Noodles & Company (Nasdaq: NDLS) today announced financial
results for its first quarter ended March 31, 2020.
Key highlights for the first quarter of 2020 versus the
first quarter of 2019 include:
- Total revenue decreased 8.8% to $100.3 million from $110.0
million, primarily due to the decrease in comparable restaurant
sales as a result of mandated dining room closures in response to
COVID-19 as well as the refranchising of fourteen restaurants since
the first quarter of 2019.
- Comparable restaurant sales decreased 7.2% system-wide,
comprised of a 7.0% decrease at company-owned restaurants and an
8.9% decrease at franchise restaurants.- Comparable sales growth
system-wide increased 5.5% during the first ten weeks of the year
through March 10th.- Comparable sales were negatively impacted by
COVID-19 during the last three weeks of the fiscal quarter,
resulting in a system-wide comparable sales decline of 46.3% from
March 11th to March 31st.
- Strengthened existing off-premise capabilities by: launching
curbside pickup in 350 restaurants, expanding delivery options
through existing digital channels, adding Uber Eats as a delivery
partner to complement existing partnership with Door Dash, and
launching direct delivery channel.
- Digital sales grew 44.2% and accounted for 31.0% of sales;
contributed to a 6.0% increase in the total percentage of
off-premise sales from 55.7% to 61.7% of all sales.
- Net loss was $5.8 million, or $0.13 per diluted share, compared
to a net loss of $1.9 million, or $0.04 per diluted share.
- Adjusted net loss(1) was $3.9 million, or $0.09 per diluted
share, compared to an adjusted net loss of $1.2 million, or $0.03
per diluted share.
- Restaurant contribution margin(1) decreased 190 basis points to
10.7%.
- Opened one new company-owned restaurant and sold nine
restaurants to an existing franchisee.
- Enhanced cash position with precautionary revolving credit
draws totaling $47.0 million.
(1) Adjusted net loss and restaurant
contribution margin are non-GAAP measures. Reconciliations of net
loss to adjusted net loss and of operating income (loss) to
restaurant contribution margin are included in the accompanying
financial data. See “Non-GAAP Financial Measures.”
“I am proud of all of our team members and
partners for their tremendous commitment to quickly evolve and
address the needs of the consumer during this unprecedented time,”
said Dave Boennighausen, Chief Executive Officer. “After a strong
2019 reflecting continued growth in comparable sales, margin and
earnings, 2020 began with significant business momentum as our
off-premise, culinary and operational initiatives continued to
resonate with our guests. As we previously disclosed, the company
achieved mid-single digit comparable sales growth during the first
ten weeks of the quarter before sales were abruptly disrupted by
the current COVID-19 crisis.”
Boennighausen continued “Fortunately, Noodles
& Company’s investment in building a strong off-premise
business, which represented over 60% of sales quarter-to-date prior
to the COVID-19 crisis, has allowed the company to navigate this
downturn. We are seeing a steady rebound in company-owned
comparable sales growth, which declined 54.7% during the last week
of March but has since improved to a decline of just 33.6% for the
fiscal week ended May 5, 2020 as our digital and off-premise
innovation is helping offset the continued closure of our
restaurant dining rooms. Our balance sheet remains strong, with
cash on hand of $61.1 million as of May 5, 2020.”
“We continue to maintain our intense focus on
ensuring the health and safety of our team members and guests,
including several process enhancements enacted over the past
several weeks. Although we are prepared and excited to welcome
guests back into our dining rooms as the situation allows, our
strong off-premise business and increased digital capabilities give
us increased confidence in both the company’s ability to navigate
this current crisis but also strengthen our competitive position
going forward.” Boennighausen concluded.
First Quarter 2020 Financial Results
Total revenue decreased $9.7 million in the
first quarter of 2020, or 8.8%, to $100.3 million, compared to
$110.0 million in the first quarter of 2019. This decrease was
primarily due to a decline in traffic related to the impact of
COVID-19 during the last few weeks of the quarter, as well as the
refranchising of 14 total restaurants since January 2019. Average
unit volume (“AUV”) for the quarter increased $14,000 to $1,145,000
compared to $1,131,000 in the first quarter of 2019.
In the first quarter of 2020, system-wide
comparable restaurant sales declined 7.2%, comprised of a 7.0%
decrease at company-owned restaurants and an 8.9% decrease at
franchise restaurants.
Sales for the first and second period of 2020
were trending positively as shown below. As we entered the third
week of the third period of the quarter and as mandated shutdowns
and stay at home orders went into effect across the country, our
sales were significantly reduced as we began relying solely on
off-premise sales.
