Document and Entity Information
Document and Entity Information Document - shares | 9 Months Ended | |
Sep. 29, 2015 | Nov. 02, 2015 | |
Document Information [Line Items] | ||
Entity Registrant Name | NOODLES & Co | |
Entity Central Index Key | 1,275,158 | |
Current Fiscal Year End Date | --12-29 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Common Class A [Member] | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 26,185,819 | |
Common Class B [Member] | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 1,522,098 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 29, 2015 | Dec. 30, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 2,016 | $ 1,906 |
Accounts receivable | 3,867 | 5,184 |
Inventories | 10,381 | 9,415 |
Prepaid expenses and other assets | 7,834 | 6,271 |
Total current assets | 24,098 | 22,776 |
Property and equipment, net | 198,098 | 205,573 |
Deferred tax assets, net | 1,314 | 0 |
Goodwill | 1,956 | 1,927 |
Goodwill | 6,400 | 6,400 |
Other assets, net | 2,314 | 2,227 |
Total long-term assets | 210,082 | 216,127 |
Total assets | 234,180 | 238,903 |
Current liabilities: | ||
Accounts payable | 11,263 | 10,865 |
Accrued payroll and benefits | 9,107 | 4,704 |
Accrued expenses and other current liabilities | 10,178 | 8,560 |
Current deferred tax liabilities, net | 1,702 | 1,702 |
Total current liabilities | 32,250 | 25,831 |
Long-term debt | 60,404 | 27,500 |
Deferred rent | 40,514 | 35,498 |
Deferred tax liabilities, net | 0 | 6,512 |
Other long-term liabilities | 3,512 | 3,447 |
Total liabilities | 136,680 | 98,788 |
Stockholders' equity: | ||
Preferred stock—$0.01 par value, authorized 1,000,000 shares as of June 30, 2015 and December 30, 2014; no shares issued or outstanding | 0 | 0 |
Common stock—$0.01 par value, authorized 180,000,000 shares as of September 29, 2015 and December 30, 2014; 30,131,788 issued and 27,707,917 outstanding as of September 29, 2015 and 29,820,340 issued and outstanding as of December 30, 2014 | 301 | 298 |
Treasury stock, at cost, 2,423,871 and 67,586 shares as of September 29, 2015 and December 30, 2014, respectively | (35,000) | (2,848) |
Additional paid-in capital | 120,065 | 120,929 |
Accumulated other comprehensive loss | (92) | 0 |
Retained earnings | 12,226 | 21,736 |
Total stockholders' equity | 97,500 | 140,115 |
Total liabilities and stockholders' equity | $ 234,180 | $ 238,903 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 29, 2015 | Dec. 30, 2014 |
Preferred stock, par value (USD per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 180,000,000 | 180,000,000 |
Common stock, shares, issued | 30,005,350 | 29,820,340 |
Common stock, shares, outstanding | 29,598,100 | 29,820,340 |
Treasury stock, shares | 474,826 | 67,586 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2015 | Sep. 30, 2014 | Sep. 29, 2015 | Sep. 30, 2014 | |
Revenue: | ||||
Restaurant revenue | $ 116,151 | $ 105,143 | $ 334,767 | $ 291,789 |
Franchising royalties and fees | 1,177 | 1,073 | 3,555 | 3,406 |
Total revenue | 117,328 | 106,216 | 338,322 | 295,195 |
Restaurant operating costs (exclusive of depreciation and amortization shown separately below): | ||||
Cost of sales | 30,941 | 28,359 | 88,616 | 78,533 |
Labor | 37,687 | 31,884 | 105,865 | 88,410 |
Occupancy | 12,911 | 11,004 | 37,609 | 31,114 |
Other restaurant operating costs | 17,003 | 14,532 | 46,878 | 38,981 |
General and administrative | 9,384 | 7,545 | 27,034 | 22,806 |
Depreciation and amortization | 7,117 | 6,454 | 20,959 | 17,969 |
Pre-opening | 1,108 | 1,142 | 3,150 | 3,282 |
Restaurant impairment, asset disposals and closure costs | 16,479 | 251 | 22,815 | 658 |
Total costs and expenses | 132,630 | 101,171 | 352,926 | 281,753 |
(Loss) income from operations | (15,302) | 5,045 | (14,604) | 13,442 |
Interest expense | 391 | 112 | 818 | 168 |
(Loss) income before income taxes | (15,693) | 4,933 | (15,422) | 13,274 |
(Benefit) provision for income taxes | (5,872) | 1,990 | (5,911) | 5,380 |
Net (loss) income | $ (9,821) | $ 2,943 | $ (9,511) | $ 7,894 |
(Loss) earnings per share of Class A and Class B common stock, combined: | ||||
Basic (USD per share) | $ (0.35) | $ 0.10 | $ (0.32) | $ 0.27 |
Diluted (USD per share) | $ (0.35) | $ 0.10 | $ (0.32) | $ 0.25 |
Weighted average shares of Class A and Class B common stock outstanding, combined: | ||||
Basic (in shares) | 28,253,859 | 29,757,820 | 29,349,061 | 29,689,342 |
Diluted (in shares) | 28,253,859 | 30,893,904 | 29,349,061 | 31,042,443 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income Statement - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2015 | Sep. 30, 2014 | Sep. 29, 2015 | Sep. 30, 2014 | |
Net (loss) income | $ (9,821) | $ 2,943 | $ (9,511) | $ 7,894 |
Cash flow hedges: | ||||
Foreign currency translation adjustments | (80) | 0 | (92) | 0 |
Other comprehensive loss | (80) | 0 | (92) | 0 |
Comprehensive (loss) income | $ (9,901) | $ 2,943 | $ (9,603) | $ 7,894 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 29, 2015 | Sep. 30, 2014 | |
