Noodles & Company (NASDAQ:NDLS) today announced financial
results for its second quarter ended June 28, 2016.
Key highlights for the second quarter of
2016 versus the same quarter a year ago include:
- Total revenue increased 5.4% to $121.4 million from $115.2
million.
- Comparable restaurant sales decreased 0.9% for company-owned
restaurants, decreased 2.1% for franchise restaurants and decreased
1.0% system-wide.
- Nine new restaurants opened system-wide in the second quarter,
including eight company-owned restaurants and one franchise
restaurant.
- Net loss was $14.1 million for the second quarter of 2016, or
$0.51 per diluted share, compared to net income of $3.1 million, or
$0.10 per diluted share, in the second quarter of 2015. The Company
recorded a $10.2 million pre-tax impairment charge in the second
quarter of 2016 related to 11 restaurants, and recognized $0.4
million of on-going closure costs associated with restaurants
closed in the fourth quarter of 2015.
- Adjusted net loss(1) was $0.8 million, or $0.03 per
diluted share, compared to adjusted net income of $3.1 million, or
$0.10 per diluted share.
- Adjusted EBITDA(1) decreased to $7.5 million from $12.7
million.
______________________(1) Adjusted net income
(loss) and adjusted EBITDA are non-GAAP measures. A reconciliation
of GAAP net income (loss) to each of these measures is included in
the accompanying financial data. See “Non-GAAP Financial
Measures.”
Dave Boennighausen, Chief Financial Officer and
interim Chief Executive Officer of Noodles & Company, stated,
“Our second quarter results were below expectations in what proved
to be a challenging environment for the industry. Noodles &
Company remains a unique, differentiated brand with significant
upside. We are working aggressively to implement important
strategic decisions to regain momentum and increase shareholder
value.”
Boennighausen continued, “We remain confident in
the potential and progress of our recent initiatives, including
building off-premise sales and our increased investment in building
brand awareness in our markets. We are also working to move the
business forward through heightened communication of our World
Kitchen positioning and a reevaluation of our store operating model
to improve the guest experience, as well as to deliver improved
unit level profitability. Additionally, on the corporate level we
will pursue a more moderate unit growth rate as well as a reduction
in corporate overhead.”
Boennighausen concluded, “We are also excited to
welcome Victor Heutz as our Chief Operations Officer. Victor brings
a wealth of operating experience to the Noodles & Company team
and will be instrumental in applying lessons learned from our top
performing markets to other markets. Given a challenging consumer
backdrop, we do expect that substantial improvement in our
financial performance will take time, but I am confident we can
deliver a unique guest experience balanced with superior financial
results.”
Second Quarter 2016 Financial Results
Total revenue increased $6.2 million in the
second quarter of 2016, or 5.4%, to $121.4 million, compared to
$115.2 million in the second quarter of 2015. This increase was the
result of new restaurants opened system-wide since the beginning of
the second quarter of 2015, partially offset by the closure of 16
company-owned restaurants in the fourth quarter of 2015 and a
decline in comparable restaurant sales. Additionally, average unit
volumes (“AUVs”) overall decreased $31,000 due primarily to lower
AUVs at non-comparable restaurants.
Nine new restaurants opened system-wide in the
second quarter of 2016, including eight company-owned and one
franchise restaurant. We had 514 restaurants at the end of the
second quarter, comprised of 443 company-owned and 71 franchise
restaurants. In the second quarter of 2016, comparable restaurant
sales decreased 0.9% for company-owned restaurants, decreased 2.1%
for franchise restaurants and decreased 1.0% system-wide.
Restaurant contribution margin decreased to
13.7% in the second quarter of 2016, compared to 18.6% in the
second quarter of 2015. This decrease was primarily due to
deleverage on lower AUVs, increased labor costs, investments in
marketing initiatives and additional maintenance costs.