Comparable Restaurant
Sales |
4 weeks ended January 28, 2020 (first period) |
4 weeks ended February 25, 2020 (second
period) |
2 weeks ended March 10, 2020 |
March 11-March 31, 2020 |
Fiscal Quarter Ended March 31, 2020 |
Company-owned |
4.4 |
% |
7.4 |
% |
4.5 |
% |
(45.5 |
)% |
(7.0 |
)% |
Franchise |
2.2 |
% |
7.7 |
% |
5.2 |
% |
(51.3 |
)% |
(8.9 |
)% |
System-wide |
4.1 |
% |
7.5 |
% |
4.6 |
% |
(46.3 |
)% |
(7.2 |
)% |
In the first quarter of 2020, we opened one new
company-owned restaurant and sold nine restaurants to a franchisee.
The Company had 458 restaurants at the end of the first quarter
2020, comprised of 381 company-owned restaurants and 77 franchise
restaurants.
For the first quarter of 2020, the Company
reported a net loss of $5.8 million, or $0.13 per diluted share,
compared with net loss of $1.9 million in the first quarter of
2019, or $0.04 per diluted share. Loss from operations for the
first quarter of 2020 was $4.9 million, compared to $1.1 million in
the first quarter of 2019. Closure costs in the first quarter of
2020 included ongoing costs as well as adjustments to liabilities
as lease terminations occur.
Restaurant contribution margin decreased 190 bps
to 10.7% in the first quarter of 2020, compared to 12.6% in the
first quarter of 2019. This decrease was primarily due to decreased
sales volumes, increased costs related to COVID-19 and increased
third-party delivery fees associated with higher delivery
sales.
Adjusted net loss was $3.9 million, or $0.09 per
diluted share, in the first quarter of 2020, compared to adjusted
net loss of $1.2 million, or $0.03 per diluted share, in the first
quarter of 2019. Adjusted EBITDA decreased to $1.8 million in the
first quarter of 2020 from $5.6 million in the first quarter of
2019.
We do not have any further updates on our fiscal
year 2020 expectations following the withdrawal of our financial
guidance on March 16th, 2020.
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 of the average annualized sales of all company-owned
restaurants for the trailing 12 periods. AUV 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 consumer traffic and per person spending 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.
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.
Conference Call
Noodles & Company will host a conference
call to discuss its first quarter financial results on Wednesday,
May 6, 2020 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 4192015. The replay will be available until
Wednesday, May 13, 2020. 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 Wednesday, May 13,
2020.
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, 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 more
than 450 restaurants and 10,000 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 crisis,
projected capital expenditures, the revenue and balance sheet
impact of the COVID-19 crisis, estimated costs associated with our
closure of underperforming restaurants, the implementation and
results of strategic initiatives and our future financial
performance. Our actual results may differ materially from those
anticipated in these forward-looking statements due to reasons
including, but not limited to, the extent, duration and severity of
the COVID-19 crisis; governmental and guest response to the
COVID-19 crisis; 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 crisis and perceptions of food
safety; 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; our ability to
maintain compliance with debt covenants and continue to access
financing necessary to execute our business strategy; the success
of our marketing efforts; our ability to open new restaurants on
schedule; current economic conditions; price and availability of
commodities; our ability to adequately staff our restaurants;
