Noodles & Company (Nasdaq: NDLS) today announced financial
results for its second quarter ended June 29, 2021.
Key highlights for the second quarter of
2021 versus the second quarter of 2020 include:
- Total revenue increased 57% to
$125.6 million.
- Comparable restaurant sales
increased 56.8% system-wide, comprised of a 55.7% increase at
company-owned restaurants and a 63.8% increase at franchise
restaurants.
- Record Company Average Unit Volumes
of $1.35 million represented a 51.5% increase compared to the
second quarter of 2020 and a 12.3% increase versus the second
quarter of 2019.
- Digital sales grew 15% and
accounted for 56% of sales.
- Restaurant contribution margin(1)
was 18.9%, the highest since Q4 2014 and an increase of 1,220 basis
points.
- Net income was $5.7 million, or
$0.12 per diluted share, compared to net loss of $13.5 million, or
$0.30 per diluted share.
- Adjusted EBITDA(1) was $13.8
million, an increase of $17.1 million.
- Net debt(1) decreased to $19.9
million compared to $34.2 million at the end of the fourth quarter
2020.
_____________________ |
(1) |
Restaurant
contribution margin, EBITDA, adjusted EBITDA and net debt are
non-GAAP measures. Reconciliations of operating income (loss) to
restaurant contribution margin, net income (loss) to EBITDA and
adjusted EBITDA, and debt to net debt are included in the
accompanying financial data. See “Non-GAAP Financial
Measures.” |
“We are very pleased with our second quarter
results which reflect the strong momentum and the resiliency in our
concept despite volatility in market conditions. Our second quarter
results are further proof of the strength of the Noodles &
Company brand, with continued sales acceleration and strong
restaurant contribution margins. Our average unit volumes reached a
new record level of $1.35 million, representing 12.3% growth
relative to the second quarter of 2019 and we achieved our highest
restaurant contribution margin of 18.9% in nearly seven years,
despite an inflationary environment. Our results in the second
quarter reflect strength across all channels, as digital sales
continued to grow as in-restaurant sales returned to 70% of
pre-pandemic levels. The launch of Tortelloni in June was extremely
well received by guests and our early read from our marketing
analytics is showing an increase in both frequency and repurchase
rates. Most importantly, we continue to be proud of our dedicated
team of high performers with strong tenure and better than industry
average retention and turnover.”
Boennighausen continued, “I am pleased to report
that we continued to see strong sales momentum into the third
quarter. With our AUVs at an all-time high and consistent margin
expansion, there is no better time for us to grow our brand. We are
making strong progress in building our pipeline of both
company-owned and franchise restaurant development units to achieve
7% annual system-wide unit growth in 2022 and at least 10% shortly
thereafter.”
Second Quarter 2021 Financial
Results
Total revenue grew 56.8% to $125.6 million in
the second quarter of 2021, compared to $80.2 million in the second
quarter of 2020. This growth was due to an increase in system-wide
comparable restaurant sales as well as new restaurant openings
performing at higher levels than historical openings.
In the second quarter of 2021, system-wide
comparable restaurant sales increased 56.8%, comprised of a 55.7%
increase at company-owned restaurants and a 63.8% increase at
franchise restaurants. Comparable restaurant sales reflect
continued momentum in both price and traffic, in addition to
lapping the initial impact of the COVID-19 pandemic. Average unit
volumes, which normalizes for the impact of temporary restaurant
closures, increased 51.5% over the second quarter of 2020 and 12.3%
compared to the second quarter of 2019.
Digital sales during the second quarter grew 15%
relative to the second quarter of the prior year and accounted for
56% of total revenue. Digital sales remained steady even as our
dining rooms reopened.
Restaurant contribution margin increased to
18.9% in the second quarter of 2021, compared to 6.7% in the second
quarter of 2020. This increase was primarily due to leverage on
increased average unit volumes and the benefit of labor efficiency
initiatives, partially offset by modest commodity pressures,
particularly in the back half of the quarter.
The safety and well-being of our team members
and guests remains our highest priority and we continue to actively
monitor and adhere to local and federal mandates as it relates to
in-restaurant dining and safety protocols. As of July 30, 2021,
substantively all company-owned and franchise locations are
offering in-restaurant dining at varying capacities.
There were two company-owned restaurant openings
and one franchise restaurant opening during the second quarter. We
did not close any company-owned locations in the second quarter of
2021. There were 451 restaurants system-wide at the end of the
second quarter 2021, comprised of 374 company-owned restaurants and
77 franchise restaurants. Recent openings that are not in the
Company’s comparable restaurant base, many of which offer order
ahead drive-thru pick-up windows, continue to perform as a group at
the highest sales level of any class of new restaurants in the
Company’s history.