The Company reported a net loss of $14.1 million
in the second quarter of 2016, compared with net income of $3.1
million in the second quarter of 2015. In the second quarter of
2016 the Company recorded a $10.2 million pre-tax impairment charge
related to eleven restaurants resulting from the Company’s current
assessment of their expected future cash flows relative to their
asset bases, based on recent results. Adjusted net loss of $0.8
million in the second quarter of 2016 decreased from adjusted net
income of $3.1 million in the second quarter of 2015. Adjusted
EBITDA decreased to $7.5 million in the second quarter of 2016 from
$12.7 million in the second quarter of 2015.
First Two Quarters of 2016 Financial
Results
Total revenue increased $14.4 million in the
first two quarters of 2016, or 6.5%, to $235.4 million, compared
with $221.0 million in the first two quarters of 2015. This
increase was the result of new restaurants opened system-wide since
the beginning of the second quarter of 2015, partially offset by
the closure of 16 company-owned restaurants in the fourth quarter
of 2015 and a decline in comparable restaurant sales. Additionally,
AUVs overall decreased $31,000 due primarily to lower AUVs at
non-comparable restaurants.
In the first two quarters of 2016, the Company
opened 24 new restaurants system-wide, including 22 company-owned
and 2 franchise restaurants.
In the first two quarters of 2016, comparable
restaurant sales decreased 0.4% for company-owned restaurants, 1.3%
for franchise restaurants and 0.5% system-wide.
Restaurant contribution margin decreased to
13.5% in the first two quarters of 2016, compared with 17.5% in the
first two quarters of 2015. The decrease was primarily due to
deleverage on lower AUVs, increased labor costs, investments in
marketing initiatives and additional maintenance costs.
The Company reported a net loss of $16.5 million
in the first two quarters of 2016, compared with net income of $0.3
million in the first two quarters of 2015. In the first two
quarters of 2016, the Company recorded a $10.3 million pre-tax
impairment charge related to 12 restaurants resulting from the
Company’s assessment of their expected future cash flows relative
to their asset bases, based on recent results. The Company also
incurred $1.0 million of pre-tax ongoing costs related to closing
16 restaurants in fourth quarter of 2015. In the first quarter of
2015, the Company recorded a $5.9 million pre-tax impairment charge
related to eight restaurants. Adjusted net loss was $2.5 million
for the first two quarters of 2016, which was a decrease from
adjusted net income of $3.9 million in the first two quarters of
2015. Adjusted EBITDA decreased to $12.9 million from $21.5 million
in the first two quarters of 2015.
2016 Outlook
Based upon management’s current assessment
following second quarter results, the Company has revised guidance
and currently expects the following for full year 2016:
- Approximately 45 new restaurants system-wide, including 37 to
40 company-owned restaurant openings;
- Total revenue of $490 million to $500 million;
- Flat to modestly negative comparable restaurant sales
growth;
- Restaurant level contribution margin of 13.5% to 14.5%;
- Adjusted EBITDA of $28 million to $32 million; and
- Adjusted diluted loss per share of ($0.08) to ($0.12)
The Company believes that a quantitative
reconciliation of the Company’s non-GAAP financial guidance, namely
adjusted EBITDA and adjusted diluted loss per share, 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 predict the timing and likelihood
of outcomes that determine future impairments and the tax benefit
of any such future impairments. Neither of these measures, nor
their probable significance, can be reliably quantified due to the
inability to forecast future impairments.
Key Definitions
Comparable Restaurant Sales —
represent year-over-year sales comparisons for the comparable
restaurant base open for at least 18 full periods.
Restaurant Contribution Margin
— represents restaurant revenue less restaurant operating costs
which are costs of sales, labor, occupancy and other restaurant
operating costs.
Adjusted EBITDA — represents
net income (loss) before interest expense, debt extinguishment
expense, provision (benefit) for income taxes, restaurant
impairments, closure costs and asset disposals, depreciation and
amortization, stock-based compensation and other one-time expenses.
