Noodles & Company (Nasdaq: NDLS) today announced financial
results for its first quarter ended March 30, 2021.
“We are very pleased with our first quarter
results, which included growth of 10.5% in company-owned comparable
restaurant sales and 12.7% in average unit volumes versus the first
quarter of 2020, reflecting strong momentum in the business as we
make progress against the accelerated growth objectives that we
outlined earlier in 2021. Momentum accelerated throughout the first
quarter and has continued into the second quarter. Average unit
volumes increased to an all-time record level of $1.35 million
during our April fiscal period, nearly 13% above the same pre-COVID
period in 2019. While we will continue to remain nimble in the face
of continued uncertainty surrounding COVID-19, our recent results
and improvement we are seeing in metrics across the organization
give us confidence that we will continue to build upon the digital
sales growth gained during the last year, even as we see a return
to our dine-in business,” said Dave Boennighausen, Chief Executive
Officer of Noodles & Company.
Boennighausen continued, “As we look ahead, we
are more encouraged than ever that our brand is well positioned to
thrive in the years to come. Our 2019 and 2020 new restaurant
openings as a group continue to have the best sales performance in
our history, and we are making strong progress in building our
pipeline to achieve 7% annual system-wide unit growth in 2022 and
at least 10% shortly thereafter. Our culinary innovations continue
to resonate with consumers and redefine the brand for consumers,
which was reinforced by our first quarter rollout of our low carb,
gluten free Cauliflower Gnocchi and will be bolstered later in the
second quarter through our national launch of Tortelloni.
Furthermore, our digital platforms remain a significant strength,
as we improve our level of convenience and engagement with guests.
Finally, and most importantly, we are fortunate to have a dedicated
team of high performers throughout our organization who are excited
to welcome guests back into our restaurants while serving our large
base of off-premise customers.”
Key highlights for the first quarter of
2021 versus the first quarter of 2020 include:
- Total revenue was $109.6 million
compared to $100.3 million.
- Comparable restaurant sales
increased 10.7% system-wide, comprised of a 10.5% increase at
company-owned restaurants and an 11.7% increase at franchise
restaurants.
- Company Average Unit Volumes in the
first quarter of 2021 increased 12.7% compared to the first quarter
of 2020 and 6.1% compared to the first quarter of 2019.
- Digital sales grew 110% compared to
the first quarter of 2020 and accounted for 62% of sales.
- Net loss was $2.0 million, or $0.04
per diluted share, compared to net loss of $5.8 million, or $0.13
per diluted share, in the first quarter of 2020.
- Adjusted net loss(1) was $0.8
million, or $0.02 per diluted share, compared to an adjusted net
loss of $3.9 million, or $0.09 per diluted share, in the first
quarter of 2020.
- Adjusted EBITDA(1) was $6.3 million
compared to $1.8 million for the first quarter of 2020.
- Restaurant contribution margin(1)
increased 290 bps to 13.6%.
- Net debt decreased to $34.0 million
compared to $35.6 million at end of the first quarter 2020.
_____________________
(1) Adjusted net income (loss),
restaurant contribution margin, EBITDA, adjusted EBITDA and net
debt are non-GAAP measures. Reconciliations of net income (loss) to
adjusted net income, EBITDA and adjusted EBITDA and debt to net
debt are included in the accompanying financial data. See “Non-GAAP
Financial Measures.”
First Quarter 2021 Financial Results
Total revenue grew 9.2% to $109.6 million in the
first quarter of 2021, compared to $100.3 million in the first
quarter of 2020. This growth was due to an increase in system-wide
comparable restaurant sales as well as new restaurant openings
performing at higher levels than historical openings, partially
offset by temporary restaurant closures related to COVID-19 and
restaurant closures.
In the first quarter of 2021, system-wide
comparable restaurant sales increased 10.7%, comprised of a 10.5%
increase at company-owned restaurants and an 11.7% increase at
franchise restaurants. Comparable restaurant sales improved
sequentially throughout each month of the quarter, particularly in
March as the Company lapped the initial impact of the COVID-19
pandemic. Average unit volumes, which normalizes for the impact of
temporary restaurant closures, increased 12.7% over the first
quarter of 2020 and 6.1% compared to the first quarter of 2019.
Digital sales during the first quarter grew 110%
relative to the first quarter of the prior year and accounted for
62% of total revenue. Digital sales continued to grow throughout
the first quarter even as nearly all of our dining rooms
reopened.
