Document and Entity Information
Document and Entity Information Document and Entity Information - shares | 9 Months Ended | |
Oct. 02, 2018 | Oct. 19, 2018 | |
Document Information [Line Items] | ||
Entity Registrant Name | NOODLES & COMPANY | |
Entity Central Index Key | 1,275,158 | |
Current Fiscal Year End Date | --01-01 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Oct. 2, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Common Class A | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 43,922,066 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Oct. 02, 2018 | Jan. 02, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 1,918 | $ 3,361 |
Accounts receivable | 1,959 | 2,434 |
Inventories | 9,897 | 9,929 |
Prepaid expenses and other assets | 6,704 | 6,258 |
Income tax receivable | 122 | 76 |
Total current assets | 20,600 | 22,058 |
Property and equipment, net | 141,375 | 152,593 |
Goodwill | 6,400 | 6,400 |
Intangibles, net | 1,384 | 1,565 |
Other assets, net | 2,573 | 2,617 |
Total long-term assets | 151,732 | 163,175 |
Total assets | 172,332 | 185,233 |
Current liabilities: | ||
Accounts payable | 7,294 | 10,929 |
Accrued payroll and benefits | 9,851 | 11,719 |
Accrued expenses and other current liabilities | 12,292 | 21,221 |
Current portion of long-term debt | 688 | 0 |
Total current liabilities | 30,125 | 43,869 |
Long-term debt, net | 47,097 | 57,624 |
Deferred rent | 37,592 | 38,872 |
Deferred tax liabilities, net | 153 | 416 |
Other long-term liabilities | 5,390 | 8,591 |
Total liabilities | 120,357 | 149,372 |
Stockholders’ equity: | ||
Preferred stock—$0.01 par value, 1,000,000 shares authorized and undesignated as of October 2, 2018 and January 2, 2018; no shares issued or outstanding | 0 | 0 |
Common stock—$0.01 par value, 180,000,000 shares authorized as of October 2, 2018 and January 2, 2018; 46,340,013 issued and 43,916,142 outstanding as of October 2, 2018 and 43,550,329 issued and 41,126,458 outstanding as of January 2, 2018 | 463 | 436 |
Treasury stock, at cost, 2,423,871 shares as of October 2, 2018 and January 2, 2018 | (35,000) | (35,000) |
Additional paid-in capital | 197,666 | 171,613 |
Accumulated deficit | (111,154) | (101,188) |
Total stockholders’ equity | 51,975 | 35,861 |
Total liabilities and stockholders’ equity | $ 172,332 | $ 185,233 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2018 | Oct. 03, 2017 | Oct. 02, 2018 | Oct. 03, 2017 | |
Revenue: | ||||
Restaurant revenue | $ 115,552 | $ 113,020 | $ 341,616 | $ 340,175 |
Franchising royalties and fees | 1,175 | 1,191 | 3,032 | 3,543 |
Total revenue | 116,727 | 114,211 | 344,648 | 343,718 |
Restaurant operating costs (exclusive of depreciation and amortization shown separately below): | ||||
Cost of sales | 30,617 | 29,955 | 90,962 | 91,640 |
Labor | 37,738 | 36,897 | 112,353 | 112,921 |
Occupancy | 12,035 | 12,709 | 37,155 | 39,340 |
Other restaurant operating costs | 16,224 | 15,811 | 49,997 | 49,152 |
General and administrative | 10,399 | 9,807 | 35,480 | 29,866 |
Depreciation and amortization | 5,790 | 6,183 | 17,407 | 18,729 |
Pre-opening | 0 | 69 | 50 | 860 |
Restaurant impairments, closure costs and asset disposals | 1,792 | 10,263 | 5,952 | 35,147 |
Total costs and expenses | 114,595 | 121,694 | 349,356 | 377,655 |
Income (loss) from operations | 2,132 | (7,483) | (4,708) | (33,937) |
Loss on extinguishment of debt | 0 | 0 | 626 | 0 |
Interest expense, net | 1,093 | 893 | 3,385 | 2,828 |
Income (loss) before income taxes | 1,039 | (8,376) | (8,719) | (36,765) |
(Benefit) provision for income taxes | (11) | (41) | (259) | 230 |
Net income (loss) | 1,050 | (8,335) | (8,460) | (36,995) |
Accretion of preferred stock to redemption value | 0 | 0 | 0 | (7,967) |
Net income (loss) attributable to common stockholders | $ 1,050 | $ (8,335) | $ (8,460) | $ (44,962) |
Earnings (loss) per share of Class A and Class B common stock, combined: | ||||
Basic (USD per share) | $ 0.02 | $ (0.20) | $ (0.20) | $ (1.23) |
Diluted (USD per share) | $ 0.02 | $ (0.20) | $ (0.20) | $ (1.23) |
Weighted average shares of Class A and Class B common stock outstanding, combined: | ||||
Basic (in shares) | 43,094,524 | 41,109,827 | 41,798,640 | 36,639,382 |
Diluted (in shares) | 44,829,363 | 41,109,827 | 41,798,640 | 36,639,382 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Oct. 02, 2018 | Jan. 02, 2018 |
Statement of Financial Position [Abstract] | ||
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 (in shares) | 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 (in shares) | 46,340,013 | 43,550,329 |
Common stock, shares, outstanding | 43,916,142 | 41,126,458 |
Treasury stock, shares | 2,423,871 | 2,423,871 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2018 | Oct. 03, 2017 | Oct. 02, 2018 | Oct. 03, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ 1,050 | $ (8,335) | $ (8,460) | $ (36,995) |
Other comprehensive loss: | ||||
Foreign currency translation adjustments | 0 | (11) | 0 | (20) |
Other comprehensive loss | 0 | (11) | 0 | (20) |
Comprehensive income (loss) | $ 1,050 | $ (8,346) | $ (8,460) | $ (37,015) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 02, 2018 | Oct. 03, 2017 | |
Operating activities | ||
Net loss | $ (8,460) | $ (36,995) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 17,407 | 18,729 |
Deferred income taxes | (263) | 230 |
Restaurant impairments, closure costs and asset disposals | 5,289 | 28,867 |
Loss on extinguishment of debt | 626 | 0 |
Amortization of debt issuance costs | 484 | 288 |
Stock-based compensation | 2,232 | 1,193 |
Gain on insurance proceeds received for property damage | (373) | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 489 | 3,142 |
Inventories | (647) | (358) |
Prepaid expenses and other assets | (402) | (460) |
Accounts payable | (2,172) | (1,093) |
Deferred rent | (1,278) | 1,517 |
Income taxes | (46) | 158 |
Accrued expenses and other liabilities | (17,754) | (22,147) |
Net cash used in operating activities | (4,868) | (6,929) |
Investing activities | ||
Purchases of property and equipment | (9,937) | (17,468) |
Insurance proceeds received for property damage | 500 | 0 |
Net cash used in investing activities | (9,437) | (17,468) |
Financing activities | ||
Net (payments) borrowings from swing line loan | (101) | 6,042 |
Proceeds from issuance of long-term debt | 74,889 | 10,532 |
Payments on long-term debt | (84,030) | (37,015) |
Issuance of preferred stock and common stock warrants, net of transaction expenses (see Note 9) | 0 | 16,589 |
Issuance of common stock, net of transaction expenses (see Note 9) | 23,157 | 29,110 |
Proceeds from exercise of stock options and employee stock purchase plan | 654 | 56 |
Debt issuance costs | (1,707) | (662) |
Net cash provided by financing activities | 12,862 | 24,652 |
Effect of exchange rate changes on cash | 0 | (4) |
Net (decrease) increase in cash and cash equivalents | (1,443) | 251 |
Cash and cash equivalents | ||
Beginning of period | 3,361 | 1,837 |
End of period | $ 1,918 | $ 2,088 |
Business Summary and Basis of P
Business Summary and Basis of Presentation | 9 Months Ended |
