Noodles & Company (Nasdaq: NDLS) today announced financial
results for its third quarter ended October 3, 2023.
Key highlights for the
third quarter of
2023 versus the
third quarter of
2022 include:
- Total revenue decreased 1.2% to
$127.9 million from $129.4 million in the third quarter of
2022.
- Comparable restaurant sales
decreased 3.7% system-wide, comprised of a 4.3% decrease at
company-owned restaurants and a 1.2% decrease at franchise
restaurants.
- Net income was $0.7 million, or
$0.02 per diluted share, compared to net income of $0.8 million, or
$0.02 per diluted share, in the third quarter of 2022.
- Operating margin was 1.6% compared
to 1.2% in the third quarter of 2022.
- Restaurant contribution margin(1)
was 16.4% compared to 14.4% in the third quarter of 2022.
- Adjusted EBITDA(1) was $11.7
million, an increase of $1.9 million compared to the third quarter
of 2022.
- Adjusted net income(1) was $1.6
million, or $0.04 per diluted share, compared to adjusted net
income of $1.6 million, or $0.04 per diluted share, in the third
quarter of 2022.
- Four new company-owned restaurants
opened in the third quarter of 2023.
_____________________ |
(1) |
Restaurant contribution margin, EBITDA, adjusted EBITDA, and
adjusted net income (loss) are non-GAAP measures. Reconciliations
of operating income (loss) to restaurant contribution margin, net
income (loss) to EBITDA and adjusted EBITDA and net income (loss)
to adjusted net income (loss) are included in the accompanying
financial data. See “Non-GAAP Financial Measures.” |
“Noodles & Company made meaningful traction
during the third quarter, evidenced by 200 bps of restaurant
contribution margin expansion to 16.4% and nearly 20% growth in
Adjusted EBITDA relative to the third quarter of the prior year,”
said Dave Boennighausen, Chief Executive Officer of Noodles &
Company. “In the third quarter, we made tangible progress in
improving the Company’s economic model, while being opportunistic
in completing our previously announced $5 million share repurchase
program.”
“We continue to aggressively execute strategies
to improve upon our comparable restaurant sales trend,”
Boennighausen continued. “Our introduction of Chicken Parmesan in
September has been one of our most successful new product launches
in history and serves as an excellent foundation as we focus on
enhancing and optimizing our menu with the help of an industry
leading culinary consulting firm. Additionally, we have made
progress on our efforts towards price optimization and leveraging
our robust digital guest engagement capabilities, supported by
digital menu boards, which we anticipate will be installed at all
company restaurants by the end of 2023.”
Third Quarter 2023 Financial
Results
Total revenue decreased $1.5 million in the
third quarter of 2023, or 1.2%, to $127.9 million, compared to
$129.4 million in the third quarter of 2022. This decrease was
primarily due to a decline in comparable restaurant sales due to
lower guest count, partially offset by growth in new restaurant
openings.
In the third quarter of 2023, system-wide
comparable restaurant sales decreased 3.7%, comprised of a 4.3%
decrease at company-owned restaurants and a 1.2% decrease at
franchise restaurants.
Operating margin improved to 1.6% in the third
quarter of 2023 from 1.2% in the third quarter of 2022. Restaurant
contribution margin increased to 16.4% in the third quarter of
2023, compared to 14.4% in the third quarter of 2022. Increases in
operating margin and restaurant contribution margin were primarily
due to favorability in the Company’s cost of sales as a percentage
of sales due to overall lower food and ingredient commodity
pricing, particularly with our protein costs, partially offset by
higher promotional discounts.
Four company-owned restaurants opened during the
third quarter of 2023 and one franchise location closed. The
Company did not close any company-owned restaurants. There were 468
restaurants system-wide at the end of the third quarter 2023,
comprised of 377 company-owned restaurants and 91 franchise
restaurants.
For the third quarter of 2023, the Company
reported net income of $0.7 million, or $0.02 per diluted share,
compared with net income of $0.8 million in the third quarter of
2022, or $0.02 per diluted share. Income from operations for the
third quarter of 2023 was $2.0 million, compared to income from
operations of $1.5 million in the third quarter of 2022.
Adjusted net income was $1.6 million, or $0.04
per diluted share, in the third quarter of 2023, compared to
adjusted net income of $1.6 million, or $0.04 per diluted share, in
the third quarter of 2022. Adjusted EBITDA increased 19.6%, or $1.9
million, to $11.7 million in the third quarter of 2023 compared to
2022.
