Delaware | 001-35987 | 84-1303469 | |||
(State or Other Jurisdiction of | (Commission File Number) | (I.R.S. Employer | |||
Incorporation) | Identification No.) | ||||
520 Zang Street, Suite D, Broomfield, CO | 80021 | ||||
(Address of Principal Executive Offices) | (Zip Code) | ||||
Exhibit No. | Description | ||
99.1 | Noodles & Company Press Release dated February 19, 2015 |
Noodles & Company | ||
By: | /s/ DAVE BOENNIGHAUSEN | |
Name: | Dave Boennighausen | |
Title: | Chief Financial Officer |
Exhibit No. | Description | |
99.1 | Noodles & Company Press Release dated February 19, 2015 |
Exhibit 99.1 |
• | Total revenue increased 18.7% to $108.5 million. |
• | Comparable restaurant sales increased 1.3% for company-owned restaurants, 1.5% for franchise restaurants and 1.3% system-wide. |
• | Two-year comparable restaurant sales increased to +5.6% for company owned restaurants, or +4.8% when adjusting for an extra operating day that occurred in the fourth quarter of 2013 due to a holiday shift in our fiscal calendar. |
• | 14 new restaurants opened system-wide in the fourth quarter, including 13 company-owned and one franchise restaurant. |
• | GAAP net income increased 46.9% to $3.5 million. |
• | Adjusted net income(1) increased 9.2% to $3.9 million, or $0.13 per diluted share. |
• | Adjusted EBITDA(1) increased 11.6% to $13.4 million. |
• | Restaurant contribution margin decreased 100 basis points to 20.0%. |
• | Total revenue increased 15.1% to $403.7 million. |
• | Comparable restaurant sales increased 0.3% for company-owned restaurants, decreased 0.4% for franchise restaurants and increased 0.2% system-wide. |
• | 59 net new restaurants opened system-wide in 2014, including 49 company-owned and 10 franchise restaurants, resulting in 15.5% system-wide unit growth. |
• | GAAP net income increased 71.5% to $11.4 million, or $0.37 per diluted share. |
• | Adjusted net income(1) decreased 2.1% to $11.9 million, or $0.38 per diluted share. |
• | Adjusted EBITDA(1) increased 6.1% to $46.7 million. |
• | Restaurant contribution margin decreased 160 basis points to 19.1%. |
• | 12% to 14% unit growth systemwide; |
• | 2.5% to 4.0% comparable restaurant sales growth; |
• | Restaurant level contribution margin of 19.0% to 19.5%; |
• | Adjusted diluted earnings per share growth of approximately 20%; and |
• | An estimated tax rate of approximately 39%. |
• | For each 1.0% change in guest counts, approximately $0.04 annualized; |
• | For each 10 basis point change in restaurant level contribution margin, approximately $0.01 annualized; and |
• | For each $500,000 in pre-tax income or expense, approximately $0.01. |
Fiscal Quarter Ended | Fiscal Year Ended | |||||||||||||||
December 30, 2014 | December 31, 2013 | December 30, 2014 | December 31, 2013 | |||||||||||||
Revenue: | ||||||||||||||||
Restaurant revenue | $ | 107,204 | $ | 90,396 | $ | 398,993 | $ | 347,140 | ||||||||
Franchising royalties and fees | 1,342 | 1,072 | 4,748 | 3,784 | ||||||||||||
Total revenue | 108,546 | 91,468 | 403,741 | 350,924 | ||||||||||||
Costs and expenses: | ||||||||||||||||
Restaurant operating costs (exclusive of depreciation and amortization shown separately below): | ||||||||||||||||
Cost of sales | 28,684 | 24,367 | 107,217 | 91,892 | ||||||||||||
Labor | 32,082 | 26,576 | 120,492 | 104,040 | ||||||||||||
Occupancy | 11,426 | 9,349 | 42,540 | 35,173 | ||||||||||||
Other restaurant operating costs | 13,598 | 11,116 | 52,580 | 44,078 | ||||||||||||
General and administrative (1) | 8,588 | 8,084 | 31,394 | 35,893 | ||||||||||||
Depreciation and amortization | 6,818 | 5,550 | 24,787 | 20,623 | ||||||||||||
Pre-opening | 1,143 | 936 | 4,425 | 3,809 | ||||||||||||
Asset disposals, closure costs and restaurant impairments | 733 | 328 | 1,391 | 1,164 | ||||||||||||
Total costs and expenses | 103,072 | 86,306 | 384,826 | 336,672 | ||||||||||||
Income from operations | 5,474 | 5,162 | 18,915 | 14,252 | ||||||||||||
Debt extinguishment expense | — | 579 | — | 624 | ||||||||||||
Interest expense | 197 | 42 | 365 | 2,196 | ||||||||||||
Income before income taxes | 5,277 | 4,541 | 18,550 | 11,432 | ||||||||||||
Provision for income taxes | 1,742 | 2,134 | 7,122 | 4,767 | ||||||||||||
Net income | $ | 3,535 | $ | 2,407 | $ | 11,428 | $ | 6,665 | ||||||||
Earnings per share of Class A and Class B common stock, combined: | ||||||||||||||||
