What was the net cash provided by operating activities for Potbelly Sandwich Works in 2024?
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 |
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's 2025 Franchise Disclosure Document, the net cash provided by operating activities for the fiscal year 2024 was $19,663. This figure represents the cash flow generated from the company's core business operations during that period. It's a key indicator of Potbelly Sandwich Works's financial health and its ability to fund ongoing expenses and investments.
Several factors contributed to this net cash flow. These include the company's net income of $41,332, which was adjusted for non-cash items such as depreciation expense ($12,669), noncash lease expense ($24,317), and deferred income tax ($-34,091). These adjustments are necessary because net income, calculated according to accounting standards, doesn't always reflect the actual cash generated or used by the business.
Changes in operating assets and liabilities also played a role. For example, there were changes in accounts receivable ($-1,826), inventories ($-269), prepaid expenses and other assets ($-1,747), accounts payable ($-622), operating lease liabilities ($-27,887), and accrued expenses and other liabilities ($-877). These changes reflect how efficiently Potbelly Sandwich Works is managing its working capital, such as collecting payments from customers, managing inventory levels, and paying its suppliers. Understanding these cash flow dynamics is crucial for assessing the overall financial stability and performance of Potbelly Sandwich Works.