Operating activities | ||
Net (loss) income | $ (9,511) | $ 7,894 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||
Depreciation and amortization | 20,959 | 17,969 |
Deferred income taxes | (7,826) | 5,380 |
Restaurant impairment, asset disposals and closure costs | 22,740 | 658 |
Amortization of debt issuance costs | 73 | 76 |
Stock-based compensation | 1,036 | 1,028 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 686 | 318 |
Inventories | (945) | (1,639) |
Prepaid expenses and other assets | (1,585) | (2,040) |
Accounts payable | 512 | 3,169 |
Deferred rent | 5,027 | 4,660 |
Income taxes | 1,538 | (505) |
Accrued expenses and other liabilities | 5,182 | 485 |
Net cash provided by operating activities | 37,886 | 37,453 |
Investing activities | ||
Purchases of property and equipment | (35,616) | (39,943) |
Acquisition of franchise restaurants | (628) | (13,623) |
Net cash used in investing activities | (36,244) | (53,566) |
Financing activities | ||
Proceeds from issuance of long-term debt | 328,008 | 211,326 |
Payments on long-term debt | (295,104) | (196,138) |
Debt issuance costs | (138) | 0 |
Acquisition of treasury stock | (32,152) | (71) |
Other financing activities | (25) | (60) |
Other financing activities | (2,029) | 2,336 |
Net cash (used in) provided by financing activities | (1,440) | 17,393 |
Effect of Exchange Rate on Cash and Cash Equivalents | (92) | 0 |
Net increase in cash and cash equivalents | 110 | 1,280 |
Cash and cash equivalents | ||
Beginning of period | 1,906 | $ 968 |
End of period | $ 2,016 |
Business and Summary and Basis
Business and Summary and Basis of Presentation | 9 Months Ended |
Sep. 29, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business and Summary and Basis of Presentation | Business Summary and Basis of Presentation Business Noodles & Company, (the "Company" or "Noodles & Company"), a Delaware corporation, develops and operates fast casual restaurants that serve globally inspired noodle and pasta dishes, soups, salads and sandwiches. As of September 29, 2015 , there were 424 company-owned restaurants and 64 franchise restaurants located in 35 states, the District of Columbia and one Canadian province. The Company operates its business as one operating and reportable segment. The accompanying interim unaudited consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"). Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles in the United States ("U.S. GAAP") for complete financial statements. In the opinion of the Company, all adjustments considered necessary for the fair presentation of the Company's results of operations, financial position and cash flows for the periods presented have been included and are of a normal, recurring nature. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. These financial statements should be read in conjunction with the audited financial statements and the related notes included in the Company's Annual Report on Form 10-K for the fiscal year ended December 30, 2014 . Principles of Consolidation The accompanying consolidated financial statements include the accounts of Noodles & Company and its subsidiaries. All material intercompany balances and transactions are eliminated in consolidation. Fiscal Year The Company operates on a 52- or 53-week fiscal year ending on the Tuesday closest to December 31. Fiscal year 2015 , which ends on December 29, 2015 , and fiscal year 2014 , which ended on December 30, 2014 , each contain 52 weeks. Fiscal quarters each contain thirteen weeks, with the exception of the fourth quarter of a 53-week fiscal year, which contains fourteen weeks. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, "Revenue from Contracts with Customers (Topic 606)." The pronouncement was issued to clarify the principles for recognizing revenue and to develop a common revenue standard and disclosure requirements for U.S. GAAP and International Financial Reporting Standards. The pronouncement is effective for annual and interim periods beginning after December 15, 2017, which will require the Company to adopt these provisions in the first quarter of fiscal 2018. Early adoption is not permitted. This pronouncement permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect this guidance will have on the Company's consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting. In August 2014, the FASB issued ASU No. 2014-15, "Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern." This update requires management of the Company to evaluate whether there is substantial doubt about the Company’s ability to continue as a going concern. This update is effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter. Early adoption is permitted. The Company does not expect this standard to have an impact on the Company’s consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-03, "Interest-Imputation of Interest (Subtopic 835-50): Simplifying the Presentation of Debt Issuance Costs." This update requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the carrying value of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by this update. The update is effective retrospectively for fiscal years, and interim periods within those years, beginning after December 15, 2015. Early adoption is permitted. The adoption of this standard is not expected to have a material effect on the Company's consolidated financial statements. 