Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | Apr. 28, 2019 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | PBPB | |
Entity Registrant Name | Potbelly Corporation | |
Entity Central Index Key | 0001195734 | |
Current Fiscal Year End Date | --12-30 | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 23,943,564 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 30, 2018 |
Current assets | ||
Cash and cash equivalents | $ 13,831 | $ 19,775 |
Accounts receivable, net of allowances of $65 and $113 as of March 31, 2019 and December 30, 2018, respectively | 5,548 | 4,737 |
Inventories | 3,293 | 3,482 |
Prepaid expenses and other current assets | 9,920 | 11,426 |
Total current assets | 32,592 | 39,420 |
Property and equipment, net | 84,172 | 87,782 |
Right-of-use assets for operating leases | 222,177 | |
Indefinite-lived intangible assets | 3,404 | 3,404 |
Goodwill | 2,222 | 2,222 |
Deferred income taxes | 13,385 | |
Deferred expenses, net and other assets | 6,963 | 7,002 |
Total assets | 351,530 | 153,215 |
Current liabilities | ||
Accounts payable | 3,203 | 3,835 |
Accrued expenses | 20,062 | 25,029 |
Short-term operating lease liabilities | 28,768 | |
Accrued income taxes | 162 | 162 |
Total current liabilities | 52,195 | 29,026 |
Deferred rent and landlord allowances | 22,905 | |
Long-term operating lease liabilities | 217,008 | |
Other long-term liabilities | 6,239 | 5,751 |
Total liabilities | 275,442 | 57,682 |
Commitments and contingencies (Note 9) | ||
Stockholders’ equity | ||
Common stock, $0.01 par value—authorized 200,000,000 shares; outstanding 24,038,211 and 24,142,586 shares as of March 31, 2019 and December 30, 2018, respectively | 330 | 330 |
Additional paid-in-capital | 433,400 | 432,771 |
Treasury stock, held at cost, 8,939,202 and 8,801,154 shares as of March 31, 2019, and December 30, 2018, respectively | (109,541) | (108,372) |
Accumulated deficit | (248,528) | (229,558) |
Total stockholders’ equity | 75,661 | 95,171 |
Non-controlling interest | 427 | 362 |
Total stockholders' equity | 76,088 | 95,533 |
Total liabilities and equity | $ 351,530 | $ 153,215 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 30, 2018 |
Statement Of Financial Position [Abstract] | ||
Allowances on accounts receivable | $ 65 | $ 113 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, authorized | 200,000,000 | 200,000,000 |
Common stock, outstanding | 24,038,211 | 24,142,586 |
Treasury stock, shares | 8,939,202 | 8,801,154 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Apr. 01, 2018 | |
Revenues | ||
Total revenues | $ 98,087 | $ 102,917 |
Sandwich shop operating expenses | ||
Cost of goods sold, excluding depreciation | 25,978 | 26,636 |
Labor and related expenses | 31,973 | 31,579 |
Occupancy expenses | 14,377 | 14,726 |
Other operating expenses | 12,145 | 12,500 |
General and administrative expenses | 12,709 | 12,188 |
Depreciation expense | 5,536 | 5,826 |
Pre-opening costs | 10 | 68 |
Impairment and loss on disposal of property and equipment | 82 | 2,024 |
Total expenses | 102,810 | 105,547 |
Loss from operations | (4,723) | (2,630) |
Interest expense | 32 | 27 |
Loss before income taxes | (4,755) | (2,657) |
Income tax expense (benefit) | 13,619 | (504) |
Net loss | (18,374) | (2,153) |
Net income attributable to non-controlling interest | 65 | 41 |
Net loss attributable to Potbelly Corporation | $ (18,439) | $ (2,194) |
Net loss per common share attributable to common stockholders: | ||
Basic | $ (0.76) | $ (0.09) |
Diluted | $ (0.76) | $ (0.09) |
Weighted average shares outstanding: | ||
Basic | 24,133,038 | 25,144,855 |
Diluted | 24,133,038 | 25,144,855 |
Product [Member] | ||
Revenues | ||
Total revenues | $ 97,258 | $ 102,247 |
Franchise Royalties And Fees [Member] | ||
Revenues | ||
Total revenues | $ 829 | $ 670 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock [Member] | Treasury Stock [Member] | Additional Paid-in-Capital [Member] | Accumulated Deficit [Member] | Non-Controlling Interest [Member] |
Beginning balance at Dec. 31, 2017 | $ 117,238 | $ 318 | $ (85,262) | $ 421,657 | $ (219,990) | $ 515 |
Beginning balance, common shares at Dec. 31, 2017 | 24,999,688 | |||||
Cumulative impact | ASU 2014-09 (Topic 606) [Member] | (690) | (690) | ||||
Net income (loss) | (2,153) | (2,194) | 41 | |||
Stock-based compensation plans | 2,255 | $ 3 | 2,252 | |||
Stock-based compensation plans, shares | 300,312 | |||||
Repurchases of common stock | (63) | (63) | ||||
Repurchases of common stock, shares | (5,000) | |||||
Treasury shares used for stock-based plans | (116) | (116) | ||||
Treasury shares used for stock-based plans, shares | (8,771) | |||||
Amortization of stock-based compensation | 862 | 862 | ||||
Ending balance at Apr. 01, 2018 | 117,333 | $ 321 | (85,441) | 424,771 | (222,874) | 556 |
Ending balance, common shares at Apr. 01, 2018 | 25,286,229 | |||||
Beginning balance at Dec. 30, 2018 | $ 95,533 | $ 330 | (108,372) | 432,771 | (229,558) | 362 |
Beginning balance, common shares at Dec. 30, 2018 | 24,142,586 | 24,142,586 | ||||
Cumulative impact | ASU 2016-02 (Topic 842) [Member] | $ (531) | (531) | ||||
Net income (loss) | (18,374) | (18,439) | 65 | |||
Stock-based compensation plans | 170 | 170 | ||||
Stock-based compensation plans, shares | 33,673 | |||||
Repurchases of common stock | (1,144) | (1,144) | ||||
Repurchases of common stock, shares | (135,000) | |||||
Treasury shares used for stock-based plans | (25) | (25) | ||||
Treasury shares used for stock-based plans, shares | (3,048) | |||||
Amortization of stock-based compensation | 459 | 459 | ||||
Ending balance at Mar. 31, 2019 | $ 76,088 | $ 330 | $ (109,541) | $ 433,400 | $ (248,528) | $ 427 |
Ending balance, common shares at Mar. 31, 2019 | 24,038,211 | 24,038,211 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Equity (Unaudited) (Parenthetical) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
ASU 2016-02 (Topic 842) [Member] | |
Cumulative impact tax | $ 196 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Apr. 01, 2018 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (18,374) | $ (2,153) |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 5,536 | 5,826 |
Noncash lease expense | 7,829 | |
Deferred income tax | 13,580 | |
Deferred rent and landlord allowances | (23) | |
Amortization of stock compensation expense | 459 | 862 |
Excess tax deficiency from stock-based compensation | 122 | |
Asset impairment, store closure and disposal of property and equipment | 87 | 2,381 |
Amortization of debt issuance costs | 9 | 9 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (811) | (41) |
Inventories | 189 | 68 |
Prepaid expenses and other assets | 1,455 | 207 |
Accounts payable | (130) | (241) |
Operating lease liabilities | (7,860) | |
Accrued and other liabilities | (4,342) | (352) |
Net cash provided by operating activities: | (2,373) | 6,665 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (2,572) | (4,939) |
Net cash used in investing activities: | (2,572) | (4,939) |
Cash flows from financing activities: | ||
Proceeds from exercise of stock options | 170 | 2,255 |
Employee taxes on certain stock-based payment arrangements | (25) | (512) |
Treasury stock repurchases | (1,144) | (63) |
Net cash used in financing activities: | (999) | 1,680 |
Net increase (decrease) in cash and cash equivalents | (5,944) | 3,406 |
Cash and cash equivalents at beginning of period | 19,775 | 25,530 |
Cash and cash equivalents at end of period | 13,831 | 28,936 |
Supplemental cash flow information: | ||
Income taxes paid | 4 | |
Interest paid | 24 | 19 |
Supplemental non-cash investing and financing activities: | ||
Unpaid liability for purchases of property and equipment | $ 161 | $ 1,234 |
Organization and Other Matters
Organization and Other Matters | 3 Months Ended |
