Financial Data and Key Metrics Changes - Quarterly revenue reached $120.2 million, and full-year revenue was $452 million, both all-time records, representing a 17% increase for the quarter and a 19% increase for the year compared to the previous year [14][24] - Same store sales growth was 18.9% for the quarter and 18.5% for the year, driven by strong traffic and operational success [14][24] - Positive net income of $2.7 million for the quarter and $4.3 million for the year, marking the third consecutive quarter of profitability [14][18] - Adjusted EBITDA for the year was $15.7 million, an improvement of $15.2 million compared to the previous year [24] Business Line Data and Key Metrics Changes - Digital engagement represented 38% of revenue, significantly contributing to record fourth-quarter results [15][44] - Catering business is accelerating, with sales approaching pre-pandemic levels, supported by targeted marketing initiatives [16][40] Market Data and Key Metrics Changes - AUVs (Average Unit Volumes) were $24,144 for the fourth quarter and $22,464 for the full year, with January and February 2023 AUVs recorded at $22,311 and $23,815 respectively [14][17] - The company experienced strong growth in CBD, airport, and suburban locations, indicating a recovery in these markets [3][17] Company Strategy and Development Direction - The company aims to become primarily franchise-focused, with 51 new shop commitments signed in late 2022, and plans to refranchise approximately 25% of company-owned shops [13][22] - The strategic plan includes achieving AUVs of $1.3 million and shop level margins of 16% by 2024 [22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued growth in 2023, expecting first-quarter AUVs between $23,000 and $24,000 and same store sales growth between 18.5% and 20.5% [21] - The company anticipates inflation to be less impactful in 2023, with a focus on maintaining operational efficiencies [19][20] Other Important Information - The company reported a liquidity position of $31.4 million at the end of the fourth quarter, including cash and available credit [23] - The company has made significant progress in improving customer satisfaction scores and operational efficiencies [3][12] Q&A Session Summary Question: What is the goal for new shop commitments by year-end? - The company is focusing on quality over quantity in filling the pipeline, with mid-hundreds of leads per quarter and a robust sales team to manage these leads [28][30] Question: What is the outlook on commodity pressures and contracts? - Commodity inflation peaked at over 21% but is expected to continue decreasing, with about 55% of the basket locked in contracts [31] Question: How has wage inflation been trending? - Wage inflation is expected to be in the mid-single digits, with high retention rates aiding in recruitment [33][35] Question: What is the status of the digital kitchen rollout? - The digital kitchen is currently in 38 locations, with plans to expand to around 100 by year-end, showing improvements in customer experience metrics [51] Question: How is the company leveraging digital engagement? - The company is focusing on digital advertising, e-commerce efforts, and a perks loyalty program to enhance customer engagement [59][69]

Business Operations - As of December 25, 2022, Potbelly had 429 shops across 31 states and the District of Columbia, with 384 company-operated and 45 franchise-operated shops[19][49]. - The company employs over 6,000 individuals, with approximately 1,800 in shop management roles[37]. - Potbelly's culture, defined by its Vision, Mission, and Values, plays a crucial role in attracting and retaining employees, contributing to a better-than-industry-average turnover rate[18][43]. - The company has initiated a franchising program since 2010, with plans to expand the number of franchise shops at an increasing rate[28]. - The average investment for a new shop is approximately $650,000, with average annual unit volumes of $1.15 million, aiming for shop-level profit margins in the mid to high teens[51]. - The average size of new shops is targeted between 1,800 and 2,200 square feet, with a typical dining area seating 40 to 60 people[53]. - The franchise agreement includes a 6.0% weekly royalty on sales and an initial franchise fee, with franchisees required to participate in an eight-week training program[57][55]. - Approximately 69.3% of the company's total domestic shops are concentrated in Illinois, Texas, Michigan, Maryland, Washington, D.C., and Virginia, making it vulnerable to regional economic conditions[154]. Financial Performance - In fiscal 2022, the system-wide average check per entree was approximately $11.38, an increase from $9.81 in 2021[29]. - Increased costs of utilities, labor, and commodities could adversely affect profitability, with inflation and supply chain disruptions being significant factors[100]. - The company has experienced significant labor cost inflation, which could materially adversely impact financial performance if not offset[165]. - The company may face increased healthcare costs due to rising medical claims, which could adversely affect financial performance[166]. - Changes