1. Business Summary and Basis of Presentation (continued) In April 2015, the FASB issued ASU No. 2015-05, "Intangibles - Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer's Accounting for Fees Paid in a Cloud Computing Arrangement." The pronouncement was issued to provide guidance concerning accounting for fees in a cloud computing arrangement. The update is effective for reporting periods beginning after December 15, 2015. The adoption of this standard is not expected to have a material effect on the Company's consolidated financial statements. In July 2015, the FASB issued ASU No. 2015-11, "Inventory (Topic 330)." The pronouncement was issued to simplify the measurement of inventory and changes the measurement from lower of cost or market to lower of cost and net realizable value. This pronouncement is effective for reporting periods beginning after December 15, 2016. The adoption of ASU 2015-11 is not expected to have a significant impact on the Company's consolidated financial statements. |
Supplemental Financial Informat
Supplemental Financial Information | 9 Months Ended |
Sep. 29, 2015 | |
Supplemental Financial Information [Abstract] | |
Supplemental Financial Information | Supplemental Financial Information Property and equipment, net, consist of the following (in thousands): September 29, December 30, Leasehold improvements $ 210,927 $ 208,678 Furniture, fixtures and equipment 117,737 114,148 Construction in progress 9,649 12,074 338,313 334,900 Accumulated depreciation and amortization (140,215 ) (129,327 ) $ 198,098 $ 205,573 |
Borrowings
Borrowings | 9 Months Ended |
Sep. 29, 2015 | |
Debt Disclosure [Abstract] | |
Borrowings | On June 4, 2015, the Company amended its existing credit facility to increase borrowing capacity on the revolving line of credit from $45.0 million to $75.0 million and to extend its term from November 2018 to June 2020. All other material terms and covenants remained the same. As of September 29, 2015 , the Company had $60.4 million outstanding and $11.8 million available for borrowing under the credit facility after considering the outstanding letters of credit aggregating $2.8 million . The credit facility bore interest between 3.50% and 3.75% during the first three quarters of 2015 . The Company was in compliance with all of its debt covenants as of September 29, 2015 . |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 29, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and all other current liabilities approximate their fair values due to the short maturities of these instruments. The carrying amounts of borrowings approximate fair value as interest rates on the the line of credit borrowings vary with market interest rates and negotiated terms and conditions are consistent with current market rates. The fair value of our line of credit borrowings is measured using Level 2 inputs. Adjustments to the fair value of non-financial assets measured at fair value on a non-recurring basis as of September 29, 2015 are discussed in Note 9-Restaurant Impairments, Asset Disposals and Closure Costs. There were no adjustments to the fair values of non-financial assets measured at fair value on a non-recurring basis as of September 30, 2014 . |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 29, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The following table presents the Company's provision (benefit) for income taxes for the first three quarters ended September 29, 2015 and September 30, 2014 (dollars in thousands): Fiscal Quarter Ended Three Fiscal Quarters Ended September 29, September 30, September 29, September 30, (Benefit) provision for income taxes $ (5,872 ) $ 1,990 $ (5,911 ) $ 5,380 Effective tax rate 37.4 % 40.3 % 38.3 % 40.5 % 5. Income Taxes (continued) The effective tax rate for the third quarter of 2015 and the first three quarters of 2015 reflects a projected federal tax rate of 34% , compared to 35% for the third quarter of 2014 and the first three quarters of 2014. The 2015 estimated annual effective tax rate is expected to be between 38% and 39% compared to 38.4% for 2014 . |
Share Repurchase (Notes)
Share Repurchase (Notes) | 9 Months Ended |
Sep. 29, 2015 | |
Equity [Abstract] | |
