Delaware
|
|
84-1303469
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
520 Zang Street, Suite D
|
|
|
Broomfield, CO
|
|
80021
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Large accelerated filer o
|
|
Accelerated filer x
|
|
|
|
Non-accelerated filer o
|
|
Smaller reporting company o
|
|
|
Emerging growth company x
|
Class
|
|
Outstanding at October 19, 2018
|
Class A Common Stock, $0.01 par value per share
|
|
43,922,066 shares
|
|
|
|
Page
|
|
|
|
|
|
|||
|
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||
|
|
||
|
|
||
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|
|||
|
|||
|
|||
|
|
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|
|||
|
|||
|
|||
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|||
|
|||
|
|||
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|||
|
|
|
October 2,
2018 |
|
January 2,
2018 |
||||
|
|
(unaudited)
|
|
|
||||
Assets
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
1,918
|
|
|
$
|
3,361
|
|
Accounts receivable
|
|
1,959
|
|
|
2,434
|
|
||
Inventories
|
|
9,897
|
|
|
9,929
|
|
||
Prepaid expenses and other assets
|
|
6,704
|
|
|
6,258
|
|
||
Income tax receivable
|
|
122
|
|
|
76
|
|
||
Total current assets
|
|
20,600
|
|
|
22,058
|
|
||
Property and equipment, net
|
|
141,375
|
|
|
152,593
|
|
||
Goodwill
|
|
6,400
|
|
|
6,400
|
|
||
Intangibles, net
|
|
1,384
|
|
|
1,565
|
|
||
Other assets, net
|
|
2,573
|
|
|
2,617
|
|
||
Total long-term assets
|
|
151,732
|
|
|
163,175
|
|
||
Total assets
|
|
$
|
172,332
|
|
|
$
|
185,233
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Accounts payable
|
|
$
|
7,294
|
|
|
$
|
10,929
|
|
Accrued payroll and benefits
|
|
9,851
|
|
|
11,719
|
|
||
Accrued expenses and other current liabilities
|
|
12,292
|
|
|
21,221
|
|
||
Current portion of long-term debt
|
|
688
|
|
|
—
|
|
||
Total current liabilities
|
|
30,125
|
|
|
43,869
|
|
||
Long-term debt, net
|
|
47,097
|
|
|
57,624
|
|
||
Deferred rent
|
|
37,592
|
|
|
38,872
|
|
||
Deferred tax liabilities, net
|
|
153
|
|
|
416
|
|
||
Other long-term liabilities
|
|
5,390
|
|
|
8,591
|
|
||
Total liabilities
|
|
120,357
|
|
|
149,372
|
|
||
|
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
|
||||
Preferred stock—$0.01 par value, 1,000,000 shares authorized and undesignated as of October 2, 2018 and January 2, 2018; no shares issued or outstanding
|
|
—
|
|
|
—
|
|
||
Common stock—$0.01 par value, 180,000,000 shares authorized as of October 2, 2018 and January 2, 2018; 46,340,013 issued and 43,916,142 outstanding as of October 2, 2018 and 43,550,329 issued and 41,126,458 outstanding as of January 2, 2018
|
|
463
|
|
|
436
|
|
||
Treasury stock, at cost, 2,423,871 shares as of October 2, 2018 and January 2, 2018
|
|
(35,000
|
)
|
|
(35,000
|
)
|
||
Additional paid-in capital
|
|
197,666
|
|
|
171,613
|
|
||
Accumulated deficit
|
|
(111,154
|
)
|
|
(101,188
|
)
|
||
Total stockholders’ equity
|
|
51,975
|
|
|
35,861
|
|
||
Total liabilities and stockholders’ equity
|
|
$
|
172,332
|
|
|
$
|
185,233
|
|
|
|
Fiscal Quarter Ended
|
|
Three Fiscal Quarters Ended
|
||||||||||||
|
|
October 2,
2018 |
|
October 3,
2017 |
|
October 2,
2018 |
|
October 3,
2017 |
||||||||
Revenue:
|
|
|
|
|
|
|
|
|
||||||||
Restaurant revenue
|