For the second quarter of 2021, the Company
reported net income of $5.7 million, or $0.12 per diluted share,
compared with net loss of $13.5 million in the second quarter of
2020, or $0.30 loss per diluted share. Income from operations for
the second quarter of 2021 was $6.2 million, compared to a loss
from operations of $12.5 million in the second quarter of 2020.
Adjusted net income was $4.5 million, or $0.10
per diluted share, in the second quarter of 2021, which includes
$0.01 for stock-based compensation, compared to adjusted net loss
of $8.1 million, or $0.18 loss per diluted share, in the second
quarter of 2020. Adjusted EBITDA increased to $13.8 million in the
second quarter of 2021, an increase of $17.1 million over the
second quarter of 2020.
Liquidity Update:
As of June 29, 2021, the Company had $17.3
million of cash on hand, outstanding debt of $38.8 million under
the revolving credit facility and $57.0 million available for
borrowing.
Business Outlook:
Boennighausen concluded, “Our performance during
2020, and over the past several months, gives me confidence that we
are well positioned to navigate any market environment given the
strength of our menu, our off-premise capabilities and our digital
platform. Given that market challenges and uncertainties remain,
particularly on the potential impact of the Delta COVID variant, we
are not providing full financial guidance for fiscal 2021.” The
Company is, however, providing the following expectations for
2021:
- 10 to 15 new restaurants
system-wide in 2021, including eight to eleven company-owned
locations; and
- Capital expenditures of $20 million
to $24 million in 2021.
Non-GAAP Financial Measures
The Company believes that a quantitative
reconciliation of the Company’s non-GAAP financial measures
guidance to the most comparable financial measures calculated and
presented in accordance with GAAP cannot be made available without
unreasonable efforts. A reconciliation of these non-GAAP
financial measures would require the Company to provide guidance
for various reconciling items that are outside of the Company’s
control and cannot be reasonably predicted due to the fact that
these items could vary significantly from period to period. A
reconciliation of certain non-GAAP financial measures would also
require the Company to predict the timing and likelihood of
outcomes that determine future impairments and the tax benefit
thereof. None of these measures, nor their probable
significance, can be reliably quantified. The non-GAAP financial
measures noted above have limitations as analytical financial
measures, as discussed below in the section entitled “Non-GAAP
Financial Measures.” In addition, the guidance with respect to
non-GAAP financial measures is a forward-looking statement, which
by its nature involves risks and uncertainties that could cause
actual results to differ materially from the Company’s
forward-looking statement, as discussed below in the section
entitled “Forward-Looking Statements.”
Key Definitions
Average Unit Volume —
represents the average annualized sales of all company-owned
restaurants for a given time period. Average unit volume is
calculated by dividing restaurant revenue by the number of
operating days within each time period and multiplying by the
number of operating days we have in a typical year. This
measurement allows management to assess changes in revenue patterns
at our restaurants.
Comparable Restaurant Sales —
represents year-over-year sales comparisons for the comparable
restaurant base open for at least 18 full periods. This measure
highlights performance of existing restaurants, as the impact of
new restaurant openings is excluded. Changes in comparable
restaurant sales are generated by changes in traffic, which we
calculate as the number of entrées sold, or changes in per-person
spend, calculated as sales divided by traffic. For fiscal year
2020, restaurants that were temporarily closed or operating at
reduced hours or dining capacity due to the COVID-19 pandemic
remained in comparable restaurant sales.
Restaurant Contribution and Restaurant
Contribution Margin — restaurant contribution represents
restaurant revenue less restaurant operating costs, which are costs
of sales, labor, occupancy and other restaurant operating items.
Restaurant contribution margin represents restaurant contribution
as a percentage of restaurant revenue. Restaurant contribution and
restaurant contribution margin are presented because they are
widely-used metrics within the restaurant industry to evaluate
restaurant-level productivity, efficiency and performance.
Management also uses restaurant contribution and restaurant
contribution margin as metrics to evaluate the profitability of
incremental sales at our restaurants, restaurant performance across
periods, and restaurant financial performance compared with
competitors. See “Non-GAAP Financial Measures” below.
EBITDA and Adjusted EBITDA —
EBITDA represents net income (loss) before interest expense,
provision (benefit) for income taxes and depreciation and
amortization. Adjusted EBITDA represents net income (loss) before
interest expense, provision (benefit) for income taxes,
depreciation and amortization, restaurant impairments, closure
costs and asset disposals, acquisition costs, severance costs and
stock-based compensation expense. EBITDA and Adjusted EBITDA are
presented because: (i) management believes they are useful measures
for investors to assess the operating performance of our business
without the effect of non-cash charges such as depreciation and
amortization expenses and restaurant impairments, asset disposals
and closure costs, and (ii) management uses them internally as a
benchmark for certain of our cash incentive plans and to evaluate
our operating performance or compare performance to that of
competitors. See “Non-GAAP Financial Measures” below.