Oct. 02, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business Summary and Basis of Presentation | Business Summary and Basis of Presentation Business Noodles & Company (the “Company”), a Delaware corporation, develops and operates fast casual restaurants that serve globally inspired noodle and pasta dishes, soups, salads and appetizers. As of October 2, 2018 , the Company had 401 company-owned restaurants and 65 franchise restaurants in 29 states and the District of Columbia. The Company operates its business as one operating and reportable segment. Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of Noodles & Company and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The accompanying interim unaudited condensed 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 accounting principles generally accepted in the United States of America (“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 preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The results of operations for any interim period are not necessarily indicative of results for the full year. Certain information and footnote disclosures normally included in the Company’s annual consolidated financial statements on Form 10-K have been condensed or omitted. The condensed consolidated balance sheet as of January 2, 2018 was derived from audited financial statements. 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 January 2, 2018 . Fiscal Year The Company operates on a 52- or 53-week fiscal year ending on the Tuesday closest to December 31. Fiscal year 2018 , which ends on January 1, 2019 , and fiscal year 2017 , which ended on January 2, 2018 , both contain 52 weeks. The Company’s fiscal quarters each contain 13 operating weeks, with the exception of the fourth quarter of a 53-week fiscal year, which contains 14 operating weeks. The Company’s fiscal quarter that ended October 2, 2018 is referred to as the third quarter of 2018, and the fiscal quarter ended October 3, 2017 is referred to as the third quarter of 2017. Recent Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842).” This pronouncement requires a lessee to recognize on the balance sheet a liability to make lease payments and a corresponding right-of-use asset. Additionally, the new lease guidance requires a dual approach for lessee accounting under which a lessee would account for leases as finance leases or operating leases. Both finance leases and operating leases will result in the lessee recognizing a right-of-use asset and a corresponding lease liability. For finance leases, the lessee would recognize interest expense and amortization of the right-of-use asset, while for operating leases, the lessee would recognize a straight-line total lease expense. The guidance also requires certain qualitative and quantitative disclosures about the amount, timing and uncertainty of cash flows arising from leases. This pronouncement will be effective for interim and annual periods beginning after December 15, 2018 (the Company’s first quarter of fiscal 2019). There have been multiple standards updates amending this guidance or providing corrections or improvements on issues in the guidance. In July 2018, the FASB issued ASU 2018-11 which provided either a modified retrospective transition approach with application in all comparative periods presented, or an alternative transition method, which permits a company to use its effective date as the date of initial application without restating comparative period financial statements. The Company anticipates implementing the standard by taking advantage of the alternative transition method and will apply the transition approach as of the beginning of the period of adoption and will not be restating comparative periods. The Company believes the adoption of this lease guidance will have a significant impact on its consolidated balance sheets by significantly increasing its non-current assets and non-current liabilities in order to record the right of use assets and related lease liabilities for its existing operating leases. The Company is assessing the impact of the standard to our accounting policies, processes, and internal control over financial reporting and we are implementing necessary upgrades to our existing lease system. The Company is still evaluating the impact the adoption of this accounting standard will have on its results of operations and cash flows and related disclosures. Recently Adopted Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” which supersedes the revenue recognition requirements in Accounting Standards Codification 605, “Revenue Recognition.” This ASU is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In August 2015, the FASB issued ASU No. 2015-14, which deferred the effective date of the new revenue standard by one year, and allowed entities the option to early adopt the new revenue standard as of the original effective date. There have been multiple standards updates amending this guidance or providing corrections or improvements on issues in the guidance. The requirements for these standards relating to Topic 606 are effective for interim and annual periods beginning after December 15, 2017. This standard permitted adoption using one of two transition methods, either the retrospective or the modified retrospective transition method. |
Supplemental Financial Informat
Supplemental Financial Information | 9 Months Ended |
Oct. 02, 2018 | |
Supplemental Financial Information [Abstract] | |
Supplemental Financial Information | Supplemental Financial Information Property and equipment, net, consists of the following (in thousands): October 2, January 2, Leasehold improvements $ 199,056 $ 199,211 Furniture, fixtures and equipment 122,036 120,234 Construction in progress 2,024 2,592 323,116 322,037 Accumulated depreciation and amortization (181,741 ) (169,444 ) $ 141,375 $ 152,593 Accrued expenses and other current liabilities consist of the following (in thousands): October 2, January 2, Gift card liability $ 2,520 $ 4,078 Occupancy related 3,993 3,733 Utilities 1,603 1,705 Data breach liabilities — 7,605 Other accrued expenses 4,176 4,100 $ 12,292 $ 21,221 |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Oct. 02, 2018 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt 2018 Credit Facility On May 9, 2018, the Company entered into a credit facility with U.S. Bank National Association (the “2018 Credit Facility”). The 2018 Credit Facility consists of a term loan facility in an aggregate principal amount of $25.0 million and a revolving line of credit of $65.0 million (which may be increased to $75.0 million ), which includes a letter of credit subfacility in the amount of $15.0 million and a swingline subfacility in the amount of $10.0 million . The 2018 Credit Facility has a four-year term and matures on May 9, 2022. Borrowings under the 2018 Credit Facility, including the term loan facility, bear interest annually, at the Company’s option, at either (i) LIBOR plus a margin of 2.25% to 3.25% per annum, based upon the consolidated total