What was the change in accrued expenses and other liabilities for Potbelly Sandwich Works in 2022?
Potbelly_Sandwich_Works Franchise · 2025 FDDAnswer from 2025 FDD Document
n thousands)**
| Fiscal Year | ||||||
|---|---|---|---|---|---|---|
| 2024 | 2023 | 2022 | ||||
| Cash flows from operating activities: | ||||||
| Net income | $ 41,332 | $ | 5,577 | $ 4,711 | ||
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||
| Depreciation expense | 12,669 | 12,138 | 11,890 | |||
| Noncash lease expense | 24,317 | 25,814 | 25,792 | |||
| Deferred income tax | (34,091) | — | 18 | |||
| Stock-based compensation expense | 5,728 | 5,450 | 3,265 | |||
| Asset impairment, shop closure and disposal of property and equipment | (136) | 1,058 | 3,651 | |||
| Loss (gain) on Franchise Growth Acceleration Initiative activities | 462 | (2,202) | — | |||
| Loss (gain) on extinguishment of debt | 2,376 | 224 | (10,191) | |||
| Amortization of debt issuance costs | 234 | 482 | 270 | |||
| Changes in operating assets and liabilities: | ||||||
| Accounts receivable, net | (1,826) | (1,580) | (387) | |||
| Inventories | (269) | 177 | (499) | |||
| Prepaid expenses and other assets | (1,747) | (3,989) | (520) | |||
| Accounts payable | (622) | (1,025) | 2,239 | |||
| Operating lease liabilities | (27,887) | (30,721) | (27,984) | |||
| Accrued expenses and other liabilities | (877) | 8,086 | 221 | |||
| Net cash provided by operating activities | 19,663 | 19,488 | 12,476 | |||
| Cash flows from investing activities: | ||||||
| Purchases of property and equipment | (19,284) | (17,053) | (8,426) | |||
| Proceeds from sales of refranchised shops | 373 | 6,282 | — | |||
| Other investing activities | (171) | — | — | |||
| Net cash used in investing activities | (19,082) | (10,771) | (8,426) | |||
| Cash flows from financing activities: | ||||||
| Borrowings under Revolving Facility | 11,500 | — | — | |||
| Borrowings under Term Loan | — | 25,000 | — | |||
| Borrowings under Former Credit Facility | — | 14,600 | 39,050 | |||
| Repayments under Revolving Facility | (7,500) | — | — | |||
| Repayments under Term Loan | (22,827) | — | — | |||
| Repayments under Former Credit Facility | — | (23,150) | (40,350) | |||
| Principal payments made for Term Loan | — | (2,838) | — | |||
| Payment of debt issuance costs | (623) | (2,205) | (196) | |||
| Proceeds from exercise of warrants | 1,309 | 961 | — | |||
| Employee taxes on certain stock-based payment arrangements | (2,229) | (1,312) | (813) | |||
| Contributions from non-controlling interest | 303 | — | — | |||
| Distributions to non-controlling interest | (1,180) | (854) | (475) | |||
| Treasury Stock repurchase | (1,393) | — | — | |||
| Net cash (used in) provided by financing activities | (22,640) | 10,202 | (2,784) | |||
| Net change in cash and cash equivalents | (22,059) | 18,918 | 1,266 | |||
| Cash and cash equivalents and restricted cash at beginning of period | 34,537 | 15,619 | 14,353 | |||
| Cash and cash equivalents and restricted cash at end of period | $ 12,478 | $ | 34,537 | $ 15,619 | ||
| Supplemental cash flow information: | ||||||
| Income taxes paid | 784 | 278 | 139 | |||
| Interest paid | 715 | 3,483 | 936 | |||
| Supplemental non-cash investing and financing activities: | ||||||
| Unpaid liability for purchases of property and equipment | 1,239 | 1,008 | 778 | |||
| Unpaid liability for employee taxes on certain stock-based payment arrangements | 16 |
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 37–49)
What This Means (2025 FDD)
According to Potbelly Sandwich Works' 2025 Franchise Disclosure Document, the change in accrued expenses and other liabilities in 2022 was $221. This figure represents the net increase or decrease in the company's short-term financial obligations, such as wages, taxes, and other operational costs that have been incurred but not yet paid.
For a prospective franchisee, understanding this change is crucial as it reflects the company's financial management and short-term obligations. A positive change, as seen in 2022, could indicate that the company is managing its expenses effectively or has deferred payments, while a negative change might suggest increased immediate liabilities.
It's important to note that this figure is part of a larger financial picture. Franchisees should consider this change in conjunction with other financial metrics, such as revenue, net income, and cash flow, to gain a comprehensive understanding of Potbelly Sandwich Works' financial health. Additionally, franchisees should inquire about the specific factors that contributed to this change in accrued expenses to better assess the company's financial practices and stability.