Restaurant contribution margin increased to
13.6% in the first quarter of 2021, compared to 10.7% in the first
quarter of 2020. This increase was primarily due to leverage on
increased average unit volumes and the run rate of our implemented
labor efficiencies, offset by increased third-party delivery fees
associated with higher revenue.
The safety and well-being of our team members
and guests remains our highest priority and we continue to actively
monitor and adhere to local and federal mandates as it relates to
in-restaurant dining. As of April 28, 2021, the Company has 98% of
company-owned locations and 100% of franchise locations offering
in-restaurant dining.
In the first quarter of 2021, six company-owned
restaurants were closed, some of which were near the end of their
lease and were not well-positioned for a post-COVID consumer
environment. The Company currently anticipates only one additional
permanent closure through the balance of 2021. There were 448
restaurants system-wide at the end of the first quarter 2021,
comprised of 372 company-owned restaurants and 76 franchise
restaurants. Recent openings that are not in the Company’s
comparable restaurant base, many of which offer order ahead
drive-thru pick-up windows, continue to perform as a group at the
highest sales level of any class of new restaurants in the
Company’s history.
For the first quarter of 2021, the Company
reported a net loss of $2.0 million, or $0.04 per diluted share,
compared with net loss of $5.8 million in the first quarter of
2020, or $0.13 per diluted share. Loss from operations for the
first quarter of 2021 was $1.4 million, compared to a loss from
operations of $4.9 million in the first quarter of 2020. Closure
costs in the first quarter of 2021 included ongoing costs as well
as adjustments to liabilities as lease terminations occur.
Adjusted net loss was $0.8 million, or $0.02 per
diluted share, in the first quarter of 2021, compared to adjusted
net loss of $3.9 million, or $0.09 per diluted share, in the first
quarter of 2020. Adjusted EBITDA increased to $6.3 million in the
first quarter of 2021 from $1.8 million in the first quarter of
2020.
Liquidity Update:
As of March 30, 2021, the Company had $3.1
million of cash on hand, outstanding debt of $38.8 million under
the revolving credit facility and $52.3 million available for
borrowing, reflecting a debt reduction of $5.0 million during the
quarter.
Business Outlook:
Due to the continuing uncertainty surrounding
the future impact of the COVID-19 pandemic 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:
- 10 to 15 new restaurants
system-wide in 2021, including eight to eleven company-owned
locations; and
- Capital expenditures of $20 million
to $24 million in 2021.
The Company is also maintaining its accelerated
growth objectives outlined earlier in 2021, 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.
Non-GAAP Financial Measures
The Company believes that a quantitative
reconciliation of the Company’s non-GAAP financial measures
guidance to the most comparable financial measures calculated and
presented in accordance with GAAP cannot be made available without
unreasonable efforts. A reconciliation of these non-GAAP
financial measures would require the Company to provide guidance
for various reconciling items that are outside of the Company’s
control and cannot be reasonably predicted due to the fact that
these items could vary significantly from period to period. A
reconciliation of certain non-GAAP financial measures would also
require the Company to predict the timing and likelihood of
outcomes that determine future impairments and the tax benefit
thereof. None of these measures, nor their probable
significance, can be reliably quantified. The non-GAAP financial
measures noted above have limitations as analytical financial
measures, as discussed below in the section entitled “Non-GAAP
Financial Measures.” In addition, the guidance with respect to
non-GAAP financial measures is a forward-looking statement, which
by its nature involves risks and uncertainties that could cause
actual results to differ materially from the Company’s
forward-looking statement, as discussed below in the section
entitled “Forward-Looking Statements.”
Key Definitions
Average Unit Volume —
represents the average annualized sales of all restaurants for a
given time period. Average unit volume is calculated by dividing
restaurant revenue by the number of operating days within each time
period and multiplying by the number of operating days we have in a
typical year. This measurement allows management to assess changes
in revenue patterns at our restaurants.
Comparable Restaurant Sales —
represents year-over-year sales comparisons for the comparable
restaurant base open for at least 18 full periods. This measure
highlights performance of existing restaurants, as the impact of
new restaurant openings is excluded. Changes in comparable
restaurant sales are generated by changes in traffic, which we
calculate as the number of entrées sold, or changes in per-person
spend, calculated as sales divided by traffic. For fiscal year
2020, restaurants that were temporarily closed or operating at
reduced hours or dining capacity due to the COVID-19 pandemic
remained in comparable restaurant sales.