Adjusted Net Income (Loss) —
represents net income (loss) plus various adjustments and the tax
effects of such adjustments. Adjusted net income (loss) is
presented because management believes it helps convey supplemental
information to investors regarding the Company’s performance,
excluding the impact of special items that affect the comparability
of results in past quarters and expected results in future
quarters. See “Non-GAAP Financial Measures” below.
Net Debt — represents debt (the
most comparable GAAP measure, calculated as long-term obligations
plus short-term borrowings) minus cash and equivalents. Management
believes that net debt is an important measure to monitor leverage
and evaluate the balance sheet. With respect to net debt, cash and
equivalents are subtracted from the GAAP measure because they could
be used to reduce the Company’s debt obligations. A limitation
associated with using net debt is that it subtracts cash and
equivalents and therefore may imply that there is less Company debt
than the most comparable GAAP measure indicates. Management
believes that investors may find it useful to monitor leverage and
evaluate the balance sheet. See “Non-GAAP Financial Measures”
below.
Conference Call
Noodles & Company will host a conference
call to discuss its second quarter financial results on Tuesday,
August 3, 2021 at 4:30 PM Eastern Time. The conference call
can be accessed live over the phone by dialing (877) 303-1298 or
for international callers by dialing (253) 237-1032. A replay will
be available after the call and can be accessed by dialing (855)
859-2056 or for international callers by dialing (404) 537-3406;
the passcode is 9995345. The replay will be available until
Tuesday, August 10, 2021. The conference call will also be webcast
live from the Company’s corporate website at investor.noodles.com,
under the “Events & Presentations” page. An archive of the
webcast will be available at this location shortly after the call
has concluded until Tuesday, August 10, 2021.
Non-GAAP Financial Measures
To supplement its condensed consolidated
financial statements, which are prepared and presented in
accordance with accounting principles generally accepted in the
United States of America (“GAAP”), the Company uses the following
non-GAAP financial measures: EBITDA, adjusted EBITDA, adjusted net
income (loss), adjusted earnings (loss) per share, net debt,
restaurant contribution and restaurant contribution margin
(collectively, the “non-GAAP financial measures”). The presentation
of this financial information is not intended to be considered in
isolation or as a substitute for, or to be superior to, the
financial information prepared and presented in accordance with
GAAP. The Company uses these non-GAAP financial measures for
financial and operational decision making and as a means to
evaluate period-to-period comparisons. The Company believes that
they provide useful information about operating results, enhance
the overall understanding of past financial performance and future
prospects and allow for greater transparency with respect to key
metrics used by management in its financial and operational
decision making. Adjusted net income (loss) is presented because
management believes it helps convey supplemental information to
investors regarding the Company’s operating performance excluding
the impact of restaurant impairment and closure costs, dead deal or
registration statement costs, severance costs and stock-based
compensation expense and the tax effect of such adjustments.
However, the Company recognizes that non-GAAP financial measures
have limitations as analytical financial measures. The Company
compensates for these limitations by relying primarily on its GAAP
results and using non-GAAP metrics only supplementally. There are
numerous of these limitations, including that: adjusted EBITDA does
not reflect the Company’s capital expenditures or future
requirements for capital expenditures; adjusted EBITDA does not
reflect interest expense or the cash requirements necessary to
service interest or principal payments, associated with our
indebtedness; adjusted EBITDA does not reflect depreciation and
amortization, which are non-cash charges, although the assets being
depreciated and amortized will likely have to be replaced in the
future, and do not reflect cash requirements for such replacements;
adjusted EBITDA does not reflect the cost of stock-based
compensation; adjusted EBITDA does not reflect changes in, or cash
requirements for, our working capital needs; adjusted net income
(loss) does not reflect cash expenditures, or future requirements,
for lease termination payments and certain other expenses
associated with reduced new restaurant development; and restaurant
contribution and restaurant contribution margin are not reflective
of the underlying performance of our business because
corporate-level expenses are excluded from these measures. When
analyzing the Company’s operating performance, investors should not
consider non-GAAP financial metrics in isolation or as substitutes
for net income (loss) or cash flow from operations, or other
statement of operations or cash flow statement data prepared in
accordance with GAAP. The non-GAAP financial measures used by the
Company in this press release may be different from the measures
used by other companies.
For more information on the non-GAAP financial
measures, please see the “Reconciliation of Non-GAAP Measurements
to GAAP Results” tables in this press release. These accompanying
tables have more details on the GAAP financial measures that are
most directly comparable to non-GAAP financial measures and the
related reconciliations between these financial measures.