Basic | $ | 0.12 | $ | 0.08 | $ | 0.38 | $ | 0.25 | ||||||||
Diluted | $ | 0.11 | $ | 0.08 | $ | 0.37 | $ | 0.24 | ||||||||
Weighted average shares of Class A and Class B common stock outstanding, combined: | ||||||||||||||||
Basic | 29,798,974 | 29,479,084 | 29,717,304 | 26,406,904 | ||||||||||||
Diluted | 30,884,874 | 31,068,792 | 31,001,099 | 27,688,629 |
(1) | In the second quarter of 2013, we incurred $5.7 million of IPO-related expenses: $2.0 million of stock-based compensation related to accelerated vesting of outstanding stock options, $1.2 million of stock-based compensation related to stock options granted to our Chief Executive Officer and President and Chief Operating Officer of which 50% were vested at grant, $1.7 million of transaction bonuses and related payroll taxes and $0.8 million in transaction payments to our Equity Sponsors. Additionally, the full year of 2013 included $500,000 of management fee expense in accordance with our management services agreement and through the Class C common stock dividend paid to the holder of the one outstanding share of our Class C common stock. In connection with our IPO, the management services agreement expired and the one share of Class C common stock was redeemed. In the fourth quarter of 2013, we incurred $0.7 million of offering expenses related to our follow-on offering which closed in December of 2013. |
Fiscal Quarter Ended | Fiscal Year Ended | |||||||||||
December 30, 2014 | December 31, 2013 | December 30, 2014 | December 31, 2013 | |||||||||
Revenue: | ||||||||||||
Restaurant revenue | 98.8 | % | 98.8 | % | 98.8 | % | 98.9 | % | ||||
Franchising royalties and fees | 1.2 | 1.2 | 1.2 | 1.1 | ||||||||
Total revenue | 100.0 | 100.0 | 100.0 | 100.0 | ||||||||
Costs and Expenses: | ||||||||||||
Restaurant operating costs (exclusive of depreciation and amortization shown separately below): (1) | ||||||||||||
Cost of sales | 26.8 | 27.0 | 26.9 | 26.5 | ||||||||
Labor | 29.9 | 29.4 | 30.2 | 30.0 | ||||||||
Occupancy | 10.7 | 10.3 | 10.7 | 10.1 | ||||||||
Other restaurant operating costs | 12.7 | 12.3 | 13.2 | 12.7 | ||||||||
General and administrative (2) | 7.9 | 8.8 | 7.8 | 10.2 | ||||||||
Depreciation and amortization | 6.3 | 6.1 | 6.1 | 5.9 | ||||||||
Pre-opening | 1.1 | 1.0 | 1.1 | 1.1 | ||||||||
Asset disposals, closure costs and restaurant impairments | 0.7 | 0.4 | 0.3 | 0.3 | ||||||||
Total costs and expenses | 95.0 | 94.4 | 95.3 | 95.9 | ||||||||
Income from operations | 5.0 | 5.6 | 4.7 | 4.1 | ||||||||
Debt extinguishment expense | — | 0.6 | — | 0.2 | ||||||||
Interest expense | 0.2 | — | 0.1 | 0.6 | ||||||||
Income before income taxes | 4.9 | 5.0 | 4.6 | 3.3 | ||||||||
Provision for income taxes | 1.6 | 2.3 | 1.8 | 1.4 | ||||||||
Net income | 3.3 | % | 2.6 | % | 2.8 | % | 1.9 | % |
(1) | As a percentage of restaurant revenue. |
(2) | In the second quarter of 2013, we incurred $5.7 million of IPO-related expenses: $2.0 million of stock-based compensation related to accelerated vesting of outstanding stock options, $1.2 million of stock-based compensation related to stock options granted to our Chief Executive Officer and President and Chief Operating Officer of which 50% were vested at grant, $1.7 million of transaction bonuses and related payroll taxes and $0.8 million in transaction payments to our Equity Sponsors. Additionally, the full year of 2013 included $500,000 of management fee expense in accordance with our management services agreement and through the Class C common stock dividend paid to the holder of the one outstanding share of our Class C common stock. In connection with our IPO, the management services agreement expired and the one share of Class C common stock was redeemed. In the fourth quarter of 2013, we incurred $0.7 million of offering expenses related to our follow-on offering which closed in December of 2013. |
As of | ||||||||
December 30, 2014 | December 31, 2013 | |||||||
Balance Sheet Data | ||||||||
Total current assets | $ | 22,776 | $ | 18,333 | ||||
Total assets | 238,903 | 187,802 | ||||||
Total current liabilities | 25,831 | 24,165 | ||||||
Total long-term debt | 27,500 | 6,312 | ||||||
Total liabilities | 98,788 | 63,329 | ||||||
Total stockholders' equity | 140,115 | 124,473 |
Fiscal Quarter Ended | ||||||||||||||||
Dec. 30, 2014 | Sept. 30, 2014 | July 1, 2014 | April 1, 2014 | Dec. 31, 2013 | ||||||||||||