Adjusted EBITDA is presented because: (i) management believes it is
a useful measure 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 it
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 these 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 CallNoodles &
Company will host a conference call to discuss its second quarter
financial results on Thursday, August 4, 2016 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 46588374. The
replay will be available until Thursday, August 11, 2016. 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 11, 2016.
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: adjusted EBITDA, adjusted net income
(loss) and adjusted earnings (loss) per share (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 performance excluding the impact of restaurant impairment
costs, stock-based compensation expense and the tax effect of such
adjustments. 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
Noodles & Company is a fast-casual
restaurant chain where its globally inspired dishes come together
to create a World Kitchen. Recognized by Parents Magazine as a Top
Family Friendly Restaurant, and Health Magazine as one of America’s
Healthiest Fast Food Restaurants, Noodles & Company is a
restaurant where Japanese Pan Noodles rest comfortably next to
Penne Rosa and Wisconsin Mac & Cheese, but where world flavors
don’t end at just noodles. Inspired by some of the world’s most
celebrated flavor combinations, Noodle & Company’s menu offers
soups, salads, sandwiches and shareables, too. Everything is made
fresh to order, just as you like it, using quality ingredients.
Dishes are delivered to the table allowing guests time to sit and
relax or grab a quick bite. With more than 500 locations
nationwide, from California to Connecticut, guests can find a
location nearest them and take a tour of the global World Kitchen
menu by visiting www.noodles.com.
Forward-Looking Statements
This press release contains a number of
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Words, and variations of
words, such as “believe,” “estimate,” “anticipate,” “expect,”
“intend,” “may,” “will,” “would” and similar expressions are
intended to identify our forward-looking statements. Examples of
forward-looking statements include all matters that are not
historical facts, such as statements regarding 2016 guidance,
including unit growth, total revenue, comparable restaurant sales
growth, restaurant level contribution margin, adjusted EBITDA,
adjusted diluted earnings (loss) per share and our expected annual
effective tax rate; operating margins; new restaurant development;
additional public company expenses; our target and adjusted net
income (loss) and targeted restaurant openings. By their nature,
forward-looking statements involve risks and uncertainties that
could cause actual results to differ materially from the Company’s
forward-looking statements. These risks and uncertainties include:
our ability to achieve and maintain increases in comparable
restaurant sales and to successfully execute our growth strategy;
the success of our marketing efforts; our ability to open new
restaurants on schedule; current economic conditions; price and
availability of commodities; changes in labor costs; consumer
confidence and spending patterns; the assumptions used in the
adjustment of interest expense and the adjustments for certain
incremental legal, accounting, insurance and other compliance costs
used to calculate adjusted net income; changes in consumer tastes
and the level of acceptance of the Company’s restaurant concepts
(including consumer acceptance of prices and the success of our
catering offerings); consumer reactions to public health issues and
perceptions of food safety; 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, 2015
filed on March 1, 2016. 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 & Company |