About Noodles & Company
Since 1995, Noodles & Company has been
serving noodles your way, from noodles and flavors that you know
and love, to new ones you’re about to discover for the first time.
From indulgent Wisconsin Mac & Cheese to good-for-you Zoodles,
Noodles serves a world of flavor in every bowl. Made up of over 450
restaurants and 8,000 passionate team members, Noodles is dedicated
to nourishing and inspiring every guest who walks through the door.
To learn more or find the location nearest you, visit
www.noodles.com.
Forward-Looking Statements
In addition to historical information, this
press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995
that involve risks and uncertainties such as the number of
restaurants we intend to open, projected capital expenditures and
estimates of our effective tax rates. In some cases, you can
identify forward-looking statements by terms such as “may,”
“might,” “will,” “objective,” “intend,” “should,” “could,” “can,”
“would,” “expect,” “believe,” “design,” “estimate,” “predict,”
“potential,” “plan” or the negative of these terms and similar
expressions intended to identify forward-looking statements. These
statements reflect our current views with respect to future events
and are based on currently available operating, financial and
competitive information. Examples of forward-looking statements
include all matters that are not historical facts, such as
statements regarding our ability to navigate the COVID-19 pandemic,
projected capital expenditures, the revenue and balance sheet
impact of the COVID-19 pandemic, estimated costs associated with
our closure of underperforming restaurants, the implementation and
results of strategic initiatives and investments and our future
financial performance, including comparable sales improvement and
our ability to generate positive cash flow. Our actual results may
differ materially from those anticipated in these forward-looking
statements due to reasons including, but not limited to, our
ability to sustain our overall growth, in particular, our digital
sales growth; our ability to open new restaurants on schedule and
cause those newly opened restaurants to be successful; our ability
to achieve and maintain increases in comparable restaurant sales
and to successfully execute our business strategy, including new
restaurant initiatives and operational strategies to improve the
performance of our restaurant portfolio; the success of our
marketing efforts; price and availability of commodities; our
ability to adequately staff our restaurants; changes in labor
costs; the extent, duration and severity of the COVID-19 pandemic;
governmental and guest response to the COVID-19 pandemic; other
conditions beyond our control such as weather, natural disasters,
disease outbreaks, epidemics or pandemics impacting our customers
or food supplies; consumer reaction to industry related public
health issues and health pandemics, including the COVID-19 pandemic
and perceptions of food safety; our ability to maintain compliance
with debt covenants and continue to access the financing necessary
to execute our business strategy; current economic conditions;
consumer confidence and spending patterns; seasonal factors; and
weather. For additional information on these and other factors that
could affect the Company’s forward-looking statements, see the
Company’s risk factors, as they may be amended from time to time,
set forth in its filings with the SEC, included in our Annual
Report on Form 10-K for the fiscal year ended December 29, 2020
filed on February 25, 2021 and in our Quarterly Report on Form 10-Q
for the quarterly period ended March 30, 2021 filed on April 30,
2021. The Company disclaims and does not undertake any obligation
to update or revise any forward-looking statement in this press
release, except as may be required by applicable law or
regulation.
|
Noodles & CompanyCondensed
Consolidated Statements of Operations(in
thousands, except share and per share data,
unaudited) |
|
|
|
Fiscal Quarter Ended |
|
Two Fiscal Quarters Ended |