|
$
|
115,552
|
|
|
$
|
113,020
|
|
|
$
|
341,616
|
|
|
$
|
340,175
|
|
Franchising royalties and fees
|
|
1,175
|
|
|
1,191
|
|
|
3,032
|
|
|
3,543
|
|
||||
Total revenue
|
|
116,727
|
|
|
114,211
|
|
|
344,648
|
|
|
343,718
|
|
||||
Costs and expenses:
|
|
|
|
|
|
|
|
|
||||||||
Restaurant operating costs (exclusive of depreciation and amortization shown separately below):
|
|
|
|
|
|
|
|
|
||||||||
Cost of sales
|
|
30,617
|
|
|
29,955
|
|
|
90,962
|
|
|
91,640
|
|
||||
Labor
|
|
37,738
|
|
|
36,897
|
|
|
112,353
|
|
|
112,921
|
|
||||
Occupancy
|
|
12,035
|
|
|
12,709
|
|
|
37,155
|
|
|
39,340
|
|
||||
Other restaurant operating costs
|
|
16,224
|
|
|
15,811
|
|
|
49,997
|
|
|
49,152
|
|
||||
General and administrative
|
|
10,399
|
|
|
9,807
|
|
|
35,480
|
|
|
29,866
|
|
||||
Depreciation and amortization
|
|
5,790
|
|
|
6,183
|
|
|
17,407
|
|
|
18,729
|
|
||||
Pre-opening
|
|
—
|
|
|
69
|
|
|
50
|
|
|
860
|
|
||||
Restaurant impairments, closure costs and asset disposals
|
|
1,792
|
|
|
10,263
|
|
|
5,952
|
|
|
35,147
|
|
||||
Total costs and expenses
|
|
114,595
|
|
|
121,694
|
|
|
349,356
|
|
|
377,655
|
|
||||
Income (loss) from operations
|
|
2,132
|
|
|
(7,483
|
)
|
|
(4,708
|
)
|
|
(33,937
|
)
|
||||
Loss on extinguishment of debt
|
|
—
|
|
|
—
|
|
|
626
|
|
|
—
|
|
||||
Interest expense, net
|
|
1,093
|
|
|
893
|
|
|
3,385
|
|
|
2,828
|
|
||||
Income (loss) before income taxes
|
|
1,039
|
|
|
(8,376
|
)
|
|
(8,719
|
)
|
|
(36,765
|
)
|
||||
(Benefit) provision for income taxes
|
|
(11
|
)
|
|
(41
|
)
|
|
(259
|
)
|
|
230
|
|
||||
Net income (loss)
|
|
1,050
|
|
|
(8,335
|
)
|
|
(8,460
|
)
|
|
(36,995
|
)
|
||||
Accretion of preferred stock to redemption value
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,967
|
)
|
||||
Net income (loss) attributable to common stockholders
|
|
$
|
1,050
|
|
|
$
|
(8,335
|
)
|
|
$
|
(8,460
|
)
|
|
$
|
(44,962
|
)
|
Earnings (loss) per share of Class A and Class B common stock, combined:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
0.02
|
|
|
$
|
(0.20
|
)
|
|
$
|
(0.20
|
)
|
|
$
|
(1.23
|
)
|
Diluted
|
|
$
|
0.02
|
|
|
$
|
(0.20
|
)
|
|
$
|
(0.20
|
)
|
|
$
|
(1.23
|
)
|
Weighted average shares of Class A and Class B common stock outstanding, combined:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
43,094,524
|
|
|
41,109,827
|
|
|
41,798,640
|
|
|
36,639,382
|
|
||||
Diluted
|
|
44,829,363
|
|
|
41,109,827
|
|
|
41,798,640
|
|
|
36,639,382
|
|
|
|
Fiscal Quarter Ended
|
|
Three Fiscal Quarters Ended
|
||||||||||||
|
|
October 2,
2018 |
|
October 3,
2017 |
|
October 2,
2018 |
|
October 3,
2017 |
||||||||
Net income (loss)
|
|
$
|
1,050
|
|
|
$
|
(8,335
|
)
|
|
$
|
(8,460
|
)
|
|
$
|
(36,995
|
)
|
Other comprehensive loss:
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
|
—
|
|
|
(11
|
)
|
|
—
|
|
|
(20
|
)
|
||||
Other comprehensive loss
|
|
—
|
|
|
(11
|
)
|
|
—
|
|
|
(20
|
)
|
||||
Comprehensive income (loss)
|
|
$
|
1,050
|
|
|
$
|
(8,346
|
)
|
|
$
|
(8,460
|
)
|
|
$
|
(37,015
|
)
|
|
|
Three Fiscal Quarters Ended
|
||||||
|
|
October 2,
2018 |
|
October 3,
2017 |
||||
Operating activities
|
|
|
|
|
||||
Net loss
|
|
$
|
(8,460
|
)
|
|
$
|
(36,995
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
||||
