Delaware
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84-1303469
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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520 Zang Street, Suite D
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Broomfield,
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CO
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80021
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Trading Symbol
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Name of each exchange on which registered
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Class A Common Stock, $0.01 par value per share
|
NDLS
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Nasdaq Global Select Market
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Large accelerated filer
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☐
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Accelerated Filer
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☒
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Non-accelerated filer
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☐
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Smaller reporting company
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☒
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Emerging growth company
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☐
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Class
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Outstanding at June 12, 2020
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Class A Common Stock, $0.01 par value per share
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44,239,120 shares
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Page
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March 31,
2020 |
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December 31,
2019 |
||||
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(unaudited)
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|
||||
Assets
|
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|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
50,530
|
|
|
$
|
10,459
|
|
Accounts receivable
|
|
1,926
|
|
|
3,503
|
|
||
Inventories
|
|
9,538
|
|
|
9,871
|
|
||
Prepaid expenses and other assets
|
|
2,707
|
|
|
5,386
|
|
||
Income tax receivable
|
|
155
|
|
|
103
|
|
||
Total current assets
|
|
64,856
|
|
|
29,322
|
|
||
Property and equipment, net
|
|
128,669
|
|
|
128,867
|
|
||
Operating lease assets, net
|
|
210,254
|
|
|
209,717
|
|
||
Goodwill
|
|
7,154
|
|
|
7,154
|
|
||
Intangibles, net
|
|
868
|
|
|
883
|
|
||
Other assets, net
|
|
2,378
|
|
|
2,576
|
|
||
Total long-term assets
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|
349,323
|
|
|
349,197
|
|
||
Total assets
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|
$
|
414,179
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$
|
378,519
|
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Liabilities and Stockholders’ Equity
|
|
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|
||||
Current liabilities:
|
|
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|
||||
Accounts payable
|
|
$
|
9,350
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$
|
9,351
|
|
Accrued payroll and benefits
|
|
7,119
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|
|
13,479
|
|
||
Accrued expenses and other current liabilities
|
|
9,898
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|
|
11,679
|
|
||
Current operating lease liabilities
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|
22,982
|
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|
22,775
|
|
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Current portion of long-term debt
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|
750
|
|
|
750
|
|
||
Total current liabilities
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|
50,099
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|
58,034
|
|
||
Long-term debt, net
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|
85,382
|
|
|
40,497
|
|
||
Long-term operating lease liabilities, net
|
|
228,232
|
|
|
225,014
|
|
||
Deferred tax liabilities, net
|
|
214
|
|
|
200
|
|
||
Other long-term liabilities
|
|
5,346
|
|
|
4,203
|
|
||
Total liabilities
|
|
369,273
|
|
|
327,948
|
|
||
|
|
|
|
|
||||
Stockholders’ equity:
|
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|
|
|
||||
Preferred stock—$0.01 par value, 1,000,000 shares authorized and undesignated as of March 31, 2020 and December 31, 2019; no shares issued or outstanding
|
|
—
|
|
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—
|
|
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Common stock—$0.01 par value, 180,000,000 shares authorized as of March 31, 2020 and December 31, 2019; 46,583,879 issued and 44,160,008 outstanding as of March 31, 2020 and 46,557,934 issued and 44,134,063 outstanding as of December 31, 2019
|
|
466
|
|
|
466
|
|
||
Treasury stock, at cost, 2,423,871 shares as of March 31, 2020 and December 31, 2019