in tax laws or unanticipated tax liabilities could adversely affect the company's profitability[163]. - The company has no plans to pay regular cash dividends for the foreseeable future, which may limit returns on investment unless shares are sold at a higher price[180]. - The company entered into a new credit agreement with an aggregate commitment of $25 million for a term loan, which imposes certain financial covenants and restrictions on operations[148]. Market Strategy - Potbelly's business strategy includes a "Traffic-Driven Profitability" plan with five pillars aimed at driving profitable growth and enhancing customer experience[23][24]. - The company prioritizes franchise unit growth while limiting company-operated shop growth, emphasizing the importance of location selection for long-term success[52]. - The company has increased its digital marketing efforts, utilizing platforms like Facebook and Instagram to enhance customer engagement and drive traffic growth[61]. - Potbelly aims to enhance its digital customer experience through technology investments, including the Potbelly Digital Kitchen[34]. - The company plans to continue emphasizing mobile and digital ordering, delivery, and catering, although these efforts may face operational challenges[160]. Supply Chain and Food Safety - More than 85% of food supplies are sourced through a cooperative arrangement with six primary distributors, with meat products constituting approximately 30% of purchasing composition[63][66]. - The company relies heavily on a limited number of suppliers, purchasing almost all bread from one supplier and over 90% of meat products from ten suppliers, which poses a risk to operations[102]. - Potbelly emphasizes food safety and quality assurance, dedicating substantial resources to ensure safe food products[31][32]. - Supply shortages or interruptions in fresh food deliveries could adversely impact operating results and overall business performance[101]. Risks and Challenges - The business is subject to seasonal fluctuations, with the first quarter typically seeing the lowest customer spending due to various factors[79]. - New shop openings may not be profitable and could take 10 to 13 weeks to reach planned operating levels, impacting overall profitability[113]. - Expansion into new markets carries risks, including higher costs and difficulties in hiring qualified staff, which could delay profitability[112]. - The company faces challenges in attracting and retaining qualified personnel, which could lead to increased labor costs and operational inefficiencies[105]. - Negative publicity regarding food quality or safety could materially harm the company's results of operations and brand value[157]. - The company is subject to various claims and lawsuits that could divert resources and generate negative publicity, impacting sales[146]. - Cybersecurity risks and information technology system failures could disrupt operations and negatively impact business[125]. - Security breaches involving customer information could lead to reputational damage and legal liabilities[127]. - Compliance with nutritional information regulations may increase operational costs and affect menu offerings[135]. - The company may face challenges in raising capital in the future, which could limit its ability to fund capital requirements[124]. - Class action lawsuits related to workplace and employment laws pose a risk of substantial damages and management distraction[144]. - The company acknowledges that climate change poses inherent risks that could disrupt operations and lead to additional costs[171]. - The company may face increased general and administrative expenses due to evolving environmental, social, and governance (ESG) regulations and stakeholder expectations[168]. - The company may not be able to adequately protect its intellectual property, which could harm brand value and market acceptance[147]. - Provisions in the company's bylaws may discourage or delay changes in control, potentially affecting stock price[176]. Consumer Trends - Over 35% of Potbelly's orders are digital, processed through the Potbelly App or website, as well as third-party delivery services[34]. - Potbelly's menu innovation focuses on responding to consumer trends and includes the development of bundling options and premium protein sandwiches[30]. - Changes in consumer eating habits and health regulations could adversely affect revenues, potentially requiring modifications to menu offerings[122]. - A shift in consumer preferences away from outside-the-home food could negatively impact financial results, particularly if new products are not accepted[123].

Potbelly Corporation (NASDAQ:PBPB) Q3 2022 Earnings Conference Call November 3, 2022 5:00 PM ET Company Participants Adiya Dixon - Senior Vice President & Chief Legal Officer Bob Wright - President & Chief Executive Officer Steve Cirulis - Senior Vice President & Chief Financial Officer Lisa Fortuna - Investor Relations Conference Call Participants Matt Curtis – William Blair Operator Good afternoon, everyone, and welcome to the Potbelly Corporation Third Quarter 2022 Earnings Conference Call. All participa ...