Depreciation and amortization
|
|
17,407
|
|
|
18,729
|
|
||
Deferred income taxes
|
|
(263
|
)
|
|
230
|
|
||
Restaurant impairments, closure costs and asset disposals
|
|
5,289
|
|
|
28,867
|
|
||
Loss on extinguishment of debt
|
|
626
|
|
|
—
|
|
||
Amortization of debt issuance costs
|
|
484
|
|
|
288
|
|
||
Stock-based compensation
|
|
2,232
|
|
|
1,193
|
|
||
Gain on insurance proceeds received for property damage
|
|
(373
|
)
|
|
—
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
||||
Accounts receivable
|
|
489
|
|
|
3,142
|
|
||
Inventories
|
|
(647
|
)
|
|
(358
|
)
|
||
Prepaid expenses and other assets
|
|
(402
|
)
|
|
(460
|
)
|
||
Accounts payable
|
|
(2,172
|
)
|
|
(1,093
|
)
|
||
Deferred rent
|
|
(1,278
|
)
|
|
1,517
|
|
||
Income taxes
|
|
(46
|
)
|
|
158
|
|
||
Accrued expenses and other liabilities
|
|
(17,754
|
)
|
|
(22,147
|
)
|
||
Net cash used in operating activities
|
|
(4,868
|
)
|
|
(6,929
|
)
|
||
Investing activities
|
|
|
|
|
||||
Purchases of property and equipment
|
|
(9,937
|
)
|
|
(17,468
|
)
|
||
Insurance proceeds received for property damage
|
|
500
|
|
|
—
|
|
||
Net cash used in investing activities
|
|
(9,437
|
)
|
|
(17,468
|
)
|
||
Financing activities
|
|
|
|
|
||||
Net (payments) borrowings from swing line loan
|
|
(101
|
)
|
|
6,042
|
|
||
Proceeds from issuance of long-term debt
|
|
74,889
|
|
|
10,532
|
|
||
Payments on long-term debt
|
|
(84,030
|
)
|
|
(37,015
|
)
|
||
Issuance of preferred stock and common stock warrants, net of transaction expenses (see Note 9)
|
|
—
|
|
|
16,589
|
|
||
Issuance of common stock, net of transaction expenses (see Note 9)
|
|
23,157
|
|
|
29,110
|
|
||
Proceeds from exercise of stock options and employee stock purchase plan
|
|
654
|
|
|
56
|
|
||
Debt issuance costs
|
|
(1,707
|
)
|
|
(662
|
)
|
||
Net cash provided by financing activities
|
|
12,862
|
|
|
24,652
|
|
||
Effect of exchange rate changes on cash
|
|
—
|
|
|
(4
|
)
|
||
Net (decrease) increase in cash and cash equivalents
|
|
(1,443
|
)
|
|
251
|
|
||
Cash and cash equivalents
|
|
|
|
|
||||
Beginning of period
|
|
3,361
|
|
|
1,837
|
|
||
End of period
|
|
$
|
1,918
|
|
|
$
|
2,088
|
|
|
|
October 2,
2018 |
|
January 2,
2018 |
||||
Leasehold improvements
|
|
$
|
199,056
|
|
|
$
|
199,211
|
|
Furniture, fixtures and equipment
|
|
122,036
|
|
|
120,234
|
|
||
Construction in progress
|
|
2,024
|
|
|
2,592
|
|
||
|
|
323,116
|
|
|
322,037
|
|
||
Accumulated depreciation and amortization
|
|
(181,741
|
)
|
|
(169,444
|
)
|
||
|
|
$
|
141,375
|
|
|
$
|
152,593
|
|
|
|
October 2,
2018 |
|
January 2,
2018 |
||||
Gift card liability
|
|
$
|
2,520
|
|
|
$
|
4,078
|
|
Occupancy related
|
|
3,993
|
|
|
3,733
|
|
||
Utilities
|
|
1,603
|
|
|
1,705
|
|
||
Data breach liabilities
|
|
—
|
|
|
7,605
|
|
||
Other accrued expenses
|
|
4,176
|
|
|
4,100
|
|
||
|
|
$
|
12,292
|
|
|
$
|
21,221
|
|
Year 1
|
$
|
688
|
|
Year 2
|
1,125
|
|
|
Year 3
|
1,813
|
|
|
Year 4
|
45,951
|
|
|
Total
|
$
|
49,577
|
|
|
|
Fiscal Quarter Ended
|
|
Three Fiscal Quarters Ended
|
||||||||||||
|
|
October 2,
2018 |
|
October 3,
2017 |
|
October 2,
2018 |
|
October 3,
2017 |
||||||||
(Benefit) provision for income taxes
|
|
$
|
(11
|
)
|
|
$
|
(41
|
)
|
|
$
|
(259
|
)
|
|
$
|
230
|
|