Liquidity Update & Share Repurchase
Authorization:
As of October 3, 2023, the Company had $2.5
million of cash on hand and outstanding debt of $65.4 million. The
amount available for future borrowings under its revolving credit
facility was $56.6 million as of October 3, 2023.
On July 26, 2023, the Company announced a share
repurchase program (the “2023 Share Repurchase Program”) of up to
$5.0 million of the Company’s Class A common stock. Under this
program, the Company purchased shares of the Company's Class A
common stock in the open market. The Company conducted any open
market share repurchase activities in compliance with the safe
harbor provisions of Rule 10b-18 of the Exchange Act. During the
third quarter ended October 3, 2023, the Company repurchased
1,731,952 shares of its common stock for approximately $5.0 million
in open market transactions at an average price of $2.86 per share.
Share repurchases were accounted for under the retirement method
and all repurchased shares were retired and cancelled. The excess
of the purchase price over the par value of the shares was recorded
as a reduction in additional paid-in capital.
Business Outlook:
Based upon management’s current assessment
following third quarter results, the Company has revised guidance
related to its 2023 performance. The following is now expected for
the full year 2023:
- Total revenue of $502 million to
$506 million, from prior guidance of $500 million to $510
million;
- Negative low single-digit
Comparable Restaurant Sales;
- Restaurant contribution margin of
approximately 15.0%, from prior guidance of 14.5% to 15.0%;
- General & administrative
expense of $50 million to $52 million, inclusive of non-cash
stock-based compensation expense and $200,000 of corporate
restructuring costs, from prior guidance of $50 million to $53
million;
- Adjusted EBITDA of $36 million to
$40 million, from prior guidance of $35 million to $40
million;
- Depreciation and amortization of
$26.0 million to $27.0 million, from prior guidance of $26.5
million to $27.5 million;
- Disposal of assets of $3.0 million
to $3.5 million;
- Net interest expense of $4.5
million to $5.0 million;
- Stock-based compensation of $4.5 million to $5.5 million, from
prior guidance of $5.5 million to $6.5 million;
- Adjusted EPS of ($0.08) to $0.00,
from ($0.11) to $0.00, including the benefit from our new share
repurchase program;
- Approximately 5.0% new restaurant
growth system-wide, with a majority of openings being
company-owned; and
- Capital expenditures of $45 to $50
million in 2023.
Non-GAAP Financial Measures
The Company believes that a quantitative
reconciliation of certain 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 certain 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 Volumes —
represent the average annualized sales of all company-owned
restaurants for a given time period. AUVs are 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. Based on this calculation, temporarily
closed restaurants are excluded from the definition of AUV, however
restaurants with temporarily reduced operating hours are included.
This measurement allows management to assess changes in consumer
traffic and per person spending patterns at our restaurants. In
addition to the factors that impact comparable restaurant sales,
AUVs can be further impacted by effective real estate site
selection and maturity and trends within new markets.
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 and changes in per-person
spend, calculated as sales divided by traffic. Restaurants that
were temporarily closed or operating at reduced hours 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, net,
provision (benefit) for income taxes and depreciation and
amortization. Adjusted EBITDA represents net income (loss) before
interest expense, net, provision (benefit) for income taxes,
depreciation and amortization, restaurant impairments, closure
costs and asset disposals, fees, costs related to corporate
matters, severance costs and stock-based compensation. 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.
Conference Call
Noodles & Company will host a conference
call to discuss its third quarter financial results on Tuesday,
November 7, 2023 at 4:30 PM Eastern Time. The conference call
can be accessed live by registering here. While not required, it is
recommended that you join 10 minutes prior to the event start time.
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
the same location on the corporate website shortly after the call
has concluded.
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, 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 and costs related to corporate
transactions 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. To the extent that the Company provides
guidance, it does so only on a non-GAAP basis and does not provide
reconciliations of such forward-looking non-GAAP measures to GAAP.
Specifically, forecasted adjusted EBITDA, adjusted earnings per
share, and contribution margin are forward-looking non-GAAP
measures. Quantitative reconciling information for these measures
is unavailable without unreasonable efforts. The corresponding GAAP
measures (net income, earnings per share, and income (loss) from
operations, respectively) are not accessible on a forward-looking
basis and such information is likely to be significant to an
investor.