|
|
June 29,2021 |
|
June 30,2020 |
|
June 29,2021 |
|
June 30,2020 |
Revenue: |
|
|
|
|
|
|
|
|
Restaurant revenue |
|
$ |
123,715 |
|
|
$ |
80,021 |
|
|
$ |
231,459 |
|
|
$ |
178,737 |
|
Franchising royalties and fees, and other |
|
1,934 |
|
|
136 |
|
|
3,767 |
|
|
1,768 |
|
Total revenue |
|
125,649 |
|
|
80,157 |
|
|
235,226 |
|
|
180,505 |
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restaurant operating costs (exclusive of depreciation and
amortization shown separately below): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales |
|
30,805 |
|
|
20,020 |
|
|
57,782 |
|
|
45,224 |
|
Labor |
|
36,926 |
|
|
27,137 |
|
|
71,232 |
|
|
61,368 |
|
Occupancy |
|
11,519 |
|
|
11,676 |
|
|
23,168 |
|
|
23,736 |
|
Other restaurant operating costs |
|
21,082 |
|
|
15,789 |
|
|
41,287 |
|
|
32,478 |
|
General and administrative |
|
12,978 |
|
|
10,034 |
|
|
23,907 |
|
|
20,588 |
|
Depreciation and amortization |
|
5,576 |
|
|
5,397 |
|
|
11,163 |
|
|
10,732 |
|
Pre-opening |
|
163 |
|
|
71 |
|
|
221 |
|
|
144 |
|
Restaurant impairments, closure costs and asset disposals |
|
390 |
|
|
2,558 |
|
|
1,621 |
|
|
3,614 |
|
Total costs and expenses |
|
119,439 |
|
|
92,682 |
|
|
230,381 |
|
|
197,884 |
|
Income (loss) from
operations |
|
6,210 |
|
|
(12,525 |
) |
|
4,845 |
|
|
(17,379 |
) |
Interest expense, net |
|
498 |
|
|
920 |
|
|
1,120 |
|
|
1,888 |
|
Income (loss) before
taxes |
|
5,712 |
|
|
(13,445 |
) |
|
3,725 |
|
|
(19,267 |
) |
Provision for income
taxes |
|
29 |
|
|
33 |
|
|
19 |
|
|
46 |
|
Net income (loss) |
|
$ |
5,683 |
|
|
$ |
(13,478 |
) |
|
$ |
3,706 |
|
|
$ |
(19,313 |
) |
Earnings (loss) per
Class A and Class B common stock, combined |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.12 |
|
|
$ |
(0.30 |
) |
|
$ |
0.08 |
|
|
$ |
(0.44 |
) |
Diluted |
|
$ |
0.12 |
|
|
$ |
(0.30 |
) |
|
$ |
0.08 |
|
|
$ |
(0.44 |
) |
Weighted average shares of
Class A and Class B common stock outstanding,
combined: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
45,506,476 |
|
|
44,212,751 |
|
|
45,303,160 |
|
|
44,177,648 |
|
Diluted |
|
46,246,169 |
|
|
44,212,751 |
|
|
45,992,119 |
|
|
44,177,648 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noodles & CompanyCondensed
Consolidated Statements of Operations as a Percentage of
Revenue(unaudited) |
|
|
|
Fiscal Quarter Ended |
|
Two Fiscal Quarters Ended |
|
|
June 29,2021 |
|
June 30,2020 |
|
June 29,2021 |
|
June 30,2020 |
Revenue: |
|
|
|
|
|
|
|
|
Restaurant revenue |
|
98.5 |
% |
|
99.8 |
|
% |
|
98.4 |
% |
|
99.0 |
|
% |
Franchising royalties and fees, and other |
|
1.5 |
% |
|
0.2 |
|
% |
|
1.6 |
% |
|
1.0 |
|
% |
Total revenue |
|
100.0 |
% |
|
100.0 |
|
% |
|
100.0 |
% |
|
100.0 |
|
% |
Costs and expenses: |
|
|
|
|
|
|
|
|
Restaurant operating costs (exclusive of depreciation and
amortization shown separately below): (1) |
|
|
|
|
|
|
|
|
Cost of sales |
|
24.9 |
% |
|
25.0 |
|
% |
|
25.0 |
% |
|
25.3 |
|
% |
Labor |
|
29.8 |
% |
|
33.9 |
|
% |
|
30.8 |
% |
|
34.3 |
|
% |
Occupancy |
|
9.3 |
% |
|
14.6 |
|
% |
|
10.0 |
% |
|
13.3 |
|
% |
Other restaurant operating costs |
|
17.0 |
% |
|
19.7 |
|
% |
|
17.8 |
% |
|
18.2 |
|
% |
General and administrative |
|
10.3 |
% |
|
12.5 |
|
% |
|
10.2 |
% |
|
11.4 |
|
% |
Depreciation and amortization |
|
4.4 |
% |
|
6.7 |
|
% |
|
4.7 |
% |
|
5.9 |
|
% |
Pre-opening |
|
0.1 |
% |
|
0.1 |
|
% |
|
0.1 |
% |
|
0.1 |
|
% |
Restaurant impairments, closure costs and asset disposals |
|
0.3 |
% |
|
3.2 |
|
% |
|
0.7 |
% |
|
2.0 |
|
% |
Total costs and expenses |
|
95.1 |
% |
|
115.6 |
|
% |
|
97.9 |
% |
|
109.6 |
|
% |
Income (loss) from
operations |
|
4.9 |
% |
|
(15.6 |
) |
% |
|
2.1 |
% |
|
(9.6 |
) |
% |
Interest expense, net |
|
0.4 |
% |
|
1.1 |
|
% |
|
0.5 |
% |
|
1.0 |
|
% |
Income (loss) before
taxes |
|
4.5 |
% |
|
(16.8 |
) |
% |
|
1.6 |
% |
|
(10.7 |
) |
% |
Provision for income
taxes |
|
— |
% |
|
— |
|
% |
|
— |
% |
|
— |
|
% |
Net income (loss) |
|
4.5 |
% |
|
(16.8 |
) |
% |
|
1.6 |
% |
|
(10.7 |
) |
% |
_____________________(1) As a percentage of
restaurant revenue.