Share Repurchases | Share Repurchases On June 4, 2015, the Company announced a share repurchase program of up to $35.0 million of the Company's Class A common stock. Under this program, the Company purchased shares of the Company's Class A common stock in the open market (including in pre-arranged stock trading plans in accordance with the guidelines specified in Rule 10b5-1 under the Securities Exchange Act of 1934, as amended ) or in privately negotiated transactions. During the three quarters ended September 29, 2015 , the Company repurchased 2,423,871 shares of its common stock for approximately $35.0 million in open market transactions, thereby completing the repurchase program. Repurchased shares are included as treasury stock in the Condensed Consolidated Balance Sheets. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 29, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation The Company's Stock Incentive Plan, as amended and restated in May of 2013, authorizes the grant of nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units and incentive bonuses to employees, officers, non-employee directors and other service providers. The number of shares of common stock available for issuance pursuant to awards granted under the Stock Incentive Plan shall not exceed 3,750,500 . The following table presents information related to the Stock Incentive Plan (in thousands, except share and per share amounts): Fiscal Quarter Ended Three Fiscal Quarters Ended September 29, September 30, September 29, September 30, Outstanding, beginning of period 3,518,685 3,324,822 3,245,264 3,309,872 Granted 34,500 22,000 561,821 253,552 Exercised (614,504 ) (37,313 ) (790,055 ) (230,551 ) Forfeited (100,719 ) (1,401 ) (179,068 ) (24,765 ) Outstanding, end of period 2,837,962 3,308,108 2,837,962 3,308,108 Weighted average fair market value on option grant date $ 4.81 $ 7.47 $ 5.88 $ 10.63 Stock based compensation expense $ 455 $ 368 $ 1,155 $ 1,025 Capitalized stock based compensation expense $ 56 $ 25 $ 156 $ 54 |
Asset Disposals, Closure Costs
Asset Disposals, Closure Costs and Restaurant Impairments (Notes) | 9 Months Ended |
Sep. 29, 2015 | |
Property, Plant and Equipment Impairment or Disposal [Abstract] | |
Restaurant Impairments, Asset Disposals and Closure Costs | Restaurant Impairment, Asset Disposals and Closure Costs The following table presents restaurant impairment, asset disposals and closure costs for the third quarters of 2015 and 2014 and first three quarters ended September 29, 2015 and September 30, 2014 (in thousands): Fiscal Quarter Ended Three Fiscal Quarters Ended September 29, September 30, September 29, September 30, Restaurant impairments (1) $ 16,213 $ 12 $ 22,157 $ 16 Loss on disposal of assets 204 141 524 421 Closure costs and other (1) 62 98 134 221 $ 16,479 $ 251 $ 22,815 $ 658 _____________________________ (1) Restaurant impairment and closure costs can include expenditures related to restaurants previously impaired or closed. 8. Restaurant Impairment, Asset Disposals and Closure Costs (continued) During the third quarter of 2015 and the first three quarters of 2015 , the Company recognized restaurant impairment expense of $16.2 million and $22.2 million , respectively, primarily related to management's current assessment of the expected future cash flows of various restaurants based on recent results. During the first quarter of 2015 and the third quarter of 2015 , eight and 25 restaurants, respectively, were identified as impaired. Ten of the 25 restaurants impaired in the third quarter of 2015 are expected to be closed by the end of 2015. See Note 13-Subsequent Events. Impairment expense is a Level 3 fair value measure and was determined by comparing the carrying value of restaurant assets to the estimated fair market value, which is based on projected cash flows. Fair value is generally determined based on appraisals or sales prices of comparable assets and estimates of future cash flows. These expenses are included in the "Restaurant impairment, asset disposals and closure costs" line in the Consolidated Statements of Income. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 29, 2015 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Earnings per share ("EPS") is calculated by dividing (loss) income available to common stockholders by the weighted-average number of shares of common stock outstanding during each period. Diluted (loss) earnings per share ("diluted EPS") is calculated using (loss) income available to common stockholders divided by diluted weighted-average shares of common stock outstanding during each period. Potentially dilutive securities include shares of common stock underlying stock options and warrants. The following table sets forth the computations of basic and diluted (loss) earnings per share: Fiscal Quarter Ended Three Fiscal Quarters Ended September 29, September 30, September 29, September 30, Net (loss) income (in thousands): $ (9,821 ) $ 2,943 $ (9,511 ) $ 7,894 Shares: Basic weighted average shares outstanding 28,253,859 29,757,820 29,349,061 29,689,342 Dilutive stock options and warrants — 1,136,084 — 1,353,101 Diluted weighted average number of shares outstanding 28,253,859 30,893,904 29,349,061 31,042,443 (Loss) earnings per share: Basic (loss) EPS $ (0.35 ) $ 0.10 $ (0.32 ) $ 0.27 Diluted (loss) EPS $ (0.35 ) $ 0.10 $ (0.32 ) $ 0.25 Potential common shares are excluded from the computation of diluted (loss) earnings per share when the effect would be anti-dilutive. All potential common shares are anti-dilutive in periods of net loss. In the third quarters of 2015 and 2014 , there were 2,837,962 and 267,196 outstanding options, respectively, excluded from the diluted (loss) earnings per share calculation because they were anti-dilutive. In the first three quarters of 2015 and 2014 , there were 2,837,962 and 243,552 outstanding options, respectively, excluded from the diluted (loss) earnings per share calculation because they were anti-dilutive. Additionally, approximately 10,000 and 15,000 outstanding warrants were anti-dilutive and were excluded in the calculation of diluted (loss) earnings per share during the third quarter of 2015 and the first three quarters of 2015, respectively. |
Acquisition of Franchised Resta
Acquisition of Franchised Restaurants Acquisition of Franchised Restaurants | 9 Months Ended |
Sep. 29, 2015 | |
Business Combinations [Abstract] | |
Acquisition of Franchised Restaurants | Acquisition of Franchised Restaurants On July 2, 2014, the Company acquired 16 restaurants from one of its franchisees. The cash purchase price was $13.6 million and the Company incurred acquisition costs related to the transaction of approximately $60,000 reflected in General and Administrative expense for the three quarters ended September 30, 2014. The consolidated statements of income include the results of operations for the restaurants from the date of acquisition. The pro forma impact of the acquisition is not presented as the impact was not material to reported results. The Company allocated the purchase price to the tangible and intangible assets acquired and liabilities assumed at the acquisition date at their estimated fair values with the remainder allocated to goodwill. During the fourth quarter of 2014, the Company finalized the purchase price accounting of the above acquisition and recorded certain immaterial purchase accounting adjustments, which are reflected in the purchase price allocation table as follows (in thousands): 10. Acquisition of Franchised Restaurants (continued) Fair Value at July 2, 2014 Inventories $ 292 Prepaid expenses and other assets 27 Property and equipment 5,649 Intangibles 1,421 Goodwill 6,400 Deferred Rent and Other Liabilities (154 ) Total purchase price $ 13,635 The fair value measurement of tangible and intangible assets and liabilities as of the acquisition date is based on significant inputs not observed in the market and thus represents a Level 3 measurement that is subject to change. |
Supplemental Disclosures to Con
Supplemental Disclosures to Consolidated Statements of Cash Flows | 9 Months Ended |
Sep. 29, 2015 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Disclosures to Consolidated Statements of Cash Flows | Supplemental Disclosures to Consolidated Statements of Cash Flows The following table presents the supplemental disclosures to the consolidated statements of cash flows for the first three quarters ended September 29, 2015 and September 30, 2014 (in thousands): September 29, September 30, Interest paid (net of amounts capitalized) $ 445 $ 81 Income taxes paid 379 505 Changes in purchases of property and equipment accrued in accounts payable, net (115 ) (377 ) |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 29, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies In the normal course of business, the Company is subject to other proceedings, lawsuits and claims, including those matters that the Company has previously disclosed and for which there is no material update. Consequently, the Company is unable to ascertain the ultimate aggregate amount of monetary liability or financial impact with respect to these matters as of September 29, 2015 . These matters could affect the operating results of any one financial reporting period when resolved in future periods. Management believes that an unfavorable outcome with respect to these matters is remote or a potential range of loss is not material to the Company's consolidated financial statements. Significant increases in the number of these claims, or one or more successful claims that result in greater liabilities than the Company currently anticipates, could materially and adversely affect the Company's business, financial condition, results of operations or cash flows. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 29, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events The Company announced on November 5, 2015 that it plans to close 16 restaurants by the end of 2015. The Company recorded an impairment charge in the third fiscal quarter of 2015 for the write-off of the value of the leasehold improvements and restaurant and other equipment for 10 of these restaurants. Five of these restaurants were impaired in the first quarter of 2015 and one restaurant was impaired in the fourth quarter of 2010. In connection with the closure of these restaurants, the Company estimates that it will record additional closure charges totaling approximately $5.0 million . This estimate represents the lease termination fees, as well as brokerage commissions and other direct costs associated with the closure including building de-identification and equipment removal, transportation, storage and severance payments. |
