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Key highlights for the second quarter of 2018 versus the second quarter of 2017 include:
- Total revenue increased 4.1% to
$117.4 million from$112.8 million . - Comparable restaurant sales increased 5.4% system-wide, including a 5.0% increase for company-owned restaurants and an 8.0% increase for franchise restaurants. The Company estimates comparable sales in the quarter benefited from the impact of the shift in the timing of the Easter and 4th of July holidays by approximately 100 basis points (“bps”).
- Net loss(1) was
$5.9 million , or$0.14 loss per diluted share, compared to a net loss of$1.8 million . - Restaurant contribution margin(2) increased 50 basis points to 15.5%.
- Adjusted net income(2) was
$0.4 million , or$0.01 per diluted share, compared to adjusted net income of$0.3 million , or$0.01 per diluted share. - Adjusted EBITDA(2) increased 4.4% to
$9.1 million from$8.7 million .
______________________
| (1) |
In the second quarter of 2018, the Company recognized a $3.4 million charge for the final assessment related to data breach liabilities and a $0.3 million charge for the settlement of Delaware gift card litigation, and incurred $1.5 million of closure costs related to the seven restaurants closed in the second quarter of 2018, most of which were approaching the expiration of their leases, as well as ongoing costs from restaurants closed in previous years. The Company did not impair any restaurants in the second quarter of 2018. In the second quarter of 2017, the Company recorded a $3.9 million impairment charge related to nine restaurants, which was partially offset by a net gain of $1.5 million consisting primarily of adjustments to the liabilities owed to landlords as lease terminations occurred for 21 of the 55 restaurants closed during the first quarter of 2017. |
| (2) | Adjusted EBITDA, restaurant contribution margin, and adjusted net income (loss) are non-GAAP measures. Reconciliations of net income (loss) to adjusted EBITDA and adjusted net income (loss) and of operating income (loss) to restaurant contribution margin are included in the accompanying financial data. See "Non-GAAP Financial Measures." |
Second Quarter 2018 Financial Results
Total revenue increased
In the second quarter of 2018, comparable restaurant sales increased 5.4% system-wide, including a 5.0% increase for company-owned restaurants and an 8.0% increase for franchise restaurants. Comparable sales growth was driven primarily by an increase in traffic related to successful implementation of recent operational and brand initiatives, as well as a modest price increase. Comparable sales in the quarter also benefited from the impact of the shift in the timing of the Easter and 4th of July holidays by approximately 100 bps.
No new company-owned restaurants opened and seven company-owned restaurants closed in the second quarter of 2018. The Company had 469 restaurants at the end of the second quarter 2018, comprised of 404 company-owned and 65 franchise restaurants.
For the second quarter of 2018, the Company reported a net loss of
Restaurant contribution margin increased 50 bps to 15.5% in the second quarter of 2018, compared to 15.0% in the second quarter of 2017. This increase was primarily due to leverage on higher AUVs during the second quarter of 2018.
Adjusted net income was
First Two Quarters of 2018 Financial Results
Total revenue decreased
In the first two quarters of 2018, comparable restaurant sales increased 2.7% system-wide, including a 2.4% increase for company-owned restaurants, and a 4.5% increase for franchise restaurants. In the first two quarters of 2018, the Company opened one company-owned restaurant and closed ten restaurants system-wide.
For the first two quarters of 2018, the Company reported a net loss of
Restaurant contribution margin was 14.2% in the first two quarters of 2018, compared to 13.0% in the first two quarters of 2017. This increase was primarily due to the favorable impact of restaurant closures during the first quarter of 2017, as well as leverage on higher AUVs.
Adjusted net loss was
2018 Outlook
Based upon management’s current assessment following second quarter results, the Company has updated guidance and currently expects the following for the full year 2018:
- One new company-owned restaurant and no new franchise restaurants;
- Total revenue of
$450.0 million to $455.0 million ; - Positive systemwide comparable restaurant sales of 2.5% to 3.5%;
- Restaurant contribution margin of 14.5% to 15.5%;
- Adjusted EBITDA of
$32.0 million to $34.0 million ; - Adjusted net income per diluted share of
$0.00 to $0.03 ; and - Capital expenditures of
$13.0 million to $16.0 million .