|
Noodles & CompanyConsolidated Selected
Balance Sheet Data and Selected Operating Data(in
thousands, except restaurant activity, unaudited) |
|
|
As of |
|
|
June 29,2021 |
|
December 29,2020 |
Balance Sheet Data |
|
|
|
|
|
|
|
|
Total current assets |
|
$ |
34,964 |
|
|
$ |
23,714 |
|
Total assets |
|
360,155 |
|
|
353,631 |
|
Total current liabilities |
|
70,761 |
|
|
58,129 |
|
Total long-term debt |
|
35,754 |
|
|
40,949 |
|
Total liabilities |
|
324,712 |
|
|
323,932 |
|
Total stockholders’
equity |
|
35,443 |
|
|
29,699 |
|
|
|
Fiscal Quarter Ended |
|
|
June 29,2021 |
|
March 30,2021 |
|
December 29,2020 |
|
September 29,2020 |
|
June 30,2020 |
Selected Operating Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restaurant Activity: |
|
|
|
|
|
|
|
|
|
|
Company-owned restaurants at end of period |
|
374 |
|
|
372 |
|
|
378 |
|
|
|
378 |
|
|
|
380 |
|
|
Franchise restaurants at end of period |
|
77 |
|
|
76 |
|
|
76 |
|
|
|
76 |
|
|
|
76 |
|
|
Revenue Data: |
|
|
|
|
|
|
|
|
|
|
Company-owned average unit volume |
|
$ |
1,350 |
|
|
$ |
1,170 |
|
|
$ |
1,064 |
|
|
|
$ |
1,187 |
|
|
|
$ |
891 |
|
|
Franchise average unit volume |
|
$ |
1,240 |
|
|
$ |
1,142 |
|
|
$ |
1,073 |
|
|
|
$ |
1,102 |
|
|
|
$ |
781 |
|
|
Company-owned comparable restaurant sales |
|
55.7 |
% |
|
10.5 |
% |
|
(4.2 |
) |
% |
|
(3.6 |
) |
% |
|
(30.1 |
) |
% |
Franchise comparable restaurant sales |
|
63.8 |
% |
|
11.7 |
% |
|
(7.9 |
) |
% |
|
(5.0 |
) |
% |
|
(35.4 |
) |
% |
System-wide comparable restaurant sales |
|
56.8 |
% |
|
10.7 |
% |
|
(4.7 |
) |
% |
|
(3.8 |
) |
% |
|
(30.9 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliations of Non-GAAP Measurements to GAAP
Results |
|
Noodles & CompanyReconciliation
of Net Income (Loss) to EBITDA and Adjusted
EBITDA(in thousands, unaudited) |
|
|
|
Fiscal Quarter Ended |
|
Two Fiscal Quarters Ended |
|
|
June 29,2021 |
|
June 30,2020 |
|
June 29,2021 |
|
June 30,2020 |
Net income (loss) |
|
$ |
5,683 |
|
|
$ |
(13,478 |
) |
|
$ |
3,706 |
|
|
$ |
(19,313 |
) |
Depreciation and
amortization |
|
5,576 |
|
|
5,397 |
|
|
11,163 |
|
|
10,732 |
|
Interest expense, net |
|
498 |
|
|
920 |
|
|
1,120 |
|
|
1,888 |
|
Provision for income
taxes |
|
29 |
|
|
33 |
|
|
19 |
|
|
46 |
|
EBITDA |
|
$ |
11,786 |
|
|
$ |
(7,128 |
) |
|
$ |
16,008 |
|
|
$ |
(6,647 |
) |
Restaurant impairments,
closure costs and asset disposals |
|
390 |
|
|
2,558 |
|
|
1,621 |
|
|
3,614 |
|
Stock-based compensation
expense |
|
1,611 |
|
|
1,094 |
|
|
2,413 |
|
|
1,253 |
|
Severance costs |
|
— |
|
|
89 |
|
|
— |
|
|
89 |
|
Fees and costs related to
transactions and other acquisition/disposition costs |
|
— |
|
|
73 |
|
|
— |
|
|
162 |
|
Adjusted EBITDA |
|
$ |
13,787 |
|
|
$ |
(3,314 |
) |
|
$ |
20,042 |
|
|
$ |
(1,529 |
) |
_____________________EBITDA and adjusted EBITDA are supplemental
measures of operating performance that do not represent and should
not be considered as alternatives to net income (loss) or cash flow
from operations, as determined by GAAP, and our calculation thereof
may not be comparable to that reported by other companies. These
measures are presented because we believe that investors’
understanding of our performance is enhanced by including these
non-GAAP financial measures as a reasonable basis for evaluating
our ongoing results of operations.