Business and Summary and Basi20
Business and Summary and Basis of Presentation (Policies) | 9 Months Ended |
Sep. 29, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of Noodles & Company and its subsidiaries. All material intercompany balances and transactions are eliminated in consolidation. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, "Revenue from Contracts with Customers (Topic 606)." The pronouncement was issued to clarify the principles for recognizing revenue and to develop a common revenue standard and disclosure requirements for U.S. GAAP and International Financial Reporting Standards. The pronouncement is effective for annual and interim periods beginning after December 15, 2017, which will require the Company to adopt these provisions in the first quarter of fiscal 2018. Early adoption is not permitted. This pronouncement permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect this guidance will have on the Company's consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting. In August 2014, the FASB issued ASU No. 2014-15, "Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern." This update requires management of the Company to evaluate whether there is substantial doubt about the Company’s ability to continue as a going concern. This update is effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter. Early adoption is permitted. The Company does not expect this standard to have an impact on the Company’s consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-03, "Interest-Imputation of Interest (Subtopic 835-50): Simplifying the Presentation of Debt Issuance Costs." This update requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the carrying value of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by this update. The update is effective retrospectively for fiscal years, and interim periods within those years, beginning after December 15, 2015. Early adoption is permitted. The adoption of this standard is not expected to have a material effect on the Company's consolidated financial statements. |
Supplemental Financial Inform21
Supplemental Financial Information (Tables) | 9 Months Ended |
Sep. 29, 2015 | |
Supplemental Financial Information [Abstract] | |
Schedule of Property and Equipment | Property and equipment, net, consist of the following (in thousands): September 29, December 30, Leasehold improvements $ 210,927 $ 208,678 Furniture, fixtures and equipment 117,737 114,148 Construction in progress 9,649 12,074 338,313 334,900 Accumulated depreciation and amortization (140,215 ) (129,327 ) $ 198,098 $ 205,573 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 29, 2015 | |
Income Tax Disclosure [Abstract] | |
Schedule of Provision for Income Taxes | The following table presents the Company's provision (benefit) for income taxes for the first three quarters ended September 29, 2015 and September 30, 2014 (dollars in thousands): Fiscal Quarter Ended Three Fiscal Quarters Ended September 29, September 30, September 29, September 30, (Benefit) provision for income taxes $ (5,872 ) $ 1,990 $ (5,911 ) $ 5,380 Effective tax rate 37.4 % 40.3 % 38.3 % 40.5 % |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 29, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Share-based Compensation, Stock Options, Activity | The following table presents information related to the Stock Incentive Plan (in thousands, except share and per share amounts): Fiscal Quarter Ended Three Fiscal Quarters Ended September 29, September 30, September 29, September 30, Outstanding, beginning of period 3,518,685 3,324,822 3,245,264 3,309,872 Granted 34,500 22,000 561,821 253,552 Exercised (614,504 ) (37,313 ) (790,055 ) (230,551 ) Forfeited (100,719 ) (1,401 ) (179,068 ) (24,765 ) Outstanding, end of period 2,837,962 3,308,108 2,837,962 3,308,108 Weighted average fair market value on option grant date $ 4.81 $ 7.47 $ 5.88 $ 10.63 Stock based compensation expense $ 455 $ 368 $ 1,155 $ 1,025 Capitalized stock based compensation expense $ 56 $ 25 $ 156 $ 54 |
Asset Disposals, Closure Cost24
Asset Disposals, Closure Costs and Restaurant Impairments (Tables) | 9 Months Ended |
Sep. 29, 2015 | |
Property, Plant and Equipment Impairment or Disposal [Abstract] | |
