Noodles & Company (Nasdaq: NDLS) today announced financial
results for the fourth quarter and fiscal year ended
December 29, 2020, as well as provided accelerated growth
objectives.
Dave Boennighausen, Chief Executive Officer of
Noodles & Company, remarked, “Our fourth quarter results
reflect the continued resiliency of our brand, particularly
surrounding our digital and off-premise capabilities, even against
the resurgence of COVID-19 during the quarter. Our ability to
accelerate these areas and adapt to rapidly changing consumer
preferences is a testament to our brand strength, our unit economic
model and most importantly, our incredible team members. Noodles
& Company’s differentiated menu, bolstered by the recent
introduction of our low-carb Cauliflower Gnocchi, supported by a
robust digital program which grew to 62% of sales in the fourth
quarter, is particularly well suited for the needs of today’s
consumer.”
Boennighausen continued, “Thus far in 2021, we
have seen nice momentum in our comparable restaurant sales and AUV
growth relative to fourth quarter 2020, as well as continued
strength in our recent openings. As we look further ahead, we are
more encouraged than ever that our brand is well positioned to
thrive in the years to come. We believe the Company will
significantly accelerate unit growth from a company and franchise
perspective, as well as meaningfully expand both average unit
volumes and restaurant level margins. The Company’s resiliency
demonstrated during the pandemic, combined with the success of
recent openings and digital and menu strengths, support our
confidence in achieving these accelerated growth objectives.”
Key highlights for the fourth quarter of
2020 compared to the same quarter of 2019 include:
- Total revenue decreased 5.9% to
$107.2 million from $113.9 million.
- Comparable restaurant sales
decreased 4.7% system-wide, decreased 4.2% for company-owned
restaurants and decreased 7.9% for franchise restaurants.
- Digital sales grew 128% and accounted for 62% of sales.
- Net loss was $3.8 million, or $0.09
loss per diluted share compared to net loss of $1.2 million, or
$0.03 loss per diluted share.
- Adjusted net loss was $1.6 million,
or $0.04 loss per diluted share, compared to adjusted net income of
$3.0 million, or $0.07 earnings per diluted share.
- Restaurant contribution margin
decreased 360 basis points to 13.6%.
- Adjusted EBITDA
decreased 51.3% to $5.3 million from $10.9 million.
Key highlights for fiscal year 2020
compared to fiscal year 2019 include:
- Total revenue decreased 14.9% to
$393.7 million from $462.4 million.
- Comparable restaurant sales
decreased 12.0% system-wide, decreased 11.6% for company-owned
restaurants and decreased 14.5% for franchise restaurants.
- Digital sales grew 115% and accounted for 57% of sales.
- Net loss was $23.3 million, or
$0.53 per diluted share, compared to a net income of $1.6 million,
or $0.04 earnings per diluted share.
- Adjusted net loss was $13.1
million, or $0.29 loss per diluted share, compared to adjusted net
income of $8.1 million, or $0.18 earnings per diluted share.
- Restaurant contribution margin
decreased 420 basis points to 11.9%.
- Adjusted EBITDA decreased 70.1% to
$11.5 million from $38.4 million.
- Four new
company-owned restaurants opened in 2020.
Fourth Quarter 2020 Financial
Results
Total revenue decreased $6.7 million in the
fourth quarter of 2020, or 5.9%, to $107.2 million, compared to
$113.9 million in the fourth quarter of 2019. Company-owned average
unit volumes (“AUVs”) were $1.15 million compared to $1.18 million
in 2019.
Comparable restaurants sales decreased 4.7%
system-wide, including a 4.2% decrease for company-owned
restaurants and a 7.9% decrease for franchise restaurants. The
decrease was driven by volatility in the second half of the fourth
quarter related to a surge in COVID-19 cases which impacted traffic
and temporary restaurant closure days, offset by strength in our
digital business and the benefit of a delivery menu price
increase.
Restaurant contribution margin decreased to
13.6% in the fourth quarter of 2020, compared to 17.2% in the
fourth quarter of 2019. This decrease was primarily due to
deleverage on lower AUVs and increased third-party delivery fees
associated with higher delivery revenues partially offset by
ongoing supply chain initiatives and labor efficiencies.
