Earnings per Share

12 Months Ended

Dec. 28, 2014

(4) Earnings per share

Basic and diluted income (loss) per common share attributable to common stockholders are calculated using the weighted average number of common shares outstanding for the period. Diluted income (loss) per common share attributable to common stockholders is computed by dividing the income (loss) allocated to common stockholders utilizing the two-class method by the weighted average number of fully diluted common shares outstanding. The Company’s redeemable convertible preferred stock were all considered participating securities requiring the two-class method to calculate basic and diluted earnings per share. In periods of a net loss attributable to common stockholders, the redeemable convertible preferred stock were excluded from the computation of basic earnings per share due to the fact that they are not required to fund losses and the redemption amount is not reduced as a result of losses. For the fiscal year 2012, the dilutive securities did not include stock options awarded to employees that had a performance condition requiring the completion of an initial public offering of common stock, as that performance condition was not satisfied at the reporting date and the holders of these options did not have rights to our undistributed earnings until that time.


	Fiscal Year
	2014		2013			2012
Calculation of undistributed income (loss) for basic and diluted shares:
Net income attributable to Potbelly Corporation	$	4,358	$	1,258		$	24,046
Less: Dividend paid to common and preferred stockholders		—		(49,854	)		—
Less: Accretion of redeemable convertible preferred stock to maximum redemption value		—		(15,097	)		(10,495	)

Undistributed income (loss) for basic and diluted shares	$	4,358	$	(63,693	)	$	13,551

Allocation of undistributed income (losses) to participating securities:
Common shares	$	4,358	$	(63,693	)	$	2,878
Redeemable convertible preferred shares		—		—			10,673

Undistributed income (loss)	$	4,358	$	(63,693	)	$	13,551

Weighted average common shares outstanding-basic		29,209,298		10,132,805			4,013,414
Plus: Effect of potential stock options exercise		949,142		—			18,052
Plus: Effect of potential warrant exercise		116,621		—			357,356

Weighted average common shares outstanding-diluted		30,275,061		10,132,805			4,388,822

Income (loss) per share available to common stockholders-basic	$	0.15	$	(6.29	)	$	0.72
Income (loss) per share available to common stockholders-diluted	$	0.14	$	(6.29	)	$	0.66
Potentially dilutive shares that are considered anti-dilutive:
Common share options		622,879		5,029,576			1,258,537
Warrants		—		247,704			—

- Definition

The entire disclosure for earnings per share.

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