|
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(35,000
|
)
|
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(35,000
|
)
|
||
Additional paid-in capital
|
|
200,755
|
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|
200,585
|
|
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Accumulated deficit
|
|
(121,315
|
)
|
|
(115,480
|
)
|
||
Total stockholders’ equity
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|
44,906
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|
|
50,571
|
|
||
Total liabilities and stockholders’ equity
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|
$
|
414,179
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|
$
|
378,519
|
|
|
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Fiscal Quarter Ended
|
||||||
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March 31,
2020 |
|
April 2,
2019 |
||||
Revenue:
|
|
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|
||||
Restaurant revenue
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|
$
|
98,716
|
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$
|
108,765
|
|
Franchising royalties and fees, and other
|
|
1,632
|
|
|
1,281
|
|
||
Total revenue
|
|
100,348
|
|
|
110,046
|
|
||
Costs and expenses:
|
|
|
|
|
||||
Restaurant operating costs (exclusive of depreciation and amortization shown separately below):
|
|
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|
||||
Cost of sales
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25,204
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|
29,091
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|
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Labor
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34,231
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37,092
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|
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Occupancy
|
|
12,060
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12,430
|
|
||
Other restaurant operating costs
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|
16,689
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16,456
|
|
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General and administrative
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10,554
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10,140
|
|
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Depreciation and amortization
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|
5,335
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|
|
5,507
|
|
||
Pre-opening
|
|
73
|
|
|
—
|
|
||
Restaurant impairments, closure costs and asset disposals
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|
1,056
|
|
|
420
|
|
||
Total costs and expenses
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|
105,202
|
|
|
111,136
|
|
||
Loss from operations
|
|
(4,854
|
)
|
|
(1,090
|
)
|
||
Interest expense, net
|
|
968
|
|
|
761
|
|
||
Loss before taxes
|
|
(5,822
|
)
|
|
(1,851
|
)
|
||
Provision for income taxes
|
|
13
|
|
|
—
|
|
||
Net loss and comprehensive loss
|
|
$
|
(5,835
|
)
|
|
$
|
(1,851
|
)
|
Loss per Class A and Class B common stock, combined
|
|
|
|
|
||||
Basic
|
|
$
|
(0.13
|
)
|
|
$
|
(0.04
|
)
|
Diluted
|
|
$
|
(0.13
|
)
|
|
$
|
(0.04
|
)
|
Weighted average shares of Class A and Class B common stock outstanding, combined:
|
|
|
|
|
||||
Basic
|
|
44,142,220
|
|
|
43,933,235
|
|
||
Diluted
|
|
44,142,220
|
|
|
43,933,235
|
|
|
|
Fiscal Quarter Ended
|
||||||||||||||||||||||||
|
|
Common Stock(1) (2)
|
|
Treasury
|
|
Additional Paid-In
Capital |
|
Accumulated
Deficit |
|
Total
Stockholders’ Equity |
||||||||||||||||
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|||||||||||||||||
Balance—December 31, 2019
|
|
46,557,934
|
|
|
$
|
466
|
|
|
2,423,871
|
|
|
$
|
(35,000
|
)
|
|
$
|
200,585
|
|
|
$
|
(115,480
|
)
|
|
$
|
50,571
|
|
Stock plan transactions and other
|
|
25,945
|
|
|
—
|
|
|
—
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|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||||
Stock-based compensation expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
171
|
|
|
—
|
|
|
171
|
|
|||||
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,835
|
)
|
|
(5,835
|
)
|
|||||
Balance—March 31, 2020
|
|
46,583,879
|
|
|
$
|
466
|
|
|
2,423,871
|
|
|
$
|
(35,000
|
)
|
|
$
|
200,755
|
|
|
$
|
(121,315
|
)
|
|
$
|
44,906
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance—January 1, 2019
|
|
46,353,309
|
|
|
$
|
464
|
|
|
2,423,871
|
|
|
$
|
(35,000
|
)
|
|
$
|
198,352
|
|
|
$
|
(111,135
|
)
|
|
$
|
52,681
|
|
Stock plan transactions and other
|
|
17,642
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21
|
|
|
—
|
|
|
21
|
|
|||||
Stock-based compensation expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
737
|
|
|
—
|
|
|
737
|
|
|||||
Adoption of ASU No. 2016-02, Leases (Topic 842)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,992
|
)
|
|
(5,992
|
)
|
|||||
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,851
|
)
|
|
(1,851