Restaurant Contribution and Restaurant
Contribution Margin — restaurant contribution represents
restaurant revenue less restaurant operating costs, which are costs
of sales, labor, occupancy and other restaurant operating items.
Restaurant contribution margin represents restaurant contribution
as a percentage of restaurant revenue. Restaurant contribution and
restaurant contribution margin are presented because they are
widely-used metrics within the restaurant industry to evaluate
restaurant-level productivity, efficiency and performance.
Management also uses restaurant contribution and restaurant
contribution margin as metrics to evaluate the profitability of
incremental sales at our restaurants, restaurant performance across
periods, and restaurant financial performance compared with
competitors. See “Non-GAAP Financial Measures” below.
EBITDA and Adjusted EBITDA —
EBITDA represents net income (loss) before interest expense,
provision (benefit) for income taxes and depreciation and
amortization. Adjusted EBITDA represents net income (loss) before
interest expense, provision (benefit) for income taxes,
depreciation and amortization, restaurant impairments, closure
costs and asset disposals, acquisition costs, severance costs and
stock-based compensation expense. EBITDA and Adjusted EBITDA are
presented because: (i) management believes they are useful measures
for investors to assess the operating performance of our business
without the effect of non-cash charges such as depreciation and
amortization expenses and restaurant impairments, asset disposals
and closure costs, and (ii) management uses them internally as a
benchmark for certain of our cash incentive plans and to evaluate
our operating performance or compare performance to that of
competitors. See “Non-GAAP Financial Measures” below.
Adjusted Net Income (Loss) —
represents net income (loss) plus various adjustments and the tax
effects of such adjustments. Adjusted net income (loss) is
presented because management believes it helps convey supplemental
information to investors regarding the Company’s performance,
excluding the impact of special items that affect the comparability
of results in past quarters and expected results in future
quarters. See “Non-GAAP Financial Measures” below.
Net Debt — represents debt (the
most comparable GAAP measure, calculated as long-term obligations
plus short-term borrowings) minus cash and equivalents. Management
believes that net debt is an important measure to monitor leverage
and evaluate the balance sheet. With respect to net debt, cash and
equivalents are subtracted from the GAAP measure because they could
be used to reduce the Company’s debt obligations. A limitation
associated with using net debt is that it subtracts cash and
equivalents and therefore may imply that there is less Company debt
than the most comparable GAAP measure indicates. Management
believes that investors may find it useful to monitor leverage and
evaluate the balance sheet. See “Non-GAAP Financial Measures”
below.
Conference Call
Noodles & Company will host a conference
call to discuss its first quarter financial results on Thursday,
April 29, 2021 at 4:30 PM Eastern Time. The conference call
can be accessed live over the phone by dialing (877) 303-1298 or
for international callers by dialing (253) 237-1032. A replay will
be available after the call and can be accessed by dialing (855)
859-2056 or for international callers by dialing (404) 537-3406;
the passcode is 8986154. The replay will be available until
Thursday, May 6, 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, May 6, 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 448
restaurants and 8,000 passionate team members, Noodles is dedicated
to nourishing and inspiring every guest who walks through the door.
To learn more or find the location nearest you, visit
www.noodles.com.
Forward-Looking Statements
In addition to historical information, this
press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995
that involve risks and uncertainties such as the number of
restaurants we intend to open, projected capital expenditures and
estimates of our effective tax rates. In some cases, you can
