||
Total revenues | $ 600 | $ 800 | $ 1,100 | $ 1,200 |
Revenue - Summary of Current an
Revenue - Summary of Current and Noncurrent Contract Liabilities from Contracts with Customers (Detail) $ in Thousands | 6 Months Ended |
Jun. 30, 2024 USD ($) | |
Current Contract Liability | |
Beginning balance | $ 8,028 |
Ending balance | 8,229 |
Increase in contract liability | 201 |
Noncurrent Contract Liability | |
Beginning balance | 4,397 |
Ending balance | 5,701 |
Increase in contract liability | $ 1,304 |
Revenue - Summary of Expected R
Revenue - Summary of Expected Revenue Recognition Related to Contract Liabilities (Detail) $ in Thousands | Jun. 30, 2024 USD ($) |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, remaining performance obligations | $ 13,929 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2024-07-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, remaining performance obligations | $ 5,752 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 6 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2024-12-31 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, remaining performance obligations | $ 2,231 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2025-12-31 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, remaining performance obligations | $ 869 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2026-12-31 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, remaining performance obligations | $ 605 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2027-12-31 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, remaining performance obligations | $ 683 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2028-12-31 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, remaining performance obligations | $ 3,789 |
Revenue, remaining performance obligation, expected timing of satisfaction, period |
Fair Value Measurement - Schedu
Fair Value Measurement - Schedule of Assets Measured on Recurring Basis (Detail) - Fair Value, Recurring - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Financial assets measured at fair value on recurring basis | $ 0 | $ 6,398 |
Fair Value, Inputs, Level 1 | Money market funds | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Money market funds | $ 0 | $ 6,398 |
Fair Value Measurement - Additi
Fair Value Measurement - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2024 | Jun. 30, 2024 | |
Fair Value Disclosures [Abstract] | ||
Impairment charge | $ 0.4 | $ 0.6 |
Earnings Per Share - Summary of
Earnings Per Share - Summary of Loss Per Share Calculation (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 25, 2023 | Jun. 30, 2024 | Jun. 25, 2023 | |
Earnings Per Share [Abstract] | ||||
Net income attributable to Potbelly Corporation | $ 34,712 | $ 2,216 | $ 31,945 | $ 890 |
Weighted average common shares outstanding-basic (in shares) | 29,926 | 29,199 | 29,903 | 29,053 |
Plus: Effect of potentially dilutive stock-based compensation awards | 425 | 467 | 499 | 360 |
Plus: Effect of potential warrant exercise | 363 | 422 | 440 | 363 |
Weighted average common shares outstanding-diluted (in shares) | 30,714 | 30,088 | 30,842 | 29,776 |
Income (loss) per share available to common stockholders-basic (in USD per share) | $ 1.16 | $ 0.08 | $ 1.07 | $ 0.03 |
Income (loss) per share available to common stockholders-diluted (in USD per share) | $ 1.13 | $ 0.07 | $ 1.04 | $ 0.03 |
Potentially dilutive shares that are considered anti-dilutive (in shares) | 457 | 433 | 223 | 633 |
Income Taxes - (Detail)
Income Taxes - (Detail) $ in Millions | 3 Months Ended |
Jun. 30, 2024 USD ($) | |
Income Tax Disclosure [Abstract] | |
Release of valuation allowance | $ 31.3 |
Deferred tax assets, valuation allowance | $ 0.1 |
Leases - Additional Information
Leases - Additional Information (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 25, 2023 | Jun. 30, 2024 | Jun. 25, 2023 | |
Leases [Abstract] | ||||
Operating leases, term | 10 years | 10 years | ||