Mar. 31, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization and Other Matters | (1) Organization and Other Matters Business Potbelly Corporation (the “Company” or “Potbelly”), through its wholly owned subsidiaries, owns or operates more than 400 company-owned shops in the United States. Additionally, Potbelly franchisees operate approximately 50 shops domestically and in the Middle East. Basis of Presentation The unaudited condensed consolidated financial statements and notes herein should be read in conjunction with the audited consolidated financial statements of Potbelly Corporation and its subsidiaries and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 30, 2018. The unaudited condensed consolidated financial statements included herein have been prepared by the Company without audit, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to the SEC rules and regulations. In the opinion of management, all adjustments, which are of a normal and recurring nature (except as otherwise noted), that are necessary to present fairly the Company’s financial position as of March 31, 2019 and December 30, 2018, its statement of operations for the 13 weeks ended March 31, 2019 and April 1, 2018 and its statement of cash flows for the 13 weeks ended March 31, 2019 and April 1, 2018 have been included. The consolidated statements of operations for the interim periods presented herein are not necessarily indicative of the results to be expected for the full year. The Company does not have any components of other comprehensive income recorded within its consolidated financial statements and therefore, does not separately present a statement of comprehensive income in its condensed consolidated financial statements. Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts of Potbelly Corporation; its wholly owned subsidiary, Potbelly Illinois, Inc. (“PII”); PII’s wholly owned subsidiaries, Potbelly Franchising, LLC and Potbelly Sandwich Works, LLC (“LLC”); seven of LLC’s wholly owned subsidiaries and LLC’s seven joint ventures, collectively, the “Company.” All intercompany balances and transactions have been eliminated in consolidation. For consolidated joint ventures, non-controlling interest represents a non-controlling partner’s share of the assets, liabilities and operations related to the seven joint venture investments. The Company has ownership interests ranging from 51-80% in these consolidated joint ventures. Fiscal Year The Company uses a 52/53-week fiscal year that ends on the last Sunday of the calendar period. Approximately every five or six years a 53rd week is added. Fiscal year 2019 and 2018 both consist of 52 weeks. The fiscal quarters ended March 31, 2019 and April 1, 2018 each consisted of 13 weeks. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and the disclosure of contingent assets and liabilities. Significant estimates include amounts for long-lived assets and income taxes. Actual results could differ from those estimates. Recent Accounting Pronouncements On December 31, 2018, we adopted ASU 2016-02, “Leases (Topic 842),” along with related clarifications and improvements. This pronouncement requires lessees to recognize a liability for lease obligations, which represents the discounted obligation to make future lease payments, and a corresponding right-of-use asset on the balance sheet. The guidance requires disclosure of key information about leasing arrangements that is intended to give financial statement users the ability to assess the amount, timing, and potential uncertainty of cash flows related to leases. We elected the optional transition method to apply the standard as of the effective date and therefore, prior period amounts have not been adjusted and continue to be reported in accordance with our historical accounting under previous lease guidance, ASC Topic 840: Leases (Topic 840). The adoption of Topic 842 had a material impact on the consolidated balance sheets and an immaterial impact on the consolidated statements of operations, consolidated statements of equity and consolidated statements of cash flows. Our practical expedients were as follows: Implications as of December 31, 2018 Practical expedient package We have not reassessed whether any expired or existing contracts are, or contain, leases. We have not reassessed the lease classification for any expired or existing leases. We have not reassessed initial direct costs for any expired or existing leases. Hindsight practical expedient We have not elected the hindsight practical expedient, which permits the use of hindsight when determining lease term and impairment of operating lease assets. The impact on the consolidated balance sheet is as follows: Adjustments Due December 30, to the Adoption of December 31, 2018 Topic 842 2018 Assets Current assets Cash and cash equivalents $ 19,775 $ — $ 19,775 Accounts receivable, net of allowances of $113 as of December 30, 2018 4,737 — 4,737 Inventories 3,482 — 3,482 Prepaid expenses and other current assets 11,426 — 11,426 Total current assets 39,420 — 39,420 Property and equipment, net 87,782 — 87,782 Right-of-use assets for operating leases — 232,477 232,477 Indefinite-lived intangible assets 3,404 — 3,404 Goodwill 2,222 — 2,222 Deferred income taxes, noncurrent 13,385 195 13,580 Deferred expenses, net and other assets 7,002 — 7,002 Total assets $ 153,215 $ 232,672 $ 385,887 Liabilities and Equity Current liabilities Accounts payable $ 3,835 $ — $ 3,835 Accrued expenses (1) 25,029 (1,124 ) 23,905 Short-term operating lease liabilities — 28,826 28,826 Accrued income taxes 162 — 162 Total current liabilities 29,026 27,702 56,728 Deferred rent and landlord allowances (1) 22,905 (22,905 ) — Long-term operating lease liabilities — 228,406 228,406 Other long-term liabilities 5,751 — 5,751 Total liabilities 57,682 233,203 290,885 Stockholders’ equity Common stock, $0.01 par value—authorized 200,000,000 shares; outstanding 24,142,586 shares as of December 30, 2018 330 — 330 Additional paid-in-capital 432,771 — 432,771 Treasury stock, held at cost, 8,801,154 shares as of December 30, 2018 (108,372 ) — (108,372 ) Accumulated deficit (2) (229,558 ) (531 ) (230,089 ) Total stockholders’ equity 95,171 (531 ) 94,640 Non-controlling interest 362 — 362 Total stockholders' equity 95,533 (531 ) 95,002 Total liabilities and equity $ 153,215 $ 232,672 $ 385,887 (1) Adjustment to reclassify deferred rent and tenant improvement allowance to right-of-use assets for operating leases upon the adoption of Topic 842. (2) The Company recorded a net reduction of $0.5 million to opening accumulated deficit as of December 31, 2018, due to the cumulative impact of adopting Topic 842. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2019 | |
Revenue From Contract With Customer [Abstract] | |
Revenue | (2) Revenue Potbelly primarily earns revenue at a point in time through sales at our sandwich shop locations and records such revenue net of sales-related taxes collected from customers. The payment on these sales is due at the time of the customer’s purchase. The Company also receives royalties from franchisees on their respective sales, which are recognized at the point in time the sale is made and invoiced weekly. Potbelly also records revenue from sales over time related to upfront franchise fees, gift card redemptions and breakage. For the 13 weeks ended March 31, 2019, revenue recognized from all revenue sources on point in time sales was $97.8 million, and revenue recognized from sales over time was $0.3 million. For the 13 weeks ended April 1, 2018, revenue recognized from all revenue sources on point in time sales was $102.7 million, and revenue recognized from sales over time was $0.2 million. Franchise Revenue Potbelly licenses intellectual property and trademarks to franchisees through franchise agreements. As part of these franchise agreements, Potbelly receives an upfront payment from the franchisee, which the Company recognizes over the term of the franchise agreement. The Company records a contract liability for the unearned portion of the upfront franchise payments. Gift Card Redemptions / Breakage Revenue Potbelly sells gift cards to customers, records the sale as a contract liability and recognizes the associated revenue as the gift card is redeemed. A portion of these gift cards are not redeemed by the customer, which is recognized by the Company as revenue as a percentage of customers gift card redemptions. The expected breakage amount recognized