Condensed Consolidated Statements of
Operations |
(in thousands, except share and per share
data, unaudited) |
|
|
|
Fiscal Quarter Ended |
|
Two Fiscal Quarters Ended |
|
|
June 28, 2016 |
|
June 30, 2015 |
|
June 28, 2016 |
|
June 30, 2015 |
Revenue: |
|
|
|
|
|
|
|
|
Restaurant revenue |
|
$ |
120,204 |
|
|
$ |
113,834 |
|
|
$ |
233,069 |
|
|
$ |
218,616 |
|
Franchising royalties and fees |
|
1,203 |
|
|
1,399 |
|
|
2,324 |
|
|
2,378 |
|
Total revenue |
|
121,407 |
|
|
115,233 |
|
|
235,393 |
|
|
220,994 |
|
Costs and
expenses: |
|
|
|
|
|
|
|
|
Restaurant operating costs
(exclusive of depreciation and amortization shown separately
below): |
|
|
|
|
|
|
|
|
Cost of sales |
|
32,164 |
|
|
29,863 |
|
|
62,353 |
|
|
57,674 |
|
Labor |
|
39,316 |
|
|
35,149 |
|
|
76,750 |
|
|
68,178 |
|
Occupancy |
|
13,688 |
|
|
12,480 |
|
|
27,002 |
|
|
24,698 |
|
Other restaurant operating
costs |
|
18,596 |
|
|
15,158 |
|
|
35,488 |
|
|
29,875 |
|
General and administrative |
|
9,840 |
|
|
9,232 |
|
|
19,877 |
|
|
17,650 |
|
Depreciation and amortization |
|
7,071 |
|
|
6,923 |
|
|
13,977 |
|
|
13,843 |
|
Pre-opening |
|
796 |
|
|
1,162 |
|
|
1,833 |
|
|
2,042 |
|
Restaurant impairments, closure
costs and asset disposals |
|
11,248 |
|
|
250 |
|
|
12,264 |
|
|
6,336 |
|
Total costs and expenses |
|
132,719 |
|
|
110,217 |
|
|
249,544 |
|
|
220,296 |
|
(Loss) income from
operations |
|
(11,312 |
) |
|
5,016 |
|
|
(14,151 |
) |
|
698 |
|
Interest expense,
net |
|
598 |
|
|
198 |
|
|
1,226 |
|
|
427 |
|
(Loss) income before
income taxes |
|
(11,910 |
) |
|
4,818 |
|
|
(15,377 |
) |
|
271 |
|
Provision (benefit) for
income taxes |
|
2,177 |
|
|
1,756 |
|
|
1,083 |
|
|
(39 |
) |
Net (loss) income |
|
$ |
(14,087 |
) |
|
$ |
3,062 |
|
|
$ |
(16,460 |
) |
|
$ |
310 |
|
(Loss) earnings per
share of Class A and Class B common stock, combined: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.51 |
) |
|
$ |
0.10 |
|
|
$ |
(0.59 |
) |
|
$ |
0.01 |
|
Diluted |
|
$ |
(0.51 |
) |
|
$ |
0.10 |
|
|
$ |
(0.59 |
) |
|
$ |
0.01 |
|
Weighted average shares
of Class A and Class B common stock outstanding,
combined: |
|
|
|
|
|
|
|
|
Basic |
|
27,776,094 |
|
|
29,950,122 |
|
|
27,754,615 |
|
|
29,896,663 |
|
Diluted |
|
27,776,094 |
|
|
30,720,102 |
|
|
27,754,615 |
|
|
30,792,278 |
|
Noodles & Company |
Condensed Consolidated Statements of
Operations as a Percentage of Revenue |
(in percentages, unaudited) |
|
|
Fiscal Quarter Ended |
|
Two Fiscal Quarters Ended |
|
|
June 28, 2016 |
|
June 30, 2015 |
|
June 28, 2016 |
|
June 30, 2015 |
Revenue: |
|
|
|
|
|
|
|
|
Restaurant revenue |
|
99.0 |
% |
|
98.8 |
% |
|
99.0 |
% |
|
98.9 |
% |
Franchising royalties and fees |
|
1.0 |
% |
|
1.2 |
% |
|
1.0 |
% |
|
1.1 |
% |
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 |
|
26.8 |
% |
|
26.2 |
% |
|
26.8 |
% |
|
26.4 |
% |
Labor |
|
32.7 |
% |
|
30.9 |
% |
|
32.9 |
% |
|
31.2 |
% |
Occupancy |
|
11.4 |
% |
|
11.0 |
% |
|
11.6 |
% |
|
11.3 |
% |
Other restaurant operating
costs |
|
15.5 |
% |
|
13.3 |
% |
|
15.2 |
% |
|
13.7 |
% |
General and administrative |
|
8.1 |
% |
|
8.0 |
% |
|
8.4 |
% |
|
8.0 |
% |
Depreciation and amortization |
|
5.8 |
% |
|
6.0 |
% |
|
5.9 |
% |
|
6.3 |
% |
Pre-opening |
|
0.7 |
% |
|
1.0 |
% |
|
0.8 |
% |
|
0.9 |
% |
Restaurant impairments, closure
costs and asset disposals |
|
9.3 |
% |
|
0.2 |
% |
|
5.2 |
% |
|
2.9 |
% |
Total costs and expenses |
|
109.3 |
% |
|
95.6 |
% |
|
106.0 |
% |
|
99.7 |
% |
(Loss) income from
operations |
|
(9.3 |
)% |
|
4.4 |
% |
|
(6.0 |
)% |
|
0.3 |
% |
Interest expense, net |
|
0.5 |
% |
|
0.2 |
% |
|
0.5 |
% |
|
0.2 |
% |
(Loss) income before
income taxes |
|
(9.8 |
)% |
|
4.2 |
% |
|
(6.5 |
)% |
|
0.1 |
% |
Provision (benefit) for
income taxes |
|
1.8 |
% |
|
1.5 |
% |
|
0.5 |
% |
|
— |
% |
Net (loss) income |
|
(11.6 |
)% |
|
2.7 |
% |
|
(7.0 |
)% |
|
0.1 |
% |
_______________________
(1) As a percentage of restaurant revenue.