|
)
|
|||||
Balance—April 2, 2019
|
|
46,370,951
|
|
|
$
|
464
|
|
|
2,423,871
|
|
|
$
|
(35,000
|
)
|
|
$
|
199,110
|
|
|
$
|
(118,978
|
)
|
|
$
|
45,596
|
|
(1)
|
Unless otherwise noted, activity relates to Class A common stock.
|
|
|
Fiscal Quarter Ended
|
||||||
|
|
March 31,
2020 |
|
April 2,
2019 |
||||
Operating activities
|
|
|
|
|
||||
Net loss
|
|
$
|
(5,835
|
)
|
|
$
|
(1,851
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
|
||||
Depreciation and amortization
|
|
5,335
|
|
|
5,507
|
|
||
Deferred income taxes
|
|
13
|
|
|
—
|
|
||
Restaurant impairments, closure costs and asset disposals
|
|
750
|
|
|
145
|
|
||
Amortization of debt issuance costs
|
|
73
|
|
|
125
|
|
||
Stock-based compensation
|
|
159
|
|
|
726
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
||||
Accounts receivable
|
|
1,577
|
|
|
362
|
|
||
Inventories
|
|
304
|
|
|
(223
|
)
|
||
Prepaid expenses and other assets
|
|
1,131
|
|
|
50
|
|
||
Accounts payable
|
|
(106
|
)
|
|
2,798
|
|
||
Income taxes
|
|
(52
|
)
|
|
(6
|
)
|
||
Operating lease assets and liabilities
|
|
2,885
|
|
|
(328
|
)
|
||
Accrued expenses and other liabilities
|
|
(6,892
|
)
|
|
(7,191
|
)
|
||
Net cash (used in) provided by operating activities
|
|
(658
|
)
|
|
114
|
|
||
Investing activities
|
|
|
|
|
||||
Purchases of property and equipment
|
|
(3,919
|
)
|
|
(4,164
|
)
|
||
Franchise restaurant acquisition, net of cash acquired
|
|
—
|
|
|
(1,387
|
)
|
||
Net cash used in investing activities
|
|
(3,919
|
)
|
|
(5,551
|
)
|
||
Financing activities
|
|
|
|
|
||||
Net payments from swing line loan
|
|
—
|
|
|
3,071
|
|
||
Proceeds from issuance of long-term debt
|
|
47,000
|
|
|
—
|
|
||
Payments on long-term debt
|
|
(2,188
|
)
|
|
(313
|
)
|
||
Payments on finance leases
|
|
(163
|
)
|
|
(197
|
)
|
||
Stock plan transactions and tax withholding on share-based compensation awards
|
|
(1
|
)
|
|
21
|
|
||
Net cash provided by financing activities
|
|
44,648
|
|
|
2,582
|
|
||
Net increase (decrease) in cash and cash equivalents
|
|
40,071
|
|
|
(2,855
|
)
|
||
Cash and cash equivalents
|
|
|
|
|
||||
Beginning of period
|
|
10,459
|
|
|
4,655
|
|
||
End of period
|
|
$
|
50,530
|
|
|
$
|
1,800
|
|
|
|
March 31,
2020 |
|
December 31,
2019 |
||||
Insurance receivable
|
|
$
|
—
|
|
|
$
|
744
|
|
Vendor rebate receivables
|
|
551
|
|
|
788
|
|
||
Franchise and other receivables
|
|
1,375
|
|
|
1,971
|
|
||
|
|
$
|
1,926
|
|
|
$
|
3,503
|
|
|
|
March 31,
2020 |
|
December 31,
2019 |
||||
Prepaid occupancy related costs
|
|
$
|
16
|
|
|
$
|
834
|
|
Other prepaid expenses
|
|
2,685
|
|
|
2,799
|
|
||
Other current assets (1)
|
|
6
|
|
|
1,753
|
|
||
|
|
$
|
2,707
|
|
|
$
|
5,386
|
|
(1)
|
Other current assets as of December 31, 2019 included assets held in connection with the divestiture of nine company-owned restaurants to a franchisee (“RCRG Sale”) which closed in January 2020.
|
|
|
March 31,
2020 |
|
December 31,
2019 |
||||
Leasehold improvements
|
|
$
|
201,895
|
|
|
$
|
200,580
|
|
Furniture, fixtures and equipment
|
|
125,025
|
|
|
122,752
|
|
||
Construction in progress
|
|
3,621
|
|
|
2,890
|
|
||
|
|
330,541
|
|
|
326,222
|
|
||
Accumulated depreciation and amortization
|
|
(201,872
|
)
|
|
(197,355
|
)
|
||
Property and equipment, net
|
|
$
|
128,669
|
|
|
$
|
128,867
|
|
|
|
March 31,
2020 |
|
December 31,
2019 |
||||
Accrued payroll and related liabilities
|
|
$
|
2,661
|
|
|
$
|
6,364
|
|
Accrued bonus
|
|
707
|
|
|
3,505
|
|
||
Insurance liabilities
|
|
3,751
|
|
|
3,610
|
|
||
|
|
$
|
7,119
|
|
|
$
|
13,479
|
|
|
|
March 31,
2020 |
|
December 31,
2019 |
||||
Gift card liability
|
|
$
|
1,872
|
|
|
$
|
2,398
|
|
Occupancy related
|
|
1,532
|
|
|
1,458
|
|
||
Utilities
|
|
1,158
|
|
|
1,379
|
|
||
Deferred revenue
|
|
1,171
|
|
|
555
|
|
||
Current portion of finance lease liability
|
|
753
|
|
|
510
|
|
||
Other accrued expenses (1)
|
|
3,412
|
|
|
5,379
|
|
||
Accrued expenses and other current liabilities
|
|
$
|
9,898
|
|
|
$
|
11,679
|
|
(1)
|
Other accrued expenses as of December 31, 2019 included liabilities held in connection with the RCRG Sale which closed in January 2020.
|
Year 1
|
$
|
750
|
|
Year 2
|
1,125
|
|
|
Year 3
|
1,813
|
|
|
Year 4
|
2,313
|
|
|
Year 5
|
81,430
|
|
|
Total
|
$
|
87,431
|
|
|
|
Fiscal Quarter Ended
|
||||||
|
|
March 31,
2020 |
|
April 2,
2019 |
||||
Provision for income taxes
|
|
$
|
13
|
|
|
$
|
—
|
|
Effective tax rate
|
|
(0.2
|
)%
|
|
—
|
%
|
|
Fiscal Quarter Ended
|
||||||
|
March 31,
2020 |
|
April 2,
2019 |
||||
Stock-based compensation expense
|
$
|
159
|
|
|
$
|
726
|
|
Capitalized stock-based compensation expense
|
$
|
12
|
|
|
$
|
11
|
|
|
Fiscal Quarter Ended
|
||||||
|
March 31,
2020 |
|
April 2,
2019 |
||||
Restaurant impairments (1)
|
$
|
127
|
|
|
$
|
189
|
|
Closure costs (1)
|
213
|
|
|
(39
|
)
|
||
Loss on disposal of assets and other
|
716
|
|
|
270
|
|
||
|
$
|
1,056
|
|
|
$
|
420
|
|
(1)
|
Restaurant impairments and closure costs in all periods presented above include amounts related to restaurants previously impaired or closed.