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 — AUVs consist of the average annualized sales of all company-owned restaurants for the trailing 12 periods. AUVs are calculated by dividing restaurant revenue by the number of operating days within each time period and multiplying by the number of operating days we have in a typical year. This measurement allows management to assess changes in consumer traffic and per person spending 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.
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, 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
Non-GAAP Financial Measures
To supplement its condensed consolidated financial statements, which are prepared and presented in accordance with accounting principles generally accepted in
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
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 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, 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; costs associated with our data security incident, including losses associated with settling payment card networks’ expected claims; 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; consumer reaction to industry related public health issues and perceptions of food safety; seasonal factors; and weather. For additional information on these and other factors that could affect the Company’s forward-looking statements, see the Company’s risk factors, as they may be amended from time to time, set forth in its filings with the
| Noodles & Company | ||||||||||||||||
| Condensed Consolidated Statements of Operations | ||||||||||||||||
| (in thousands, except share and per share data, unaudited) | ||||||||||||||||
| Fiscal Quarter Ended | Two Fiscal Quarters Ended | |||||||||||||||
| July 3, 2018 |
July 4, 2017 |
July 3, 2018 |
July 4, 2017 |
|||||||||||||
| Revenue: | ||||||||||||||||
| Restaurant revenue | $ | 116,451 | $ | 111,628 | $ | 226,064 | $ | 227,155 | ||||||||
| Franchising royalties and fees | 944 | 1,164 | 1,857 | 2,352 | ||||||||||||
| Total revenue | 117,395 | 112,792 | 227,921 | 229,507 | ||||||||||||
| Costs and expenses: | ||||||||||||||||
| Restaurant operating costs (exclusive of depreciation and amortization shown separately below): | ||||||||||||||||
| Cost of sales | 31,089 | 29,598 | 60,345 | 61,685 | ||||||||||||
| Labor | 38,043 | 36,430 | 74,615 | 76,024 | ||||||||||||
| Occupancy | 12,357 | 12,630 | 25,120 | 26,631 | ||||||||||||
| Other restaurant operating costs | 16,875 | 16,194 | 33,773 | 33,341 | ||||||||||||
| General and administrative | 14,813 | 9,393 | 25,081 | 20,059 | ||||||||||||
| Depreciation and amortization | 5,797 | 6,279 | 11,617 | 12,546 | ||||||||||||
| Pre-opening | 3 | 246 | 50 | 791 | ||||||||||||
| Restaurant impairments, closure costs and asset disposals | 2,580 | 2,830 | 4,160 | 24,884 | ||||||||||||
| Total costs and expenses | 121,557 | 113,600 | 234,761 | 255,961 | ||||||||||||
| Loss from operations | (4,162 | ) | (808 | ) | (6,840 | ) | (26,454 | ) | ||||||||
| Loss on extinguishment of debt | 626 | — | 626 | — | ||||||||||||
| Interest expense, net | 1,154 | 927 | 2,292 | 1,935 | ||||||||||||
| Loss before income taxes | (5,942 | ) | (1,735 | ) | (9,758 | ) | (28,389 | ) | ||||||||
| (Benefit) provision for income taxes | (7 | ) | 80 | (248 | ) | 271 | ||||||||||
| Net loss | (5,935 | ) | (1,815 | ) | (9,510 | ) | (28,660 | ) | ||||||||
| Accretion of preferred stock to redemption value | — | (7,001 | ) | — | (7,967 | ) | ||||||||||