lease-adjusted leverage ratio or (ii) the highest of the following base rates plus a margin of 1.25% to 2.25% per annum: (a) the federal funds rate plus 0.50% ; (b) the U.S. Bank prime rate or (c) the one-month LIBOR plus 1.00% . The 2018 Credit Facility includes a commitment fee of 0.30% to 0.50% per annum, based upon the consolidated total lease-adjusted leverage ratio, on any unused portion of the revolving credit facility. As of October 2, 2018 , the Company had $49.6 million of indebtedness and $3.8 million of letters of credit outstanding under the 2018 Credit Facility. The term loan requires principal payments of $156,250 per quarter starting in the second quarter of 2018 through the first quarter of 2019 , $187,500 per quarter through the first quarter of 2020 , $375,000 per quarter through the first quarter of 2021 , and $531,250 per quarter through maturity in the second quarter of 2022 . Aggregate maturities for debt outstanding as of October 2, 2018 are as follows (in thousands): Year 1 $ 688 Year 2 1,125 Year 3 1,813 Year 4 45,951 Total $ 49,577 The Company’s outstanding indebtedness bore interest at rates between 4.95% to 7.25% during the first three quarters of 2018 . The Company also maintains outstanding letters of credit to secure obligations under its workers’ compensation program and certain lease obligations. The Company was in compliance with all of its debt covenants as of October 2, 2018 . Prior Credit Facility Upon execution of the 2018 Credit Facility, the Company repaid in full its outstanding indebtedness with Bank of America, N.A. (the “Prior Credit Facility”) using funds drawn on the 2018 Credit Facility. Upon repayment, the Prior Credit Facility and all related agreements were terminated. A loss on extinguishment of debt in the amount of $0.6 million |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Oct. 02, 2018 | |
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 their short-term nature. The carrying amounts of borrowings under the credit facility approximate fair value as the line of credit and term borrowings vary with market interest rates and negotiated terms and conditions are consistent with current market rates. The fair value of the Company’s line of credit and term loan borrowings are 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 October 2, 2018 and October 3, 2017 |
Income Taxes
Income Taxes | 9 Months Ended |
Oct. 02, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The following table presents the Company’s (benefit) provision for income taxes (in thousands): Fiscal Quarter Ended Three Fiscal Quarters Ended October 2, October 3, October 2, October 3, (Benefit) provision for income taxes $ (11 ) $ (41 ) $ (259 ) $ 230 Effective tax rate (1.1 )% 0.5 % 3.0 % (0.6 )% The effective tax rates for the third quarter of 2018 and the first three quarters of 2018 reflect changes made by the Tax Cuts and Jobs Act (“Tax Act”), which was signed into law in December 2017. The primary change from the Tax Act that impacts fiscal 2018 is related to an indefinite carry forward for federal and conforming states’ net operating losses, which enabled the Company to release a portion of the previously recorded valuation allowance. For the remainder of fiscal 2018, the Company does not anticipate material income tax expense or benefit as a result of the valuation allowance recorded. The Company will maintain the remaining valuation allowance against deferred tax assets until there is sufficient evidence to support a full or partial reversal. The reversal of a previously recorded valuation allowance will generally result in a benefit from income tax. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Oct. 02, 2018 | |
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 (“RSUs”) and incentive bonuses to employees, officers, nonemployee directors and other service providers. The number of shares of common stock available for issuance pursuant to awards granted under the Stock Incentive Plan on or after the Company’s initial public offering shall not exceed 3,750,500 shares. The following table shows total stock-based compensation expense (in thousands): Fiscal Quarter Ended Three Fiscal Quarters Ended October 2, October 3, October 2, October 3, Stock-based compensation expense $ 640 $ 248 $ 2,232 $ 1,193 Capitalized stock-based compensation expense $ 12 $ 44 $ 37 $ 145 |
Restaurant Impairment, Closure
Restaurant Impairment, Closure Costs and Asset Disposals Restaurant Impairment, Closure Costs and Asset Disposals | 9 Months Ended |
Oct. 02, 2018 | |
Property, Plant and Equipment Impairment or Disposal [Abstract] | |
Restaurant Impairment, Closure Costs and Asset Disposals | Restaurant Impairments, Closure Costs and Asset Disposals The following table presents restaurant impairments, closure costs and asset disposals (in thousands): Fiscal Quarter Ended Three Fiscal Quarters Ended October 2, October 3, October 2, October 3, Restaurant impairments (1) $ 314 $ 9,080 $ 1,231 $ 15,053 Closure costs (1) 1,488 779 3,561 19,194 (Gain) loss on disposal of assets and other (2) (10 ) 404 1,160 900 $ 1,792 $ 10,263 $ 5,952 $ 35,147 _____________________________ (1) Restaurant impairments and closure costs in all periods presented above include amounts related to restaurants previously impaired or closed. (2) The third quarter of 2018 and the first three quarters of 2018 include a $0.4 million gain from insurance proceeds received for property damage in excess of the loss recognized. During the third quarter of 2018 , there were no restaurants identified as impaired, compared to 18 restaurant impairments during the third quarter of 2017 . During the first three quarters of 2018 , one restaurant was identified as impaired compared to 31 restaurant impairments during the first three quarters of 2017 . Impairment is based on management’s current assessment of the expected future cash flows of a restaurant based on recent results and other specific market factors. Impairment expense is a Level 3 fair value measure and is determined by comparing the carrying value of restaurant assets to the estimated fair market value of the restaurant assets at resale value. The closure costs of $1.5 million recognized during the third quarter of 2018 and $3.6 million during the first three quarters of 2018 are related to the three restaurants closed in the third quarter of 2018 and 12 restaurants closed in the first three quarters of 2018, most of which were approaching the expiration of their leases, as well as ongoing costs from restaurants closed in previous years. These ongoing costs include adjustments to the liabilities to landlords as lease terminations occur. The closure costs of $0.8 million recognized during the third quarter of 2017 and $19.2 million during the first three quarters of 2017 are related to the 55 restaurants closed during the first quarter of 2017, as well as ongoing costs of restaurants closed in the fourth quarter of 2015. Additionally, the $19.2 million of closure costs recognized during the first three quarters of 2017 is net of a gain of $3.6 million which was primarily due to adjustments to the liabilities to landlords as lease terminations occurred for 27 of the 55 |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 9 Months Ended |