Effective tax rate
|
|
(1.1
|
)%
|
|
0.5
|
%
|
|
3.0
|
%
|
|
(0.6
|
)%
|
|
Fiscal Quarter Ended
|
|
Three Fiscal Quarters Ended
|
||||||||||||
|
October 2,
2018 |
|
October 3,
2017 |
|
October 2,
2018 |
|
October 3,
2017 |
||||||||
Stock-based compensation expense
|
$
|
640
|
|
|
$
|
248
|
|
|
$
|
2,232
|
|
|
$
|
1,193
|
|
Capitalized stock-based compensation expense
|
$
|
12
|
|
|
$
|
44
|
|
|
$
|
37
|
|
|
$
|
145
|
|
|
Fiscal Quarter Ended
|
|
Three Fiscal Quarters Ended
|
||||||||||||
|
October 2,
2018 |
|
October 3,
2017 |
|
October 2,
2018 |
|
October 3,
2017 |
||||||||
Restaurant impairments (1)
|
$
|
314
|
|
|
$
|
9,080
|
|
|
$
|
1,231
|
|
|
$
|
15,053
|
|
Closure costs (1)
|
1,488
|
|
|
779
|
|
|
3,561
|
|
|
19,194
|
|
||||
(Gain) loss on disposal of assets and other (2)
|
(10
|
)
|
|
404
|
|
|
1,160
|
|
|
900
|
|
||||
|
$
|
1,792
|
|
|
$
|
10,263
|
|
|
$
|
5,952
|
|
|
$
|
35,147
|
|
(1)
|
Restaurant impairments and closure costs in all periods presented above include amounts related to restaurants previously impaired or closed.
|
(2)
|
The third quarter of 2018 and the first three quarters of 2018 include a $0.4 million gain from insurance proceeds received for property damage in excess of the loss recognized.
|
|
|
Fiscal Quarter Ended
|
|
Three Fiscal Quarters Ended
|
||||||||||||
|
|
October 2,
2018 |
|
October 3,
2017 |
|
October 2,
2018 |
|
October 3,
2017 |
||||||||
Net income (loss) attributable to common stockholders
|
|
$
|
1,050
|
|
|
$
|
(8,335
|
)
|
|
$
|
(8,460
|
)
|
|
$
|
(44,962
|
)
|
Shares:
|
|
|
|
|
|
|
|
|
||||||||
Basic weighted average shares outstanding
|
|
43,094,524
|
|
|
41,109,827
|
|
|
41,798,640
|
|
|
36,639,382
|
|
||||
Effect of dilutive securities
|
|
1,734,839
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Diluted weighted average shares outstanding
|
|
44,829,363
|
|
|
41,109,827
|
|
|
41,798,640
|
|
|
36,639,382
|
|
||||
Earnings (loss) per share:
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings (loss) per share
|
|
$
|
0.02
|
|
|
$
|
(0.20
|
)
|
|
$
|
(0.20
|
)
|
|
$
|
(1.23
|
)
|
Diluted earnings (loss) per share
|
|
$
|
0.02
|
|
|
$
|
(0.20
|
)
|
|
$
|
(0.20
|
)
|
|
$
|
(1.23
|
)
|
|
|
October 2,
2018 |
|
October 3,
2017 |
||||
Interest paid (net of amounts capitalized)
|
|
$
|
3,006
|
|
|
$
|
3,028
|
|
Income taxes paid (refunded)
|
|
49
|
|
|
(158
|
)
|
||
Changes in purchases of property and equipment accrued in accounts payable, net
|
|
(1,346
|
)
|
|
(2,144
|
)
|
||
Conversion of Series A convertible preferred stock to common stock
|
|
—
|
|
|
18,500
|
|
•
|
consumer recognition of our brand and our ability to respond to changing consumer preferences;
|
•
|
overall economic trends, particularly those related to consumer spending;
|
•
|
our ability to operate restaurants effectively and efficiently to meet consumer expectations;
|
•
|
pricing;
|
•
|
the number of restaurant transactions, per-person spend and average check amount;
|
•
|
marketing and promotional efforts;
|
•
|
weather;
|
•
|
food safety and foodborne illness concerns;
|
•
|
local competition;
|
•
|
trade area dynamics;
|
•
|
introduction of new and seasonal menu items and limited time offerings; and
|
•
|
opening new restaurants in the vicinity of existing locations.
