Potbelly(US:PBPB)2021-08-05 15:52Revenue and Sales Performance - Total revenues increased by $41.3 million, or 73.6%, to $97.5 million during the 13 weeks ended June 27, 2021, compared to $56.2 million during the same period in 2020[99]. - Company-operated comparable store sales increased by $38.1 million, or 70.0%, during the same quarter, driven by the easing of government restrictions[99]. - Total revenues increased by $31.8 million, or 22.1%, to $175.6 million during the 26 weeks ended June 27, 2021, driven by easing government restrictions and a 26.6% increase in company-operated comparable store sales[115]. - Franchise royalties and fees increased by $0.4 million, or 138.8%, during the 13 weeks ended June 27, 2021[99]. - Franchise royalties and fees increased by $0.3 million, or 37.6%, during the 26 weeks ended June 27, 2021, reflecting growth in franchise operations[115]. Cost and Expense Management - Cost of goods sold increased by $10.2 million, or 63.5%, to $26.3 million during the 13 weeks ended June 27, 2021, primarily due to increased shop revenue[100]. - As a percentage of sandwich shop sales, cost of goods sold decreased to 27.2% from 28.8% year-over-year, attributed to increased menu prices[100]. - Labor and related expenses increased by $8.3 million, or 15.9%, to $60.6 million during the 26 weeks ended June 27, 2021, while as a percentage of sandwich shop sales, these expenses decreased to 34.8% from 36.6%[117]. - Occupancy expenses decreased by $2.5 million, or 8.5%, to $27.2 million during the 26 weeks ended June 27, 2021, with occupancy expenses as a percentage of sandwich shop sales decreasing to 15.6% from 20.8%[118]. - Other operating expenses increased by $4.3 million, or 18.0%, to $28.0 million during the 26 weeks ended June 27, 2021, while as a percentage of sandwich shop sales, these expenses decreased to 16.1% from 16.6%[119]. - General and administrative expenses decreased by $1.0 million, or 5.9%, to $16.7 million during the 26 weeks ended June 27, 2021, with these expenses as a percentage of revenues decreasing to 9.5% from 12.3%[121]. - Depreciation expense decreased by $1.7 million, or 16.2%, to $8.7 million during the 26 weeks ended June 27, 2021, with depreciation as a percentage of revenues at 5.0% compared to 7.2% in the prior year[122]. - Impairment, loss on disposal of property and equipment and shop closures decreased by $4.5 million, or 57.1%, to $3.4 million during the 26 weeks ended June 27, 2021[124]. Financial Position and Liquidity - Net loss attributable to Potbelly Corporation was $18.4 million for the 26 weeks ended June 27, 2021, compared to a net loss of $35.6 million for the same period in 2020, representing a 48.4% improvement[114]. - Total liquidity at the end of Q2 2021 was $35.3 million, up from $33.5 million at the end of the previous quarter[132]. - The company ended the second quarter of 2021 with a cash balance of $11.8 million, compared to $11.5 million at the end of the previous quarter[132]. - Net cash used in operating activities increased to $5.5 million for the 26 weeks ended June 27, 2021, compared to $4.9 million for the same period in 2020[135]. - Net cash provided by financing activities decreased to $9.5 million for the 26 weeks ended June 27, 2021, down from $22.5 million in the prior year[137]. - As of June 27, 2021, the outstanding amount under the Credit Agreement was $786 thousand, significantly reduced from $23.1 million a year earlier[141]. - Net cash used in investing activities decreased to $3.3 million for the 26 weeks ended June 27, 2021, from $7.3 million in the prior year, primarily due to reduced capital expenditures[136]. Corporate Actions and Strategic Initiatives - The corporate restructuring plan is expected to reduce annual general and administrative expenses by $3.5 million to $4.0 million[92]. - The company has amended approximately 342 lease agreements to include rent abatements and deferrals as of June 27, 2021[94]. - The company continues to monitor the impact of COVID-19 on its operations and has implemented strict sanitation protocols[90]. - The company has temporarily closed 6 shops as of June 27, 2021, while the majority of shops have reopened dining rooms[90]. - An impairment charge of $429 thousand was recorded for certain shops due to continued underperformance during the 26 weeks ended June 27, 2021[125]. - Lease termination fees incurred amounted to $0.2 million, with a net gain of $0.1 million recorded from the derecognition of ROU assets of $1.4 million and lease liabilities of $1.6 million[126]. - No shares of common stock were repurchased during the 26 weeks ended June 27, 2021, due to the impact of the COVID-19 pandemic[146]. Advertising and Marketing - Advertising expenses increased by 51.0% to $847 thousand during the 26 weeks ended June 27, 2021, compared to $561 thousand during the same period in 2020[120].