EBITDA is calculated as net income (loss) before
interest expense, provision for income taxes and depreciation and
amortization. Adjusted EBITDA further adjusts EBITDA to reflect the
eliminations shown in the table above.
EBITDA and adjusted EBITDA are presented
because: (i) we believe they are useful measures for investors
to assess the operating performance of our business without the
effect of non-cash charges such as depreciation and amortization
expenses and restaurant impairments, closure costs and asset
disposals and (ii) we use adjusted EBITDA internally as a
benchmark for certain of our cash incentive plans and to evaluate
our operating performance or compare our performance to that of our
competitors. The use of adjusted EBITDA as a performance measure
permits a comparative assessment of our operating performance
relative to our performance based on our GAAP results, while
isolating the effects of some items that vary from period to period
without any correlation to core operating performance or that vary
widely among similar companies. Companies within our industry
exhibit significant variations with respect to capital structures
and cost of capital (which affect interest expense and income tax
rates) and differences in book depreciation of property, plant and
equipment (which affect relative depreciation expense), including
significant differences in the depreciable lives of similar assets
among various companies. Our management believes that adjusted
EBITDA facilitates company-to-company comparisons within our
industry by eliminating some of these foregoing variations.
Adjusted EBITDA as presented may not be comparable to other
similarly-titled measures of other companies, and our presentation
of adjusted EBITDA should not be construed as an inference that our
future results will be unaffected by excluded or unusual items.
|
Noodles & CompanyReconciliation
of Net Income (Loss) to Adjusted Net Income
(Loss)(in thousands, except share and per share
data, unaudited) |
|
|
|
Fiscal Quarter Ended |
|
Two Fiscal Quarters Ended |
|
|
June 29,2021 |
|
June 30,2020 |
|
June 29,2021 |
|
June 30,2020 |
Net income (loss) |
|
$ |
5,683 |
|
|
$ |
(13,478 |
) |
|
$ |
3,706 |
|
|
$ |
(19,313 |
) |
Restaurant impairments,
divestitures and closure costs (a) |
|
349 |
|
|
2,267 |
|
|
1,288 |
|
|
2,707 |
|
Fees and costs related to
transactions and other acquisition/disposition costs (b) |
|
— |
|
|
73 |
|
|
— |
|
|
162 |
|
Severance costs |
|
— |
|
|
89 |
|
|
— |
|
|
89 |
|
Tax adjustments, net (c) |
|
(1,575 |
) |
|
2,948 |
|
|
(1,339 |
) |
|
4,362 |
|
Adjusted net income
(loss) |
|
$ |
4,457 |
|
|
$ |
(8,101 |
) |
|
$ |
3,655 |
|
|
$ |
(11,993 |
) |
|
|
|
|
|
|
|
|
|
Earnings (loss) per
Class A and Class B common stock, combined |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.12 |
|
|
$ |
(0.30 |
) |
|
$ |
0.08 |
|
|
$ |
(0.44 |
) |
Diluted |
|
$ |
0.12 |
|
|
$ |
(0.30 |
) |
|
$ |
0.08 |
|
|
$ |
(0.44 |
) |
Adjusted earnings (loss) per
Class A and Class B common stock, combined (d) |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.10 |
|
|
$ |
(0.18 |
) |
|
$ |
0.08 |
|
|
$ |
(0.27 |
) |
Diluted |
|
$ |
0.10 |
|
|
$ |
(0.18 |
) |
|
$ |
0.08 |
|
|
$ |
(0.27 |
) |
Weighted average Class A and
Class B common stock outstanding, combined (d) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
45,506,476 |
|
|
44,212,751 |
|
|
45,303,160 |
|
|
44,177,648 |
|
Diluted |
|
46,246,169 |
|
|
44,212,751 |
|
|
45,992,119 |
|
|
44,177,648 |
|
_____________________Adjusted net income (loss) is a
supplemental measure of financial performance that is not required
by or presented in accordance with GAAP. We define adjusted net
income (loss) as net income (loss) plus the impact of adjustments
and the tax effects of such adjustments. Adjusted net income (loss)
is presented because management believes it helps convey
supplemental information to investors regarding our performance,
excluding the impact of special items that affect the comparability
of results in past quarters to expected results in future quarters.
Adjusted net income (loss) as presented may not be comparable to
other similarly-titled measures of other companies, and our
presentation of adjusted net income (loss) should not be construed
as an inference that our future results will be unaffected by
excluded or unusual items. Our management uses this non-GAAP
financial measure to analyze changes in our underlying business
from quarter to quarter based on comparable financial results.