|
|
|
Fiscal Quarter Ended
|
||||||
|
|
March 31,
2020 |
|
April 2,
2019 |
||||
Net loss
|
|
$
|
(5,835
|
)
|
|
$
|
(1,851
|
)
|
Shares:
|
|
|
|
|
||||
Basic weighted average shares outstanding
|
|
44,142,220
|
|
|
43,933,235
|
|
||
Effect of dilutive securities
|
|
—
|
|
|
—
|
|
||
Diluted weighted average shares outstanding
|
|
44,142,220
|
|
|
43,933,235
|
|
||
Loss per share:
|
|
|
|
|
||||
Basic loss per share
|
|
$
|
(0.13
|
)
|
|
$
|
(0.04
|
)
|
Diluted loss per share
|
|
$
|
(0.13
|
)
|
|
$
|
(0.04
|
)
|
Classification
|
March 31,
2020 |
|
December 31,
2019 |
|||||
Assets
|
|
|
|
|
||||
Operating
|
Operating lease assets, net
|
$
|
210,254
|
|
|
$
|
209,717
|
|
Finance
|
Finance lease assets, net (1)
|
2,112
|
|
|
771
|
|
||
Total leased assets
|
|
$
|
212,366
|
|
|
$
|
210,488
|
|
Liabilities
|
|
|
|
|
||||
Current lease liabilities
|
|
|
|
|
||||
Operating
|
Current operating lease liabilities
|
$
|
22,982
|
|
|
$
|
22,775
|
|
Finance
|
Current finance lease liabilities (2)
|
753
|
|
|
510
|
|
||
Long-term lease liabilities
|
|
|
|
|
||||
Operating
|
Long-term operating lease liabilities
|
228,232
|
|
|
225,014
|
|
||
Finance
|
Long-term finance lease liabilities (2)
|
1,382
|
|
|
281
|
|
||
Total lease liabilities
|
|
$
|
253,349
|
|
|
$
|
248,580
|
|
(1)
|
The finance lease assets are included in property and equipment, net in the Condensed Consolidated Balance Sheets.
|
(2)
|
The current portion of the finance lease liabilities is included in accrued expenses and other current liabilities, and the long-term portion was included in other long-term liabilities in the Condensed Consolidated Balance Sheets.
|
|
|
Fiscal Quarter Ended
|
||||||
|
|
March 31,
2020 |
|
April 2,
2019 |
||||
Cash paid for lease liabilities:
|
|
|
|
|
||||
Operating leases
|
|
$
|
7,508
|
|
|
$
|
10,693
|
|
Finance leases
|
|
182
|
|
|
217
|
|
||
|
|
$
|
7,690
|
|
|
$
|
10,910
|
|
Right-of-use assets obtained in exchange for new lease liabilities:
|
|
|
|
|
||||
Operating leases
|
|
$
|
5,724
|
|
|
$
|
3,161
|
|
Finance leases
|
|
1,604
|
|
|
50
|
|
||
|
|
$
|
7,328
|
|
|
$
|
3,211
|
|
|
Operating Leases
|
|
Finance Leases
|
|
Total
|
||||||
Remainder of 2020
|
$
|
32,784
|
|
|
$
|
670
|
|
|
$
|
33,454
|
|
2021
|
43,135
|
|
|
624
|
|
|
43,759
|
|
|||
2022
|
42,968
|
|
|
482
|
|
|
43,450
|
|
|||
2023
|
41,681
|
|
|
352
|
|
|
42,033
|
|
|||
2024
|
39,572
|
|
|
143
|
|
|
39,715
|
|
|||
Thereafter
|
160,751
|
|
|
37
|
|
|
160,788
|
|
|||
Total lease payments
|
360,891
|
|
|
2,308
|
|
|
363,199
|
|
|||
Less: Imputed interest
|
109,677
|
|
|
173
|
|
|
109,850
|
|
|||
Present value of lease liabilities
|
$
|
251,214
|
|
|
$
|
2,135
|
|
|
$
|
253,349
|
|
|
|
March 31,
2020 |
|
April 2,
2019 |
||||
Interest paid (net of amounts capitalized)
|
|
$
|
598
|
|
|
$
|
713
|
|
Income taxes paid
|
|
—
|
|
|
6
|
|
||
Purchases of property and equipment accrued in accounts payable
|
|
2,593
|
|
|
1,270
|
|
•
|
Introduced direct delivery nationwide through the Noodles app and website and expanded our partnership with Uber Eats;
|
•
|
Launched curbside delivery at the majority of our restaurants;
|
•
|
Implemented enhanced health and safety protocols across the business, emergency sick pay for hourly employees and telecommuting for the majority of our corporate employees;
|
•
|
Meaningfully reduced restaurant level costs and general and administrative expenses, including salary reductions for executives and support center employees, furloughing approximately 10% of existing support center employees and an additional 20% of support center employees reduced to half time;
|
•
|
Postponed or eliminated all non-essential spending, including capital expenditures for previously planned growth and certain additional capital projects, as further described below;
|
•
|
Began engagement with landlords to negotiate concessions for rent on many of our restaurant leases, and;
|
•
|
Drew down $47.0 million on our revolver, bringing our cash balance to $50.5 million as of the end of the first quarter of 2020 and drew down an additional $8.5 million on our revolver in April 2020. As of June 17, 2020, the date of this filing, our current cash balance was $62.4 million.