- (m) - POTBEL S A N D W I C H W O R K S ® Third Quarter 2022 Earnings Presentation -- November 3, 2022 -- Cautionary Statements Forward-Looking Statements In addition to historical information, this presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended and the Private Securities Litigation Reform Act of 1995. Forward-looking statements, written, oral or otherwise made, repr ...

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Financial statements show significant revenue growth, a $9.1 million net income for the quarter due to PPP loan forgiveness, and improved equity [Condensed Consolidated Balance Sheets (Unaudited)](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20%28Unaudited%29) Total assets decreased to $241.6 million, while liabilities reduced, leading to a positive total equity of $0.9 million from a prior deficit Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 25, 2022 | Dec 26, 2021 | | :--- | :--- | :--- | | Cash and cash equivalents | $9,506 | $14,353 | | Total current assets | $25,708 | $28,054 | | **Total assets** | **$241,555** | **$253,237** | | Total current liabilities | $66,602 | $69,880 | | Long-term debt, net | $10,100 | $17,517 | | **Total liabilities** | **$240,646** | **$255,654** | | **Total equity (deficit)** | **$909** | **($2,417)** | [Condensed Consolidated Statements of Operations (Unaudited)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20%28Unaudited%29) Q3 2022 revenues rose 15.7% to $117.6 million, with a $9.1 million net income driven by PPP loan forgiveness Q3 2022 vs Q3 2021 Performance (in thousands, except per share data) | Metric | Q3 2022 | Q3 2021 | | :--- | :--- | :--- | | Total revenues | $117,649 | $101,694 | | Loss from operations | ($705) | ($2,603) | | Gain on extinguishment of debt | $10,191 | $0 | | **Net income (loss)** | **$9,136** | **($2,860)** | | Diluted EPS | $0.31 | ($0.10) | YTD 2022 vs YTD 2021 Performance (in thousands, except per share data) | Metric | YTD Sep 25, 2022 | YTD Sep 26, 2021 | | :--- | :--- | :--- | | Total revenues | $331,823 | $277,248 | | Loss from operations | ($7,049) | ($20,239) | | Gain on extinguishment of debt | $10,191 | $0 | | **Net income (loss)** | **$1,957** | **($21,182)** | | Diluted EPS | $0.06 | ($0.78) | [Condensed Consolidated Statements of Equity (Unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Equity%20%28Unaudited%29) Total equity improved from a $2.4 million deficit to a positive $0.9 million, primarily due to year-to-date net income - Total equity shifted from a deficit of **($2,417) thousand** at the end of 2021 to a positive equity of **$909 thousand** at the end of Q3 2022[13](index=13&type=chunk) - The improvement was driven by a net income of **$9,029 thousand** in Q3 2022, offsetting earlier losses and reducing the accumulated deficit[13](index=13&type=chunk) [Condensed Consolidated Statements of Cash Flows (Unaudited)](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20%28Unaudited%29) Operating activities provided $1.0 million cash year-to-date, a significant improvement, despite an overall $4.8 million decrease in cash Year-to-Date Cash Flow Summary (in thousands) | Cash Flow Activity | YTD Sep 25, 2022 | YTD Sep 26, 2021 | | :--- | :--- | :--- | | Net cash from Operating | $1,018 | ($7,138) | | Net cash from Investing | ($4,914) | ($7,543) | | Net cash from Financing | ($951) | $13,391 | | **Net decrease in cash** | **($4,847)** | **($1,290)** | | Cash at end of period | $9,506 | $9,836 | - A non-cash gain on the extinguishment of a **$10.2 million** PPP loan significantly adjusted net income to operating cash flow[15](index=15&type=chunk) [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20%28Unaudited%29) Notes detail operations, revenue recognition, debt, and contingencies, including PPP loan forgiveness and impairment charges - As of the report date, the company operates **388** shops, with franchisees operating an additional **46** shops in the United States[16](index=16&type=chunk) - On July 12, 2022, the SBA approved forgiveness of the **$10.0 million** PPP loan principal and **$0.2 million** accrued interest, resulting in a **$10.2 million** gain[65](index=65&type=chunk) - The company recorded impairment charges of **$1.0 million** for the quarter and **$3.0 million** year-to-date due to