The Company had a net loss of $3.8 million in
the fourth quarter of 2020, compared to a net loss of $1.2 million
in the fourth quarter of 2019. In the fourth quarter of 2020, the
Company recognized $1.7 million of impairment charges related to
three restaurants impaired and incurred $0.8 million of closure
costs and losses on asset disposals. In the fourth quarter of 2019,
the Company did not impair any restaurants but did write-down $3.6
million of assets related to the divestiture of company-owned
restaurants to a franchisee, and had $0.4 million of closure costs
and losses on asset disposals.
Adjusted net loss was $1.6 million in the fourth
quarter of 2020, compared to an adjusted net income of $3.0 million
in the fourth quarter of 2019. Adjusted EBITDA decreased by 51.3%
to $5.3 million in the fourth quarter of 2020 from $10.9 million in
the same period of 2019.
Fiscal Year Ended 2020 Financial
Results
Total revenue decreased $68.8 million in 2020,
or 14.9%, to $393.7 million, compared to $462.4 million in 2019.
This decrease was due to a decline in traffic and temporary store
closures related to the impact of the COVID-19 pandemic during
2020, as well as a $10.3 million decrease related to the
refranchising of nine total restaurants in 2020, partially offset
by increases in pricing and growth from new restaurants opened.
Digital sales grew 115% to $221.6 million and accounted for 57% of
sales. More than half of the digital sales were through order ahead
transactions, as guests better understand the value offered by this
channel and our investment in curbside pick-up and quick pick-up
counters, with the remaining through delivery.
In 2020, comparable restaurant sales decreased
12.0% system-wide, including an 11.6% decrease for company-owned
restaurants and a 14.5% decrease for franchise restaurants. Average
unit volumes decreased 8.9% to $1.1 million in 2020 compared to
$1.2 million 2019.
Four new company-owned restaurants opened in
2020. The Company had 454 restaurants at the end of 2020, comprised
of 378 company-owned and 76 franchise restaurants.
Restaurant contribution margin decreased to
11.9% in 2020 compared to 16.1% in 2019. This decrease was
primarily due to deleverage on lower AUVs and increased third-party
delivery fees associated with higher delivery revenues partially
offset by ongoing supply chain initiatives and labor
efficiencies.
In 2020, the Company reported net loss of $23.3
million, or $0.53 per diluted share, compared to a net income of
$1.6 million, or $0.04 earnings per diluted share in 2019. This
includes $4.1 million of impairment charges related to eight
restaurant impairments and $2.4 million of closure costs and losses
on asset disposals in 2020. In 2019, we had $2.6 million of
impairment charges on two restaurants, a $3.6 million asset write
down and $1.5 million of closure costs and losses on asset
disposals. Adjusted net loss excluding these impacts on an
after-tax basis was $13.1 million in 2020, compared to an adjusted
net income of $8.1 million in 2019. Adjusted EBITDA decreased to
$11.5 million in 2020 from $38.4 million in 2019.
Liquidity Update
As of December 29, 2020, the Company had
available cash and cash equivalents of $7.8 million, and
outstanding borrowings of $43.8 million, in-line with borrowings at
the end of 2019, and reflective of the Company’s effective
management of costs throughout 2020 while still investing in
certain growth initiatives. As of December 29, 2020, the Company
has $52.3 million available for future borrowings under its
revolving credit facility.
Business Outlook
Due to the ongoing uncertainty surrounding the
future impact of COVID-19 and its potential impact on the Company’s
near-term operations, Noodles & Company is not providing full
financial guidance for fiscal year 2021. However, the Company is
providing the following expectations within 2021:
- First quarter 2021 comparable
restaurant sales in the mid-to-high single digits;
- Approximately ten to fifteen new
restaurants system-wide in 2021, including eight to eleven company
locations;
- Capital expenditures of $20 million
to $24 million in 2021.