| Net loss attributable to common stockholders | $ | (5,935 | ) | $ | (8,816 | ) | $ | (9,510 | ) | $ | (36,627 | ) | ||||
| Loss per share of Class A and Class B common stock, combined: | ||||||||||||||||
| Basic | $ | (0.14 | ) | $ | (0.22 | ) | $ | (0.23 | ) | $ | (1.06 | ) | ||||
| Diluted | $ | (0.14 | ) | $ | (0.22 | ) | $ | (0.23 | ) | $ | (1.06 | ) | ||||
| Weighted average shares of Class A and Class B common stock outstanding, combined: | ||||||||||||||||
| Basic | 41,172,924 | 40,779,277 | 41,150,698 | 34,404,222 | ||||||||||||
| Diluted | 41,172,924 | 40,779,277 | 41,150,698 | 34,404,222 | ||||||||||||
| Noodles & Company | ||||||||||||
| Condensed Consolidated Statements of Operations as a Percentage of Revenue | ||||||||||||
| (unaudited) | ||||||||||||
| Fiscal Quarter Ended | Two Fiscal Quarters Ended | |||||||||||
| July 3, 2018 |
July 4, 2017 |
July 3, 2018 |
July 4, 2017 |
|||||||||
| Revenue: | ||||||||||||
| Restaurant revenue | 99.2 | % | 99.0 | % | 99.2 | % | 99.0 | % | ||||
| Franchising royalties and fees | 0.8 | % | 1.0 | % | 0.8 | % | 1.0 | % | ||||
| Total revenue | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||
| Costs and expenses: | ||||||||||||
| Restaurant operating costs (exclusive of depreciation and amortization shown separately below): (1) | ||||||||||||
| Cost of sales | 26.7 | % | 26.5 | % | 26.7 | % | 27.2 | % | ||||
| Labor | 32.7 | % | 32.6 | % | 33.0 | % | 33.5 | % | ||||
| Occupancy | 10.6 | % | 11.3 | % | 11.1 | % | 11.7 | % | ||||
| Other restaurant operating costs | 14.5 | % | 14.5 | % | 14.9 | % | 14.7 | % | ||||
| General and administrative | 12.6 | % | 8.3 | % | 11.0 | % | 8.7 | % | ||||
| Depreciation and amortization | 4.9 | % | 5.6 | % | 5.1 | % | 5.5 | % | ||||
| Pre-opening | — | % | 0.2 | % | — | % | 0.3 | % | ||||
| Restaurant impairments, closure costs and asset disposals | 2.2 | % | 2.5 | % | 1.8 | % | 10.8 | % | ||||
| Total costs and expenses | 103.5 | % | 100.7 | % | 103.0 | % | 111.5 | % | ||||
| Loss from operations | (3.5 | )% | (0.7 | )% | (3.0 | )% | (11.5 | )% | ||||
| Loss on extinguishment of debt | 0.5 | % | — | % | 0.3 | % | — | % | ||||
| Interest expense, net | 1.0 | % | 0.8 | % | 1.0 | % | 0.8 | % | ||||
| Loss before income taxes | (5.1 | )% | (1.5 | )% | (4.3 | )% | (12.4 | )% | ||||
| (Benefit) provision for income taxes | — | % | 0.1 | % | (0.1 | )% | 0.1 | % | ||||
| Net loss | (5.1 | )% | (1.6 | )% | (4.2 | )% | (12.5 | )% | ||||
_______________________
(1) As a percentage of restaurant revenue.
| Noodles & Company | ||||||||
| Consolidated Selected Balance Sheet Data and Selected Operating Data | ||||||||
| (in thousands, except restaurant activity, unaudited) | ||||||||
| As of | ||||||||
| July 3, 2018 |
January 2, 2018 |
|||||||
| Balance Sheet Data | ||||||||
| Total current assets | $ | 23,076 | $ | 22,058 | ||||
| Total assets | 178,053 | 185,233 | ||||||
| Total current liabilities | 44,043 | 43,869 | ||||||
| Total long-term debt | 62,743 | 57,624 | ||||||
| Total liabilities | 151,884 | 149,372 | ||||||
| Total stockholders’ equity | 26,169 | 35,861 | ||||||
| Fiscal Quarter Ended | ||||||||||||||||||||
| July 3, 2018 |
April 3, 2018 |
January 2, 2018 |
October 3, 2017 |
July 4, 2017 |
||||||||||||||||
| Selected Operating Data | ||||||||||||||||||||
| Restaurant Activity: | ||||||||||||||||||||
| Company-owned restaurants at end of period | 404 | 411 | 412 | 413 | 413 | |||||||||||||||
| Franchise restaurants at end of period | 65 | 65 | 66 | 66 | 73 | |||||||||||||||
| Revenue Data: | ||||||||||||||||||||