Renewal term | 5 years | 5 years | ||
Significant real estate leases that have not yet commenced | $ 0 | $ 0 | ||
Franchise lease expense | $ 1,400,000 | $ 600,000 | $ 2,800,000 | $ 700,000 |
Leases - Schedule of Lease Term
Leases - Schedule of Lease Terminations (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 USD ($) Termination | Jun. 25, 2023 USD ($) Termination | |
Leases [Abstract] | ||
Leases terminated | Termination | 1 | 0 |
Lease termination fees | $ 200 | $ 0 |
Right-of-use assets derecognized upon lease termination | 416 | 0 |
Lease liabilities derecognized upon lease termination | 506 | 0 |
Loss recognized upon lease termination | $ (110) | $ 0 |
Leases - Operating Lease Term a
Leases - Operating Lease Term and Discount Rate (Detail) | Jun. 30, 2024 | Jun. 25, 2023 |
Leases [Abstract] | ||
Weighted average remaining lease term (years) | 6 years 3 months | 6 years 4 months 6 days |
Weighted average discount rate | 9.79% | 8.44% |
Leases - Components of Lease Co
Leases - Components of Lease Cost (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 25, 2023 | Jun. 30, 2024 | Jun. 25, 2023 | |
Leases [Abstract] | ||||
Operating lease cost | $ 9,635,000 | $ 9,982 | $ 19,473,000 | $ 20,175 |
Variable lease cost | 4,241,000 | 3,824 | 7,570,000 | 7,364 |
Short-term lease cost | 71,000 | 62 | 172,000 | 157 |
Total lease cost | $ 13,947,000 | $ 13,868 | $ 27,215,000 | $ 27,696 |
Leases - Supplemental Disclosur
Leases - Supplemental Disclosures of Cash Flow Information Related to Leases (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 25, 2023 | Jun. 30, 2024 | Jun. 25, 2023 | |
Leases [Abstract] | ||||
Operating cash flows rent paid for operating lease liabilities | $ 11,086 | $ 10,508 | $ 21,834,000 | $ 21,206 |
Operating right-of-use assets obtained in exchange for new operating lease liabilities | 8,178 | 1,368 | 9,360,000 | 4,252 |
Reduction in operating right-of-use assets due to lease modifications | $ 2,331 | $ 859 | $ 3,007,000 | $ 859 |
Leases - Maturities of Lease Li
Leases - Maturities of Lease Liabilities (Detail) $ in Thousands | Jun. 30, 2024 USD ($) |
Operating Leases | |
Remainder of 2024 | $ 17,748,000 |
2025 | 40,586,000 |
2026 | 36,713,000 |
2027 | 31,076,000 |
2028 | 24,486,000 |
2029 | 19,024,000 |
Thereafter | 46,536,000 |
Total lease payments | 216,169,000 |
Less: imputed interest | (59,408,000) |
Present value of lease liabilities | $ 156,761,000 |
Leases - Lessor Operating Lease
Leases - Lessor Operating Leases (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 USD ($) store | Jun. 25, 2023 USD ($) store | Jun. 30, 2024 USD ($) store | Jun. 25, 2023 USD ($) store | |
Leases [Abstract] | ||||
Number of subleases | store | 34 | 8 | 34 | 8 |
Operating lease income | $ 949 | $ 480 | $ 1,960 | $ 600 |
Variable lease income | 449 | 25 | 814 | 38 |
Franchise rent income | $ 1,398 | $ 505 | $ 2,774 | $ 638 |
Leases - Schedule of Future Sub
Leases - Schedule of Future Sublease Payments (Details) $ in Thousands | Jun. 30, 2024 USD ($) |
Leases [Abstract] | |
Remainder of 2024 | $ 2,049 |
2025 | 4,006 |
2026 | 3,104 |
2027 | 2,094 |
2028 | 1,703 |
Thereafter | 3,881 |
Total sublease payments | $ 16,837 |
Debt and Credit Facilities - Co
Debt and Credit Facilities - Component of Long-term Debt (Detail) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Debt Instrument [Line Items] | ||
Unamortized debt issuance costs | $ 0 | $ (1,744) |
Less: current portion of long-term debt | 0 | (1,250) |
Total long-term debt | 4,000 | 19,168 |
Credit Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 4,000 | 0 |
Term Loan | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 0 | $ 22,162 |
Debt and Credit Facilities - Ad
Debt and Credit Facilities - Additional Information (Detail) | 3 Months Ended | 6 Months Ended | |||||||
Feb. 07, 2024 USD ($) | Feb. 07, 2023 USD ($) | Aug. 07, 2019 USD ($) | Jun. 30, 2024 USD ($) | Jun. 25, 2023 USD ($) | Jun. 30, 2024 USD ($) | Jun. 25, 2023 USD ($) | Dec. 31, 2023 USD ($) | Dec. 25, 2022 USD ($) | |