Based on the Company’s strategic framework, the
Company outlined its accelerated growth objectives, including the
following:
- System-wide unit growth of at least
7% annually beginning in 2022, quickly reaching 10% annual growth
on a path to at least 1,500 units;
- Average unit volumes of $1.45
million by 2024; and
- Restaurant contribution margin of
20% by 2024.
Serving as a foundation to its 3-year strategic
framework are the following key elements:
- Building a robust, high-returns
real estate pipeline of both company-owned and franchised
locations;
- Driving frequency of existing
guests and attracting new guests, supported by our menu innovation,
loyalty program and digital capabilities; and
- Optimizing restaurant operating
costs through further enhancements in supply chain management,
streamlined operations and more efficient back of the house
equipment.
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. These non-GAAP financial
measures 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 —
represents the average annualized sales of all restaurants for a
given time period. 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
revenue patterns at our restaurants.
Comparable Restaurant Sales —
represent year-over-year sales comparisons for the comparable
restaurant base open for at least 18 full periods. This measure
highlights performance of existing restaurants, as the impact of
new restaurant openings is excluded. Changes in comparable
restaurant sales are generated by changes in traffic, which we
calculate as the number of entrées sold, or changes in per-person
spend, calculated as sales divided by traffic. For fiscal year
2020, restaurants that were temporarily closed or operating at
reduced hours or dining capacity due to the COVID-19 pandemic
remained in comparable restaurant sales.
Restaurant Contribution and Restaurant
Contribution Margin — restaurant contribution represents
restaurant revenue less restaurant operating costs, which are costs
of sales, labor, occupancy and other restaurant operating items.
Restaurant contribution margin represents restaurant contribution
as a percentage of restaurant revenue. Restaurant contribution and
restaurant contribution margin are presented because they are
widely-used metrics within the restaurant industry to evaluate
restaurant-level productivity, efficiency and performance.
Management also uses restaurant contribution and restaurant
contribution margin as metrics to evaluate the profitability of
incremental sales at our restaurants, restaurant performance across
periods, and restaurant financial performance compared with
competitors. See “Non-GAAP Financial Measures” below.
EBITDA and Adjusted EBITDA —
EBITDA represents net income (loss) before interest expense,
provision (benefit) for income taxes and depreciation and
amortization. Adjusted EBITDA represents net income (loss) before
interest expense, provision (benefit) for income taxes,
depreciation and amortization, restaurant impairments, closure
costs and asset disposals, certain litigation settlements, data
breach assessments, non-recurring registration and related
transaction costs, 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 fourth quarter and fiscal year 2020 financial
results on Thursday, February 25, 2021 at 4:30 p.m. EST. 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 9870989. The replay will be
available until Thursday, March 4, 2021. The conference call will
also be webcast live from the Company’s corporate website at
investor.noodles.com, under the “Events & Presentations” page.
An archive of the webcast will be available at this location
shortly after the call has concluded until Thursday, March 4,
2021.
Non-GAAP Financial Measures
To supplement its condensed consolidated
financial statements, which are prepared and presented in
accordance with accounting principles generally accepted in the
United States of America (“GAAP”), the Company uses the following
non-GAAP financial measures: EBITDA, adjusted EBITDA, adjusted net
income (loss), adjusted earnings (loss) per share, 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 8,000 passionate team members, Noodles is
dedicated to nourishing and inspiring every guest who walks through
the door. To learn more or find the location nearest you, visit
www.noodles.com.
Forward-Looking Statements
In addition to historical information, this
press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995
that involve risks and uncertainties such as the number of
restaurants we intend to open, projected capital expenditures and
estimates of our effective tax rates. In some cases, you can
identify forward-looking statements by terms such as “may,”
“might,” “will,” “objective,” “intend,” “should,” “could,” “can,”
“would,” “expect,” “believe,” “design,” “estimate,” “predict,”
“potential,” “plan” or the negative of these terms and similar
expressions intended to identify forward-looking statements. These
statements reflect our current views with respect to future events
and are based on currently available operating, financial and
competitive information. Examples of forward-looking statements
include all matters that are not historical facts, such as
statements regarding our ability to navigate the COVID-19 pandemic,
projected capital expenditures, the revenue and balance sheet
impact of the COVID-19 pandemic, estimated costs associated with
our closure of underperforming restaurants, the implementation and
results of strategic initiatives and investments and our future
financial performance, including comparable sales improvement and
our ability to generate positive cash flow. Our actual results may
differ materially from those anticipated in these forward-looking
statements due to reasons including, but not limited to, the
extent, duration and severity of the COVID-19 pandemic;
governmental and guest response to the COVID-19 pandemic; other
conditions beyond our control such as weather, natural disasters,
disease outbreaks, epidemics or pandemics impacting our customers
or food supplies; consumer reaction to industry related public
health issues and health pandemics, including the COVID-19 pandemic
and perceptions of food safety; our ability to 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 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.