is determined by a historical data analysis on gift card redemption patterns. Contract Liabilities As described above, the Company records current and noncurrent contract liabilities for upfront franchise fees as well as gift cards. There are no other contract liabilities or contract assets recorded by the Company. The opening and closing balances of the Company’s current and noncurrent contract liabilities from contracts with customers were as follows: Current Contract Liability Noncurrent Contract Liability (Thousands) (Thousands) Beginning balance as of December 31, 2018 $ (2,184 ) $ (1,631 ) Ending balance as of March 31, 2019 (1,495 ) (2,076 ) Increase (Decrease) in contract liability $ (689 ) $ 445 The aggregate value of remaining performance obligations on outstanding contracts was $3.6 million as of March 31, 2019. The Company expects to recognize revenue related to contract liabilities as follows (in thousands), which may vary based upon franchise activity as well as gift card redemption patterns: Years Ending Amount 2019 $ 1,124 2020 525 2021 185 2022 176 2023 169 Thereafter 1,392 Total revenue recognized $ 3,571 For the 13 week s ended March 31, 2019, the amount of revenue recognized related to the December 31, 2018 liability ending balance was $0.8 million. For the 13 weeks ended April 1, 2018, the amount of revenue recognized related to the January 1, 2018 liability ending balance was $0.9 million. This revenue related to the recognition of gift card redemptions and upfront franchise fees. For the 13 weeks ended March 31, 2019 and the 13 weeks ended April 1, 2018, the Company did not recognize any revenue from obligations satisfied (or partially satisfied) in prior periods. |
Fair Value Measurement
Fair Value Measurement | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | (3) Fair Value Measurement The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and all other current liabilities approximate fair values due to the short maturities of these balances. The Company assesses potential impairments to its long-lived assets, which includes property and equipment and lease right-of-use assets, on a quarterly basis or whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. Shop-level assets and right-of-use assets are grouped at the individual shop-level for the purpose of the impairment assessment. Recoverability of an asset group is measured by a comparison of the carrying amount of an asset group to its estimated undiscounted future cash flows expected to be generated by the asset group. If the carrying amount of the asset group exceeds its estimated undiscounted future cash flows, an impairment charge is recognized as the amount by which the carrying amount of the asset group exceeds the fair value of the asset group. The fair value of the shop assets is determined using the discounted future cash flow method of anticipated cash flows through the shop’s lease-end date using fair value measurement inputs classified as Level 3. The fair value of right-of-use assets is estimated using market comparative information for similar properties. Level 3 inputs are derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. At transition of adoption to ASC 842, the Company impaired $0.7 million of pre-tax right-of-use assets related to previously impaired shops. This amount is recorded, net of tax, as an opening reduction to retained earnings. After performing a periodic review of the Company’s shops during the 13 weeks ended March 31, 2019, it was determined that there were no indicators of impairment for the quarter ended March 31, 2019 and accordingly, the Company recorded no impairment charge for the 13 weeks ended March 31, 2019. The Company recorded an impairment charge of $2.0 million for the 13 weeks ended April 1, 2018. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis Assets recognized or disclosed at fair value on the consolidated financial statements on a nonrecurring basis include items such as leasehold improvements, property and equipment, operating lease assets, goodwill, and other intangible assets. These assets are measured at fair value if determined to be impaired. |
Loss Per Share
Loss Per Share | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Loss Per Share | (4) Loss Per Share Basic and diluted income per common share attributable to common stockholders are calculated using the weighted average number of common shares outstanding for the period. Diluted income per common share attributable to common stockholders is computed by dividing the income allocated to common stockholders by the weighted average number of fully diluted common shares outstanding. In periods of a net loss, no potential common shares are included in diluted shares outstanding as the effect is anti-dilutive. For the 13 weeks ended March 31, 2019, and April 1, 2018, the Company had a loss per share, and therefore potentially diluted shares were excluded from the calculation. The following table summarizes the loss per share calculation: For the 13 Weeks Ended March 31, April 1, 2019 2018 Net loss attributable to Potbelly Corporation $ (18,439 ) $ (2,194 ) Weighted average common shares outstanding-basic 24,133,038 25,144,855 Plus: Effect of potential stock options exercise — — Weighted average common shares outstanding-diluted 24,133,038 25,144,855 Loss per share available to common stockholders-basic $ (0.76 ) $ (0.09 ) Loss per share available to common stockholders-diluted $ (0.76 ) $ (0.09 ) Potentially dilutive shares that are considered anti-dilutive: Common share options 2,386,820 3,101,447 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | (5) Income Taxes Our interim tax provision is determined using an estimated annual effective tax rate and adjusted for discrete taxable events that occur during the quarter. The difference between the effective tax rate in Q1 2019 and Q1 2018 is the recording of the valuation allowance in Q1 2019. The Company regularly assesses the need for a valuation allowance related to its deferred tax assets, which includes consideration of both positive and negative evidence related to the likelihood of realization of such deferred tax assets to determine, based on the weight of the available evidence, whether it is more-likely-than-not that some or all of its deferred tax assets will not be realized. In its assessment, the Company considered recent financial operating results, the change in projected future taxable income for fiscal year 2019, the reversal of existing taxable temporary differences, and tax planning strategies. As a result of the recent changes in the projected taxable income for 2019, the Company now estimates it will be in a cumulative loss position as of December 29, 2019. Therefore, the Company determined that the negative evidence outweighed the positive evidence and, therefore, recorded a full valuation allowance against its net deferred tax assets. The Company recorded a non-cash charge to income tax expense of $13.6 million related to the recognition of the valuation allowance and did not provide for an income tax benefit on the pre-tax loss recorded for the three months ended March 31, 2019. This accounting treatment has no effect on the Company’s ability to utilize deferred tax assets to reduce future cash tax payments. The Company will continue to assess the likelihood of the realization of its deferred tax assets at the end of each reporting period and the valuation allowance will be adjusted accordingly. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Leases | (6) Leases We determine if a contract contains a lease at inception. The Company leases retail shops, warehouse and office space under operating leases. For leases with renewal periods at the Company’s option, the Company determines the expected lease period based on whether the renewal of any options are reasonably assured at the inception of the lease. Operating lease assets and liabilities are recognized at the lease commencement date. Operating lease liabilities represent the present value of lease payments not yet paid. Operating lease assets represent our right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs, lease incentives, and impairment of operating lease assets. To determine the present value of lease payments not yet paid, we estimate incremental secured borrowing rates corresponding to the maturities of the leases. As we have no outstanding debt nor committed credit facilities, secured or otherwise, we estimate this rate based on prevailing financial market conditions, comparable company and credit analysis, and management judgment. We recognize expense for these leases on a straight-line basis over the lease term. Additionally, tenant incentives used to fund leasehold improvements are recognized when earned and reduce our right-of-use asset related to the lease. These are amortized through the right-of-use asset as reductions of expense over the lease term. Related to the adoption of Topic 842, our policy elections were as follows: Separation of lease and non-lease components We elected this expedient to account for lease and non-lease components as a single component for our entire population of operating lease assets. Short-term policy We have elected the short-term lease recognition exemption for all applicable classes of underlying assets. Short-term disclosures include only those leases with a term greater than one month and 12 months or less, and expense is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less, that do not include an option to purchase the underlying asset that we are reasonably certain to exercise, are not recorded on the balance sheet. Supplemental balance sheet information related to leases was as follows: March 31, Operating Leases Classification 2019 Right-of-use assets Right-of-use assets for operating leases $ 222,177 Short-term lease liabilities Short-term operating lease liabilities 28,768 Long-term lease liabilities Long-term operating lease liabilities 217,008 Total lease liabilities 245,776 Operating lease term and discount rate were as follows: March 31, 2019 Weighted average remaining lease term (years) 8.90 Weighted average discount rate 8.01 % Certain of the Company’s operating lease agreements include variable payments that are passed through by the landlord, such as common area maintenance and real estate taxes, as well as variable payments based on percentage rent for certain of our shops. Pass-through charges and payments based on percentage rent are included within variable lease cost. The components of lease cost were as follows: 13 weeks ending March 31, Classification 2019 Operating lease cost Occupancy and General and administrative expenses 10,995 Variable lease cost Occupancy 3,504 Total lease cost $ 14,499 Supplemental disclosures of cash flow information related to leases were as follows: 13 weeks ending March 31, 2019 Operating cash flows rent paid for operating lease liabilities 11,938 Operating right-of-use assets obtained in exchange for new operating lease liabilities 922 As of March 31, 2019, the Company has additional operating leases related to shops not yet open of $1.6 million. These operating leases will commence during fiscal year 2019 with lease terms of 7 years. Maturities of lease liabilities were as follows as of March 31, 2019: Operating Leases Remainder of 2019 35,277 2020 45,402 2021 41,183 2022 36,002 2023 31,111 Thereafter 164,475 Total lease payments 353,450 Less: imputed interest (107,674 ) Present value of lease liabilities $ 245,776 As previously disclosed in our 2018 Annual Report on Form 10-K and under the previous lease accounting, maturities of lease liabilities were as follows as of December 30, 2018: Operating Leases 2019 47,918 2020 45,828 2021 41,497 2022 36,120 2023 31,060 Thereafter 138,928 Total minimum lease payments 341,351 |
Capital Stock
Capital Stock | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Capital Stock | (7) Capital Stock On May 8, 2018, the Company announced that its Board of Directors authorized a stock repurchase program for up to $65.0 million of its outstanding common stock. The program permits the Company, from time to time, to purchase shares in the open market (including in pre-arranged stock trading plans in accordance with the guidelines specified in Rule 10b5-1 under the Securities Exchange Act of 1934, as amended) or in privately negotiated transactions. The number of common shares actually repurchased, and the timing and price of repurchases, will depend upon market conditions, Securities and Exchange Commission requirements and other factors. Purchases may be started or stopped at any time without prior notice depending on market conditions and other factors. For the 13 weeks ended March 31, 2019, the Company repurchased 135,000 shares of its common stock for approximately $1.1 million under the stock repurchase program, including cost and commission, in open market transactions. Repurchased shares are included as treasury stock in the condensed consolidated balance sheets and the condensed consolidated statements of equity. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation | (8) Stock-Based Compensation Stock options Stock options are awarded under the 2013 Long-Term Incentive Plan to eligible employees and certain non-employee members of the Board of Directors A summary of stock option activity for the 13 weeks ended March 31, 2019 is as follows: Options Shares (Thousands) Weighted Average Exercise Price Aggregate Intrinsic Value (Thousands) Weighted Average Remaining Term (Years) Outstanding—December 30, 2018 2,150 $ 11.49 $ 378 5.13 Granted — — Exercised (21 ) 7.92 Canceled (173 ) 13.55 Outstanding—March 31, 2019 1,956 $ 11.34 $ 620 5.31 Exercisable—March 31, 2019 1,511 $ 11.01 $ 620 4.33 Stock-based compensation is measured at the grant date based on the calculated fair value of the award, and is recognized as expense over the requisite employee service period, which is generally the vesting period of the grant with a corresponding increase to additional paid-in capital. For the 13 weeks ended March 31, 2019, the Company recognized stock-based compensation expense related to stock options of $0.3 million. For the 13 weeks ended April 1, 2018, the Company recognized stock-based compensation expense related to stock options of $0.8 million. As of March 31, 2019, unrecognized stock-based compensation expense for stock options was $1.6 million, which will be recognized through fiscal year 2022. The Company records stock-based compensation expense within general and administrative expenses in the condensed consolidated statements of operations. Restricted stock units The Company awards restricted stock units (“RSUs”) to certain employees of the Company and certain non-employee members of its Board of Directors. The Board of Director grants have a vesting schedule of 50% on the first anniversary of the grant date and 50% on the second anniversary of the grant date. The employee grants vest in one-third increments over a three-year period. For the 13 weeks ended March 31, 2019, the Company recognized stock-based compensation expense related to RSUs of $0.2 million. For the 13 weeks ended April 1, 2018, the Company recognized stock-based compensation expense related to RSUs of $0.1 million. As of March 31, 2019, unrecognized stock-based compensation expense for RSUs was $2.4 million, which will be recognized though fiscal year 2022. A summary of RSU activity for the 13 weeks ended March 31, 2019 is as follows: RSUs Number of RSUs Weighted Average Fair Value per Share Non-vested as of December 30, 2018 247 $ 11.99 Granted 194 8.46 Vested (10 ) 8.52 Canceled — — Non-vested as of March 31, 2019 431 $ 10.43 Performance stock units The Company awards performance share units (“PSUs”) to eligible employees under the 2013 LTIP that are subject to service and performance vesting conditions. In March of 2019 the Company issued 188,414 PSUs with a grant date fair value of $8.46 per share. The PSUs will vest based on the Company’s achievement of certain targets related to adjusted EBITDA and same store sales goals. The PSUs will vest fully on the third anniversary of the grant date. The quantity of shares that will vest ranges from 0% to 200% of the targeted number of shares. If the defined minimum targets are not met, then no shares will vest. In the first quarter of 2019, the Company recognized less than $0.1 million of expense associated with the PSUs. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | (9) Commitments and Contingencies The Company is subject to legal proceedings, claims and liabilities, such as employment-related claims and slip and fall cases, which arise in the ordinary course of business and are generally covered by insurance. In the opinion of management, the amount of ultimate liability with respect to those actions should not have a material adverse impact on the Company’s financial position or results of operations and cash flows. In October 2017, plaintiffs filed a purported collective and class action lawsuit (the “Complaint”) in the United States District Court for the Southern District of New York against the Company alleging violations of the Fair Labor Standards Act (FLSA) and New York Labor Law (NYLL). The plaintiffs allege that the Company violated the FLSA and NYLL by not paying overtime compensation to our assistant managers and violated NYLL by not paying spread-of-hours pay. The Complaint was brought as a nationwide “collective action” under the FLSA and as a “class action” under NYLL. Since the filing of the Complaint, the plaintiffs filed a proposed amended complaint removing the NYLL class claim, but adding a proposed Illinois state law class action. The Court has not ruled on whether to permit this amendment. The Company believes the assistant managers were properly classified under state and federal law. The Company intends to vigorously defend this action. |
Organization and Other Matters
Organization and Other Matters (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Business | Business Potbelly Corporation (the “Company” or “Potbelly”), through its wholly owned subsidiaries, owns or operates more than 400 company-owned shops in the United States. Additionally, Potbelly franchisees operate approximately 50 shops domestically and in the Middle East. |
Basis of Presentation | Basis of Presentation The unaudited condensed consolidated financial statements and notes herein should be read in conjunction with the audited consolidated financial statements of Potbelly Corporation and its subsidiaries and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 30, 2018. The unaudited condensed consolidated financial statements included herein have been prepared by the Company without audit, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to the SEC rules and regulations. In the opinion of management, all adjustments, which are of a normal and recurring nature (except as otherwise noted), that are necessary to present fairly the Company’s financial position as of March 31, 2019 and December 30, 2018, its statement of operations for the 13 weeks ended March 31, 2019 and April 1, 2018 and its statement of cash flows for the 13 weeks ended March 31, 2019 and April 1, 2018 have been included. The consolidated statements of operations for the interim periods presented herein are not necessarily indicative of the results to be expected for the full year. The Company does not have any components of other comprehensive income recorded within its consolidated financial statements and therefore, does not separately present a statement of comprehensive income in its condensed consolidated financial statements. |
Principles of Consolidation | Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts of Potbelly Corporation; its wholly owned subsidiary, Potbelly Illinois, Inc. (“PII”); PII’s wholly owned subsidiaries, Potbelly Franchising, LLC and Potbelly Sandwich Works, LLC (“LLC”); seven of LLC’s wholly owned subsidiaries and LLC’s seven joint ventures, collectively, the “Company.” All intercompany balances and transactions have been eliminated in consolidation. For consolidated joint ventures, non-controlling interest represents a non-controlling partner’s share of the assets, liabilities and operations related to the seven joint venture investments. The Company has ownership interests ranging from 51-80% in these consolidated joint ventures. |
Fiscal Year | Fiscal Year The Company uses a 52/53-week fiscal year that ends on the last Sunday of the calendar period. Approximately every five or six years a 53rd week is added. Fiscal year 2019 and 2018 both consist of 52 weeks. The fiscal quarters ended March 31, 2019 and April 1, 2018 each consisted of 13 weeks. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and the disclosure of contingent assets and liabilities. Significant estimates include amounts for long-lived assets and income taxes. Actual results could differ from those estimates. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements On December 31, 2018, we adopted ASU 2016-02, “Leases (Topic 842),” along with related clarifications and improvements. This pronouncement requires lessees to recognize a liability for lease obligations, which represents the discounted obligation to make future lease payments, and a corresponding right-of-use asset on the balance sheet. The guidance requires disclosure of key information about leasing arrangements that is intended to give financial statement users the ability to assess the amount, timing, and potential uncertainty of cash flows related to leases. We elected the optional transition method to apply the standard as of the effective date and therefore, prior period amounts have not been adjusted and continue to be reported in accordance with our historical accounting under previous lease guidance, ASC Topic 840: Leases (Topic 840). The adoption of Topic 842 had a material impact on the consolidated balance sheets and an immaterial impact on the consolidated statements of operations, consolidated statements of equity and consolidated statements of cash flows. Our practical expedients were as follows: Implications as of December 31, 2018 Practical expedient package We have not reassessed whether any expired or existing contracts are, or contain, leases. We have not reassessed the lease classification for any expired or existing leases. We have not reassessed initial direct costs for any expired or existing leases. Hindsight practical expedient We have not elected the hindsight practical expedient, which permits the use of hindsight when determining lease term and impairment of operating lease assets. The impact on the consolidated balance sheet is as follows: Adjustments Due December 30, to the Adoption of December 31, 2018 Topic 842 2018 Assets Current assets Cash and cash equivalents $ 19,775 $ — $ 19,775 Accounts receivable, net of allowances of $113 as of December 30, 2018 4,737 — 4,737 Inventories 3,482 — 3,482 Prepaid expenses and other current assets 11,426 — 11,426 Total current assets 39,420 — 39,420 Property and equipment, net 87,782 — 87,782 Right-of-use assets for operating leases — 232,477 232,477 Indefinite-lived intangible assets 3,404 — 3,404 Goodwill 2,222 — 2,222 Deferred income taxes, noncurrent 13,385 195 13,580 Deferred expenses, net and other assets 7,002 — 7,002 Total assets $ 153,215 $ 232,672 $ 385,887 Liabilities and Equity Current liabilities Accounts payable $ 3,835 $ — $ 3,835 Accrued expenses (1) 25,029 (1,124 ) 23,905 Short-term operating lease liabilities — 28,826 28,826 Accrued income taxes 162 — 162 Total current liabilities 29,026 27,702 56,728 Deferred rent and landlord allowances (1) 22,905 (22,905 ) — Long-term operating lease liabilities — 228,406 228,406 Other long-term liabilities 5,751 — 5,751 Total liabilities 57,682 233,203 290,885 Stockholders’ equity Common stock, $0.01 par value—authorized 200,000,000 shares; outstanding 24,142,586 shares as of December 30, 2018 330 — 330 Additional paid-in-capital 432,771 — 432,771 Treasury stock, held at cost, 8,801,154 shares as of December 30, 2018 (108,372 ) — (108,372 ) Accumulated deficit (2) (229,558 ) (531 ) (230,089 ) Total stockholders’ equity 95,171 (531 ) 94,640 Non-controlling interest 362 — 362 Total stockholders' equity 95,533 (531 ) 95,002 Total liabilities and equity $ 153,215 $ 232,672 $ 385,887 (1) Adjustment to reclassify deferred rent and tenant improvement allowance to right-of-use assets for operating leases upon the adoption of Topic 842. (2) The Company recorded a net reduction of $0.5 million to opening accumulated deficit as of December 31, 2018, due to the cumulative impact of adopting Topic 842. |