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 guests Uncommon Goodness and noodles your way, with noodles
and flavors you know and love as well as new ones you’re about to
discover. From indulgent Wisconsin Mac & Cheese to
better-for-you Zoodles, Noodles serves a world of flavor in every
bowl. Made up of more than 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 expectations with respect to unit growth and
planned restaurant openings, projected capital expenditures, and
potential volatility through 2023 and 2024 due to the current high
inflationary environment and economic uncertainties, including the
effects on the consumer sentiment and behavior. 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, including
our digital sales growth; our ability to open new restaurants on
schedule and on budget 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, such as
digital menu boards, and operational strategies to improve the
performance of our restaurant portfolio; the success of our
marketing efforts, including our ability to introduce new products;
current economic conditions including any impact from inflation or
an economic recession; a rising interest rate environment; price
and availability of commodities and other supply chain challenges;
our ability to adequately staff our restaurants; changes in labor
costs; other conditions beyond our control such as weather, natural
disasters, disease outbreaks, epidemics or pandemics impacting our
customer or food supplies; and consumer reaction to industry
related public health issues and health pandemics, including
perceptions of food safety. 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 most recently filed Annual Report on Form 10-K, and, from
time to time, in our subsequently filed Quarterly Reports on Form
10-Q. 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. To the extent that the Company provides guidance, it
does so only on a non-GAAP basis and does not provide
reconciliations of such forward-looking non-GAAP measures to GAAP.
Specifically, forecasted adjusted EBITDA, adjusted EPS and
restaurant contribution margin are forward-looking non-GAAP
measures. Quantitative reconciling information for these measures
is unavailable without unreasonable efforts. The corresponding GAAP
measures (net income, earnings per share and operating margin,
respectively) are not accessible on a forward-looking basis and
such information is likely to be significant to an investor.
|
Noodles & CompanyCondensed
Consolidated Statements of Operations(in
thousands, except share and per share data,
unaudited) |
|
|
|
Fiscal Quarter Ended |
|
Three Fiscal Quarters Ended |
|
|
October 3,2023 |
|
September 27,2022 |
|
October 3,2023 |
|
September 27,2022 |
Revenue: |
|
|
|
|
|
|
|
|
Restaurant revenue |
|
$ |
125,208 |
|
|
$ |
126,638 |
|
|
$ |
370,829 |
|
|
$ |
364,873 |
|
Franchising royalties and fees, and other |
|
|
2,646 |
|
|
|
2,743 |
|
|
|
8,256 |
|
|
|
8,137 |
|
Total revenue |
|
|
127,854 |
|
|
|
129,381 |
|
|
|
379,085 |
|
|
|
373,010 |
|
Costs and expenses: |
|
|
|
|
|
|
|
|
Restaurant operating costs (exclusive of depreciation and