changes in labor costs; 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 31, 2019 filed on February 26, 2020. 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 |
|
|
March 31, 2020 |
|
April 2, 2019 |
Revenue: |
|
|
|
|
Restaurant revenue |
|
$ |
98,716 |
|
|
$ |
108,765 |
|
Franchising royalties and fees, and other |
|
1,632 |
|
|
1,281 |
|
Total revenue |
|
100,348 |
|
|
110,046 |
|
Costs and expenses: |
|
|
|
|
Restaurant operating costs (exclusive of depreciation and
amortization shown separately below): |
|
|
|
|
Cost of sales |
|
25,204 |
|
|
29,091 |
|
Labor |
|
34,231 |
|
|
37,092 |
|
Occupancy |
|
12,060 |
|
|
12,430 |
|
Other restaurant operating costs |
|
16,689 |
|
|
16,456 |
|
General and administrative |
|
10,554 |
|
|
10,140 |
|
Depreciation and amortization |
|
5,335 |
|
|
5,507 |
|
Pre-opening |
|
73 |
|
|
— |
|
Restaurant impairments, closure costs and asset disposals |
|
1,056 |
|
|
420 |
|
Total costs and expenses |
|
105,202 |
|
|
111,136 |
|
Loss from operations |
|
(4,854 |
) |
|
(1,090 |
) |
Interest expense, net |
|
968 |
|
|
761 |
|
Loss before taxes |
|
(5,822 |
) |
|
(1,851 |
) |
Provision for income
taxes |
|
13 |
|
|
— |
|
Net loss |
|
$ |
(5,835 |
) |
|
$ |
(1,851 |
) |
Loss per Class A and
Class B common stock, combined |
|
|
|
|
Basic |
|
$ |
(0.13 |
) |
|
$ |
(0.04 |
) |
Diluted |
|
$ |
(0.13 |
) |
|
$ |
(0.04 |
) |
Weighted average shares of
Class A and Class B common stock outstanding,
combined: |
|
|
|
|
Basic |
|
44,142,220 |
|
|
43,933,235 |
|
Diluted |
|
44,142,220 |
|
|
43,933,235 |
|
Noodles &
CompanyCondensed Consolidated Statements of
Operations as a Percentage of
Revenue(unaudited)
|
|
Fiscal Quarter Ended |
|
|
March 31, 2020 |
|
April 2, 2019 |
Revenue: |
|
|
|
|
Restaurant revenue |
|
98.4 |
% |
|
98.8 |
% |
Franchising royalties and fees, and other |
|
1.6 |
% |
|
1.2 |
% |
Total revenue |
|
100.0 |
% |
|
100.0 |
% |
Costs and expenses: |
|
|
|
|
Restaurant operating costs (exclusive of depreciation and
amortization shown separately below): (1) |
|
|
|
|
Cost of sales |
|
25.5 |
% |
|
26.7 |
% |
Labor |
|
34.7 |
% |
|
34.1 |
% |
Occupancy |
|
12.2 |
% |
|
11.4 |
% |
Other restaurant operating costs |
|
16.9 |
% |
|
15.1 |
% |
General and administrative |
|
10.5 |
% |
|
9.2 |
% |
Depreciation and amortization |
|
5.3 |
% |
|
5.0 |
% |
Pre-opening |
|
0.1 |
% |
|
— |
% |
Restaurant impairments, closure costs and asset disposals |
|
1.1 |
% |
|
0.4 |
% |
Total costs and expenses |
|
104.8 |
% |
|
101.0 |
% |
Loss from operations |
|
(4.8 |
)% |
|
(1.0 |
)% |
Interest expense, net |
|
1.0 |
% |
|
0.7 |
% |
Loss before taxes |
|
(5.8 |
)% |
|
(1.7 |
)% |
Provision for income
taxes |
|
— |
% |
|
— |
% |
Net loss |
|
(5.8 |
)% |
|
(1.7 |
)% |
(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 |
|
|
March 31, 2020 |
|
December 31, 2019 |
|
|
|
|
|
Balance Sheet
Data |
|
|
Total current assets |
|
$ |
64,856 |
|
|
$ |
29,322 |
|
Total assets |
|
414,179 |
|
|
378,519 |
|
Total current liabilities |
|
50,099 |
|
|
58,034 |
|
Total long-term debt |
|
85,382 |
|
|
40,497 |
|
Total liabilities |
|
369,273 |
|
|
327,948 |
|
Total stockholders’
equity |
|
44,906 |
|
|
50,571 |
|
|
|
Fiscal Quarter Ended |
|
|
March 31, 2020 |
|
December 31, 2019 |
|
October 1, 2019 |
|
July 2, 2019 |
|
April 2, 2019 |
|
|
|
|
|
|
|
|
|
|
|
Selected Operating
Data |
|
|
Restaurant Activity: |
|
|
|
|
|
|
|
|
|
|
Company-owned
restaurants at end of period |
|
381 |
|
|
389 |
|
|
391 |
|
|
395 |
|
|
395 |
|
Franchise restaurants
at end of period |
|
77 |
|
|
68 |
|
|
67 |
|
|
62 |
|
|
64 |
|
Revenue Data: |
|
|
|
|
|
|
|
|
|
|
Company-owned average
unit volume |
|
$ |
1,145 |
|
|
$ |
1,163 |
|
|
$ |
1,157 |
|
|
$ |
1,148 |
|
|
$ |
1,131 |
|
Franchise average unit
volume |
|
$ |
1,129 |
|
|
$ |
1,162 |
|
|
$ |
1,161 |
|
|
$ |