Organization and Other Matter_2
Organization and Other Matters (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
ASU 2016-02 (Topic 842) [Member] | |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |
Schedule of Impact on Consolidated Balance Sheet | The impact on the consolidated balance sheet is as follows: Adjustments Due December 30, to the Adoption of December 31, 2018 Topic 842 2018 Assets Current assets Cash and cash equivalents $ 19,775 $ — $ 19,775 Accounts receivable, net of allowances of $113 as of December 30, 2018 4,737 — 4,737 Inventories 3,482 — 3,482 Prepaid expenses and other current assets 11,426 — 11,426 Total current assets 39,420 — 39,420 Property and equipment, net 87,782 — 87,782 Right-of-use assets for operating leases — 232,477 232,477 Indefinite-lived intangible assets 3,404 — 3,404 Goodwill 2,222 — 2,222 Deferred income taxes, noncurrent 13,385 195 13,580 Deferred expenses, net and other assets 7,002 — 7,002 Total assets $ 153,215 $ 232,672 $ 385,887 Liabilities and Equity Current liabilities Accounts payable $ 3,835 $ — $ 3,835 Accrued expenses (1) 25,029 (1,124 ) 23,905 Short-term operating lease liabilities — 28,826 28,826 Accrued income taxes 162 — 162 Total current liabilities 29,026 27,702 56,728 Deferred rent and landlord allowances (1) 22,905 (22,905 ) — Long-term operating lease liabilities — 228,406 228,406 Other long-term liabilities 5,751 — 5,751 Total liabilities 57,682 233,203 290,885 Stockholders’ equity Common stock, $0.01 par value—authorized 200,000,000 shares; outstanding 24,142,586 shares as of December 30, 2018 330 — 330 Additional paid-in-capital 432,771 — 432,771 Treasury stock, held at cost, 8,801,154 shares as of December 30, 2018 (108,372 ) — (108,372 ) Accumulated deficit (2) (229,558 ) (531 ) (230,089 ) Total stockholders’ equity 95,171 (531 ) 94,640 Non-controlling interest 362 — 362 Total stockholders' equity 95,533 (531 ) 95,002 Total liabilities and equity $ 153,215 $ 232,672 $ 385,887 |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Revenue From Contract With Customer [Abstract] | |
Summary of Current and Noncurrent Contract Liabilities from Contracts with Customers | The opening and closing balances of the Company’s current and noncurrent contract liabilities from contracts with customers were as follows: Current Contract Liability Noncurrent Contract Liability (Thousands) (Thousands) Beginning balance as of December 31, 2018 $ (2,184 ) $ (1,631 ) Ending balance as of March 31, 2019 (1,495 ) (2,076 ) Increase (Decrease) in contract liability $ (689 ) $ 445 |
Summary of Expected Revenue Recognition Related to Contract Liabilities | The Company expects to recognize revenue related to contract liabilities as follows (in thousands), which may vary based upon franchise activity as well as gift card redemption patterns: Years Ending Amount 2019 $ 1,124 2020 525 2021 185 2022 176 2023 169 Thereafter 1,392 Total revenue recognized $ 3,571 |
Loss Per Share (Tables)
Loss Per Share (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Summary of Loss Per Share Calculation | The following table summarizes the loss per share calculation: For the 13 Weeks Ended March 31, April 1, 2019 2018 Net loss attributable to Potbelly Corporation $ (18,439 ) $ (2,194 ) Weighted average common shares outstanding-basic 24,133,038 25,144,855 Plus: Effect of potential stock options exercise — — Weighted average common shares outstanding-diluted 24,133,038 25,144,855 Loss per share available to common stockholders-basic $ (0.76 ) $ (0.09 ) Loss per share available to common stockholders-diluted $ (0.76 ) $ (0.09 ) Potentially dilutive shares that are considered anti-dilutive: Common share options 2,386,820 3,101,447 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Supplemental Balance Sheet Information Related to Leases | Supplemental balance sheet information related to leases was as follows: March 31, Operating Leases Classification 2019 Right-of-use assets Right-of-use assets for operating leases $ 222,177 Short-term lease liabilities Short-term operating lease liabilities 28,768 Long-term lease liabilities Long-term operating lease liabilities 217,008 Total lease liabilities 245,776 |
Operating Lease Term and Discount Rate | Operating lease term and discount rate were as follows: March 31, 2019 Weighted average remaining lease term (years) 8.90 Weighted average discount rate 8.01 % |
Components of Lease Cost | Certain of the Company’s operating lease agreements include variable payments that are passed through by the landlord, such as common area maintenance and real estate taxes, as well as variable payments based on percentage rent for certain of our shops. Pass-through charges and payments based on percentage rent are included within variable lease cost. The components of lease cost were as follows: |
Supplemental Disclosures of Cash Flow Information Related to Leases | Supplemental disclosures of cash flow information related to leases were as follows: 13 weeks ending March 31, 2019 Operating cash flows rent paid for operating lease liabilities 11,938 Operating right-of-use assets obtained in exchange for new operating lease liabilities 922 |
Maturities of Lease Liabilities | Maturities of lease liabilities were as follows as of March 31, 2019: Operating Leases Remainder of 2019 35,277 2020 45,402 2021 41,183 2022 36,002 2023 31,111 Thereafter 164,475 Total lease payments 353,450 Less: imputed interest (107,674 ) Present value of lease liabilities $ 245,776 |
Maturities of Lease Liabilities Under the Previous Lease Accounting | As previously disclosed in our 2018 Annual Report on Form 10-K and under the previous lease accounting, maturities of lease liabilities were as follows as of December 30, 2018: Operating Leases 2019 47,918 2020 45,828 2021 41,497 2022 36,120 2023 31,060 Thereafter 138,928 Total minimum lease payments 341,351 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Stock Option Activity | A summary of stock option activity for the 13 weeks ended March 31, 2019 is as follows: Options Shares (Thousands) Weighted Average Exercise Price Aggregate Intrinsic Value (Thousands) Weighted Average Remaining Term (Years) Outstanding—December 30, 2018 2,150 $ 11.49 $ 378 5.13 Granted — — Exercised (21 ) 7.92 Canceled (173 ) 13.55 Outstanding—March 31, 2019 1,956 $ 11.34 $ 620 5.31 Exercisable—March 31, 2019 1,511 $ 11.01 $ 620 4.33 |
Summary of RSU Activity | A summary of RSU activity for the 13 weeks ended March 31, 2019 is as follows: RSUs Number of RSUs Weighted Average Fair Value per Share Non-vested as of December 30, 2018 247 $ 11.99 Granted 194 8.46 Vested (10 ) 8.52 Canceled — — Non-vested as of March 31, 2019 431 $ 10.43 |
Organization and Other Matter_3
Organization and Other Matters - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2019ShopSubsidiaryJointVenture | |
Nature Of Business And Basis Of Presentation [Line Items] | |
Number of wholly owned subsidiaries | Subsidiary | 7 |
Number of joint ventures | JointVenture | 7 |
Lease, practical expedients, package | false |
Lease, practical expedient, use of hindsight | false |
Minimum [Member] | |
Nature Of Business And Basis Of Presentation [Line Items] | |
Number of shops Potbelly Corporation owns or operates | 400 |
Ownership interest rate | 51.00% |
Maximum [Member] | |
Nature Of Business And Basis Of Presentation [Line Items] | |
Ownership interest rate | 80.00% |
Middle East [Member] | |
Nature Of Business And Basis Of Presentation [Line Items] | |
Number of shops franchisees operate | 50 |
Organization and Other Matter_4
Organization and Other Matters - Schedule of Impact on Consolidated Balance Sheet (Detail) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | Dec. 30, 2018 | Apr. 01, 2018 | Dec. 31, 2017 |
Current assets | |||||
Cash and cash equivalents | $ 13,831 | $ 19,775 | $ 28,936 | $ 25,530 | |