Noodles & Company |
Consolidated Selected Balance Sheet Data and
Selected Operating Data |
(in thousands, except restaurant activity and
comparable restaurant sales, unaudited) |
|
|
|
As of |
|
|
June 28, 2016 |
|
December 29, 2015 |
Balance Sheet
Data |
|
|
|
|
|
|
|
|
Total current
assets |
|
$ |
21,942 |
|
|
$ |
25,401 |
|
Total assets |
|
233,892 |
|
|
239,961 |
|
Total current
liabilities |
|
28,089 |
|
|
32,914 |
|
Total long-term
debt |
|
78,503 |
|
|
67,732 |
|
Total liabilities |
|
154,604 |
|
|
146,189 |
|
Total stockholders’
equity |
|
79,288 |
|
|
93,772 |
|
|
|
Fiscal Quarter Ended |
|
|
June 28, 2016 |
|
March 29, 2016 |
|
December 29, 2015 |
|
September 29, 2015 |
|
June 30, 2015 |
Selected
Operating Data |
|
|
Restaurant
Activity: |
|
|
|
|
|
|
|
|
|
|
Company-owned restaurants at end of
period |
|
443 |
|
|
436 |
|
|
422 |
|
|
424 |
|
|
411 |
|
Franchise restaurants at end of
period |
|
71 |
|
|
71 |
|
|
70 |
|
|
64 |
|
|
61 |
|
Revenue Data: |
|
|
|
|
|
|
|
|
|
|
Company-owned average unit
volumes |
|
$ |
1,092 |
|
|
$ |
1,101 |
|
|
$ |
1,103 |
|
|
$ |
1,111 |
|
|
$ |
1,123 |
|
Franchise average unit volumes |
|
$ |
1,083 |
|
|
$ |
1,105 |
|
|
$ |
1,121 |
|
|
$ |
1,128 |
|
|
$ |
1,138 |
|
Company-owned comparable restaurant
sales |
|
(0.9 |
)% |
|
— |
% |
|
(0.9 |
)% |
|
(0.7 |
)% |
|
0.1 |
% |
Franchise comparable restaurant
sales |
|
(2.1 |
)% |
|
(0.5 |
)% |
|
(2.1 |
)% |
|
(1.9 |
)% |
|
(0.5 |
)% |
System-wide comparable restaurant
sales |
|
(1.0 |
)% |
|
(0.1 |
)% |
|
(1.1 |
)% |
|
(0.9 |
)% |
|
— |
% |
Reconciliations of Non-GAAP Measurements
to GAAP Results
Noodles & Company |
Reconciliation of Net Income (Loss) to EBITDA
and Adjusted EBITDA |
(in thousands, unaudited) |
|
|
|
Fiscal Quarter Ended |
|
Two Fiscal Quarters Ended |
|
|
June 28, 2016 |
|
June 30, 2015 |
|
June 28, 2016 |
|
June 30, 2015 |
Net (loss) income |
|
$ |
(14,087 |
) |
|
$ |
3,062 |
|
|
$ |
(16,460 |
) |
|
$ |
310 |
|
Depreciation and
amortization |
|
7,071 |
|
|
6,923 |
|
|
13,977 |
|
|
13,843 |
|
Interest expense,
net |
|
598 |
|
|
198 |
|
|
1,226 |
|
|
427 |
|
Provision (benefit) for
income taxes |
|
2,177 |
|
|
1,756 |
|
|
1,083 |
|
|
(39 |
) |
EBITDA |
|
$ |
(4,241 |
) |
|
$ |
11,939 |
|
|
$ |
(174 |
) |
|
$ |
14,541 |
|
Restaurant impairments,
closure costs and asset disposals |
|
11,248 |
|
|
250 |
|
|
12,264 |
|
|
6,336 |
|
Stock-based
compensation expense |
|
501 |
|
|
464 |
|
|
849 |
|
|
625 |
|
Adjusted EBITDA |
|
$ |
7,508 |
|
|
$ |
12,653 |
|
|
$ |
12,939 |