|
Comparable Restaurant Sales
|
4 Weeks Ended January 28, 2020 (first period)
|
4 Weeks Ended February 25, 2020 (second period)
|
2 Weeks Ended March 10, 2020
|
March 11-March 31, 2020
|
Fiscal Quarter Ended March 31, 2020
|
Company-owned
|
4.4%
|
7.4%
|
4.5%
|
(45.5)%
|
(7.0)%
|
Franchise
|
2.2%
|
7.7%
|
5.2%
|
(51.3)%
|
(8.9)%
|
System-wide
|
4.1%
|
7.5%
|
4.6%
|
(46.3)%
|
(7.2)%
|
Comparable Restaurant Sales
|
4 Weeks Ended April 28, 2020 (fourth period)
|
4 Weeks Ended May 26, 2020 (fifth period)
|
Week Ended June 2, 2020
|
Week Ended June 9, 2020
|
Week Ended June 16, 2020
|
Quarter to Date June 16, 2020
|
Company-owned
|
(47.0)%
|
(28.9)%
|
(23.2)%
|
(20.2)%
|
(14.8)%
|
(33.2)%
|
Franchise
|
(55.5)%
|
(37.3)%
|
(25.7)%
|
(23.2)%
|
(16.8)%
|
(39.8)%
|
System-wide
|
(48.2)%
|
(30.1)%
|
(23.6)%
|
(20.6)%
|
(15.1)%
|
(34.1)%
|
•
|
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;
|
•
|
abnormal weather patterns;
|
•
|
food safety and foodborne illness concerns;
|
•
|
the impact of the COVID-19 pandemic;
|
•
|
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
|
||||||
|
|
March 31,
2020 |
|
April 2,
2019 |
||||
|
|
(in thousands, unaudited)
|
||||||
Net loss
|
|
$
|
(5,835
|
)
|
|
$
|
(1,851
|
)
|
Depreciation and amortization
|
|
5,335
|
|
|
5,507
|
|
||
Interest expense, net
|
|
968
|
|
|
761
|
|
||
Provision for income taxes
|
|
13
|
|
|
—
|
|
||
EBITDA
|
|
$
|
481
|
|
|
$
|
4,417
|
|
Restaurant impairments, closure costs and asset disposals (1)
|
|
1,056
|
|
|
420
|
|
||
Stock-based compensation expense
|
|
159
|
|
|
726
|
|
||
Fees and costs related to transactions and other acquisition/disposition costs
|
|
89
|
|
|
36
|
|
||
Adjusted EBITDA
|
|
$
|
1,785
|
|
|
$
|
5,599
|
|
(1)
|
Restaurant impairments and closure costs in all periods presented above include amounts related to restaurants previously impaired or closed. See Note 7, Restaurant Impairments, Closure Costs and Asset Disposals.
|
|
|
Fiscal Quarter Ended
|
||||
|
|
March 31,
2020 |
|
April 2,
2019 |
||
Company-Owned Restaurant Activity
|
|
|
|
|
||
Beginning of period
|
|
389
|
|
|
394
|
|
Openings
|
|
1
|
|
|
—
|
|
Acquisition (2)
|
|
—
|
|
|
1
|
|
Divestitures (1)
|
|
(9
|
)
|
|
—
|
|
Restaurants at end of period
|
|
381
|
|
|
395
|
|
Franchise Restaurant Activity
|
|
|
|
|
||
Beginning of period
|
|
68
|
|
|
65
|
|
Openings
|
|
—
|
|
|
—
|
|
Acquisitions (1)
|
|
9
|
|
|
—
|
|
Divestiture (2)
|
|
—
|
|
|
(1
|
)
|
Restaurants at end of period
|
|
77
|
|
|
64
|
|
Total restaurants
|
|
458
|
|
|
459
|
|
(1)
|
Represents nine company-owned restaurants sold to a franchisee.