Accounts receivable, net of allowances of $113 as of December 30, 2018 | 5,548 | 4,737 | |||
Inventories | 3,293 | 3,482 | |||
Prepaid expenses and other current assets | 9,920 | 11,426 | |||
Total current assets | 32,592 | 39,420 | |||
Property and equipment, net | 84,172 | 87,782 | |||
Right-of-use assets for operating leases | 222,177 | ||||
Indefinite-lived intangible assets | 3,404 | 3,404 | |||
Goodwill | 2,222 | 2,222 | |||
Deferred income taxes | 13,385 | ||||
Deferred expenses, net and other assets | 6,963 | 7,002 | |||
Total assets | 351,530 | 153,215 | |||
Current liabilities | |||||
Accounts payable | 3,203 | 3,835 | |||
Accrued expenses | 20,062 | 25,029 | |||
Short-term operating lease liabilities | 28,768 | ||||
Accrued income taxes | 162 | 162 | |||
Total current liabilities | 52,195 | 29,026 | |||
Deferred rent and landlord allowances | 22,905 | ||||
Long-term operating lease liabilities | 217,008 | ||||
Other long-term liabilities | 6,239 | 5,751 | |||
Total liabilities | 275,442 | 57,682 | |||
Stockholders’ equity | |||||
Common stock, $0.01 par value—authorized 200,000,000 shares; outstanding 24,142,586 shares as of December 30, 2018 | 330 | 330 | |||
Additional paid-in-capital | 433,400 | 432,771 | |||
Treasury stock, held at cost, 8,801,154 shares as of December 30, 2018 | (109,541) | (108,372) | |||
Accumulated deficit | (248,528) | (229,558) | |||
Total stockholders’ equity | 75,661 | 95,171 | |||
Non-controlling interest | 427 | 362 | |||
Total stockholders' equity | 76,088 | 95,533 | $ 117,333 | $ 117,238 | |
Total liabilities and equity | $ 351,530 | $ 153,215 | |||
ASU 2016-02 (Topic 842) [Member] | |||||
Current assets | |||||
Cash and cash equivalents | $ 19,775 | ||||
Accounts receivable, net of allowances of $113 as of December 30, 2018 | 4,737 | ||||
Inventories | 3,482 | ||||
Prepaid expenses and other current assets | 11,426 | ||||
Total current assets | 39,420 | ||||
Property and equipment, net | 87,782 | ||||
Right-of-use assets for operating leases | 232,477 | ||||
Indefinite-lived intangible assets | 3,404 | ||||
Goodwill | 2,222 | ||||
Deferred income taxes | 13,580 | ||||
Deferred expenses, net and other assets | 7,002 | ||||
Total assets | 385,887 | ||||
Current liabilities | |||||
Accounts payable | 3,835 | ||||
Accrued expenses | 23,905 | ||||
Short-term operating lease liabilities | 28,826 | ||||
Accrued income taxes | 162 | ||||
Total current liabilities | 56,728 | ||||
Long-term operating lease liabilities | 228,406 | ||||
Other long-term liabilities | 5,751 | ||||
Total liabilities | 290,885 | ||||
Stockholders’ equity | |||||
Common stock, $0.01 par value—authorized 200,000,000 shares; outstanding 24,142,586 shares as of December 30, 2018 | 330 | ||||
Additional paid-in-capital | 432,771 | ||||
Treasury stock, held at cost, 8,801,154 shares as of December 30, 2018 | (108,372) | ||||
Accumulated deficit | (230,089) | ||||
Total stockholders’ equity | 94,640 | ||||
Non-controlling interest | 362 | ||||
Total stockholders' equity | 95,002 | ||||
Total liabilities and equity | 385,887 | ||||
Adjustments Due to the Adoption of Topic 842 | ASU 2016-02 (Topic 842) [Member] | |||||
Current assets | |||||
Right-of-use assets for operating leases | 232,477 | ||||
Deferred income taxes | 195 | ||||
Total assets | 232,672 | ||||
Current liabilities | |||||
Accrued expenses | (1,124) | ||||
Short-term operating lease liabilities | 28,826 | ||||
Total current liabilities | 27,702 | ||||
Deferred rent and landlord allowances | (22,905) | ||||
Long-term operating lease liabilities | 228,406 | ||||
Total liabilities | 233,203 | ||||
Stockholders’ equity | |||||
Accumulated deficit | (531) | ||||
Total stockholders’ equity | (531) | ||||
Total stockholders' equity | (531) | ||||
Total liabilities and equity | $ 232,672 |
Organization and Other Matter_5
Organization and Other Matters - Schedule of Impact on Consolidated Balance Sheet (Parenthetical) (Detail) - USD ($) $ / shares in Units, $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | Dec. 30, 2018 |
Nature Of Business And Basis Of Presentation [Line Items] | |||
Allowances on accounts receivable | $ 65 | $ 113 | |
Common stock, par value | $ 0.01 | $ 0.01 | |
Common stock, authorized | 200,000,000 | 200,000,000 | |
Common stock, outstanding | 24,038,211 | 24,142,586 | |
Treasury stock, shares | 8,939,202 | 8,801,154 | |
ASU 2016-02 (Topic 842) [Member] | |||
Nature Of Business And Basis Of Presentation [Line Items] | |||
Net reduction to opening accumulated deficit | $ 500 |
Revenue - Additional Informatio
Revenue - Additional Information (Detail) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Apr. 01, 2018 | |
Disaggregation Of Revenue [Line Items] | ||
Amount of revenue recognized | $ 98,087,000 | $ 102,917,000 |
Aggregate value of remaining performance obligation on outstanding contracts | 3,571,000 | |
Revenue recognized related to prior periods | 0 | 0 |
January 1, 2018 Liability Ending Balance [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Amount of revenue recognized | 800,000 | 900,000 |
Point in Time Sales [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Amount of revenue recognized | 97,800,000 | 102,700,000 |
Over Time Sales [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Amount of revenue recognized | $ 300,000 | $ 200,000 |
Revenue - Summary of Current an
Revenue - Summary of Current and Noncurrent Contract Liabilities from Contracts with Customers (Detail) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Revenue From Contract With Customer [Abstract] | |
Beginning balance of current contract liability | $ (2,184) |
Ending balance of current contract liability | (1,495) |
Increase (Decrease) in contract liability | (689) |
Beginning balance of noncurrent contract liability | (1,631) |
Ending balance of noncurrent contract liability | (2,076) |
Increase (Decrease) in contract liability | $ 445 |
Revenue - Summary of Expected R
Revenue - Summary of Expected Revenue Recognition Related to Contract Liabilities (Detail1) $ in Thousands | Mar. 31, 2019USD ($) |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, remaining performance obligations | $ 3,571 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2019-04-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, remaining performance obligations | $ 1,124 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 9 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2020-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, remaining performance obligations | $ 525 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2021-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, remaining performance obligations | $ 185 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2022-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, remaining performance obligations | $ 176 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2023-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, remaining performance obligations | $ 169 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2024-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, remaining performance obligations | $ 1,392 |
Revenue, remaining performance obligation, expected timing of satisfaction, period |
Revenue - Summary of Expected_2
Revenue - Summary of Expected Revenue Recognition Related to Contract Liabilities (Detail) $ in Thousands | Mar. 31, 2019USD ($) |
Revenue From Contract With Customer [Abstract] | |
Revenue, remaining performance obligations | $ 3,571 |
Fair Value Measurement - Additi
Fair Value Measurement - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Apr. 01, 2018 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Impairment charge | $ 0 | $ 2 |
ASU 2016-02 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Impaired pre-tax right-of-use assets related to previously impaired shops | $ 0.7 |
Loss Per Share - Additional Inf
Loss Per Share - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2019shares | |
Common Share Options [Member] | |
Loss Per Share [Line Items] | |
Potential common shares included in diluted shares outstanding | 0 |
Loss Per Share - Summary of Los