Debt Instrument [Line Items] | |||||||||
Loss on extinguishment of debt | $ 0 | $ 0 | $ (2,376,000) | $ (239,000) | |||||
Total long-term debt | $ 4,000,000 | $ 4,000,000 | $ 19,168,000 | ||||||
J P Morgan Chase Bank N A | Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Credit facility agreement, maximum principal amount | $ 40,000,000 | $ 25,000,000 | |||||||
Commitment fee, percentage (in percent) | 0.20% | ||||||||
J P Morgan Chase Bank N A | Maximum Increase | Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Credit facility agreement, future increases | $ 20,000,000 | ||||||||
Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Loss on extinguishment of debt | $ (200,000) | ||||||||
Credit Agreement | Line of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Credit facility agreement, maximum principal amount | $ 30,000,000 | ||||||||
Credit Agreement | SOFR | Line of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Credit facility agreement, interest rate | 3.25% | ||||||||
Credit Agreement | SOFR | Maximum | Line of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Credit facility agreement, interest rate | 3.75% | ||||||||
Credit Agreement | SOFR | Minimum | Line of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Credit facility agreement, interest rate | 2.75% | ||||||||
Credit Agreement | Base Rate | Line of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Credit facility agreement, interest rate | 1.75% | ||||||||
Credit Agreement | Base Rate | Maximum | Line of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Credit facility agreement, interest rate | 2.25% | ||||||||
Credit Agreement | Base Rate | Minimum | Line of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Credit facility agreement, interest rate | 1.25% | ||||||||
Term Loan | |||||||||
Debt Instrument [Line Items] | |||||||||
Credit facility agreement, maximum principal amount | 25,000,000 | ||||||||
Debt issuance costs | $ 2,200,000 | ||||||||
Principal payments as a percentage of initial principal of term loan | 0.0125 | ||||||||
Term Loan | Prepayment Percentage One | |||||||||
Debt Instrument [Line Items] | |||||||||
Prepayment as a percentage of principal amount outstanding | 0.0300 | ||||||||
Term Loan | Prepayment Percentage Two | |||||||||
Debt Instrument [Line Items] | |||||||||
Prepayment as a percentage of principal amount outstanding | 0.0300 | ||||||||
Term Loan | Prepayment Percentage Three | |||||||||
Debt Instrument [Line Items] | |||||||||
Prepayment as a percentage of principal amount outstanding | 0.0100 | ||||||||
Term Loan | SOFR | |||||||||
Debt Instrument [Line Items] | |||||||||
Credit facility agreement, interest rate | 9.25% | ||||||||
Term Loan | Base Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Credit facility agreement, interest rate | 8.25% |
Franchise Growth Acceleration_3
Franchise Growth Acceleration Initiative - Schedule of Franchises (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 USD ($) store | Jun. 25, 2023 USD ($) store | Jun. 30, 2024 USD ($) store | Jun. 25, 2023 USD ($) store | |
Other Industries [Abstract] | ||||
Number of shops sold to franchisees | store | 1 | 0 | 1 | 8 |
Proceeds from sale of company-operated shops | $ 167 | $ 0 | $ 167 | $ 100 |
Net assets sold | (188) | 0 | (188) | (512) |
Goodwill related to the company-operated shops sold to franchisee | (3) | 0 | (3) | (21) |
Loss on sale of company-operated shops, net | (24) | 0 | (24) | (433) |
Adjustment to recognize held-for-sale assets at fair value | 0 | 0 | (30) | (503) |
Other expenses | (4) | (14) | (107) | (27) |
Loss on Franchise Growth Acceleration Initiative activities | $ (28) | $ (14) | $ (161) | $ (963) |
Capital Stock (Detail)
Capital Stock (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | |||||||||
Nov. 03, 2021 | Feb. 09, 2021 | Jun. 30, 2024 | Mar. 31, 2024 | Jun. 25, 2023 | Mar. 26, 2023 | Jun. 30, 2024 | Jun. 25, 2023 | May 07, 2024 | Dec. 31, 2023 | May 08, 2018 | |