|
|
|
Fiscal Quarter Ended
|
|
Three Fiscal Quarters Ended
|
||||||||||||
|
|
October 2,
2018 |
|
October 3,
2017 |
|
October 2,
2018 |
|
October 3,
2017 |
||||||||
|
|
(in thousands, unaudited)
|
||||||||||||||
Net income (loss)
|
|
$
|
1,050
|
|
|
$
|
(8,335
|
)
|
|
$
|
(8,460
|
)
|
|
$
|
(36,995
|
)
|
Depreciation and amortization
|
|
5,790
|
|
|
6,183
|
|
|
17,407
|
|
|
18,729
|
|
||||
Interest expense, net
|
|
1,093
|
|
|
893
|
|
|
3,385
|
|
|
2,828
|
|
||||
(Benefit) provision for income taxes
|
|
(11
|
)
|
|
(41
|
)
|
|
(259
|
)
|
|
230
|
|
||||
EBITDA
|
|
$
|
7,922
|
|
|
$
|
(1,300
|
)
|
|
$
|
12,073
|
|
|
$
|
(15,208
|
)
|
Restaurant impairments, closure costs and asset disposals (1)
|
|
1,792
|
|
|
10,263
|
|
|
5,952
|
|
|
35,147
|
|
||||
Litigation settlements and data breach assessments (2)
|
|
—
|
|
|
—
|
|
|
3,796
|
|
|
(421
|
)
|
||||
Fees and costs related to registration statements and related transactions (3)
|
|
—
|
|
|
—
|
|
|
53
|
|
|
679
|
|
||||
Loss on extinguishment of debt (4)
|
|
—
|
|
|
—
|
|
|
626
|
|
|
—
|
|
||||
Severance costs (5)
|
|
—
|
|
|
248
|
|
|
278
|
|
|
580
|
|
||||
Stock-based compensation expense
|
|
640
|
|
|
248
|
|
|
2,232
|
|
|
1,193
|
|
||||
Adjusted EBITDA
|
|
$
|
10,354
|
|
|
$
|
9,459
|
|
|
$
|
25,010
|
|
|
$
|
21,970
|
|
(1)
|
Restaurant impairments and closure costs in all periods presented above include amounts related to restaurants previously impaired or closed. Additionally, the first three quarters of 2018 includes closure costs of the 12 restaurants closed in the first three quarters of 2018 and the impairment of one restaurant, and the first three quarters of 2017 includes the closure costs related to the 55 restaurants closed in the first quarter of 2017 and the impairment of 31 restaurants. The third quarter of 2018 and the first three quarters of 2018 also include a $0.4 million gain from insurance proceeds received for property damage in excess of the loss recognized. See Note 7, Restaurant Impairments, Closure Costs and Asset Disposals.
|
(2)
|
The first three quarters of 2018 includes a charge of $3.4 million for the final assessment related to data breach liabilities, and a $0.3 million charge for a litigation settlement related to the Delaware gift card matter. The first three quarters of 2017 includes a gain on an employment-related litigation settlement due to final settlement being less than what the Company had previously accrued.
|
(3)
|
The first three quarters of 2018 includes expenses related to the registration statement the Company filed in the second quarter of 2018. The first three quarters of 2017 includes expenses related to the registration statement the Company filed in the first quarter of 2017, which registration statement was later withdrawn.
|
(4)
|
The first three quarters of 2018 includes 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.
|
(5)
|
The first three quarters of 2018 and 2017 include severance costs from departmental structural changes.