Impaired Assets to be Disposed of by Method Other than Sale | The following table presents restaurant impairment, asset disposals and closure costs for the third quarters of 2015 and 2014 and first three quarters ended September 29, 2015 and September 30, 2014 (in thousands): Fiscal Quarter Ended Three Fiscal Quarters Ended September 29, September 30, September 29, September 30, Restaurant impairments (1) $ 16,213 $ 12 $ 22,157 $ 16 Loss on disposal of assets 204 141 524 421 Closure costs and other (1) 62 98 134 221 $ 16,479 $ 251 $ 22,815 $ 658 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 29, 2015 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share | The following table sets forth the computations of basic and diluted (loss) earnings per share: Fiscal Quarter Ended Three Fiscal Quarters Ended September 29, September 30, September 29, September 30, Net (loss) income (in thousands): $ (9,821 ) $ 2,943 $ (9,511 ) $ 7,894 Shares: Basic weighted average shares outstanding 28,253,859 29,757,820 29,349,061 29,689,342 Dilutive stock options and warrants — 1,136,084 — 1,353,101 Diluted weighted average number of shares outstanding 28,253,859 30,893,904 29,349,061 31,042,443 (Loss) earnings per share: Basic (loss) EPS $ (0.35 ) $ 0.10 $ (0.32 ) $ 0.27 Diluted (loss) EPS $ (0.35 ) $ 0.10 $ (0.32 ) $ 0.25 |
Acquisition of Franchised Res26
Acquisition of Franchised Restaurants Acquisition of Franchised Restaurants (Tables) | 9 Months Ended |
Sep. 29, 2015 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | Company finalized the purchase price accounting of the above acquisition and recorded certain immaterial purchase accounting adjustments, which are reflected in the purchase price allocation table as follows (in thousands): 10. Acquisition of Franchised Restaurants (continued) Fair Value at July 2, 2014 Inventories $ 292 Prepaid expenses and other assets 27 Property and equipment 5,649 Intangibles 1,421 Goodwill 6,400 Deferred Rent and Other Liabilities (154 ) Total purchase price $ 13,635 |
Supplemental Disclosures to C27
Supplemental Disclosures to Consolidated Statements of Cash Flows (Tables) | 9 Months Ended |
Sep. 29, 2015 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Cash Flow, Supplemental Disclosures | The following table presents the supplemental disclosures to the consolidated statements of cash flows for the first three quarters ended September 29, 2015 and September 30, 2014 (in thousands): September 29, September 30, Interest paid (net of amounts capitalized) $ 445 $ 81 Income taxes paid 379 505 Changes in purchases of property and equipment accrued in accounts payable, net (115 ) (377 ) |
Business and Summary and Basi28
Business and Summary and Basis of Presentation (Details) | 9 Months Ended | 12 Months Ended |
Sep. 29, 2015segmentprovincerestaurantstate$ / shares | Dec. 30, 2014$ / shares | |
Franchisor Disclosure [Line Items] | ||
Number of states in which Noodles & Company operates | state | 35 | |
Number of Canadian provinces | province | 1 | |
Number of operating segments | segment | 1 | |
Number of reportable segments | segment | 1 | |
Common stock, par value (USD per share) | $ / shares | $ 0.01 | $ 0.01 |
Number of weeks in fiscal year | 364 days | 364 days |
Company-Owned [Member] | ||
Franchisor Disclosure [Line Items] | ||
Number of restaurants | 424 | |
Franchise [Member] | ||
Franchisor Disclosure [Line Items] | ||
Number of restaurants | 64 |
Supplemental Financial Inform29
Supplemental Financial Information (Property and Equipment) (Details) - USD ($) $ in Thousands | Sep. 29, 2015 | Dec. 30, 2014 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 338,313 | $ 334,900 |
Accumulated depreciation and amortization | (140,215) | (129,327) |
Property and equipment, net | 198,098 | 205,573 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 210,927 | 208,678 |
Furniture, Fixtures, and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 117,737 | 114,148 |
Construction in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 9,649 | $ 12,074 |
Borrowings (Details)
Borrowings (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2015 | Sep. 29, 2015 | Jun. 04, 2015 | Jun. 03, 2015 | |
Line of Credit Facility [Line Items] | ||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 75 | $ 45 | ||
Amount outstanding | $ 60.4 | $ 60.4 | ||
Remaining borrowing capacity | 11.8 | 11.8 | ||
Letters of credit outstanding | $ 2.8 | $ 2.8 | ||
Minimum [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Interest rate | 3.50% | 3.50% | ||
Maximum [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Interest rate | 3.75% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 29, 2015 | Sep. 30, 2014 | Sep. 29, 2015 | Sep. 30, 2014 | Dec. 30, 2014 | |
Income Tax Contingency [Line Items] | |||||
(Benefit) provision for income taxes | $ (5,872) | $ 1,990 | $ (5,911) | $ 5,380 | |
Effective tax rate | 37.40% | 40.30% | 38.30% | 40.50% | |
Income tax rate | 34.00% | 35.00% | |||
Estimated effective tax rate | 38.00% | ||||
Minimum [Member] | |||||
Income Tax Contingency [Line Items] | |||||
Estimated effective tax rate | 38.00% | 38.00% | |||
Maximum [Member] | |||||
Income Tax Contingency [Line Items] | |||||
Estimated effective tax rate | 39.00% | 39.00% |
Share Repurchase (Details)