identify forward-looking statements by terms such as “may,”
“might,” “will,” “objective,” “intend,” “should,” “could,” “can,”
“would,” “expect,” “believe,” “design,” “estimate,” “predict,”
“potential,” “plan” or the negative of these terms and similar
expressions intended to identify forward-looking statements. These
statements reflect our current views with respect to future events
and are based on currently available operating, financial and
competitive information. Examples of forward-looking statements
include all matters that are not historical facts, such as
statements regarding our ability to navigate the COVID-19 pandemic,
projected capital expenditures, the revenue and balance sheet
impact of the COVID-19 pandemic, estimated costs associated with
our closure of underperforming restaurants, the implementation and
results of strategic initiatives and investments and our future
financial performance, including comparable sales improvement and
our ability to generate positive cash flow. Our actual results may
differ materially from those anticipated in these forward-looking
statements due to reasons including, but not limited to, our
ability to sustain our overall growth, in particular, our digital
sales growth; our ability to open new restaurants on schedule and
cause those newly opened restaurants to be successful; our ability
to achieve and maintain increases in comparable restaurant sales
and to successfully execute our business strategy, including new
restaurant initiatives and operational strategies to improve the
performance of our restaurant portfolio; the success of our
marketing efforts; price and availability of commodities; our
ability to adequately staff our restaurants; changes in labor
costs; the extent, duration and severity of the COVID-19 pandemic;
governmental and guest response to the COVID-19 pandemic; other
conditions beyond our control such as weather, natural disasters,
disease outbreaks, epidemics or pandemics impacting our customers
or food supplies; consumer reaction to industry related public
health issues and health pandemics, including the COVID-19 pandemic
and perceptions of food safety; our ability to continue to access
the financing necessary to execute our business strategy; current
economic conditions; consumer confidence and spending patterns;
seasonal factors; and weather. For additional information on these
and other factors that could affect the Company’s forward-looking
statements, see the Company’s risk factors, as they may be amended
from time to time, set forth in its filings with the SEC, included
in our Annual Report on Form 10-K for the fiscal year ended
December 29, 2020 filed on February 25, 2021. 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 30,2021 |
|
March 31,2020 |
Revenue: |
|
|
|
|
Restaurant revenue |
|
$ |
107,744 |
|
|
$ |
98,716 |
|
Franchising royalties and fees, and other |
|
1,833 |
|
|
1,632 |
|
Total revenue |
|
109,577 |
|
|
100,348 |
|
Costs and expenses: |
|
|
|
|
Restaurant operating costs (exclusive of depreciation and
amortization shown separately below): |
|
|
|
|
Cost of sales |
|
26,977 |
|
|
25,204 |
|
Labor |
|
34,306 |
|
|
34,231 |
|
Occupancy |
|
11,649 |
|
|
12,060 |
|
Other restaurant operating costs |
|
20,205 |
|
|
16,689 |
|
General and administrative |
|
10,929 |
|
|
10,554 |
|
Depreciation and amortization |
|
5,587 |
|
|
5,335 |
|
Pre-opening |
|
58 |
|
|
73 |
|
Restaurant impairments, closure costs and asset disposals |
|
1,231 |
|
|
1,056 |
|
Total costs and expenses |
|
110,942 |
|
|
105,202 |
|
Loss from operations |
|
(1,365 |
) |
|
(4,854 |
) |
Interest expense, net |
|
622 |
|
|
968 |
|
Loss before taxes |
|
(1,987 |
) |
|
(5,822 |
) |
(Benefit) provision for income
taxes |
|
(10 |
) |
|
13 |
|
Net loss |
|
$ |
(1,977 |
) |
|
$ |
(5,835 |
) |
Loss per Class A and
Class B common stock, combined |
|
|
|
|
Basic |
|
$ |
(0.04 |
) |
|
$ |
(0.13 |
) |
Diluted |
|
$ |
(0.04 |
) |
|
$ |
(0.13 |
) |
Weighted average shares of
Class A and Class B common stock outstanding,
combined: |
|
|
|
|
Basic |
|
45,098,028 |
|
|
44,142,220 |
|
Diluted |
|
45,098,028 |
|
|
44,142,220 |
|
Noodles &