amortization shown separately below): |
|
|
|
|
|
|
|
|
Cost of sales |
|
|
31,457 |
|
|
|
35,528 |
|
|
|
93,182 |
|
|
|
101,963 |
|
Labor |
|
|
39,139 |
|
|
|
39,049 |
|
|
|
118,626 |
|
|
|
113,370 |
|
Occupancy |
|
|
11,500 |
|
|
|
11,135 |
|
|
|
34,351 |
|
|
|
33,358 |
|
Other restaurant operating costs |
|
|
22,558 |
|
|
|
22,709 |
|
|
|
69,163 |
|
|
|
67,367 |
|
General and administrative |
|
|
11,864 |
|
|
|
11,596 |
|
|
|
37,968 |
|
|
|
36,180 |
|
Depreciation and amortization |
|
|
6,626 |
|
|
|
5,826 |
|
|
|
19,313 |
|
|
|
17,310 |
|
Pre-opening |
|
|
541 |
|
|
|
337 |
|
|
|
1,642 |
|
|
|
1,098 |
|
Restaurant impairments, closure costs and asset disposals |
|
|
2,135 |
|
|
|
1,672 |
|
|
|
5,313 |
|
|
|
5,032 |
|
Total costs and expenses |
|
|
125,820 |
|
|
|
127,852 |
|
|
|
379,558 |
|
|
|
375,678 |
|
Income (loss) from
operations |
|
|
2,034 |
|
|
|
1,529 |
|
|
|
(473 |
) |
|
|
(2,668 |
) |
Interest expense, net |
|
|
1,186 |
|
|
|
735 |
|
|
|
3,201 |
|
|
|
1,661 |
|
Income (loss) before
taxes |
|
|
848 |
|
|
|
794 |
|
|
|
(3,674 |
) |
|
|
(4,329 |
) |
Provision for (benefit from)
income taxes |
|
|
148 |
|
|
|
(1 |
) |
|
|
45 |
|
|
|
(40 |
) |
Net income (loss) |
|
$ |
700 |
|
|
$ |
795 |
|
|
$ |
(3,719 |
) |
|
$ |
(4,289 |
) |
Earnings (loss) per
Class A and Class B common stock, combined |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.02 |
|
|
$ |
0.02 |
|
|
$ |
(0.08 |
) |
|
$ |
(0.09 |
) |
Diluted |
|
$ |
0.02 |
|
|
$ |
0.02 |
|
|
$ |
(0.08 |
) |
|
$ |
(0.09 |
) |
Weighted average shares of
Class A and Class B common stock outstanding,
combined: |
|
|
|
|
|
|
|
|
Basic |
|
|
45,935,305 |
|
|
|
46,010,824 |
|
|
|
46,166,320 |
|
|
|
45,872,893 |
|
Diluted |
|
|
46,008,651 |
|
|
|
46,197,511 |
|
|
|
46,166,320 |
|
|
|
45,872,893 |
|
|
Noodles & CompanyCondensed
Consolidated Statements of Operations as a Percentage of
Revenue(unaudited) |
|
|
|
Fiscal Quarter Ended |
|
Three Fiscal Quarters Ended |
|
|
October 3,2023 |
|
September 27,2022 |
|
October 3,2023 |
|
September 27,2022 |
Revenue: |
|
|
|
|
|
|
|
|
Restaurant revenue |
|
97.9 |
% |
|
97.9 |
% |
|
97.8 |
% |
|
97.8 |
% |
Franchising royalties and fees, and other |
|
2.1 |
% |
|
2.1 |
% |
|
2.2 |
% |
|
2.2 |
% |
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 |
|
25.1 |
% |
|
28.1 |
% |
|
25.1 |
% |
|
27.9 |
% |
Labor |
|
31.3 |
% |
|
30.8 |
% |
|
32.0 |
% |
|
31.1 |
% |
Occupancy |
|
9.2 |
% |
|
8.8 |
% |
|
9.3 |
% |
|
9.1 |
% |
Other restaurant operating costs |
|
18.0 |
% |
|
17.9 |
% |
|
18.7 |
% |
|
18.5 |
% |
General and administrative |
|
9.3 |
% |
|
9.0 |
% |
|
10.0 |
% |
|
9.7 |
% |
Depreciation and amortization |
|
5.2 |
% |
|
4.5 |
% |
|
5.1 |
% |
|
4.6 |
% |
Pre-opening |
|
0.4 |
% |
|
0.3 |
% |
|
0.4 |
% |
|
0.3 |
% |
Restaurant impairments, closure costs and asset disposals |
|
1.7 |
% |
|
1.3 |
% |
|
1.4 |
% |
|
1.3 |
% |
Total costs and expenses |
|
98.4 |
% |
|
98.8 |
% |
|
100.1 |
% |
|
100.7 |
% |
Income (loss) from
operations |
|
1.6 |
% |
|
1.2 |
% |
|
(0.1 |
)% |
|
(0.7 |
)% |
Interest expense, net |
|
0.9 |
% |
|
0.6 |
% |
|
0.8 |
% |
|
0.4 |
% |
Income (loss) before
taxes |
|
0.7 |
% |
|
0.6 |
% |
|
(1.0 |
)% |
|
(1.2 |
)% |