Loss Per Share - Summary of Loss Per Share Calculation (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Apr. 01, 2018 | |
Loss Per Share [Line Items] | ||
Net loss attributable to Potbelly Corporation | $ (18,439) | $ (2,194) |
Weighted average common shares outstanding-basic | 24,133,038 | 25,144,855 |
Weighted average common shares outstanding-diluted | 24,133,038 | 25,144,855 |
Loss per share available to common stockholders-basic | $ (0.76) | $ (0.09) |
Loss per share available to common stockholders-diluted | $ (0.76) | $ (0.09) |
Common Share Options [Member] | ||
Loss Per Share [Line Items] | ||
Potentially dilutive shares that are considered anti-dilutive | 2,386,820 | 3,101,447 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2019 | Apr. 01, 2018 | |
Income Tax Disclosure [Abstract] | |||
Income tax expense | $ 13,619 | $ 13,600 | $ (504) |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information Related to Leases (Detail) $ in Thousands | Mar. 31, 2019USD ($) |
Leases [Abstract] | |
Right-of-use assets | $ 222,177 |
Short-term lease liabilities | 28,768 |
Long-term lease liabilities | 217,008 |
Total lease liabilities | $ 245,776 |
Leases - Operating Lease Term a
Leases - Operating Lease Term and Discount Rate (Detail) | Mar. 31, 2019 |
Leases [Abstract] | |
Weighted average remaining lease term (years) | 8 years 10 months 24 days |
Weighted average discount rate | 8.01% |
Leases - Components of Lease Co
Leases - Components of Lease Cost (Detail) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Lessee Lease Description [Line Items] | |
Total lease cost | $ 14,499 |
Occupancy and General and Administrative Expenses [Member] | |
Lessee Lease Description [Line Items] | |
Operating lease cost | 10,995 |
Occupancy Expenses [Member] | |
Lessee Lease Description [Line Items] | |
Variable lease cost | $ 3,504 |
Leases - Supplemental Disclosur
Leases - Supplemental Disclosures of Cash Flow Information Related to Leases (Detail) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating cash flows rent paid for operating lease liabilities | $ 11,938 |
Operating right-of-use assets obtained in exchange for new operating lease liabilities | $ 922 |
Leases - Additional Information
Leases - Additional Information (Detail) $ in Millions | Mar. 31, 2019USD ($) |
Leases [Abstract] | |
Additional operating leases related to shops not yet open, amount | $ 1.6 |
Additional operating leases related to shops not yet commence, term | 7 years |
Leases - Maturities of Lease Li
Leases - Maturities of Lease Liabilities (Detail) $ in Thousands | Mar. 31, 2019USD ($) |
Operating Leases | |
Remainder of 2019 | $ 35,277 |
2020 | 45,402 |
2021 | 41,183 |
2022 | 36,002 |
2023 | 31,111 |
Thereafter | 164,475 |
Total lease payments | 353,450 |
Less: imputed interest | (107,674) |
Present value of lease liabilities | $ 245,776 |
Leases - Maturities of Lease _2
Leases - Maturities of Lease Liabilities Under the Previous Lease Accounting (Detail) $ in Thousands | Dec. 30, 2018USD ($) |
Operating Leases | |
2019 | $ 47,918 |
2020 | 45,828 |
2021 | 41,497 |
2022 | 36,120 |
2023 | 31,060 |
Thereafter | 138,928 |
Total minimum lease payments | $ 341,351 |
Capital Stock - Additional Info
Capital Stock - Additional Information (Detail) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Apr. 01, 2018 | May 08, 2018 | |
Equity Class Of Treasury Stock [Line Items] | |||
Stock repurchase program, authorized amount | $ 65,000,000 | ||
Common stock repurchased value | $ 1,144,000 | $ 63,000 | |
Stock Repurchase Program [Member] | |||
Equity Class Of Treasury Stock [Line Items] | |||
Common stock shares repurchased | 135,000 | ||
Common stock repurchased value | $ 1,100,000 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2019 | Apr. 01, 2018 | Jun. 14, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Recognized stock-based compensation expense | $ 459 | $ 862 | ||
Stock units issued | 194,000 | |||
Stock units issued, grant-date fair value | $ 8.46 | |||
Common Share Options [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Recognized stock-based compensation expense | $ 300 | 800 | ||
Unrecognized stock compensation expense | $ 1,600 | $ 1,600 | ||
Unrecognized stock compensation expense, recognition period | 2022 | |||
Restricted Stock Units (RSUs) [Member] | Non-Employee Board Of Directors [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Recognized stock-based compensation expense | $ 200 | $ 100 | ||
Unrecognized stock compensation expense | $ 2,400 | $ 2,400 | ||
Vesting description | The employee grants vest in one-third increments over a three-year period. | |||
Options vesting period | 3 years | |||
Restricted Stock Units (RSUs) [Member] | Non-Employee Board Of Directors [Member] | First Anniversary [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 50.00% | |||
Restricted Stock Units (RSUs) [Member] | Non-Employee Board Of Directors [Member] | Second Anniversary [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 50.00% | |||
Performance Shares | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting description | The PSUs will vest fully on the third anniversary of the grant date. The quantity of shares that will vest ranges from 0% to 200% of the targeted number of shares. If the defined minimum targets are not met, then no shares will vest. | |||
Stock units issued | 188,414 | |||
Stock units issued, grant-date fair value | $ 8.46 | |||
Performance Shares | Minimum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage of targeted number of shares | 0.00% | |||
Performance Shares | Maximum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Recognized stock-based compensation expense | $ 100 | |||
Vesting percentage of targeted number of shares | 20000.00% | |||
2013 Long Term Incentive Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Additional shares of common stock reserved for issuance | 1,000,000 | |||
Total number of shares registered | 3,500,000 | |||
Method used to determine fair value of the options | Black-Scholes option pricing model | |||
Stock options granted | 0 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock Option Activity (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 30, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||
Options outstanding shares, beginning balance | 2,150 | |
Options, exercised | (21) | |
Options, canceled | (173) | |
Options outstanding shares, ending balance | 1,956 | 2,150 |
Options outstanding shares, exercisable | 1,511 | |
Options outstanding weighted average exercise price, beginning balance | $ 11.49 | |
Options, weighted average exercise price, exercised | 7.92 | |
Options, weighted average exercise price, canceled | 13.55 | |
Options outstanding weighted average exercise price, ending balance | 11.34 | $ 11.49 |
Options outstanding weighted average exercise price, exercisable | $ 11.01 | |
Options outstanding aggregate intrinsic value | $ 620 | $ 378 |
Options exercisable aggregate intrinsic value | $ 620 | |
Option outstanding weighted average remaining term | 5 years 3 months 21 days | 5 years 1 month 17 days |
Options exercisable weighted average remaining term | 4 years 3 months 29 days |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of RSU Activity (Detail) shares in Thousands | 3 Months Ended |
Mar. 31, 2019$ / sharesshares | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Number of RSUs, Non-vested, beginning balance | shares | 247 |
Number of RSUs, Granted | shares | 194 |
Number of RSUs, Vested | shares | (10) |
Number of RSUs, Non-vested, ending balance | shares | 431 |
Weighted Average Fair Value per Share, Non-vested, beginning balance | $ / shares | $ 11.99 |
Weighted Average Fair Value per Share, Granted | $ / shares | 8.46 |
Weighted Average Fair Value per Share, Vested | $ / shares | 8.52 |
Weighted Average Fair Value per Share, Non-vested, ending balance | $ / shares | $ 10.43 |
Commitment and Contingencies -
Commitment and Contingencies - Additional Information (Detail) | 1 Months Ended |
Oct. 31, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Purported collective and class action lawsuit filed date | October 2017 |