CompanyCondensed Consolidated Statements of
Operations as a Percentage of
Revenue(unaudited)
|
|
Fiscal Quarter Ended |
|
|
March 30,2021 |
|
March 31,2020 |
Revenue: |
|
|
|
|
Restaurant revenue |
|
98.3 |
|
% |
|
98.4 |
|
% |
Franchising royalties and fees, and other |
|
1.7 |
|
% |
|
1.6 |
|
% |
Total revenue |
|
100.0 |
|
% |
|
100.0 |
|
% |
Costs and expenses: |
|
|
|
|
Restaurant operating costs (exclusive of depreciation and
amortization shown separately below): (1) |
|
|
|
|
Cost of sales |
|
25.0 |
|
% |
|
25.5 |
|
% |
Labor |
|
31.8 |
|
% |
|
34.7 |
|
% |
Occupancy |
|
10.8 |
|
% |
|
12.2 |
|
% |
Other restaurant operating costs |
|
18.8 |
|
% |
|
16.9 |
|
% |
General and administrative |
|
10.0 |
|
% |
|
10.5 |
|
% |
Depreciation and amortization |
|
5.1 |
|
% |
|
5.3 |
|
% |
Pre-opening |
|
0.1 |
|
% |
|
0.1 |
|
% |
Restaurant impairments, closure costs and asset disposals |
|
1.1 |
|
% |
|
1.1 |
|
% |
Total costs and expenses |
|
101.2 |
|
% |
|
104.8 |
|
% |
Loss from operations |
|
(1.2 |
) |
% |
|
(4.8 |
) |
% |
Interest expense, net |
|
0.6 |
|
% |
|
1.0 |
|
% |
Loss before taxes |
|
(1.8 |
) |
% |
|
(5.8 |
) |
% |
(Benefit) provision for income
taxes |
|
— |
|
% |
|
— |
|
% |
Net loss |
|
(1.8 |
) |
% |
|
(5.8 |
) |
% |
_______________________(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 30,2021 |
|
December 29,2020 |
Balance Sheet Data |
|
|
|
|
|
|
|
|
Total current assets |
|
$ |
19,470 |
|
|
$ |
23,714 |
|
Total assets |
|
343,179 |
|
|
353,631 |
|
Total current liabilities |
|
63,115 |
|
|
58,129 |
|
Total long-term debt |
|
36,018 |
|
|
40,949 |
|
Total liabilities |
|
315,054 |
|
|
323,932 |
|
Total stockholders’
equity |
|
28,125 |
|
|
29,699 |
|
|
|
Fiscal Quarter Ended |
|
|
March 30,2021 |
|
December 29,2020 |
|
September 29,2020 |
|
June 30,2020 |
|
March 31,2020 |
|
Selected Operating Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restaurant Activity: |
|
|
|
|
|
|
|
|
|
|
|
Company-owned restaurants at end of period |
|
372 |
|
|
378 |
|
|
|
378 |
|
|
|
380 |
|
|
|
381 |
|
|
|
Franchise restaurants at end of period |
|
76 |
|
|
76 |
|
|
|
76 |
|
|
|
76 |
|
|
|
77 |
|
|
|
Revenue Data: |
|
|
|
|
|
|
|
|
|
|
|
Company-owned average unit volume |
|
$ |
1,170 |
|
|
$ |
1,064 |
|
|
|
$ |
1,187 |
|
|
|
$ |
891 |
|
|
|
$ |
1,038 |
|
|
|
Franchise average unit volume |
|
$ |
1,142 |
|
|
$ |
1,073 |
|
|
|
$ |
1,102 |
|
|
|
$ |
781 |
|
|
|
$ |
994 |
|
|
|
Company-owned comparable restaurant sales |
|
10.5 |
% |
|
(4.2 |
) |
% |
|
(3.6 |
) |
% |
|
(30.1 |
) |
% |
|
(7.0 |
) |
% |
|
Franchise comparable restaurant sales |
|
11.7 |
% |
|
(7.9 |
) |
% |
|
(5.0 |
) |
% |
|
(35.4 |
) |
% |
|
(8.9 |
) |
% |
|
System-wide comparable restaurant sales |
|
10.7 |
% |
|
(4.7 |
) |
% |
|
(3.8 |
) |
% |
|
(30.9 |
) |
% |
|
(7.2 |
) |
% |
|
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 30,2021 |
|
March 31,2020 |
Net loss |
|
$ |
(1,977 |
) |
|
$ |
(5,835 |
) |
Depreciation and
amortization |
|
5,587 |
|
|
5,335 |
|
Interest expense, net |
|
622 |
|
|
968 |
|
(Benefit) provision for income
taxes |
|
(10 |
) |
|
13 |
|
EBITDA |
|
$ |
4,222 |
|
|
$ |
481 |
|
Restaurant impairments,
closure costs and asset disposals |
|
1,231 |
|
|
1,056 |
|
Stock-based compensation
expense |
|
802 |
|
|
159 |
|
Fees and costs related to
transactions and other acquisition/disposition costs |
|
— |
|
|
89 |
|
Adjusted EBITDA |
|
$ |
6,255 |
|
|
$ |
1,785 |
|
|
|
|
|
|
|
|
|
|
______________________________
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 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 to Adjusted Net
Loss(in thousands, except share and per share
data, unaudited)
|
|
Fiscal Quarter Ended |
|
|
March 30,2021 |
|
March 31,2020 |
Net loss |
|
$ |
(1,977 |
) |
|
$ |
(5,835 |
) |
Restaurant impairments,
divestitures and closure costs (a) |
|
939 |
|
|
440 |
|
Fees and costs related to
transactions and other acquisition/disposition costs (b) |
|
— |
|
|
89 |
|
Tax adjustments, net (c) |
|
236 |
|
|
1,414 |
|
Adjusted net loss |
|
$ |
(802 |
) |
|
$ |
(3,892 |
) |
|
|
|
|
|
Loss per Class A and
Class B common stock, combined |
|
|
|
|
Basic |
|
$ |
(0.04 |
) |
|
$ |
(0.13 |
) |
Diluted |
|
$ |