underperforming shops[42](index=42&type=chunk) - The revolving credit facility's maturity was extended to **December 31, 2023**, with **$10.1 million** outstanding as of September 25, 2022[61](index=61&type=chunk)[62](index=62&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses 15.7% quarterly revenue growth, improved shop-level profit margin, and the 'Franchise Growth Acceleration Initiative' [Business and Strategy](index=19&type=section&id=Business%20and%20Strategy) The company's strategy centers on a 5-pillar plan and a 'Franchise Growth Acceleration Initiative' to refranchise 25% of units - The company's strategy centers on the **"Traffic-Driven Profitability" 5-pillar plan** for growth and customer engagement[85](index=85&type=chunk) - A major strategic push is the **Franchise Growth Acceleration Initiative**, aiming to refranchise approximately **25%** of company units over three years[86](index=86&type=chunk) Shop Count Rollforward | Period | Company Operated | Franchise Operated | Total | | :--- | :--- | :--- | :--- | | Shops as of Dec 26, 2021 | 397 | 46 | 443 | | Shops opened YTD | 0 | 1 | 1 | | Shops closed YTD | (9) | (1) | (10) | | **Shops as of Sep 27, 2022** | **388** | **46** | **434** | [Results of Operations](index=22&type=section&id=Results%20of%20Operations) Q3 2022 revenues increased 15.7% to $117.6 million, driven by comparable store sales and price increases, with PPP loan forgiveness aiding profitability Q3 2022 vs Q3 2021 Results (in thousands) | Metric | Q3 2022 | Q3 2021 | % Change | | :--- | :--- | :--- | :--- | | Total Revenues | $117,649 | $101,694 | 15.7% | | Sandwich shop sales, net | $116,449 | $100,996 | 15.3% | | Loss from operations | ($705) | ($2,603) | 72.9% | | Net income (loss) | $9,029 | ($2,948) | NM | - Quarterly revenue growth was driven by recovery in central business districts, improved catering, marketing, and price increases[98](index=98&type=chunk) YTD 2022 vs YTD 2021 Results (in thousands) | Metric | YTD 2022 | YTD 2021 | % Change | | :--- | :--- | :--- | :--- | | Total Revenues | $331,823 | $277,248 | 19.7% | | Sandwich shop sales, net | $328,873 | $275,274 | 19.5% | | Loss from operations | ($7,049) | ($20,239) | 65.2% | | Net income (loss) | $1,690 | ($21,301) | NM | [Non-GAAP Financial Measures](index=28&type=section&id=Non-GAAP%20Financial%20Measures) Non-GAAP metrics show improved Q3 2022 shop-level profit margin at 10.6% and Adjusted EBITDA at $4.7 million Non-GAAP Performance Metrics | Metric | Q3 2022 | Q3 2021 | YTD 2022 | YTD 2021 | | :--- | :--- | :--- | :--- | :--- | | Shop-level profit margin | 10.6% | 8.7% | 9.2% | 6.5% | | Adjusted EBITDA (in thousands) | $4,677 | $2,677 | $8,199 | ($2,036) | [Liquidity and Capital Resources](index=29&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains $23.7 million in total liquidity, with operating activities providing $1.0 million cash year-to-date, bolstered by PPP loan forgiveness - At the end of Q3 2022, the company had a cash balance of **$9.5 million** and total liquidity of **$23.7 million**[135](index=135&type=chunk) - The company's **$10.0 million** PPP loan, with accrued interest, was fully forgiven in July 2022, resulting in a **$10.2 million** gain[147](index=147&type=chunk) - The company has an 'at the market' equity offering program for up to **$40.0 million**, with no shares sold as of September 25, 2022[150](index=150&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=31&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reports no material changes to its market risk exposures since December 26, 2021 - There have been no material changes in the company's market risk exposures since **December 26, 2021**[153](index=153&type=chunk) [Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of September 25, 2022, with no material changes to internal controls - The CEO and CFO concluded that disclosure controls and procedures were effective as of **September 25, 2022**[154](index=154&type=chunk) - No changes occurred during the quarter that materially affected internal control over financial reporting[155](index=155&type=chunk) [PART II. OTHER INFORMATION](index=32&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings, but management expects no material adverse financial impact - Information regarding legal proceedings is provided in **Note 11** to the Condensed Consolidated Financial Statements[156](index=156&type=chunk) - Management does not expect current legal proceedings to materially impact the company's financials[81](index=81&type=chunk) [Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors have occurred since the fiscal year ended December 26, 2021 - No material changes to the company's Risk Factors have occurred since the Annual Report on Form 10-K for the fiscal year ended **December 26, 2021**[157](index=157&type=chunk) [Unregistered Sale of Equity Securities and Use of Proceeds](index=32&type=section&id=Item%202.