Oct. 02, 2018 | |
Earnings Per Share [Abstract] | |
Loss Per Share | Earnings (Loss) Per Share Basic earnings (loss) per share (“EPS”) is calculated by dividing net income (loss) available to common stockholders by the weighted-average number of shares of common stock outstanding during each period. Diluted EPS is calculated using net income (loss) 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, warrants and RSUs. Diluted EPS considers the impact of potentially dilutive securities except in periods in which there is a loss because the inclusion of the potential common shares would have an anti-dilutive effect. The following table sets forth the computations of basic and diluted EPS (in thousands, except share and per share data): Fiscal Quarter Ended Three Fiscal Quarters Ended October 2, October 3, October 2, October 3, Net income (loss) attributable to common stockholders $ 1,050 $ (8,335 ) $ (8,460 ) $ (44,962 ) Shares: Basic weighted average shares outstanding 43,094,524 41,109,827 41,798,640 36,639,382 Effect of dilutive securities 1,734,839 — — — Diluted weighted average shares outstanding 44,829,363 41,109,827 41,798,640 36,639,382 Earnings (loss) per share: Basic earnings (loss) per share $ 0.02 $ (0.20 ) $ (0.20 ) $ (1.23 ) Diluted earnings (loss) per share $ 0.02 $ (0.20 ) $ (0.20 ) $ (1.23 ) The Company computes the effect of dilutive securities using the treasury stock method and average market prices during the period. Potential common shares are excluded from the computation of diluted earnings (loss) per share when the effect would be anti-dilutive. All potential common shares are anti-dilutive in periods of net loss. Shares issuable on the vesting or exercise of share based awards or exercise of outstanding warrants, and the shares underlying the 18,500 shares of convertible preferred stock outstanding in the first quarter of 2017, were excluded from the calculation of diluted loss per share because the effect of their inclusion would have been anti-dilutive. The number of such shares totaled 176,325 and 4,575,537 for the third quarters of 2018 and 2017 , respectively, and totaled 2,758,848 and 7,031,639 for the first three quarters of 2018 and 2017 |
Stockholder's Equity
Stockholder's Equity | 9 Months Ended |
Oct. 02, 2018 | |
Equity [Abstract] | |
Stockholder's Equity | Stockholders’ Equity Public Offering of Class A Common Stock On July 31, 2018, the Company sold 2,500,000 shares of its Class A common stock at a public offering price of $10.00 per share. The shares offered were registered pursuant to a registration statement that the Company filed with the Securities and Exchange Commission (the “SEC”). The Company received net proceeds of $23.8 million , after deducting the underwriting discounts and commissions. The Company also incurred $0.6 million of transaction expenses related to the public offering. The proceeds of the offering were used by the Company to pay down borrowings under the 2018 Credit Facility and fund working capital obligations. Securities Purchase Agreement with L Catterton On February 8, 2017, the Company entered into a securities purchase agreement with L Catterton, pursuant to which the Company agreed, in return for aggregate gross proceeds of $18.5 million , to sell to L Catterton an aggregate of 18,500 shares of preferred stock convertible into 4,252,873 shares of the Company’s Class A common stock, par value $0.01 per share (“Class A common stock”), at a price per share of $1,000 , plus warrants exercisable for five years beginning six months following their issuance for the purchase of 1,913,793 shares of the Company’s Class A common stock, at a price per share of $4.35 (such transactions, collectively, the “private placement”). The funding of the private placement occurred on February 9, 2017 and the net proceeds from the transaction were $16.6 million during the first three quarters of 2017, after $1.9 million of transaction expenses. The Company determined that the preferred stock was more akin to a temporary equity security than permanent equity primarily because the preferred stock was contingently redeemable upon the occurrence of an event that was outside of the Company’s control. The proceeds were allocated between the three features of the private placement: the warrants, the embedded beneficial conversion feature in the preferred stock, and the preferred stock itself. The fair values of the warrants of $3.1 million and the embedded beneficial conversion feature of $3.1 million were recorded as a discount against the stated value of the preferred stock on the date of issuance. The fair value of the warrants was estimated using a Black-Scholes option pricing model which is a Level 2 estimate of fair value. On April 5, 2017, the Company delivered a notice to L Catterton of its election to exercise the conversion option with respect to the Series A Convertible Preferred Stock. The terms of the preferred stock provided that the Company could, at its option upon the satisfaction of certain conditions, cause all outstanding shares of preferred stock to be automatically converted into the Company’s Class A common stock. The conversion of the preferred stock into 4,252,873 shares of the Company’s Class A common stock occurred on April 12, 2017. The discount was amortized, using the interest method, and treated as a deemed dividend through the date of conversion, which resulted in the accretion of the preferred stock to its full redemption value. After the conversion, no shares of preferred stock are outstanding. At the conversion date, all unamortized discounts were recognized immediately as a deemed dividend, which increased the net loss attributable to common stockholders. The amortized discount, which was treated in the same manner as dividends, was $8.0 million for the first three quarters of 2017. Securities Purchase Agreement with Mill Road Capital On March 13, 2017, the Company entered into a securities purchase agreement with Mill Road Capital II, L.P. (“Mill Road”), pursuant to which the Company agreed, in return for aggregate gross proceeds of $31.5 million , to issue to Mill Road an aggregate of 8,873,240 shares of its Class A common stock at a price per share of $3.55 , which was equal to the closing sale price for the Company’s Class A common stock on March 10, 2017. On April 3, 2017, such shares were issued and the funding of the private placement occurred. The net proceeds from the transaction were $29.1 million during the first three quarters of 2017, after $2.4 million of transaction expenses. Conversion of Argentia Class B Common Stock On May 24, 2018, Argentia Private Investments Inc. (“Argentia”) converted 1,522,098 shares of the Company’s Class B common stock, par value $0.01 |
Supplemental Disclosures to Con
Supplemental Disclosures to Condensed Consolidated Statements of Cash Flows | 9 Months Ended |