|
Noodles & CompanyConsolidated
Statements of Operations(in thousands, except
share and per share data, unaudited) |
|
|
|
Fiscal Quarter Ended |
|
Fiscal Year Ended |
|
|
December 29,2020 |
|
December 31,2019 |
|
December 29,2020 |
|
December 31,2019 |
Revenue: |
|
|
|
|
|
|
|
|
Restaurant revenue |
|
$ |
105,330 |
|
|
$ |
112,289 |
|
|
$ |
388,480 |
|
|
$ |
456,671 |
|
Franchise royalties and fees, and other |
|
1,838 |
|
|
1,582 |
|
|
5,175 |
|
|
5,740 |
|
Total revenue |
|
107,168 |
|
|
113,871 |
|
|
393,655 |
|
|
462,411 |
|
Costs and expenses: |
|
|
|
|
|
|
|
|
Restaurant operating costs (exclusive of depreciation and
amortization shown separately below): |
|
|
|
|
|
|
|
|
Cost of sales |
|
26,573 |
|
|
28,096 |
|
|
97,697 |
|
|
117,179 |
|
Labor |
|
33,792 |
|
|
36,645 |
|
|
126,424 |
|
|
150,565 |
|
Occupancy |
|
11,314 |
|
|
12,014 |
|
|
46,787 |
|
|
48,863 |
|
Other restaurant operating costs |
|
19,347 |
|
|
16,209 |
|
|
71,208 |
|
|
66,684 |
|
General and administrative |
|
11,461 |
|
|
11,022 |
|
|
42,876 |
|
|
43,446 |
|
Depreciation and amortization |
|
5,436 |
|
|
5,460 |
|
|
21,709 |
|
|
22,086 |
|
Pre-opening |
|
60 |
|
|
71 |
|
|
443 |
|
|
402 |
|
Restaurant impairments, closure costs and asset disposals |
|
2,557 |
|
|
4,107 |
|
|
6,540 |
|
|
7,747 |
|
Total costs and expenses |
|
110,540 |
|
|
113,624 |
|
|
413,684 |
|
|
456,972 |
|
(Loss) income from
operations |
|
(3,372 |
) |
|
247 |
|
|
(20,029 |
) |
|
5,439 |
|
Loss on extinguishment of
debt |
|
— |
|
|
746 |
|
|
— |
|
|
746 |
|
Interest expense, net |
|
436 |
|
|
644 |
|
|
3,146 |
|
|
2,942 |
|
(Loss) income before income
taxes |
|
(3,808 |
) |
|
(1,143 |
) |
|
(23,175 |
) |
|
1,751 |
|
Provision for income
taxes |
|
11 |
|
|
40 |
|
|
84 |
|
|
104 |
|
Net (loss) income |
|
$ |
(3,819 |
) |
|
$ |
(1,183 |
) |
|
$ |
(23,259 |
) |
|
$ |
1,647 |
|
(Loss) earnings per share,
combined |
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.09 |
) |
|
$ |
(0.03 |
) |
|
$ |
(0.53 |
) |
|
$ |
0.04 |
|
Diluted |
|
$ |
(0.09 |
) |
|
$ |
(0.03 |
) |
|
$ |
(0.53 |
) |
|
$ |
0.04 |
|
Weighted average common shares
outstanding |
|
|
|
|
|
|
|
|
Basic |
|
44,373,832 |
|
|
43,993,394 |
|
|
44,272,474 |
|
|
44,036,947 |
|
Diluted |
|
44,373,832 |
|
|
43,993,394 |
|
|
44,272,474 |
|
|
44,976,436 |
|
|
Noodles & CompanyConsolidated
Statements of Operations as a Percentage of
Revenue(unaudited) |
|
|
|
Fiscal Quarter Ended |
|
Fiscal Year Ended |
|
|
December 29,2020 |
|
December 31,2019 |
|
December 29,2020 |
|
December 31,2019 |
Revenue: |
|
|
|
|
|
|
|
|
Restaurant revenue |
|
98.3 |
% |
|
98.6 |
% |
|
98.7 |
% |
|
98.8 |
% |
Franchise royalties and fees, and other |
|
1.7 |
% |
|
1.4 |
% |
|
1.3 |
% |
|
1.2 |
% |
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 |