%20Unregistered%20Sale%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not repurchase shares under its program year-to-date, acquiring 128,000 shares solely for tax withholding obligations - The company did not repurchase any shares under its stock repurchase program during the quarter[69](index=69&type=chunk)[148](index=148&type=chunk) - A total of **128,000** shares were acquired year-to-date, solely for employee tax withholding on vested equity awards[158](index=158&type=chunk)[161](index=161&type=chunk) - Approximately **$38.0 million** remains available for future purchases under the authorized stock repurchase program[158](index=158&type=chunk) [Defaults Upon Senior Securities](index=32&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) Not applicable - Not applicable[159](index=159&type=chunk) [Mine Safety Disclosures](index=32&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Not applicable - Not applicable[160](index=160&type=chunk) [Other Information](index=32&type=section&id=Item%205.%20Other%20Information) Not applicable - Not applicable[161](index=161&type=chunk) [Exhibits](index=33&type=section&id=Item%206.%20Exhibits) The report includes key exhibits such as the credit agreement amendment and Sarbanes-Oxley Act certifications - Exhibit **10.1** is Amendment No. **8** to the Second Amended and Restated Credit Agreement, dated **September 23, 2022**[163](index=163&type=chunk) - Exhibits **31.1, 31.2, and 32.1** contain required CEO and CFO certifications under the Sarbanes-Oxley Act[163](index=163&type=chunk)

Potbelly Corporation (NASDAQ:PBPB) Q2 2022 Earnings Conference Call August 4, 2022 5:00 PM ET Company Participants Adiya Dixon – Senior Vice President and Chief Legal Officer Bob Wright – President and Chief Executive Officer Steve Cirulis – Senior Vice President and Chief Financial Officer Lisa Fortuna – Investor Relations Conference Call Participants Matt Curtis – William Blair Operator Good afternoon, everyone, and welcome to Potbelly Corporation's Second Quarter 2022 Earnings Conference Call. [Operator ...

QOTETI S A N D W I C H W O R K S ® Second Quarter 2022 Earnings Presentation -- August 4, 2022 -- Forward-Looking Statements In addition to historical information, this presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended and the Private Securities Litigation Reform Act of 1995. Forward-looking statements, written, oral or otherwise made, represent the Company's expectation ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ______________________________________________ x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended June 26, 2022 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from ____to ____ Commission File Number: 001-36104 ______________________________________________ Potbelly Cor ...

Potbelly Corporation (NASDAQ:PBPB) Q1 2022 Earnings Conference Call May 5, 2022 5:00 PM ET Company Participants Adiya Dixon – Senior Vice President and Chief Legal Officer Bob Wright – President and Chief Executive Officer Steve Cirulis – Senior Vice President and Chief Financial Officer Conference Call Participants Matt Curtis – William Blair Operator Good afternoon, everyone, and welcome to Potbelly Corporation’s First Quarter 2022 Earnings Conference Call. All participants will be in a listen-only mode. ...

Potbelly is the sandwich shop with the craveable quality and good vibes of a first-class dive. First Quarter 2022 Earnings Presentation -- May 5, 2022 -- Cautionary Statements Forward-Looking Statements In addition to historical information, this presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended and the Private Securities Litigation Reform Act of 1995. Forward-looking st ...