(a) |
Reflects the
adjustment to eliminate the impact of impairing restaurants,
divestiture costs and ongoing closure costs recognized during the
first two quarters of 2021 and 2020. Both periods include ongoing
closure costs from restaurants closed in previous years. These
expenses are included in the “Restaurant impairments, closure costs
and asset disposals” line in the Condensed Consolidated Statements
of Operations. |
(b) |
Reflects the adjustment to eliminate expenses related to
certain corporate transactions in the first two quarters of
2020. |
(c) |
Reflects the adjustment to normalize the impact of the
valuation allowance that affects our annual effective tax rate and
the tax impact of the other adjustments discussed in (a) through
(b) above. |
(d) |
Adjusted per share amounts are calculated by dividing adjusted
net income (loss) by the basic and diluted weighted average shares
outstanding. |
|
|
Noodles & CompanyReconciliation
of Operating Income (Loss) to Restaurant Contribution
(in thousands, unaudited) |
|
|
|
Fiscal Quarter Ended |
|
Two Fiscal Quarters Ended |
|
|
June 29,2021 |
|
June 30,2020 |
|
June 29,2021 |
|
June 30,2020 |
Income (loss) from operations |
|
$ |
6,210 |
|
|
$ |
(12,525 |
) |
|
$ |
4,845 |
|
|
$ |
(17,379 |
) |
Less: Franchising royalties
and fees, and other |
|
1,934 |
|
|
136 |
|
|
3,767 |
|
|
1,768 |
|
Plus: General and
administrative |
|
12,978 |
|
|
10,034 |
|
|
23,907 |
|
|
20,588 |
|
Depreciation and amortization |
|
5,576 |
|
|
5,397 |
|
|
11,163 |
|
|
10,732 |
|
Pre-opening |
|
163 |
|
|
71 |
|
|
221 |
|
|
144 |
|
Restaurant impairments, closure costs and asset disposals |
|
390 |
|
|
2,558 |
|
|
1,621 |
|
|
3,614 |
|
Restaurant contribution |
|
$ |
23,383 |
|
|
$ |
5,399 |
|
|
$ |
37,990 |
|
|
$ |
15,931 |
|
|
|
|
|
|
|
|
|
|
Restaurant contribution
margin |
|
18.9 |
% |
|
6.7 |
% |
|
16.4 |
% |
|
8.9 |
% |
_____________________Restaurant contribution represents
restaurant revenue less restaurant operating costs, which are the
cost of sales, labor, occupancy and other operating items.
Restaurant contribution margin represents restaurant contribution
as a percentage of restaurant revenue. Restaurant contribution and
restaurant contribution margin are non-GAAP measures that are
neither required by, nor presented in accordance with GAAP, and the
calculations thereof may not be comparable to similar measures
reported by other companies. These measures are supplemental
measures of the operating performance of our restaurants and are
not reflective of the underlying performance of our business
because corporate-level expenses are excluded from these
measures.
Restaurant contribution and restaurant
contribution margin have limitations as analytical tools and should
not be considered in isolation or as substitutes for analysis of
our results as reported under GAAP. Management does not consider
these measures in isolation or as an alternative to financial
measures determined in accordance with GAAP. However, management
believes that restaurant contribution and restaurant contribution
margin are important tools for investors and other interested
parties because they are widely-used metrics within the restaurant
industry to evaluate restaurant-level productivity, efficiency and
performance. Management also uses these measures as metrics to
evaluate the profitability of incremental sales at our restaurants,
restaurant performance across periods, and restaurant financial
performance compared with competitors.
Reconciliation of Debt to Net
Debt (in thousands, unaudited)
|
|
As of |
|
|
June 29,2021 |
|
December 29,2020 |
Current portion of long-term
debt |
|
$ |
1,500 |
|
|
$ |
1,125 |
|
Long-term debt, net |
|
35,754 |
|
|
40,949 |
|
Less: Cash and cash equivalents |
|
17,324 |
|
|
7,840 |
|
Net debt |
|
$ |
19,930 |
|
|
$ |
34,234 |
|
_____________________________
Net debt is a non-GAAP financial measure. The
most comparable GAAP measure, calculated as long-term obligations
plus short-term borrowings minus cash and equivalents. Management
believes that net debt is an important measure to monitor leverage
and evaluate the balance sheet. With respect to net debt, cash and
equivalents are subtracted from the GAAP measure because they could
be used to reduce the Company’s debt obligations. A limitation
associated with using net debt is that it subtracts cash and
equivalents and therefore may imply that there is less Company debt
than the most comparable GAAP measure indicates. Management
believes that investors may find it useful to monitor leverage and
evaluate the balance sheet.
Contacts:Investor
Relationsinvestorrelations@noodles.com
MediaDanielle Moorepress@noodles.com
Source: Noodles & Company
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