Selected Operating Data | ||||||||||||||||
Restaurant Activity: | ||||||||||||||||
Company-owned restaurants at end of period | 386 | 370 | 343 | 331 | 318 | |||||||||||
Franchise restaurants at end of period | 53 | 55 | 67 | 63 | 62 | |||||||||||
Revenue Data: | ||||||||||||||||
Company-owned average unit volumes | $ | 1,147 | 1,152 | 1,156 | 1,163 | 1,179 | ||||||||||
Franchise average unit volumes | $ | 1,131 | 1,130 | 1,127 | 1,126 | 1,133 | ||||||||||
Company-owned comparable restaurant sales | 0.3 | % | 1.6 | % | (0.6 | )% | (1.4 | )% | 4.3 | % | ||||||
Franchise comparable restaurant sales | 1.5 | % | 2.0 | % | (1.2 | )% | (3.3 | )% | 1.5 | % | ||||||
System-wide comparable restaurant sales | 1.3 | % | 1.7 | % | (0.7 | )% | (1.6 | )% | 3.9 | % |
Fiscal Quarter Ended | Fiscal Year Ended | |||||||||||||||
December 30, 2014 | December 31, 2013 | December 30, 2014 | December 31, 2013 | |||||||||||||
(in thousands, unaudited) | ||||||||||||||||
Net income | $ | 3,535 | $ | 2,407 | $ | 11,428 | $ | 6,665 | ||||||||
Depreciation and amortization | 6,818 | 5,550 | 24,787 | 20,623 | ||||||||||||
Interest expense | 197 | 42 | 365 | 2,196 | ||||||||||||
Provision for income taxes | 1,742 | 2,134 | 7,122 | 4,767 | ||||||||||||
EBITDA | $ | 12,292 | $ | 10,133 | $ | 43,702 | $ | 34,251 | ||||||||
Debt extinguishment expense | — | 579 | — | 624 | ||||||||||||
Asset disposals, closure costs and restaurant impairment | 733 | 328 | 1,391 | 1,164 | ||||||||||||
Management fees (a) | — | — | — | 500 | ||||||||||||
Stock-based compensation expense (b) | 309 | 254 | 1,509 | 1,127 | ||||||||||||
IPO-related expenses (c) | — | — | — | 5,667 | ||||||||||||
Follow-on offering expenses (d) | — | 696 | — | 696 | ||||||||||||
Transaction costs (e) | 42 | — | 100 | — | ||||||||||||
Adjusted EBITDA (f) | $ | 13,376 | $ | 11,990 | $ | 46,702 | $ | 44,029 |
(a) | The fiscal year 2013 included $500,000 of management fee expense in accordance with our management services agreement and through the Class C common stock dividend paid to the holder of the one outstanding share of our Class C common stock. In connection with our IPO, the management services agreement expired and the one share of Class C common stock was redeemed. |
(b) | Reflects stock-based compensation included in general and administrative expenses. The stock-based compensation expense for fiscal year 2013 that was previously reported in our earnings release and Annual Report on Form 10-K for the fiscal year ended December 31, 2013 improperly included $3.2 million of stock-based compensation related to the accelerated vesting of outstanding stock options upon our IPO that was also properly included in IPO-related expenses. Accordingly, fiscal year 2013 stock-based compensation expense presented in the table above has been corrected. |
(c) | Reflects certain expenses incurred in conjunction with our IPO. Amount includes $2.0 million of stock-based compensation related to accelerated vesting of outstanding stock options, $1.2 million of stock-based compensation related to stock options granted to our Chief Executive Officer and President and Chief Operations Officer of which 50% were vested at grant, $1.7 million of transaction bonuses and related payroll tax and $0.8 million in transaction payments to our Equity Sponsors. |
(d) | Reflects $0.7 million of offering expenses related to our follow-on offering completed in December of 2013. |
(e) | Expenses related to the acquisition of 19 franchise restaurants. 16 of the restaurants were acquired in July 2014 and three restaurants were acquired in December 2014. |
(f) | Adjusted EBITDA for fiscal year 2013 that was previously reported in our earnings release and Annual Report on Form 10-K for the fiscal year ended December 31, 2013 improperly included $3.2 million of stock-based compensation related to the accelerated vesting of outstanding stock options at our IPO that was also properly included in IPO-related expenses. Accordingly, fiscal year 2013 adjusted EBITDA presented in the table above has been corrected. |
Fiscal Quarter Ended | Fiscal Year Ended | |||||||||||||||
December 30, 2014 | December 31, 2013 | December 30, 2014 | December 31, 2013 | |||||||||||||
(in thousands, unaudited) | ||||||||||||||||
Net income | $ | 3,535 | $ | 2,407 | $ | 11,428 | $ | 6,665 | ||||||||