|
|
|
Fiscal Quarter Ended
|
|
Three Fiscal Quarters Ended
|
||||||||
|
|
October 2,
2018 |
|
October 3,
2017 |
|
October 2,
2018 |
|
October 3,
2017 |
||||
Company-Owned Restaurant Activity
|
|
|
|
|
|
|
|
|
||||
Beginning of period
|
|
404
|
|
|
413
|
|
|
412
|
|
|
457
|
|
Openings
|
|
—
|
|
|
—
|
|
|
1
|
|
|
11
|
|
Closures
|
|
(3
|
)
|
|
—
|
|
|
(12
|
)
|
|
(55
|
)
|
Restaurants at end of period
|
|
401
|
|
|
413
|
|
|
401
|
|
|
413
|
|
Franchise Restaurant Activity
|
|
|
|
|
|
|
|
|
||||
Beginning of period
|
|
65
|
|
|
73
|
|
|
66
|
|
|
75
|
|
Openings
|
|
—
|
|
|
1
|
|
|
—
|
|
|
3
|
|
Closures
|
|
—
|
|
|
(8
|
)
|
|
(1
|
)
|
|
(12
|
)
|
Restaurants at end of period
|
|
65
|
|
|
66
|
|
|
65
|
|
|
66
|
|
Total restaurants
|
|
466
|
|
|
479
|
|
|
466
|
|
|
479
|
|
|
|
Fiscal Quarter Ended
|
|
Three Fiscal Quarters Ended
|
||||||||
|
|
October 2,
2018 |
|
October 3,
2017 |
|
October 2,
2018 |
|
October 3,
2017 |
||||
Revenue:
|
|
|
|
|
|
|
|
|
||||
Restaurant revenue
|
|
99.0
|
%
|
|
99.0
|
%
|
|
99.1
|
%
|
|
99.0
|
%
|
Franchising royalties and fees
|
|
1.0
|
%
|
|
1.0
|
%
|
|
0.9
|
%
|
|
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
|
|
26.5
|
%
|
|
26.5
|
%
|
|
26.6
|
%
|
|
26.9
|
%
|
Labor
|
|
32.7
|
%
|
|
32.6
|
%
|
|
32.9
|
%
|
|
33.2
|
%
|
Occupancy
|
|
10.4
|
%
|
|
11.2
|
%
|
|
10.9
|
%
|
|
11.6
|
%
|
Other restaurant operating costs
|
|
14.0
|
%
|
|
14.0
|
%
|
|
14.6
|
%
|
|
14.4
|
%
|
General and administrative
|
|
8.9
|
%
|
|
8.6
|
%
|
|
10.3
|
%
|
|
8.7
|
%
|
Depreciation and amortization
|
|
5.0
|
%
|
|
5.4
|
%
|
|
5.1
|
%
|
|
5.4
|
%
|
Pre-opening
|
|
—
|
%
|
|
0.1
|
%
|
|
—
|
%
|
|
0.3
|
%
|
Restaurant impairments, closure costs and asset disposals
|
|
1.5
|
%
|
|
9.0
|
%
|
|
1.7
|
%
|
|
10.2
|
%
|
Total costs and expenses
|
|
98.2
|
%
|
|
106.6
|
%
|
|
101.4
|
%
|
|
109.9
|
%
|
Income (loss) from operations
|
|
1.8
|
%
|
|
(6.6
|
)%
|
|
(1.4
|
)%
|
|
(9.9
|
)%
|
Loss on extinguishment of debt
|
|
—
|
%
|
|
—
|
%
|
|
0.2
|
%
|
|
—
|
%
|
Interest expense, net
|
|
0.9
|
%
|
|
0.8
|
%
|
|
1.0
|
%
|
|
0.8
|
%
|
Income (loss) before income taxes
|
|
0.9
|
%
|
|
(7.3
|
)%
|
|
(2.5
|
)%
|
|
(10.7
|
)%
|
(Benefit) provision for income taxes
|
|
—
|
%
|
|
—
|
%
|
|
(0.1
|
)%
|
|
0.1
|
%
|
Net income (loss)
|
|
0.9
|
%
|
|
(7.3
|
)%
|
|
(2.5
|
)%
|
|
(10.8
|
)%
|
(1)
|
As a percentage of restaurant revenue.