|
(2)
|
During the first quarter of 2019 we acquired one franchise restaurant.
|
|
|
Fiscal Quarter Ended
|
||||
|
|
March 31,
2020 |
|
April 2,
2019 |
||
|
|
(unaudited)
|
||||
Revenue:
|
|
|
|
|
||
Restaurant revenue
|
|
98.4
|
%
|
|
98.8
|
%
|
Franchising royalties and fees, and other
|
|
1.6
|
%
|
|
1.2
|
%
|
Total revenue
|
|
100.0
|
%
|
|
100.0
|
%
|
Costs and expenses:
|
|
|
|
|
||
Restaurant operating costs (exclusive of depreciation and amortization shown separately below):
|
|
|
|
|
||
Cost of sales
|
|
25.5
|
%
|
|
26.7
|
%
|
Labor
|
|
34.7
|
%
|
|
34.1
|
%
|
Occupancy
|
|
12.2
|
%
|
|
11.4
|
%
|
Other restaurant operating costs
|
|
16.9
|
%
|
|
15.1
|
%
|
General and administrative
|
|
10.5
|
%
|
|
9.2
|
%
|
Depreciation and amortization
|
|
5.3
|
%
|
|
5.0
|
%
|
Pre-opening
|
|
0.1
|
%
|
|
—
|
%
|
Restaurant impairments, closure costs and asset disposals
|
|
1.1
|
%
|
|
0.4
|
%
|
Total costs and expenses
|
|
104.8
|
%
|
|
101.0
|
%
|
Loss from operations
|
|
(4.8
|
)%
|
|
(1.0
|
)%
|
Interest expense, net
|
|
1.0
|
%
|
|
0.7
|
%
|
Loss before taxes
|
|
(5.8
|
)%
|
|
(1.7
|
)%
|
Provision for income taxes
|
|
—
|
%
|
|
—
|
%
|
Net loss
|
|
(5.8
|
)%
|
|
(1.7
|
)%
|
|
|
Fiscal Quarter Ended
|
|
Increase / (Decrease)
|
|||||||||||
|
|
March 31,
2020 |
|
April 2,
2019 |
|
$
|
|
%
|
|||||||
|
|
|
|
||||||||||||
|
|
(in thousands, unaudited)
|
|||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|||||||
Restaurant revenue
|
|
$
|
98,716
|
|
|
$
|
108,765
|
|
|
$
|
(10,049
|
)
|
|
(9.2
|
)%
|
Franchising royalties and fees, and other
|
|
1,632
|
|
|
1,281
|
|
|
351
|
|
|
27.4
|
%
|
|||
Total revenue
|
|
100,348
|
|
|
110,046
|
|
|
(9,698
|
)
|
|
(8.8
|
)%
|
|||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|||||||
Restaurant operating costs (exclusive of depreciation and amortization shown separately below):
|
|
|
|
|
|
|
|
|
|||||||
Cost of sales
|
|
25,204
|
|
|
29,091
|
|
|
(3,887
|
)
|
|
(13.4
|
)%
|
|||
Labor
|
|
34,231
|
|
|
37,092
|
|
|
(2,861
|
)
|
|
(7.7
|
)%
|
|||
Occupancy
|
|
12,060
|
|
|
12,430
|
|
|
(370
|
)
|
|
(3.0
|
)%
|
|||
Other restaurant operating costs
|
|
16,689
|
|
|
16,456
|
|
|
233
|
|
|
1.4
|
%
|
|||
General and administrative
|
|
10,554
|
|
|
10,140
|
|
|
414
|
|
|
4.1
|
%
|
|||
Depreciation and amortization
|
|
5,335
|
|
|
5,507
|
|
|
(172
|
)
|
|
(3.1
|
)%
|
|||
Pre-opening
|
|
73
|
|
|
—
|
|
|
73
|
|
|
100.0
|
%
|
|||
Restaurant impairments, closure costs and asset disposals
|
|
1,056
|
|
|
420
|
|
|
636
|
|
|
*
|
|
|||
Total costs and expenses
|
|
105,202
|
|
|
111,136
|
|
|
(5,934
|
)
|
|
(5.3
|
)%
|
|||
Loss from operations
|
|
(4,854
|
)
|
|
(1,090
|
)
|
|
(3,764
|
)
|
|
*
|
|
|||
Interest expense, net
|
|
968
|
|
|
761
|
|
|
207
|
|
|
27.2
|
%
|
|||
Loss before taxes
|
|
(5,822
|
)
|
|
(1,851
|
)
|
|
(3,971
|
)
|
|
*
|
|
|||
Provision for income taxes
|
|
13
|
|
|
—
|
|
|
13
|
|
|
100.0
|
%
|
|||
Net loss
|
|
$
|
(5,835
|
)
|
|
$
|
(1,851
|
)
|
|
$
|
(3,984
|
)
|
|
*
|
|
Company-owned:
|
|
|
|
|
|
|
|
|
|||||||
Average unit volume
|
|
$
|
1,145
|
|
|
$
|
1,131
|
|
|
$
|
14
|
|
|
1.2
|
%
|
Comparable restaurant sales
|
|
(7.0
|
)%
|
|
3.0
|
%
|
|
|
|
|
*
|
Not meaningful.