Provision for (benefit from)
income taxes |
|
0.1 |
% |
|
— |
% |
|
— |
% |
|
— |
% |
Net income (loss) |
|
0.6 |
% |
|
0.6 |
% |
|
(1.0)% |
|
(1.2 |
)% |
_______________________ |
(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 |
|
|
October 3,2023 |
|
January 3,2023 |
Balance Sheet
Data |
|
|
Total current assets |
|
$ |
22,768 |
|
$ |
21,636 |
Total assets |
|
|
368,830 |
|
|
343,843 |
Total current liabilities |
|
|
75,589 |
|
|
64,113 |
Total long-term debt |
|
|
64,040 |
|
|
46,051 |
Total liabilities |
|
|
336,315 |
|
|
305,479 |
Total stockholders’
equity |
|
|
32,515 |
|
|
38,364 |
|
|
Fiscal Quarter Ended |
|
|
October 3,2023 |
|
|
July 4,2023 |
|
April 4,2023 |
|
January 3,2023 |
|
September 27,2022 |
Selected Operating
Data |
|
|
Restaurant Activity: |
|
|
|
|
|
|
|
|
|
|
|
Company-owned restaurants at end of period |
|
|
377 |
|
|
|
373 |
|
|
|
369 |
|
|
|
368 |
|
|
|
366 |
|
Franchise restaurants at end of period |
|
|
91 |
|
|
|
92 |
|
|
|
92 |
|
|
|
93 |
|
|
|
93 |
|
Revenue Data: |
|
|
|
|
|
|
|
|
|
|
|
Company-owned average unit volume |
|
$ |
1,335 |
|
|
$ |
1,327 |
|
|
$ |
1,343 |
|
|
$ |
1,379 |
|
|
$ |
1,387 |
|
Franchise average unit volume |
|
$ |
1,244 |
|
|
$ |
1,203 |
|
|
$ |
1,257 |
|
|
$ |
1,276 |
|
|
$ |
1,260 |
|
Company-owned comparable restaurant sales |
|
|
(4.3 |
)% |
|
|
(5.9 |
)% |
|
|
6.9 |
% |
|
|
10.2 |
% |
|
|
3.4 |
% |
Franchise comparable restaurant sales |
|
|
(1.2 |
)% |
|
|
(3.4 |
)% |
|
|
4.1 |
% |
|
|
1.3 |
% |
|
|
(3.8 |
)% |
System-wide comparable restaurant sales |
|
|
(3.7 |
)% |
|
|
(5.5 |
)% |
|
|
6.4 |
% |
|
|
8.7 |
% |
|
|
2.1 |
% |
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 |
|
Three Fiscal Quarters Ended |
|
|
October 3,2023 |
|
September 27,2022 |
|
October 3,2023 |
|
September 27,2022 |
Net income (loss) |
|
$ |
700 |
|
$ |
795 |
|
|
$ |
(3,719 |
) |
|
$ |
(4,289 |
) |
Depreciation and
amortization |
|
|
6,626 |
|
|
5,826 |
|
|
|
19,313 |
|
|
|
17,310 |
|
Interest expense, net |
|
|
1,186 |
|
|
735 |
|
|
|
3,201 |
|
|
|
1,661 |
|
Provision for (benefit from)
income taxes |
|
|
148 |
|
|
(1 |
) |
|
|
45 |
|
|
|
(40 |
) |
EBITDA |
|
$ |
8,660 |
|
$ |
7,355 |
|
|
$ |
18,840 |
|
|
$ |
14,642 |
|
Restaurant impairments,
closure costs and asset disposals |
|
|
2,135 |
|
|
1,672 |
|
|
|
5,313 |
|
|
|
5,032 |
|
Stock-based compensation
expense |
|
|
694 |
|
|
751 |
|
|
|
3,580 |
|
|
|
3,419 |
|
Severance costs |
|
|
191 |
|
|
— |
|
|
|
191 |
|
|
|
— |
|
Costs related to corporate
matters |
|
|
24 |
|
|
7 |
|
|
|
82 |
|
|
|
70 |
|
Adjusted EBITDA |
|
$ |
11,704 |
|
$ |
9,785 |
|
|
$ |
28,006 |
|
|
$ |
23,163 |
|
______________________________
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, net, provision (benefit) 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 |
|
Three Fiscal Quarters Ended |
|
|
October 3,2023 |
|
September 27,2022 |
|
October 3,2023 |
|
September 27,2022 |
Net income (loss) |
|
$ |
700 |
|
$ |
795 |
|
|
$ |
(3,719 |
) |
|
$ |
(4,289 |
) |
Restaurant impairments,
divestitures and closure costs (a) |
|
|
721 |
|
|
531 |
|
|
|
2,084 |
|
|
|
2,164 |
|
Severance costs (b) |
|
|
191 |
|
|
— |
|
|
|
191 |
|
|
|
— |
|