|
|
|
Fiscal Quarter Ended
|
|
Increase / (Decrease)
|
|||||||||||
|
|
October 2,
2018 |
|
October 3,
2017 |
|
$
|
|
%
|
|||||||
|
|
|
|
||||||||||||
|
|
(in thousands)
|
|||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|||||||
Restaurant revenue
|
|
$
|
115,552
|
|
|
$
|
113,020
|
|
|
$
|
2,532
|
|
|
2.2
|
%
|
Franchising royalties and fees
|
|
1,175
|
|
|
1,191
|
|
|
(16
|
)
|
|
(1.3
|
)%
|
|||
Total revenue
|
|
116,727
|
|
|
114,211
|
|
|
2,516
|
|
|
2.2
|
%
|
|||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|||||||
Restaurant operating costs (exclusive of depreciation and amortization shown separately below):
|
|
|
|
|
|
|
|
|
|||||||
Cost of sales
|
|
30,617
|
|
|
29,955
|
|
|
662
|
|
|
2.2
|
%
|
|||
Labor
|
|
37,738
|
|
|
36,897
|
|
|
841
|
|
|
2.3
|
%
|
|||
Occupancy
|
|
12,035
|
|
|
12,709
|
|
|
(674
|
)
|
|
(5.3
|
)%
|
|||
Other restaurant operating costs
|
|
16,224
|
|
|
15,811
|
|
|
413
|
|
|
2.6
|
%
|
|||
General and administrative
|
|
10,399
|
|
|
9,807
|
|
|
592
|
|
|
6.0
|
%
|
|||
Depreciation and amortization
|
|
5,790
|
|
|
6,183
|
|
|
(393
|
)
|
|
(6.4
|
)%
|
|||
Pre-opening
|
|
—
|
|
|
69
|
|
|
(69
|
)
|
|
(100.0
|
)%
|
|||
Restaurant impairments, asset disposals and closure costs
|
|
1,792
|
|
|
10,263
|
|
|
(8,471
|
)
|
|
(82.5
|
)%
|
|||
Total costs and expenses
|
|
114,595
|
|
|
121,694
|
|
|
(7,099
|
)
|
|
(5.8
|
)%
|
|||
Income (loss) from operations
|
|
2,132
|
|
|
(7,483
|
)
|
|
9,615
|
|
|
*
|
|
|||
Interest expense, net
|
|
1,093
|
|
|
893
|
|
|
200
|
|
|
22.4
|
%
|
|||
Income (loss) before income taxes
|
|
1,039
|
|
|
(8,376
|
)
|
|
9,415
|
|
|
*
|
|
|||
Benefit from income taxes
|
|
(11
|
)
|
|
(41
|
)
|
|
30
|
|
|
(73.2
|
)%
|
|||
Net income (loss)
|
|
$
|
1,050
|
|
|
$
|
(8,335
|
)
|
|
$
|
9,385
|
|
|
*
|
|
Company-owned:
|
|
|
|
|
|
|
|
|
|||||||
Average unit volumes
|
|
$
|
1,107
|
|
|
$
|
1,066
|
|
|
$
|
41
|
|
|
3.8
|
%
|
Comparable restaurant sales
|
|
5.2
|
%
|
|
(3.8
|
)%
|
|
|
|
|
|
|
*
|
Not meaningful.
|
|
|
Three Fiscal Quarters Ended
|
|
Increase / (Decrease)
|
|||||||||||
|
|
October 2,
2018 |
|
October 3,
2017 |
|
$
|
|
%
|
|||||||
|
|
|
|
||||||||||||
|
|
(in thousands, except percentages)
|
|||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|||||||
Restaurant revenue
|
|
$
|
341,616
|
|
|
$
|
340,175
|
|
|
$
|
1,441
|
|
|
0.4
|
%
|
Franchising royalties and fees
|
|
3,032
|
|
|
3,543
|
|
|
(511
|
)
|
|
(14.4
|
)%
|
|||
Total revenue
|
|
344,648
|
|
|
343,718
|
|
|
930
|
|
|
0.3
|
%
|
|||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|||||||
Restaurant operating costs (exclusive of depreciation and amortization shown separately below):
|
|
|
|
|
|
|
|
|
|||||||
Cost of sales
|
|
90,962
|
|
|
91,640
|
|
|
(678
|
)
|
|
(0.7
|
)%
|
|||
Labor
|
|
112,353
|
|
|
112,921
|
|
|
(568
|
)
|
|
(0.5
|
)%
|
|||
Occupancy
|
|
37,155
|
|
|
39,340
|
|
|
(2,185
|
)
|
|
(5.6
|
)%
|
|||
Other restaurant operating costs
|
|
49,997
|
|
|
49,152
|
|
|
845
|
|
|
1.7
|
%
|
|||
General and administrative
|
|
35,480
|
|
|
29,866
|
|
|
5,614
|
|
|
18.8
|
%
|
|||
Depreciation and amortization
|
|
17,407
|
|
|
18,729
|
|
|
(1,322
|
)
|
|
(7.1
|
)%
|
|||
Pre-opening
|
|
50
|
|
|
860
|
|
|
(810
|
)
|
|
(94.2
|
)%
|
|||
Restaurant impairments, asset disposals and closure costs
|
|
5,952
|
|
|
35,147
|
|
|
(29,195
|
)
|
|
(83.1
|
)%
|
|||
Total costs and expenses
|
|
349,356
|
|
|
377,655
|
|
|
(28,299
|
)
|
|
(7.5
|
)%
|
|||
Loss from operations
|
|
(4,708
|
)
|
|
(33,937
|
)
|
|
29,229
|
|
|
86.1
|
%
|
|||
Loss on extinguishment of debt
|
|
626
|
|
|
—
|
|
|
626
|
|
|
100.0
|
%
|
|||
Interest expense, net
|
|
3,385
|
|
|
2,828
|
|
|
557
|
|
|
19.7
|
%
|
|||
Loss before income taxes
|
|
(8,719
|
)
|
|
(36,765
|
)
|
|
28,046
|
|
|
76.3
|
%
|
|||
(Benefit) provision for income taxes
|
|
(259
|
)
|
|
230
|
|
|
(489
|
)
|
|
*
|
|
|||
Net loss
|
|
$
|
(8,460
|
)
|
|
$
|
(36,995
|
)
|
|
$
|
28,535
|
|
|
77.1
|
%
|
Company-owned:
|
|
|
|
|
|
|
|
|
|||||||
Average unit volumes
|
|
$
|
1,107
|
|
|
$
|
1,066
|
|
|
$
|
41
|
|
|
3.8
|
%
|
Comparable restaurant sales
|
|
3.3
|
%
|
|
(3.4
|
)%
|
|
|
|
|
|
|
*
|
Not meaningful.