| Company-owned average unit volumes | $ | 1,092 | $ | 1,080 | $ | 1,072 | $ | 1,066 | $ | 1,065 | ||||||||||
| Franchise average unit volumes | $ | 1,113 | $ | 1,081 | $ | 1,066 | $ | 1,062 | $ | 1,061 | ||||||||||
| Company-owned comparable restaurant sales | 5.0 | % | (0.3 | )% | (0.9 | )% | (3.8 | )% | (3.9 | )% | ||||||||||
| Franchise comparable restaurant sales | 8.0 | % | 0.9 | % | (0.9 | )% | (1.6 | )% | (0.4 | )% | ||||||||||
| System-wide comparable restaurant sales | 5.4 | % | (0.2 | )% | (0.9 | )% | (3.5 | )% | (3.4 | )% | ||||||||||
Reconciliations of Non-GAAP Measurements to GAAP Results
| Noodles & Company | ||||||||||||||||
| Reconciliation of Net Loss to EBITDA and Adjusted EBITDA | ||||||||||||||||
| (in thousands, unaudited) | ||||||||||||||||
| Fiscal Quarter Ended | Two Fiscal Quarters Ended | |||||||||||||||
| July 3, 2018 |
July 4, 2017 |
July 3, 2018 |
July 4, 2017 |
|||||||||||||
| Net loss | $ | (5,935 | ) | $ | (1,815 | ) | $ | (9,510 | ) | $ | (28,660 | ) | ||||
| Depreciation and amortization | 5,797 | 6,279 | 11,617 | 12,546 | ||||||||||||
| Interest expense, net | 1,154 | 927 | 2,292 | 1,935 | ||||||||||||
| (Benefit) provision for income taxes | (7 | ) | 80 | (248 | ) | 271 | ||||||||||
| EBITDA | $ | 1,009 | $ | 5,471 | $ | 4,151 | $ | (13,908 | ) | |||||||
| Restaurant impairments, closure costs and asset disposals | 2,580 | 2,830 | 4,160 | 24,884 | ||||||||||||
| Litigation settlements | 3,796 | (421 | ) | 3,796 | (421 | ) | ||||||||||
| Fees and costs related to registration statements and related transactions | 53 | 40 | 53 | 679 | ||||||||||||
| Loss on extinguishment of debt | 626 | — | 626 | — | ||||||||||||
| Severance costs | — | 129 | 278 | 332 | ||||||||||||
| Stock-based compensation expense | 1,012 | 647 | 1,592 | 945 | ||||||||||||
| Adjusted EBITDA | $ | 9,076 | $ | 8,696 | $ | 14,656 | $ | 12,511 | ||||||||
______________________________
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 & Company | ||||||||||||||||
| Reconciliation of Net Loss to Adjusted Net Income (Loss) | ||||||||||||||||
| (in thousands, except share and per share data, unaudited) | ||||||||||||||||
| Fiscal Quarter Ended | Two Fiscal Quarters Ended | |||||||||||||||
| July 3, 2018 |
July 4, 2017 |
July 3, 2018 |
July 4, 2017 |
|||||||||||||
| Net loss | $ | (5,935 | ) | $ | (1,815 | ) | $ | (9,510 | ) | $ | (28,660 | ) | ||||
| Restaurant impairments and closure costs (a) | 1,998 | 2,445 | 3,079 | 24,110 | ||||||||||||
| Fees and costs related to registration statements and related transactions (b) | 53 | 40 | 53 | 679 | ||||||||||||
| Litigation settlements (c) | 3,796 | (421 | ) | 3,796 | (421 | ) | ||||||||||
| Loss on extinguishment of debt (d) | 626 | — | 626 | — | ||||||||||||
| Severance costs (e) | — | 129 | 278 | 332 | ||||||||||||
| Tax adjustments, net (f) | (149 | ) | (83 | ) | 262 | 1,765 | ||||||||||
| Adjusted net income (loss) | $ | 389 | $ | 295 | $ | (1,416 | ) | $ | (2,195 | ) | ||||||
| Loss per share of Class A and Class B common stock, combined: | ||||||||||||||||
| Basic | $ | (0.14 | ) | $ | (0.22 | ) | $ | (0.23 | ) | $ | (1.06 | ) | ||||
| Diluted | $ | (0.14 | ) | $ | (0.22 | ) | $ | (0.23 | ) | $ | (1.06 | ) | ||||
| Adjusted income (loss) per share of Class A and Class B common stock, combined (g) | ||||||||||||||||
| Basic | $ | 0.01 | $ | 0.01 | $ | (0.03 | ) | $ | (0.06 | ) | ||||||
| Diluted | $ | 0.01 | $ | 0.01 | $ | (0.03 | ) | $ | (0.06 | ) | ||||||
| Weighted average Class A and Class B common stock outstanding, combined (g) | ||||||||||||||||