|
25.2 |
% |
|
25.0 |
% |
|
25.1 |
% |
|
25.7 |
% |
Labor |
|
32.1 |
% |
|
32.6 |
% |
|
32.5 |
% |
|
33.0 |
% |
Occupancy |
|
10.7 |
% |
|
10.7 |
% |
|
12.0 |
% |
|
10.7 |
% |
Other restaurant operating costs |
|
18.4 |
% |
|
14.4 |
% |
|
18.3 |
% |
|
14.6 |
% |
General and administrative |
|
10.7 |
% |
|
9.7 |
% |
|
10.9 |
% |
|
9.4 |
% |
Depreciation and amortization |
|
5.1 |
% |
|
4.8 |
% |
|
5.5 |
% |
|
4.8 |
% |
Pre-opening |
|
0.1 |
% |
|
0.1 |
% |
|
0.1 |
% |
|
0.1 |
% |
Restaurant impairments, closure costs and asset disposals |
|
2.4 |
% |
|
3.6 |
% |
|
1.7 |
% |
|
1.7 |
% |
Total costs and expenses |
|
103.1 |
% |
|
99.8 |
% |
|
105.1 |
% |
|
98.8 |
% |
(Loss) income from
operations |
|
(3.1 |
)% |
|
0.2 |
% |
|
(5.1 |
)% |
|
1.2 |
% |
Loss on extinguishment of
debt |
|
— |
% |
|
0.7 |
% |
|
— |
% |
|
0.2 |
% |
Interest expense, net |
|
0.4 |
% |
|
0.6 |
% |
|
0.8 |
% |
|
0.6 |
% |
(Loss) income before income
taxes |
|
(3.6 |
)% |
|
(1.0 |
)% |
|
(5.9 |
)% |
|
0.4 |
% |
Provision for income
taxes |
|
— |
% |
|
— |
% |
|
— |
% |
|
— |
% |
Net (loss) income |
|
(3.6 |
)% |
|
(1.0 |
)% |
|
(5.9 |
)% |
|
0.4 |
% |
________________________
(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 |
|
|
December 29,2020 |
|
December 31,2019 |
|
|
|
Balance Sheet
Data |
|
|
Total current assets |
|
$ |
23,714 |
|
|
$ |
29,322 |
|
Total assets |
|
353,631 |
|
|
378,519 |
|
Total current liabilities |
|
58,129 |
|
|
58,034 |
|
Total long-term debt |
|
40,949 |
|
|
40,497 |
|
Total liabilities |
|
323,932 |
|
|
327,948 |
|
Total stockholders’
equity |
|
29,699 |
|
|
50,571 |
|
|
|
Fiscal Quarter Ended |
|
|
December 29,2020 |
|
September 29,2020 |
|
June 30,2020 |
|
March 31,2020 |
|
December 31,2019 |
Selected Operating
Data |
|
|
Restaurant Activity: |
|
|
|
|
|
|
|
|
|
|
Company-owned restaurants at end of period |
|
378 |
|
|
378 |
|
|
380 |
|
|
381 |
|
|
389 |
|
Franchise restaurants at end of period |
|
76 |
|
|
76 |
|
|
76 |
|
|
77 |
|
|
68 |
|
Revenue Data: |
|
|
|
|
|
|
|
|
|
|
Company-owned average unit volumes |
|
$ |
1,064 |
|
|
$ |
1,187 |
|
|
$ |
891 |
|
|
$ |
1,036 |
|
|
$ |
1,168 |
|
Franchise average unit volumes |
|
$ |
1,073 |
|
|
$ |
1,102 |
|
|
$ |
781 |
|
|
$ |
994 |
|
|
$ |
1,186 |
|
Company-owned comparable restaurant sales |
|
(4.2 |
)% |
|
(3.6 |
)% |
|
(30.1 |
)% |
|
(7.0 |
)% |
|
1.4 |
% |
Franchise comparable restaurant sales |
|
(7.9 |
)% |
|
(5.0 |
)% |
|
(35.4 |
)% |
|
(8.9 |
)% |
|
1.8 |
% |
System-wide comparable restaurant sales |
|
(4.7 |
)% |
|
(3.8 |
)% |
|
(30.9 |
)% |
|
(7.2 |
)% |
|
1.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliations of Non-GAAP Measurements
to GAAP Results
|
Noodles & CompanyReconciliation
of Net (Loss) Income to EBITDA and Adjusted
EBITDA(in thousands, unaudited) |