|
|
|
Three Fiscal Quarters Ended
|
||||||
|
|
October 2,
2018 |
|
October 3,
2017 |
||||
Net cash used in operating activities
|
|
$
|
(4,868
|
)
|
|
$
|
(6,929
|
)
|
Net cash used in investing activities
|
|
(9,437
|
)
|
|
(17,468
|
)
|
||
Net cash provided by financing activities
|
|
12,862
|
|
|
24,652
|
|
||
Effect of exchange rate changes on cash
|
|
$
|
—
|
|
|
$
|
(4
|
)
|
Net (decrease) increase in cash and cash equivalents
|
|
$
|
(1,443
|
)
|
|
$
|
251
|
|
Exhibit Number
|
|
Description of Exhibit
|
|
10.1
|
|
|
|
31.1
|
|
|
|
32.1
|
|
|
|
101.INS
|
|
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
|
101.SCH
|
|
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF
|
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB
|
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE
|
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
NOODLES & COMPANY
|
|
By:
|
/s/ DAVE BOENNIGHAUSEN
|
|
Dave Boennighausen
Chief Executive Officer and Principal Financial Officer
|
Date
|
October 23, 2018
|
•
|
Your start date is TBD, as agreed to by you and Noodles & Company.
|
•
|
Your title is Chief Financial Officer.
|
•
|
You will report to Dave Boennighausen, CEO.
|
•
|
Your base pay will be $325,000 on an annual basis, paid bi-weekly, less payroll deductions and all required withholdings.
|
•
|
You will also receive an initial grant valued at $300,000 comprised of 40% nonqualified stock options and 60% restricted stock units (RSUs), under the Company’s Stock Incentive Plan. The grant shall have a 4-year level vesting period.
|
•
|
You will be eligible for an annual merit review for fiscal year 2018 so long as you remain employed with Noodles & Company. The review might lead to an increase in your compensation and is tied to your annual performance review and performance criteria.
|
•
|
You will be eligible to participate in the 2018 Company Bonus Program depending on both the company’s and your performance. Your bonus target is 40% of your annual salary. You must be actively employed by Noodles & Company at the time the bonus is paid out. The terms and conditions of the bonus plan may vary from year to year. For fiscal year 2018, your bonus will be pro-rated, based on your start date.
|
•
|
Noodles & Company offers a variety of benefits for you, your spouse or domestic partner, and your family. Please refer to the 2018-2019 Employee Benefits Summary included with this letter for additional information. You will be able to enroll for your benefits online 48 hours after your start date. If you choose to enroll, your benefits will be effective on the 1st of the month following 30 days from your start date. Employee health premiums are deducted from each bi-weekly paycheck on a pre-tax basis. Please note the deadline for benefits enrollment is 30 days from your benefits effective date.
|
•
|
You will be eligible for a monthly car allowance of $750/month.
|
•
|
Noodles & Company has agreed to provide you with a relocation allowance of $50,000 (net). Please review and sign the terms and conditions contained in Noodles & Company Cash Advance Agreement.
|
•
|
You will be entitled to a 9-month severance agreement if you are terminated without cause, subject to approval by the Compensation Committee of Noodles & Company Board of Directors.
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
/s/ DAVE BOENNIGHAUSEN
|
|
|
Dave Boennighausen
|
|
|
Chief Executive Officer
(Principal Executive Officer and Principal Financial Officer)
|
|
By:
|
|
/s/ DAVE BOENNIGHAUSEN
|
|
Name:
|
|
Dave Boennighausen
|
|
Title:
|
|
Chief Executive Officer and Principal Financial Officer
|