| Basic | 41,172,924 | 40,779,277 | 41,150,698 | 34,404,222 | ||||||||||||
| Diluted | 42,643,123 | 40,779,277 | 41,150,698 | 34,404,222 | ||||||||||||
_____________________________
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 closure costs and impairing restaurants during the first two quarters of 2018 and 2017. The first two quarters of 2018 include closure costs related to the nine restaurants closed in the first two quarters of 2018, most of which were approaching the expiration of their leases, as well as ongoing costs from restaurants closed in previous years, and the impairment of one restaurant. The first two quarters of 2017 include the closure costs related to the 55 restaurants closed in the first quarter of 2017 and the impairment of thirteen restaurants. All periods include the ongoing closure costs of restaurants closed in the fourth quarter of 2015. These expenses are included in the “Restaurant impairments, closure costs and asset disposals” line in the Condensed Consolidated Statements of Operations. | |
| (b) | Reflects the adjustment to eliminate the expenses related to the registration statement the Company filed in the first quarter of 2018 and the registration statement the Company filed in the first quarter of 2017, which registration statement was later withdrawn. | |
| (c) | Reflects the adjustments to eliminate the charges booked in the second quarter of 2018 for the final assessment related to the data breach liabilities and the settlement of the Delaware gift card litigation, and the adjustment to eliminate the gain on an employee-related litigation settlement in the second quarter of 2017 due to final settlement being less than what the Company had previously accrued. | |
| (d) | Reflects the adjustment to eliminate the loss on extinguishment of debt which resulted from writing off the remaining unamortized balance of debt issuance costs related to the prior credit facility when it was repaid in full in the second quarter of 2018. | |
| (e) | Reflects the adjustment to eliminate the severance costs from department structural changes. | |
| (f) | 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 (e) above. | |
| (g) | Adjusted per share amounts are calculated by dividing adjusted net loss by the basic and diluted weighted average shares outstanding. | |
| Noodles & Company | ||||||||||||||||
| Reconciliation of Operating Loss to Restaurant Contribution | ||||||||||||||||
| (in thousands, unaudited) | ||||||||||||||||
| Fiscal Quarter Ended | Two Fiscal Quarters Ended | |||||||||||||||
| July 3, 2018 |
July 4, 2017 |
July 3, 2018 |
July 4, 2017 |
|||||||||||||
| Loss from operations | $ | (4,162 | ) | $ | (808 | ) | $ | (6,840 | ) | $ | (26,454 | ) | ||||
| Less: Franchising royalties and fees | 944 | 1,164 | 1,857 | 2,352 | ||||||||||||
| Plus: General and administrative | 14,813 | 9,393 | 25,081 | 20,059 | ||||||||||||
| Depreciation and amortization | 5,797 | 6,279 | 11,617 | 12,546 | ||||||||||||
| Pre-opening | 3 | 246 | 50 | 791 | ||||||||||||
| Restaurant impairments, closure costs and asset disposals | 2,580 | 2,830 | 4,160 | 24,884 | ||||||||||||
| Restaurant contribution | $ | 18,087 | $ | 16,776 | $ | 32,211 | $ | 29,474 | ||||||||
| as a percentage of restaurant revenue | 15.5 | % | 15.0 | % | 14.2 | % | 13.0 | % | ||||||||
_____________________________
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 Relations
investorrelations@noodles.com
Media
(720) 214-1971
press@noodles.com
Source:
Source: Noodles & Company