Share Repurchase (Details) - Common Class A [Member] - USD ($) | 3 Months Ended | |
Sep. 29, 2015 | Jun. 04, 2015 | |
Equity, Class of Treasury Stock [Line Items] | ||
Share repurchase program amount | $ 35,000,000 | |
Treasury shares acquired in period (in shares) | 2,423,871 | |
Value of treasury stock acquired | $ 35,000,000 |
Stock-Based Compensation (Narra
Stock-Based Compensation (Narrative) (Details) | May. 31, 2013shares |
IPO [Member] | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |
Maximum shares reserved for issuance | 3,750,500 |
Stock-Based Compensation (Stock
Stock-Based Compensation (Stock Incentive Plan) (Details) - Stock Option [Member] - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2015 | Sep. 30, 2014 | Sep. 29, 2015 | Sep. 30, 2014 | |
Options, Outstanding [Roll Forward] | ||||
Outstanding, beginning of period | 3,518,685 | 3,324,822 | 3,245,264 | 3,309,872 |
Granted | 34,500 | 22,000 | 561,821 | 253,552 |
Exercised | (614,504) | (37,313) | (790,055) | (230,551) |
Forfeited | (100,719) | (1,401) | (179,068) | (24,765) |
Outstanding, end of period | 2,837,962 | 3,308,108 | 2,837,962 | 3,308,108 |
Weighted average fair market value on option grant date | $ 4.81 | $ 7.47 | $ 5.88 | $ 10.63 |
Stock based compensation expense | $ 455 | $ 368 | $ 1,155 | $ 1,025 |
Capitalized stock based compensation expense | $ 56 | $ 25 | $ 156 | $ 54 |
Asset Disposals, Closure Cost35
Asset Disposals, Closure Costs and Restaurant Impairments (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 29, 2015USD ($)restaurant | Mar. 31, 2015restaurant | Sep. 30, 2014USD ($) | Mar. 31, 2010restaurant | Sep. 29, 2015USD ($) | Sep. 30, 2014USD ($) | |
Property, Plant and Equipment Impairment or Disposal [Abstract] | ||||||
Restaurant impairments | $ 16,213 | $ 12 | $ 22,157 | $ 16 | ||
Loss on disposal of assets | 204 | 141 | 524 | 421 | ||
Closure costs and other | 62 | 98 | 134 | 221 | ||
Total | $ 16,479 | $ 251 | $ 22,815 | $ 658 | ||
Number of Impaired restaurants | restaurant | 25 | 8 | ||||
Number of impaired restaurants expected to be closed | restaurant | 10 | 5 | 1 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2015 | Sep. 30, 2014 | Sep. 29, 2015 | Sep. 30, 2014 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Net (loss) income | $ (9,821) | $ 2,943 | $ (9,511) | $ 7,894 |
Shares: | ||||
Basic weighted average shares outstanding (in shares) | 28,253,859 | 29,757,820 | 29,349,061 | 29,689,342 |
Dilutive stock options and warrants (in shares) | 0 | 1,136,084 | 0 | 1,353,101 |
Diluted weighted average number of shares outstanding (in shares) | 28,253,859 | 30,893,904 | 29,349,061 | 31,042,443 |
(Loss) earnings per share: | ||||
Basic EPS (USD per share) | $ (0.35) | $ 0.10 | $ (0.32) | $ 0.27 |
Diluted EPS (USD per share) | $ (0.35) | $ 0.10 | $ (0.32) | $ 0.25 |
Antidilutive securities excluded from computation of earnings per share | 2,837,962 | 267,196 | 2,837,962 | 243,552 |
Warrant [Member] | ||||
(Loss) earnings per share: | ||||
Antidilutive securities excluded from computation of earnings per share | 10,000 | 15,000 |
Acquisition of Franchised Res37
Acquisition of Franchised Restaurants Acquisition of Franchised Restaurants (Details) | Jul. 02, 2014USD ($)restaurant | Sep. 29, 2015USD ($) | Sep. 30, 2014USD ($) | Dec. 30, 2014USD ($) |
Business Acquisition [Line Items] | ||||
Total purchase price of restaurants acquired | $ 628,000 | $ 13,623,000 | ||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | ||||
Goodwill | $ 6,400,000 | $ 6,400,000 | ||
Restaurants from Franchisees [Member] | ||||
Business Acquisition [Line Items] | ||||
Number of Businesses Acquired | restaurant | 16 | |||
Total purchase price of restaurants acquired | $ 13,600,000 | |||
Acquisition costs incurred | 60,000 | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | ||||
Inventories | 292,000 | |||
Prepaid expenses and other assets | 27,000 | |||
Property and equipment | 5,649,000 | |||
Intangibles | 1,421,000 | |||
Goodwill | 6,400,000 | |||
Deferred Rent and Other Liabilities | (154,000) | |||
Total purchase price | $ 13,635,000 |
Supplemental Disclosures to C38
Supplemental Disclosures to Consolidated Statements of Cash Flows (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 29, 2015 | Sep. 30, 2014 | |
Supplemental Cash Flow Elements [Abstract] | ||
Interest paid (net of amounts capitalized) | $ 445 | $ 81 |
Income taxes paid | 379 | 505 |
Changes in purchases of property and equipment accrued in accounts payable, net | $ (115) | $ (377) |
Subsequent Events Subsequent Ev
Subsequent Events Subsequent Events (Details) $ in Millions | Nov. 05, 2015USD ($)restaurant | Sep. 29, 2015restaurant | Mar. 31, 2015restaurant | Mar. 31, 2010restaurant |
Subsequent Event [Line Items] | ||||
Number of impaired restaurants expected to be closed | 10 | 5 | 1 | |
Number of Impaired restaurants | 25 | 8 | ||
Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Number of restaurants closed | 16 | |||
Closure charges | $ | $ 5 |