Oct. 02, 2018 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Disclosures to Condensed Consolidated Statements of Cash Flows | Supplemental Disclosures to Condensed Consolidated Statements of Cash Flows The following table presents the supplemental disclosures to the Condensed Consolidated Statements of Cash Flows for the three quarters ended October 2, 2018 and October 3, 2017 (in thousands): October 2, October 3, Interest paid (net of amounts capitalized) $ 3,006 $ 3,028 Income taxes paid (refunded) 49 (158 ) Changes in purchases of property and equipment accrued in accounts payable, net (1,346 ) (2,144 ) Conversion of Series A convertible preferred stock to common stock — 18,500 |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Oct. 02, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition Revenue Revenue consists of sales from restaurant operations and franchise royalties and fees. Revenue from the operation of company-owned restaurants are recognized when sales occur. The Company reports revenue net of sales and use taxes collected from customers and remitted to governmental taxing authorities. The Company adopted the revenue recognition standards under Topic 606 at the beginning of the first quarter of fiscal 2018 using the modified retrospective method. The adoption of these standards did not have an impact on the Company’s recognition of revenue from company-owned restaurants or its recognition of continuing royalty fees from franchisees, which are based on a percentage of restaurant revenues and are recognized in the period the related franchised restaurants’ sales occur. Gift Cards The Company sells gift cards which do not have an expiration date, and it does not deduct non-usage fees from outstanding gift card balances. The Company recognizes revenue from gift cards when the gift card is redeemed by the customer or the Company determines the likelihood of the gift card being redeemed by the customer is remote (“gift card breakage”). The determination of the gift card breakage rate is based upon Company-specific historical redemption patterns. The Company has determined that approximately 8% of gift cards will not be redeemed and recognizes gift card breakage ratably over the estimated redemption period of the gift card, which is approximately 18 months . Gift card liability balances are typically highest at the end of each calendar year following increased gift card purchases during the holiday season. The adoption of Topic 606 did not have an impact on the Company’s recognition of revenue from gift cards, including the recognition of gift card breakage, as the new standard requires the use of the “proportionate” method for recognizing breakage, which the Company has historically utilized. As of October 2, 2018 and January 2, 2018 , the current portion of the gift card liability, $2.5 million and $4.1 million , respectively, is included in accrued expenses and other current liabilities, and the long-term portion, $0.3 million and $0.4 million , respectively, is included in other long-term liabilities in the Consolidated Balance Sheets. Revenue recognized in the Condensed Consolidated Statements of Operations for the redemption of gift cards was $4.4 million and $4.1 million for the first three quarters of 2018 and 2017, respectively. The revenue recognized from gift cards for the first three quarters of 2018 includes $0.3 million of gift card breakage that resulted from a change in the estimate for gift card unredeemed balances for the years 2014 and after. This change in estimate was a result of the Delaware Gift Card Litigation settlement in the second quarter of 2018 (see Note 12, Commitments and Contingencies). Franchise Fees Royalties from franchise restaurants are based on a percentage of restaurant revenues and are recognized in the period the related franchised restaurants’ sales occur. Development fees and franchise fees, portions of which are collected in advance, are nonrefundable and are recognized in income ratably over the term of the related franchise agreement or recognized upon the termination of the agreement between the Company and the franchisee. The adoption of Topic 606 impacted the Company’s accounting for initial fees charged to franchisees. In the past, the Company recognized initial franchise fees when all material services or conditions relating to the sale of the franchise had been substantially performed or satisfied by the Company, which was generally when a new franchise restaurant opened. In accordance with the new guidance, the Company has determined that the initial franchise services are not distinct from the continuing rights or services offered during the term of the franchise agreement and should be treated as a single performance obligation. Therefore, initial fees received from franchisees will be recognized as revenue over the term of each respective franchise agreement, which is typically 20 years . An adjustment to beginning retained earnings and a corresponding contract liability of $1.5 million was established on the date of adoption, at the beginning of the first quarter of 2018, associated with the initial fees received through January 2, 2018 that would have been deferred and recognized over the term of each respective franchise agreement if the new guidance had been applied in the past. The Company recognized revenue of $0.1 million during the first three quarters of 2018 related to initial fees from franchisees that were included in the contract liability balance at the beginning of the year. This amount included fees recognized upon the termination of one franchise restaurant agreement in the first quarter of 2018. The Company expects to recognize approximately $0.1 million each fiscal year through fiscal 2022 and approximately $0.9 million thereafter related to performance obligations that are unsatisfied as of October 2, 2018 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Oct. 02, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Data Security Incident On June 28, 2016, the Company announced that a data security incident compromised the security of the payment information of some customers who used debit or credit cards at certain Noodles & Company locations between January 31, 2016 and June 2, 2016. The malware involved in the incident has been removed, and the Company believes that it no longer poses a risk to credit or debit cards currently being used at affected locations. In the fourth quarter of 2016, the Company recorded a charge of $10.6 million for estimated losses, net of $1.0 million of insurance coverage, at the low end of an estimated range, associated with claims and anticipated claims by payment card companies for non-ordinary course operating expenses, card issuer losses and card replacement costs for which it expected to be liable (the “Data Breach Liabilities”). On June 7, 2018, the Company received the final assessment from the third of the three payment card companies to which it expected to owe Data Breach Liabilities. This assessment was $11.0 million . During the first three quarters