Equity Class Of Treasury Stock [Line Items] | |||||||||||
Repurchases of common stock | $ 703,000 | ||||||||||
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 | $ 0.01 | ||||||||
Proceeds from exercise of warrants | $ 1,309,000 | $ 96,000 | $ 865,000 | ||||||||
Warrants outstanding | 883,402 | 1,123,589 | 883,402 | 1,123,589 | |||||||
2018 Repurchase Program | |||||||||||
Equity Class Of Treasury Stock [Line Items] | |||||||||||
Stock repurchase program, authorized amount | $ 65,000,000 | ||||||||||
Repurchases of common stock (in shares) | 0 | 0 | |||||||||
2024 Repurchase Program | |||||||||||
Equity Class Of Treasury Stock [Line Items] | |||||||||||
Stock repurchase program, authorized amount | $ 20,000,000 | ||||||||||
Repurchases of common stock (in shares) | 86,445 | 86,445 | |||||||||
Repurchases of common stock | $ 700,000 | $ 700,000 | |||||||||
Warrants | |||||||||||
Equity Class Of Treasury Stock [Line Items] | |||||||||||
Placement agent fees and offering expenses | $ 1,000,000 | ||||||||||
Proceeds from exercise of warrants | $ (474,000) | $ (34,000) | $ (313,000) | ||||||||
Common Stock | |||||||||||
Equity Class Of Treasury Stock [Line Items] | |||||||||||
Repurchases of common stock (in shares) | (86,000) | ||||||||||
Proceeds from exercise of warrants (in shares) | 240,000 | 18,000 | 159,000 | ||||||||
Proceeds from exercise of warrants | $ 2,000 | $ 0 | $ 1,000 | ||||||||
Securities purchase agreement | |||||||||||
Equity Class Of Treasury Stock [Line Items] | |||||||||||
Proceeds from exercise of warrants (in shares) | 3,249,668 | ||||||||||
Common stock, par value (in USD per share) | $ 0.01 | ||||||||||
Securities purchase agreement | Warrants | |||||||||||
Equity Class Of Treasury Stock [Line Items] | |||||||||||
Proceeds from exercise of warrants (in shares) | 1,299,861 | ||||||||||
Exercise price of warrants (in USD per share) | $ 5.45 | $ 5.45 | $ 5.45 | $ 5.45 | $ 5.45 | ||||||
Proceeds from securities purchase agreement | $ 16,000,000 | ||||||||||
Securities purchase agreement | Common Stock | |||||||||||
Equity Class Of Treasury Stock [Line Items] | |||||||||||
Proceeds from exercise of warrants (in shares) | 0 | 17,505 | 240,187 | 176,272 | |||||||
William Blair | |||||||||||
Equity Class Of Treasury Stock [Line Items] | |||||||||||
Proceeds from exercise of warrants | $ 40,000,000 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 25, 2023 | Jun. 30, 2024 | Jun. 25, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized stock compensation expense | $ 0 | $ 0 | ||
Common share options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Exercise price of options outstanding, lower limit (in USD per share) | $ 12.90 | |||
Exercise price of options outstanding, higher limit (in USD per share) | $ 13.73 | |||
Recognized stock-based compensation expense | 0 | $ 0 | $ 0 | $ 0 |
Common share options | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options vesting period (in years) | 4 years | |||
Common share options | Minimum | Tranche One | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 25% | |||
Common share options | Minimum | Tranche Two | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 25% | |||
Common share options | Minimum | Tranche Three | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 25% | |||
Common share options | Minimum | Tranche Four | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 25% | |||
Common share options | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Exercisable period from the date of grant | 10 years | |||
Options vesting period (in years) | 5 years | |||
Common share options | Maximum | Tranche One | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 20% | |||
Common share options | Maximum | Tranche Two | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 20% | |||
Common share options | Maximum | Tranche Three | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 20% | |||