|
|
|
Fiscal Quarter Ended |
|
Fiscal Year Ended |
|
|
December 29,2020 |
|
December 31,2019 |
|
December 29,2020 |
|
December 31,2019 |
Net (loss) income |
|
$ |
(3,819 |
) |
|
$ |
(1,183 |
) |
|
$ |
(23,259 |
) |
|
$ |
1,647 |
|
Depreciation and
amortization |
|
5,436 |
|
|
5,460 |
|
|
21,709 |
|
|
22,086 |
|
Interest expense, net |
|
436 |
|
|
644 |
|
|
3,146 |
|
|
2,942 |
|
Provision for income
taxes |
|
11 |
|
|
40 |
|
|
84 |
|
|
104 |
|
EBITDA |
|
$ |
2,064 |
|
|
$ |
4,961 |
|
|
$ |
1,680 |
|
|
$ |
26,779 |
|
Restaurant impairments,
closure costs and asset disposals |
|
2,557 |
|
|
4,107 |
|
|
6,540 |
|
|
7,747 |
|
Fees and costs related to the
registration statements and related transactions |
|
— |
|
|
24 |
|
|
162 |
|
|
190 |
|
Loss on extinguishment of
debt |
|
— |
|
|
746 |
|
|
— |
|
|
746 |
|
Severance costs |
|
82 |
|
|
410 |
|
|
536 |
|
|
522 |
|
Stock-based compensation
expense |
|
593 |
|
|
623 |
|
|
2,554 |
|
|
2,443 |
|
Adjusted EBITDA |
|
$ |
5,296 |
|
|
$ |
10,871 |
|
|
$ |
11,472 |
|
|
$ |
38,427 |
|
________________________
EBITDA and adjusted EBITDA are supplemental
measures of operating performance that do not represent and should
not be considered as alternatives to net (loss) income 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 (loss) income 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 Net (Loss) Income to Adjusted Net (Loss)
Income(in thousands, except share and per share
data, unaudited) |
|
|
|
Fiscal Quarter Ended |
|
Fiscal Year Ended |
|
|
December 29,2020 |
|
December 31,2019 |
|
December 29,2020 |
|
December 31,2019 |
Net (loss) income |
|
$ |
(3,819 |
) |
|
$ |
(1,183 |
) |
|
$ |
(23,259 |
) |
|
$ |
1,647 |
|
Restaurant impairments,
divestitures and closure costs (1) |
|
1,599 |
|
|
4,031 |
|
|
4,715 |
|
|
7,794 |
|
Severance costs, including
related stock-based compensation expense (2) |
|
82 |
|
|
410 |
|
|
536 |
|
|
522 |
|
Fees and costs related to
transactions and other acquisition/disposition costs (3) |
|
— |
|
|
24 |
|
|
162 |
|
|
154 |
|
Loss on extinguishment of debt
(4) |
|
— |
|
|
746 |
|
|
— |
|
|
746 |
|
Tax effect of adjustments
(5) |
|
575 |
|
|
(1,036 |
) |
|
4,786 |
|
|
(2,798 |
) |
Adjusted net (loss)
income |
|
$ |
(1,563 |
) |
|
$ |
2,992 |
|
|
$ |
(13,060 |
) |
|
$ |
8,065 |
|
|
|
|
|
|
|
|
|
|
(Loss) earnings per share |
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.09 |
) |
|
$ |
(0.03 |
) |
|
$ |
(0.53 |
) |
|
$ |
0.04 |
|
Diluted |
|
$ |
(0.09 |
) |
|
$ |
(0.03 |
) |
|
$ |
(0.53 |
) |
|
$ |
0.04 |
|
Adjusted (loss) earnings per
share (6) |
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.04 |
) |
|
$ |
0.07 |
|
|
$ |
(0.29 |
) |
|
$ |
0.18 |
|
Diluted |
|
$ |
(0.04 |
) |
|
$ |
0.07 |
|
|
$ |
(0.29 |
) |
|
$ |
0.18 |
|