of 2018, when the final assessment was received, the Company’s recorded a charge of $3.4 million to increase its accrual to cover this final assessment amount (which was within the range disclosed in prior reports filed with the SEC). The assessment was paid early in the third quarter of 2018 and there are no further obligations for Data Breach Liabilities outstanding. Delaware Gift Card Litigation As previously disclosed in prior reports filed with the SEC, the Company was named as a defendant in an action filed in the Superior Court of Delaware in New Castle County, entitled The State of Delaware, William French v. Card Compliant, LLC, et. al . The complaint in this case alleged that a number of large retailers and restaurant companies, including the Company, knowingly refused to fulfill obligations under Delaware’s Abandoned Property Law by failing to report and deliver “unclaimed gift card funds” to the State of Delaware, and knowingly made, used or caused to be made or used, false statements and records to conceal, avoid or decrease an obligation to pay or transmit money to Delaware in violation of the Delaware False Claims and Reporting Act. The complaint sought an order that the Company cease and desist from violating the Delaware Abandoned Property Law, monetary damages (including treble damages under the False Claims and Reporting Act), penalties and attorneys’ fees and costs. In 2015 the Company recorded a loss contingency accrual based on a reasonable estimate of the probable losses that might arise from this matter; this loss contingency accrual did not have a material effect on the Company’s results of operations. On July 3, 2018, a settlement was reached in this matter and a definitive settlement agreement was subsequently executed, disposing of all pending claims included in the litigation. The Company’s results of operations for the first three quarters of 2018 included a charge of $0.3 million for the Company’s liability under this settlement. The settlement was paid in the third quarter of 2018. The Company also recorded a loss contingency accrual based on a reasonable estimate of the probable losses that may arise under Delaware’s Abandoned Property Law in resolving claims for unclaimed gift card funds for the years 2011, 2012 and 2013, which were not included as part of the litigation. Other Matters In the normal course of business, the Company is subject to other proceedings, lawsuits and claims. Such matters are subject to many uncertainties, and outcomes are not predictable with assurance. Consequently, the Company is unable to ascertain the ultimate aggregate amount of monetary liability or financial impact with respect to these matters as of October 2, 2018 |
Business Summary and Basis of_2
Business Summary and Basis of Presentation (Policies) | 9 Months Ended |
Oct. 02, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business and Basis of Presentation | Business Noodles & Company (the “Company”), a Delaware corporation, develops and operates fast casual restaurants that serve globally inspired noodle and pasta dishes, soups, salads and appetizers. As of October 2, 2018 , the Company had 401 company-owned restaurants and 65 franchise restaurants in 29 states and the District of Columbia. The Company operates its business as one operating and reportable segment. Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of Noodles & Company and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The accompanying interim unaudited condensed 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 accounting principles generally accepted in the United States of America (“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 preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The results of operations for any interim period are not necessarily indicative of results for the full year. Certain information and footnote disclosures normally included in the Company’s annual consolidated financial statements on Form 10-K have been condensed or omitted. The condensed consolidated balance sheet as of January 2, 2018 was derived from audited financial statements. 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 January 2, 2018 |
Fiscal year | Fiscal Year The Company operates on a 52- or 53-week fiscal year ending on the Tuesday closest to December 31. Fiscal year 2018 , which ends on January 1, 2019 , and fiscal year 2017 , which ended on January 2, 2018 , both contain 52 weeks. The Company’s fiscal quarters each contain 13 operating weeks, with the exception of the fourth quarter of a 53-week fiscal year, which contains 14 operating weeks. The Company’s fiscal quarter that ended October 2, 2018 is referred to as the third quarter of 2018, and the fiscal quarter ended October 3, 2017 is referred to as the third |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842).” This pronouncement requires a lessee to recognize on the balance sheet a liability to make lease payments and a corresponding right-of-use asset. Additionally, the new lease guidance requires a dual approach for lessee accounting under which a lessee would account for leases as finance leases or operating leases. Both finance leases and operating leases will result in the lessee recognizing a right-of-use asset and a corresponding lease liability. For finance leases, the lessee would recognize interest expense and amortization of the right-of-use asset, while for operating leases, the lessee would recognize a straight-line total lease expense. The guidance also requires certain qualitative and quantitative disclosures about the amount, timing and uncertainty of cash flows arising from leases. This pronouncement will be effective for interim and annual periods beginning after December 15, 2018 (the Company’s first quarter of fiscal 2019). There have been multiple standards updates amending this guidance or providing corrections or improvements on issues in the guidance. In July 2018, the FASB issued ASU 2018-11 which provided either a modified retrospective transition approach with application in all comparative periods presented, or an alternative transition method, which permits a company to use its effective date as the date of initial application without restating comparative period financial statements. The Company anticipates implementing the standard by taking advantage of the alternative transition method and will apply the transition approach as of the beginning of the period of adoption and will not be restating comparative periods. The Company believes the adoption of this lease guidance will have a significant impact on its consolidated balance sheets by significantly increasing its non-current assets and non-current liabilities in order to record the right of use assets and related lease liabilities for its existing operating leases. The Company is assessing the impact of the standard to our accounting policies, processes, and internal control over financial reporting and we are implementing necessary upgrades to our existing lease system. The Company is still evaluating the impact the adoption of this accounting standard will have on its results of operations and cash flows and related disclosures. Recently Adopted Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” which supersedes the revenue recognition requirements in Accounting Standards Codification 605, “Revenue Recognition.” This ASU is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In August 2015, the FASB issued ASU No. 2015-14, which deferred the effective date of the new revenue standard by one year, and allowed entities the option to early adopt the new revenue standard as of the original effective date. There have been multiple standards updates amending this guidance or providing corrections or improvements on issues in the guidance. The requirements for these standards relating to Topic 606 are effective for interim and annual periods beginning after December 15, 2017. This standard permitted adoption using one of two transition methods, either the retrospective or the modified retrospective transition method. |