|
|
|
Fiscal Quarter Ended
|
||||||
|
|
March 31,
2020 |
|
April 2,
2019 |
||||
Net cash (used in) provided by operating activities
|
|
$
|
(658
|
)
|
|
$
|
114
|
|
Net cash used in investing activities
|
|
(3,919
|
)
|
|
(5,551
|
)
|
||
Net cash provided by financing activities
|
|
44,648
|
|
|
2,582
|
|
||
Net increase (decrease) in cash and cash equivalents
|
|
$
|
40,071
|
|
|
$
|
(2,855
|
)
|
•
|
We have experienced and we expect we will continue to experience significant reductions in demand for our products as customers may not be able to dine at our restaurants due to illness, quarantine or government or self-imposed restrictions placed on our restaurants' operations. From the last half of March through May 2020, nearly all of our dining rooms were closed due to the COVID-19 pandemic. We have begun reopening dining rooms in certain restaurants and will continue to open the remaining dining rooms as appropriate. Additionally, social distancing measures or changes in consumer spending behaviors due to the COVID-19 pandemic as customers choose to avoid public gathering places may continue to impact traffic in our restaurants after they resume normal operations and such actions could result in a loss of sales and profit.
|
•
|
The impact of a health pandemic on us might be disproportionately greater than on other dining concepts that depend less on the gathering of people. To the extent that a virus or disease is food-borne, or perceived to be food-borne, future outbreaks may adversely affect the price and availability of certain food products and cause our customers to eat less of a product.
|
•
|
Depending on the severity and the duration of the COVID-19 pandemic, our franchisees may not be able to meet the franchise royalty fee obligations that we have historically received. We are working with our franchisees to support their financial liquidity during this period of uncertainty. We have granted deferral of certain royalties, information technology support, and marketing fees earned from franchisees.
|
•
|
Depending on the severity and the duration of the COVID-19 pandemic, our liquidity may be further negatively impacted, as a result, we may be required to pursue additional sources of financing to meet our financial obligations. Obtaining such financing is not guaranteed and is largely dependent upon market conditions and other factors. Further actions may be required to improve our cash position, including but not limited to, further reductions of corporate expenses and foregoing additional capital expenditures and other discretionary expenses.
|
•
|
As more business and activities have shifted online due to the COVID-19 pandemic restrictions on congregating and physical movements, we have seen an increase in cyber security threats and attempts to breach our security networks.
|
Exhibit Number
|
|
Description of Exhibit
|
|
10.1
|
|
|
|
10.2
|
|
|
|
10.3*
|
|
|
|
10.4
|
|
|
|
31.1
|
|
|
|
31.2
|
|
|
|
32.1
|
|
|
|
101.INS
|
|
|
Inline 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
|
|
|
Inline XBRL Taxonomy Extension Schema Document
|
101.CAL
|
|
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF
|
|
|
Inline XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB
|
|
|
Inline XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE
|
|
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document
|
104.0
|
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Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
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NOODLES & COMPANY
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By:
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/s/ KEN KUICK
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Ken Kuick
Chief Financial Officer (principal financial officer and duly authorized signatory for the registrant)
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Date
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June 17, 2020
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THE COMPANY:
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NOODLES & COMPANY
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By:
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Name:
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Title:
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PARTICIPANT:
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Name:
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Address:
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Tel:
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Sincerely,
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By:
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/s/ MELISSA M. HEIDMAN
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Name:
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Melissa M. Heidman
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Title:
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Executive Vice President and General Counsel
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Acknowledged by:
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By:
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/s/ DAVE BOENNIGHAUSEN
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Name:
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Dave Boennighausen
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Title:
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Chief Executive Officer
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Pricing Level
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Consolidated Total Lease Adjusted Leverage Ratio
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Eurodollar Rate Loans and Letter of Credit Fees
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Base Rate Loans
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Commitment Fee
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1
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<3.00:1.00
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2.00%
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1.00%
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0.20%
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2
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>3.00:1.00 but <3.50:1.00
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2.25%
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1.25%
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0.25%
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3
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>3.50:1.00 but <4.00:1.00
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2.50%
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1.50%
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0.30%
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4
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>4.00:1.00 but <4.50:1.00
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2.75%
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1.75%
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0.35%
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5
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>4.50:1.00
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3.00%
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2.00%
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0.40%
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Eurodollar Rate Loans and Letter of Credit Fees
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Base Rate Loans
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Commitment Fee
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3.25%
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2.25%
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0.50%
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Measurement Period End Date
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Maximum Consolidated Total Lease Adjusted Leverage Ratio
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the last day of the Second Fiscal Quarter of Fiscal Year (June 29, 2021)
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6.00 to 1.00
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the last day of the Third Quarter of Fiscal Year 2021 (September 28, 2021)
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5.50 to 1.00
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the last day of the Fourth Quarter of Fiscal Year 2021 (December 28, 2021)
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5.25 to 1.00
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the last day of the First Quarter of Fiscal Year 2022 (March 29, 2022)
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5.00 to 1.00
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the last day of the Second Quarter of Fiscal Year 2022 (June 28, 2022)
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4.50 to 1.00
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the last day of the Third Fiscal Quarter of Fiscal Year 2022 (September 27, 2022) and the last day of each Fiscal Quarter ending thereafter.