Common share options | Maximum | Tranche Four | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 20% | |||
Common share options | Maximum | Tranche Five | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 20% | |||
Restricted stock units (RSUs) | Non-employee board of directors | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options vesting period (in years) | 3 years | |||
Recognized stock-based compensation expense | 1,100,000 | 1,000,000 | $ 1,900,000 | 1,600,000 |
Unrecognized stock compensation expense | 6,100,000 | $ 6,100,000 | ||
Restricted stock units (RSUs) | Non-employee board of directors | Tranche One | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 33% | |||
Restricted stock units (RSUs) | Non-employee board of directors | Tranche Two | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 33% | |||
Restricted stock units (RSUs) | Non-employee board of directors | Tranche Three | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 33% | |||
Performance stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized stock compensation expense | 4,200,000 | $ 4,200,000 | ||
Performance stock units | Market vesting conditions | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Recognized stock-based compensation expense | $ 400,000 | $ 300,000 | $ 1,300,000 | $ 600,000 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock Option Activity (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 | Dec. 31, 2023 | |
Shares | ||
Beginning balance (in shares) | 122 | |
Granted (in shares) | 0 | |
Exercised (in shares) | 0 | |
Canceled (in shares) | (64) | |
Ending balance (in shares) | 58 | 122 |
Exercisable (in shares) | 58 | |
Weighted Average Exercise Price | ||
Outstanding at beginning balance (in USD per share) | $ 13.71 | |
Granted (in USD per share) | 0 | |
Exercised (in USD per share) | 0 | |
Canceled (in USD per share) | 14.21 | |
Outstanding at ending balance (in USD per share) | 13.16 | $ 13.71 |
Exercisable (in USD per share) | $ 13.16 | |
Options outstanding aggregate intrinsic value | $ 0 | $ 0 |
Options exercisable aggregate intrinsic value | $ 0 | |
Weighted Average Remaining Term (Years) | ||
Options outstanding | 2 years 4 months 9 days | 1 year 5 months 8 days |
Options exercisable | 2 years 4 months 9 days |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of RSU Activity (Detail) - Restricted stock units (RSUs) shares in Thousands | 6 Months Ended |
Jun. 30, 2024 $ / shares shares | |
Number of RSUs | |
Non-vested beginning balance (in shares) | shares | 801 |
Granted (in shares) | shares | 409 |
Vested (in shares) | shares | (378) |
Canceled (in shares) | shares | (23) |
Non-vested ending balance (in shares) | shares | 809 |
Weighted Average Fair Value per Share | |
Weighted average fair value beginning balance (in USD per share) | $ / shares | $ 7.18 |
Granted (in USD per share) | $ / shares | 10.09 |
Vested (in USD per share) | $ / shares | 7.45 |
Canceled (in USD per share) | $ / shares | 8.02 |
Weighted average fair value ending balance (in USD per share) | $ / shares | $ 8.50 |
Stock-Based Compensation - Su_3
Stock-Based Compensation - Summary of PSU Activity (Detail) - Performance stock units shares in Thousands | 6 Months Ended |
Jun. 30, 2024 $ / shares shares | |
Number of RSUs | |
Non-vested beginning balance (in shares) | shares | 513 |
Granted (in shares) | shares | 212 |
Vested (in shares) | shares | (232) |
Canceled (in shares) | shares | 0 |
Non-vested ending balance (in shares) | shares | 493 |
Weighted Average Fair Value per Share | |
Weighted average fair value beginning balance (in USD per share) | $ / shares | $ 9.59 |
Granted (in USD per share) | $ / shares | 12.08 |
Vested (in USD per share) | $ / shares | 7.11 |
Canceled (in USD per share) | $ / shares | 0 |
Weighted average fair value ending balance (in USD per share) | $ / shares | $ 11.83 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Gain legal settlement | $ 1.1 |