Supplemental Financial Inform_2
Supplemental Financial Information (Tables) | 9 Months Ended |
Oct. 02, 2018 | |
Supplemental Financial Information [Abstract] | |
Schedule of Property and Equipment | Property and equipment, net, consists of the following (in thousands): October 2, January 2, Leasehold improvements $ 199,056 $ 199,211 Furniture, fixtures and equipment 122,036 120,234 Construction in progress 2,024 2,592 323,116 322,037 Accumulated depreciation and amortization (181,741 ) (169,444 ) $ 141,375 $ 152,593 |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consist of the following (in thousands): October 2, January 2, Gift card liability $ 2,520 $ 4,078 Occupancy related 3,993 3,733 Utilities 1,603 1,705 Data breach liabilities — 7,605 Other accrued expenses 4,176 4,100 $ 12,292 $ 21,221 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Oct. 02, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Maturities of Long-term Debt | Aggregate maturities for debt outstanding as of October 2, 2018 are as follows (in thousands): Year 1 $ 688 Year 2 1,125 Year 3 1,813 Year 4 45,951 Total $ 49,577 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Oct. 02, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Provision for Income Taxes | The following table presents the Company’s (benefit) provision for income taxes (in thousands): Fiscal Quarter Ended Three Fiscal Quarters Ended October 2, October 3, October 2, October 3, (Benefit) provision for income taxes $ (11 ) $ (41 ) $ (259 ) $ 230 Effective tax rate (1.1 )% 0.5 % 3.0 % (0.6 )% |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Oct. 02, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-based compensation expense | The following table shows total stock-based compensation expense (in thousands): Fiscal Quarter Ended Three Fiscal Quarters Ended October 2, October 3, October 2, October 3, Stock-based compensation expense $ 640 $ 248 $ 2,232 $ 1,193 Capitalized stock-based compensation expense $ 12 $ 44 $ 37 $ 145 |
Restaurant Impairment, Closur_2
Restaurant Impairment, Closure Costs and Asset Disposals Restaurant Impairment, Closure Costs and Asset Disposals (Tables) | 9 Months Ended |
Oct. 02, 2018 | |
Property, Plant and Equipment Impairment or Disposal [Abstract] | |
Impaired Assets to be Disposed of by Method Other than Sale | The following table presents restaurant impairments, closure costs and asset disposals (in thousands): Fiscal Quarter Ended Three Fiscal Quarters Ended October 2, October 3, October 2, October 3, Restaurant impairments (1) $ 314 $ 9,080 $ 1,231 $ 15,053 Closure costs (1) 1,488 779 3,561 19,194 (Gain) loss on disposal of assets and other (2) (10 ) 404 1,160 900 $ 1,792 $ 10,263 $ 5,952 $ 35,147 _____________________________ (1) Restaurant impairments and closure costs in all periods presented above include amounts related to restaurants previously impaired or closed. (2) The third quarter of 2018 and the first three quarters of 2018 include a $0.4 million gain from insurance proceeds received for property damage in excess of the loss recognized. |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 9 Months Ended |
Oct. 02, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Loss Per Share | The following table sets forth the computations of basic and diluted EPS (in thousands, except share and per share data): Fiscal Quarter Ended Three Fiscal Quarters Ended October 2, October 3, October 2, October 3, Net income (loss) attributable to common stockholders $ 1,050 $ (8,335 ) $ (8,460 ) $ (44,962 ) Shares: Basic weighted average shares outstanding 43,094,524 41,109,827 41,798,640 36,639,382 Effect of dilutive securities 1,734,839 — — — Diluted weighted average shares outstanding 44,829,363 41,109,827 41,798,640 36,639,382 Earnings (loss) per share: Basic earnings (loss) per share $ 0.02 $ (0.20 ) $ (0.20 ) $ (1.23 ) Diluted earnings (loss) per share $ 0.02 $ (0.20 ) $ (0.20 ) $ (1.23 ) |
Supplemental Disclosures to C_2
Supplemental Disclosures to Condensed Consolidated Statements of Cash Flows (Tables) | 9 Months Ended |
Oct. 02, 2018 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Disclosures to the Consolidated Statements of Cash Flows | The following table presents the supplemental disclosures to the Condensed Consolidated Statements of Cash Flows for the three quarters ended October 2, 2018 and October 3, 2017 (in thousands): October 2, October 3, Interest paid (net of amounts capitalized) $ 3,006 $ 3,028 Income taxes paid (refunded) 49 (158 ) Changes in purchases of property and equipment accrued in accounts payable, net (1,346 ) (2,144 ) Conversion of Series A convertible preferred stock to common stock — 18,500 |
Business Summary and Basis of_3
Business Summary and Basis of Presentation (Details) | 3 Months Ended |
Oct. 02, 2018segmentrestaurantstate | |
Franchisor Disclosure [Line Items] | |
Number of states with operations | state | 29 |
Number of operating segments | segment | 1 |
Number of reportable segments | segment | 1 |
Company-Owned [Member] | |
Franchisor Disclosure [Line Items] | |
Number of restaurants | restaurant | 401 |
Franchise [Member] | |
Franchisor Disclosure [Line Items] | |
Number of restaurants | restaurant | 65 |
Supplemental Financial Inform_3
Supplemental Financial Information (Details) - USD ($) $ in Thousands | Oct. 02, 2018 | Jan. 02, 2018 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 323,116 | $ 322,037 |
Accumulated depreciation and amortization | (181,741) | (169,444) |
Property and equipment, net | 141,375 | 152,593 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 199,056 | 199,211 |
Furniture, Fixtures, and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 122,036 | 120,234 |
Construction in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 2,024 | $ 2,592 |
Supplemental Financial Inform_4
Supplemental Financial Information - Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Oct. 02, 2018 | Jan. 02, 2018 |
Supplemental Financial Information [Abstract] | ||
Gift card liability | $ 2,520 | $ 4,078 |
Occupancy related | 3,993 | 3,733 |