|
|
$ |
21,502 |
|
______________________________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 (benefit) for income taxes and
depreciation and amortization. Adjusted EBITDA further adjusts
EBITDA to reflect the additions and 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 & Company |
Reconciliation 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 28, 2016 |
|
June 30, 2015 |
|
June 28, 2016 |
|
June 30, 2015 |
Net (loss) income |
|
$ |
(14,087 |
) |
|
$ |
3,062 |
|
|
$ |
(16,460 |
) |
|
$ |
310 |
|
Restaurant impairments
and closure costs(a) |
|
10,660 |
|
|
— |
|
|
11,326 |
|
|
5,907 |
|
Tax adjustments,
net(b) |
|
2,659 |
|
|
— |
|
|
2,646 |
|
|
(2,287 |
) |
Adjusted net (loss)
income |
|
$ |
(768 |
) |
|
$ |
3,062 |
|
|
$ |
(2,488 |
) |
|
$ |
3,930 |
|
|
|
|
|
|
|
|
|
|
(Loss) earnings per
share of Class A and Class B common stock, combined: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.51 |
) |
|
$ |
0.10 |
|
|
$ |
(0.59 |
) |
|
$ |
0.01 |
|
Diluted |
|
$ |
(0.51 |
) |
|
$ |
0.10 |
|
|
$ |
(0.59 |
) |
|
$ |
0.01 |
|
Adjusted (loss)
earnings per Class A and Class B common stock, combined |
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.03 |
) |
|
$ |
0.10 |
|
|
$ |
(0.09 |
) |
|
$ |
0.13 |
|
Diluted |
|
$ |
(0.03 |
) |
|
$ |
0.10 |
|
|
$ |
(0.09 |
) |
|
$ |
0.13 |
|
Weighted average Class
A and Class B common stock outstanding, combined (c) |
|
|
|
|
|
|
|
|
Basic |
|
27,776,094 |
|
|
29,950,122 |
|
|
27,754,615 |
|
|
29,896,663 |
|
Diluted |
|
27,776,094 |
|
|
30,720,102 |
|
|
27,754,615 |
|
|
30,792,278 |
|
_____________________________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 these 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 11 restaurants in the second quarter of 2016
and one restaurant in the first quarter of 2016, as well as,
eliminating the impact of ongoing costs related to closing 16
restaurants closed in the fourth quarter of 2015. Eight restaurants
were impaired in the first quarter of 2015. 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 normalize the
impact of the valuation allowance that affects our annual effective
tax rate and the tax impact of the other adjustment in (a)
above.
(c) Adjusted per share amounts are calculated by dividing
adjusted net income (loss) by the basic and diluted weighted
average shares outstanding.
Investor Relations
investorrelations@noodles.com
Media:
Erin Murphy
Noodles & Company
720-214-1971
press@noodles.com
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