Weighted average common shares
outstanding (6) |
|
|
|
|
|
|
|
|
Basic |
|
44,373,832 |
|
|
43,993,394 |
|
|
44,272,474 |
|
|
44,036,947 |
|
Diluted |
|
44,373,832 |
|
|
44,494,399 |
|
|
44,272,474 |
|
|
44,976,436 |
|
________________________
Adjusted net income is a supplemental measure of
financial performance that is not required by or presented in
accordance with GAAP. We define adjusted net income as net (loss)
income plus the impact of adjustments and the tax effects of such
adjustments. Adjusted net income 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 as
presented may not be comparable to other similarly-titled measures
of other companies, and our presentation of adjusted net income
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.
(1) |
|
Reflects the adjustment to eliminate the impact of impairing
restaurants, divestiture costs and ongoing closure costs recognized
in 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 Consolidated Statements of Operations. |
(2) |
|
Reflects the adjustment to eliminate the severance costs. |
(3) |
|
Reflects the adjustments to eliminate the expenses related to
certain corporate transactions in 2020 and 2019. |
(4) |
|
Reflects the adjustment to eliminate the loss on extinguishment of
debt which resulted from writing off the unamortized balance of
debt issuance costs related to the 2018 credit facility when
amended in November 2019. |
(5) |
|
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 (1) through (4)
above. |
(6) |
|
Adjusted per share amounts are calculated by dividing adjusted net
(loss) income by the basic and diluted weighted average shares
outstanding. |
|
Noodles & CompanyReconciliation
of Operating Income (Loss) to Restaurant Contribution
(in thousands, unaudited) |
|
|
|
Fiscal Quarter Ended |
|
Fiscal Year Ended |
|
|
December 29,2020 |
|
December 31,2019 |
|
December 29,2020 |
|
December 31,2019 |
(Loss) income from operations |
|
$ |
(3,372 |
) |
|
$ |
247 |
|
|
$ |
(20,029 |
) |
|
$ |
5,439 |
|
Less: Franchising royalties
and fees |
|
1,838 |
|
|
1,582 |
|
|
5,175 |
|
|
5,740 |
|
Plus: General and
administrative |
|
11,461 |
|
|
11,022 |
|
|
42,876 |
|
|
43,446 |
|
Depreciation and amortization |
|
5,436 |
|
|
5,460 |
|
|
21,709 |
|
|
22,086 |
|
Pre-opening |
|
60 |
|
|
71 |
|
|
443 |
|
|
402 |
|
Restaurant impairments, closure costs and asset disposals |
|
2,557 |
|
|
4,107 |
|
|
6,540 |
|
|
7,747 |
|
Restaurant contribution |
|
$ |
14,304 |
|
|
$ |
19,325 |
|
|
$ |
46,364 |
|
|
$ |
73,380 |
|
|
|
|
|
|
|
|
|
|
as a percentage of restaurant revenue |
|
13.6 |
% |
|
17.2 |
% |
|
11.9 |
% |
|
16.1 |
% |
________________________
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
Source: Noodles & Company
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