1,164 |
|
|
$ |
1,155 |
|
Company-owned
comparable restaurant sales |
|
(7.0 |
)% |
|
1.4 |
% |
|
2.2 |
% |
|
4.8 |
% |
|
3.0 |
% |
Franchise comparable
restaurant sales |
|
(8.9 |
)% |
|
1.8 |
% |
|
1.6 |
% |
|
3.7 |
% |
|
2.8 |
% |
System-wide comparable
restaurant sales |
|
(7.2 |
)% |
|
1.5 |
% |
|
2.1 |
% |
|
4.6 |
% |
|
3.0 |
% |
Reconciliations of Non-GAAP Measurements
to GAAP Results
Noodles &
CompanyReconciliation of Net Loss to EBITDA and
Adjusted EBITDA(in thousands,
unaudited)
|
|
Fiscal Quarter Ended |
|
|
March 31, 2020 |
|
April 2, 2019 |
Net loss |
|
$ |
(5,835 |
) |
|
$ |
(1,851 |
) |
Depreciation and
amortization |
|
5,335 |
|
|
5,507 |
|
Interest expense, net |
|
968 |
|
|
761 |
|
Provision for income
taxes |
|
13 |
|
|
— |
|
EBITDA |
|
$ |
481 |
|
|
$ |
4,417 |
|
Restaurant impairments,
closure costs and asset disposals |
|
1,056 |
|
|
420 |
|
Stock-based compensation
expense |
|
159 |
|
|
726 |
|
Fees and costs related to
transactions and other acquisition/disposition costs |
|
89 |
|
|
36 |
|
Adjusted EBITDA |
|
$ |
1,785 |
|
|
$ |
5,599 |
|
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 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 Loss to Adjusted Net
Loss(in thousands, except share and per share
data, unaudited)
|
|
Fiscal Quarter Ended |
|
|
March 31, 2020 |
|
April 2, 2019 |
Net loss |
|
$ |
(5,835 |
) |
|
$ |
(1,851 |
) |
Restaurant impairments,
divestitures and closure costs (a) |
|
440 |
|
|
271 |
|
Fees and costs related to
transactions and other acquisition/disposition costs (b) |
|
89 |
|
|
— |
|
Tax adjustments, net (c) |
|
1,414 |
|
|
418 |
|
Adjusted net loss |
|
$ |
(3,892 |
) |
|
$ |
(1,162 |
) |
|
|
|
|
|
Loss per Class A and
Class B common stock, combined |
|
|
|
|
Basic |
|
$ |
(0.13 |
) |
|
$ |
(0.04 |
) |
Diluted |
|
$ |
(0.13 |
) |
|
$ |
(0.04 |
) |
Adjusted loss per Class A
and Class B common stock, combined (d) |
|
|
|
|
Basic |
|
$ |
(0.09 |
) |
|
$ |
(0.03 |
) |
Diluted |
|
$ |
(0.09 |
) |
|
$ |
(0.03 |
) |
Weighted average Class A and
Class B common stock outstanding, combined (d) |
|
|
|
|
Basic |
|
44,142,220 |
|
|
43,933,235 |
|
Diluted |
|
44,142,220 |
|
|
43,933,235 |
|
Adjusted net loss is a supplemental measure of
financial performance that is not required by or presented in
accordance with GAAP. We define adjusted net loss as net loss plus
the impact of adjustments and the tax effects of such adjustments.
Adjusted net 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 loss as presented may not be
comparable to other similarly-titled measures of other companies,
and our presentation of adjusted net 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 quarters of 2020 and 2019. 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 certain expenses related to corporate
projects in the first quarter 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 (c) above.
(d) Adjusted per
share amounts are calculated by dividing adjusted net income by the
basic and diluted weighted average shares outstanding.
Noodles &
CompanyReconciliation of Operating Loss to
Restaurant Contribution(in thousands,
unaudited)
|
|
Fiscal Quarter Ended |
|
|
March 31, 2020 |
|
April 2, 2019 |
Loss from operations |
|
$ |
(4,854 |
) |
|
$ |
(1,090 |
) |
Less: Franchising royalties
and fees, and other |
|
1,632 |
|
|
1,281 |
|
Plus: General and
administrative |
|
10,554 |
|
|
10,140 |
|
Depreciation and amortization |
|
5,335 |
|
|
5,507 |
|
Pre-opening |
|
73 |
|
|
— |
|
Restaurant impairments, closure costs and asset disposals |
|
1,056 |
|
|
420 |
|
Restaurant contribution |
|
$ |
10,532 |
|
|
$ |
13,696 |
|
|
|
|
|
|
Restaurant contribution margin |
|
10.7 |
% |
|
12.6 |
% |
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 Moore(720) 214-1971press@noodles.com
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