Costs related to corporate
matters (c) |
|
|
24 |
|
|
7 |
|
|
|
82 |
|
|
|
70 |
|
Loss on debt modification
(d) |
|
|
— |
|
|
310 |
|
|
|
— |
|
|
|
310 |
|
Tax impact of adjustments
above (e) |
|
|
10 |
|
|
(10 |
) |
|
|
(29 |
) |
|
|
(23 |
) |
Adjusted net income
(loss) |
|
$ |
1,646 |
|
$ |
1,633 |
|
|
$ |
(1,391 |
) |
|
$ |
(1,768 |
) |
|
|
|
|
|
|
|
|
|
Earnings (loss) per
Class A and Class B common stock, combined |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.02 |
|
$ |
0.02 |
|
|
$ |
(0.08 |
) |
|
$ |
(0.09 |
) |
Diluted |
|
$ |
0.02 |
|
$ |
0.02 |
|
|
$ |
(0.08 |
) |
|
$ |
(0.09 |
) |
Adjusted earnings (loss) per
Class A and Class B common stock, combined (f) |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.04 |
|
$ |
0.04 |
|
|
$ |
(0.03 |
) |
|
$ |
(0.04 |
) |
Diluted |
|
$ |
0.04 |
|
$ |
0.04 |
|
|
$ |
(0.03 |
) |
|
$ |
(0.04 |
) |
Weighted average Class A and
Class B common stock outstanding, combined (f) |
|
|
|
|
|
|
|
|
Basic |
|
|
45,935,305 |
|
|
46,010,824 |
|
|
|
46,166,320 |
|
|
|
45,872,893 |
|
Diluted |
|
|
46,008,651 |
|
|
46,197,511 |
|
|
|
46,166,320 |
|
|
|
45,872,893 |
|
_____________________________
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 divestiture
costs and ongoing closure costs recognized during the first three
quarters of 2023 and 2022. 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 adjustments to eliminate severance costs. |
(c) |
Reflects the adjustments to eliminate the expenses related to
certain corporate matters. |
(d) |
Reflects the write-off of a portion of the unamortized debt
issuance costs related to the debt refinancing in the third quarter
of 2022. |
(e) |
Reflects the tax impact of the other adjustments discussed in (a)
through (d) above using the estimated annual effective tax
rate. |
(f) |
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 (Loss) Income to Restaurant
Contribution (in thousands,
unaudited) |
|
|
|
Fiscal Quarter Ended |
|
Three Fiscal Quarters Ended |
|
|
October 3,2023 |
|
September 27,2022 |
|
October 3,2023 |
|
September 27,2022 |
Income (loss) from operations |
|
$ |
2,034 |
|
|
$ |
1,529 |
|
|
$ |
(473 |
) |
|
$ |
(2,668 |
) |
Less: Franchising royalties
and fees, and other |
|
|
2,646 |
|
|
|
2,743 |
|
|
|
8,256 |
|
|
|
8,137 |
|
Plus: General and
administrative |
|
|
11,864 |
|
|
|
11,596 |
|
|
|
37,968 |
|
|
|
36,180 |
|
Depreciation and amortization |
|
|
6,626 |
|
|
|
5,826 |
|
|
|
19,313 |
|
|
|
17,310 |
|
Pre-opening |
|
|
541 |
|
|
|
337 |
|
|
|
1,642 |
|
|
|
1,098 |
|
Restaurant impairments, closure costs and asset disposals |
|
|
2,135 |
|
|
|
1,672 |
|
|
|
5,313 |
|
|
|
5,032 |
|
Restaurant contribution |
|
$ |
20,554 |
|
|
$ |
18,217 |
|
|
$ |
55,507 |
|
|
$ |
48,815 |
|
|
|
|
|
|
|
|
|
|
Restaurant contribution
margin |
|
|
16.4 |
% |
|
|
14.4 |
% |
|
|
15.0 |
% |
|
|
13.4 |
% |
_____________________________
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.
Contacts:Investor
Relationsinvestorrelations@noodles.com
MediaDanielle Moorepress@noodles.com
Noodles (NASDAQ:NDLS)
Historical Stock Chart
From Mar 2024 to Apr 2024
Noodles (NASDAQ:NDLS)
Historical Stock Chart
From Apr 2023 to Apr 2024