Interest expense as reported (a) | — | — | — | 2,067 | ||||||||||||
Debt extinguishment expense (b) | — | 579 | — | 624 | ||||||||||||
Adjusted interest expense using reduced debt balances (c) | — | — | — | (301 | ) | |||||||||||
Pre-IPO management fees (d) | — | — | — | 500 | ||||||||||||
IPO-related expenses (e) | — | — | — | 5,667 | ||||||||||||
Follow-on offering expenses (f) | — | 696 | — | 696 | ||||||||||||
Tax impact of follow-on offering expenses (g) | — | 354 | — | 286 | ||||||||||||
Estimated incremental public costs (h) | — | — | — | (714 | ) | |||||||||||
Non-recurring stock-based compensation (i) | — | — | 147 | — | ||||||||||||
Transaction costs (j) | 42 | — | 100 | — | ||||||||||||
Obsolete inventory (k) | 490 | — | 490 | — | ||||||||||||
Tax effect of adjustments (l) | (204 | ) | (500 | ) | (283 | ) | (3,347 | ) | ||||||||
Adjusted net income | $ | 3,863 | $ | 3,536 | $ | 11,882 | $ | 12,143 | ||||||||
Adjusted earnings per Class A and Class B common stock, combined (m) | ||||||||||||||||
Basic | $ | 0.13 | $ | 0.12 | $ | 0.40 | $ | 0.41 | ||||||||
Diluted | $ | 0.13 | $ | 0.11 | $ | 0.38 | $ | 0.40 | ||||||||
Pro forma weighted average Class A and Class B common stock outstanding, combined (m) | ||||||||||||||||
Basic | 29,798,974 | 29,479,084 | 29,717,304 | 29,419,536 | ||||||||||||
Diluted | 30,884,874 | 31,068,792 | 31,001,099 | 30,701,262 |
(a) | Reflects the adjustment to eliminate the historical interest expense for all periods presented that were based upon actual outstanding balances before the application of the net proceeds from our IPO. |
(b) | Reflects debt extinguishment expense recognized in conjunction with various amendments to our credit facility in 2013 to extend the maturity date and to reduce interest rates on borrowings, as well as the repayment of our term loan in 2013. |
(c) | Reflects interest expense assuming no term loan balance and daily balances outstanding on our revolver adjusted for the repayment of the revolver down to $0.2 million. This balance reflects $100.2 million repayment of both term and revolving debt from the net proceeds of our IPO. The interest adjustment is based on the following assumptions: |
(d) | Reflects the elimination of the management fees and Class C common stock dividend paid to our sponsors for the periods presented. |
(e) | Reflects certain expenses incurred in conjunction with our IPO. Amount includes $2.0 million of stock-based compensation related to accelerated vesting of outstanding stock options, $1.2 million of stock-based compensation related to stock options granted to our Chief Executive Officer and President and Chief Operations Officer of which 50% were vested at grant, $1.7 million of transaction bonuses and related payroll tax and $0.8 million in transaction payments to our Equity Sponsors. |
(f) | Reflects $0.7 million of offering expenses related to our follow-on offering completed in December of 2013. |
(g) | Reflects the impact follow-on offering expenses had on our effective tax rate, as well as other miscellaneous tax rate adjustments. |
(h) | Reflects an adjustment of recurring incremental legal, accounting, insurance and other compliance costs we expect to incur as a public company. By its nature, this adjustment involves risks and uncertainties, and the actual costs incurred could be different than this adjustment. |
(i) | Reflects the annual vesting of the options granted to the Chief Executive Officer and President and Chief Operating Officer prior to our IPO. |
(j) | Expenses related to the acquisition of 19 franchise restaurants. 16 of the restaurants were acquired in July 2014 and three restaurants were acquired in December 2014. |
(k) | Reflects the asset write-off from the dissolving of a relationship with an overseas vendor. |
(l) | Reflects the tax expense associated with the adjustments in a through f and h through k above at the tax rate of 38.4% in 2014, which reflects our annual effective tax rate, and 39.2% for 2013. |
(m) | Reflects weighted average shares outstanding as if all shares sold in our IPO were outstanding as of the first day of our fiscal year. Adjusted per share amounts are calculated by dividing adjusted net income by the adjusted basic and diluted weighted average shares outstanding. |
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