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4.00 to 1.00
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Measurement Period End Date
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Consolidated Fixed Charge Coverage Ratio
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the last day of the Second Fiscal Quarter of Fiscal Year 2021 (June 29, 2021)
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1.00 to 1.00
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the last day of the Third Quarter of Fiscal Year 2021 (September 28, 2021) and the last day of the Fourth Quarter of Fiscal Year 2021 (December 28, 2021)
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1.10 to 1.00
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the last day of the First Quarter of Fiscal Year 2022 (March 29, 2022) and the last day of each Fiscal Quarter ending thereafter.
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1.25 to 1.00
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Measurement Date
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Minimum Liquidity
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as of June 30, 2020
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$36,000,000
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as of July 28, 2020
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$26,000,000
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as of August 25, 2020
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$24,000,000
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as of September 29, 2020
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$20,000,000
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as of October 27, 2020
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$18,500,000
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as of November 24, 2020
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$17,500,000
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as of December 29, 2020
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$19,000,000
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as of the last Business Day of each month starting on and including January 26, 2021 through and including May 25, 2021
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$15,000,000
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NOODLES & COMPANY,
a Delaware corporation
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By:
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/s/ Melissa Heidman
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Name:
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Melissa Heidman
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Title:
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Secretary
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TNSC, INC.,
a Colorado corporation
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By:
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/s/ Melissa Heidman
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Name:
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Melissa Heidman
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Title:
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President
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THE NOODLE SHOP, CO. - COLORADO, INC.,
a Colorado corporation
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By:
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/s/ Melissa Heidman
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Name:
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Melissa Heidman
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Title:
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President
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THE NOODLE SHOP, CO. - WISCONSIN, INC.,
a Wisconsin corporation
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By:
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/s/ Melissa Heidman
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Name:
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Melissa Heidman
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Title:
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President
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THE NOODLE SHOP, CO. - ILLINOIS, INC.,
an Illinois corporation
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By:
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/s/ Melissa Heidman
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Name:
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Melissa Heidman
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Title:
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President
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THE NOODLE SHOP, CO. - VIRGINIA, INC.,
a Virginia corporation
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By:
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/s/ Melissa Heidman
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Name:
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Melissa Heidman
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Title:
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President
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THE NOODLE SHOP, CO. - KANSAS, LLC,
a Kansas limited liability company
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By:
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TNSC, Inc.
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its Member
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By:
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/s/ Melissa Heidman
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Name:
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Melissa Heidman
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Title:
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President
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THE NOODLE SHOP, CO. - DELAWARE, INC.,
a Delaware corporation
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By:
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/s/ Melissa Heidman
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Name:
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Melissa Heidman
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Title:
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President
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U.S. BANK NATIONAL ASSOCIATION,
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as a Lender, Administrative Agent, L/C Issuer and
Swing Line Lender
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By:
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/s/ Courtney A. Boltz________________
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Name:
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Courtney A. Boltz
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Title:
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Vice President
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FIRST HORIZON BANK,
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as a Lender
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By:
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/s/ Erik Toft________________
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Name:
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Erik Toft
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Title:
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Vice President
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BBVA USA,
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as a Lender
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By:
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/s/ Jake Wesley____________________
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Name:
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Jake Wesley
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Title:
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Vice President
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(a)
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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;
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(b)
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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;
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(c)
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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
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(d)
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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
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(a)
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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
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(b)
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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.
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/s/ DAVE BOENNIGHAUSEN
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Dave Boennighausen
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Chief Executive Officer
(Principal Executive Officer)
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(a)
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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;
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(b)
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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;
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(c)
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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
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(d)
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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
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(a)
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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
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(b)
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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.
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/s/ KEN KUICK
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Ken Kuick
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Chief Financial Officer
(Principal Financial Officer)
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By:
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/s/ DAVE BOENNIGHAUSEN
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Name:
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Dave Boennighausen
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Title:
|
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Chief Executive Officer
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By:
|
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/s/ KEN KUICK
|
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Name:
|
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Ken Kuick
|
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Title:
|
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Chief Financial Officer
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