(0.04 |
) |
|
$ |
(0.13 |
) |
Adjusted loss per Class A
and Class B common stock, combined (d) |
|
|
|
|
Basic |
|
$ |
(0.02 |
) |
|
$ |
(0.09 |
) |
Diluted |
|
$ |
(0.02 |
) |
|
$ |
(0.09 |
) |
Weighted average Class A and
Class B common stock outstanding, combined (d) |
|
|
|
|
Basic |
|
45,098,028 |
|
|
44,142,220 |
|
Diluted |
|
45,098,028 |
|
|
44,142,220 |
|
_____________________________
Adjusted net income (loss) is a supplemental
measure of financial performance that is not required by or
presented in accordance with GAAP. We define adjusted net income
(loss) as net income (loss) plus the impact of adjustments and the
tax effects of such adjustments. Adjusted net income (loss) is
presented because management believes it helps convey supplemental
information to investors regarding our performance, excluding the
impact of special items that affect the comparability of results in
past quarters to expected results in future quarters. Adjusted net
income (loss) as presented may not be comparable to other
similarly-titled measures of other companies, and our presentation
of adjusted net income (loss) should not be construed as an
inference that our future results will be unaffected by excluded or
unusual items. Our management uses this non-GAAP financial measure
to analyze changes in our underlying business from quarter to
quarter based on comparable financial results.
(a) Reflects the adjustment to eliminate the
impact of impairing restaurants, divestiture costs and ongoing
closure costs recognized during the first quarters of 2021 and
2020. Both periods include ongoing closure costs from restaurants
closed in previous years. These expenses are included in the
“Restaurant impairments, closure costs and asset disposals” line in
the Condensed Consolidated Statements of Operations.
(b) Reflects the adjustment to eliminate
expenses related to certain corporate transactions in the first
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 (b) above.
(d) Adjusted per share amounts are calculated by
dividing adjusted net income (loss) by the basic and diluted
weighted average shares outstanding.
Noodles &
CompanyReconciliation of Operating Loss to
Restaurant Contribution (in thousands,
unaudited)
|
|
Fiscal Quarter Ended |
|
|
March 30,2021 |
|
March 31,2020 |
Loss from operations |
|
$ |
(1,365 |
) |
|
|
$ |
(4,854 |
) |
|
Less: Franchising royalties
and fees, and other |
|
1,833 |
|
|
|
1,632 |
|
|
Plus: General and
administrative |
|
10,929 |
|
|
|
10,554 |
|
|
Depreciation and amortization |
|
5,587 |
|
|
|
5,335 |
|
|
Pre-opening |
|
58 |
|
|
|
73 |
|
|
Restaurant impairments, closure costs and asset disposals |
|
1,231 |
|
|
|
1,056 |
|
|
Restaurant contribution |
|
$ |
14,607 |
|
|
|
$ |
10,532 |
|
|
|
|
|
|
|
Restaurant contribution
margin |
|
13.6 |
|
% |
|
10.7 |
|
% |
_____________________________
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.
Noodles &
CompanyReconciliation of Debt to Net Debt
(in thousands, unaudited)
|
|
As of |
|
|
March 30,2021 |
|
March 31,2020 |
Current portion of long-term debt |
|
$ |
1,125 |
|
|
$ |
750 |
|
Long-term debt, net |
|
36,018 |
|
|
85,382 |
|
Less: Cash and cash equivalents |
|
3,117 |
|
|
50,530 |
|
Net debt |
|
$ |
34,026 |
|
|
$ |
35,602 |
|
_____________________________
Net debt is a non-GAAP financial measure. The
most comparable GAAP measure, calculated as long-term obligations
plus short-term borrowings minus cash and equivalents. Management
believes that net debt is an important measure to monitor leverage
and evaluate the balance sheet. With respect to net debt, cash and
equivalents are subtracted from the GAAP measure because they could
be used to reduce the Company’s debt obligations. A limitation
associated with using net debt is that it subtracts cash and
equivalents and therefore may imply that there is less Company debt
than the most comparable GAAP measure indicates. Management
believes that investors may find it useful to monitor leverage and
evaluate the balance sheet.
Contacts:Investor
Relationsinvestorrelations@noodles.com
MediaDanielle Moorepress@noodles.com
Source: Noodles & Company
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