Utilities | 1,603 | 1,705 |
Data breach liabilities | 0 | 7,605 |
Other accrued expenses | 4,176 | 4,100 |
Accrued liabilities, current | $ 12,292 | $ 21,221 |
Long-Term Debt - Narrative (De
Long-Term Debt - Narrative (Details) - USD ($) | May 09, 2018 | Oct. 02, 2018 | Oct. 03, 2017 | Oct. 02, 2018 | Oct. 03, 2017 | Jun. 28, 2022 | Mar. 30, 2021 | Mar. 31, 2020 | Apr. 02, 2019 |
Line of Credit Facility [Line Items] | |||||||||
Amount outstanding | $ 49,600,000 | $ 49,600,000 | |||||||
Letters of credit outstanding | 3,800,000 | 3,800,000 | |||||||
Loss on extinguishment of debt | 0 | $ 0 | 626,000 | $ 0 | |||||
Principal repayments through the first quarter of 2019 | 688,000 | 688,000 | |||||||
Principal repayments through the first quarter of 2020 | 1,125,000 | 1,125,000 | |||||||
Principal repayments through the first quarter of 2021 | 1,813,000 | 1,813,000 | |||||||
Principal repayments through the first quarter of 2022 | 45,951,000 | $ 45,951,000 | |||||||
Minimum | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Interest rate | 4.95% | ||||||||
Maximum [Member] | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Interest rate | 7.25% | ||||||||
2018 Term Loan Facility | Revolving Credit Facility | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Maximum borrowing capacity | $ 25,000,000 | ||||||||
2018 Credit Facility | Minimum | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Commitment fee percentage | 0.30% | ||||||||
2018 Credit Facility | Maximum [Member] | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Commitment fee percentage | 0.50% | ||||||||
2018 Credit Facility | LIBOR | Minimum | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Basis spread on variable rate | 2.25% | ||||||||
2018 Credit Facility | LIBOR | Maximum [Member] | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Basis spread on variable rate | 3.25% | ||||||||
2018 Credit Facility | Base Rate | Minimum | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Basis spread on variable rate | 1.25% | ||||||||
2018 Credit Facility | Base Rate | Maximum [Member] | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Basis spread on variable rate | 2.25% | ||||||||
2018 Credit Facility | Federal Funds Rate | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Basis spread on variable rate | 0.50% | ||||||||
2018 Credit Facility | Prime Rate | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Basis spread on variable rate | 1.00% | ||||||||
2018 Credit Facility | Revolving Credit Facility | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Maximum borrowing capacity | $ 65,000,000 | ||||||||
2018 Credit Facility | Letter of Credit | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Maximum borrowing capacity | 75,000,000 | ||||||||
Two Thousand and Eighteen Credit Subfacility | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Maximum borrowing capacity | 15,000,000 | ||||||||
Two Thousand and Eighteen Swingline Subfacility | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Maximum borrowing capacity | $ 10,000,000 | ||||||||
Prior Credit Facility | Letter of Credit | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Loss on extinguishment of debt | $ 600,000 | ||||||||
Scenario, Forecast | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Principal repayments through the first quarter of 2019 | $ 156,250 | ||||||||
Principal repayments through the first quarter of 2020 | $ 187,500 | ||||||||
Principal repayments through the first quarter of 2021 | $ 375,000 | ||||||||
Principal repayments through the first quarter of 2022 | $ 531,250 |
Long-Term Debt - Schedule of Ma
Long-Term Debt - Schedule of Maturities of Long-term Debt (Details) $ in Thousands | Oct. 02, 2018USD ($) |
Debt Disclosure [Abstract] | |
Year 1 (payments through third quarter of 2019) | $ 688 |
2,020 | 1,125 |
2,021 | 1,813 |
2,022 | 45,951 |
Total | $ 49,577 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2018 | Oct. 03, 2017 | Oct. 02, 2018 | Oct. 03, 2017 | |
Income Tax Disclosure [Abstract] | ||||
(Benefit) provision for income taxes | $ (11) | $ (41) | $ (259) | $ 230 |
Effective tax rate | (1.10%) | 0.50% | 3.00% | (0.60%) |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Oct. 02, 2018 | Oct. 03, 2017 | Oct. 02, 2018 | Oct. 03, 2017 | May 31, 2013 | |
IPO [Member] | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Maximum shares reserved for issuance | 3,750,500 | ||||
Employee Stock Option [Member] | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Allocated Share-based Compensation Expense | $ 640 | $ 248 | $ 2,232 | $ 1,193 | |
Capitalized stock based compensation expense | $ 12 | $ 44 | $ 37 | $ 145 |
Restaurant Impairment, Closur_3
Restaurant Impairment, Closure Costs and Asset Disposals Restaurant Impairment, Closure Costs and Asset Disposals (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Oct. 02, 2018USD ($)restaurant | Oct. 03, 2017USD ($)restaurant | Apr. 04, 2017restaurant | Oct. 02, 2018USD ($)restaurant | Oct. 03, 2017USD ($)restaurant | |
Property, Plant and Equipment Impairment or Disposal [Abstract] | |||||
Restaurant impairments | $ 314 | $ 9,080 | $ 1,231 | $ 15,053 | |
Closure costs | 1,488 | 779 | 3,561 | 19,194 | |
Loss on disposal of assets and other | 10 | (404) | (1,160) | (900) | |
Asset Disposals, Closure Costs and Restaurant Impairments | 1,792 | $ 10,263 | 5,952 | 35,147 | |
Gain on insurance proceeds received for property damage | $ 400 | $ (373) | $ 0 | ||
Number of restaurants impaired during the comparable periods | restaurant | 0 | 18 | 1 | 31 | |
Impairment closure costs and other | $ 1,500 | $ 800 | $ 3,600 | $ 19,200 | |
Gain recognized related to closures primarily due to adjustments to the liabilities to landlords | $ 3,600 | ||||
Number of restaurants closed | restaurant | 3 | 27 | 55 | 12 |
Earnings (Loss) Per Share (Deta
Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Oct. 02, 2018 | Oct. 03, 2017 | Oct. 02, 2018 | Oct. 03, 2017 | Jan. 02, 2018 | Jul. 04, 2017 | Feb. 08, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||
Document Period End Date | Oct. 2, 2018 | ||||||
Net Income (Loss) Available to Common Stockholders, Basic | $ 1,050 | $ (8,335) | $ (8,460) | $ (44,962) | |||
Net loss | $ 1,050 | $ (8,335) | $ (8,460) | $ (36,995) | |||
Shares: | |||||||
Basic weighted average shares outstanding (in shares) | 43,094,524 | 41,109,827 | 41,798,640 | 36,639,382 | |||
Effect of dilutive securities (in shares) | 1,734,839 | 0 | 0 | 0 | |||
Diluted weighted average number of shares outstanding (in shares) | 44,829,363 | 41,109,827 | 41,798,640 | 36,639,382 | |||
Earnings (loss) per share: | |||||||
Basic loss per share (USD per share) | $ 0.02 | $ (0.20) | $ (0.20) | $ (1.23) | |||
Diluted loss per share (USD per share) | $ 0.02 | $ (0.20) | $ (0.20) | $ (1.23) | |||
Preferred stock, shares issued (in shares) | 0 | 0 | 0 | ||||
Antidilutive securities excluded from computation of earnings per share | 176,325 | 4,575,537 | 2,758,848 | 7,031,639 | |||
L Catterton | Preferred Stock | |||||||
Earnings (loss) per share: | |||||||
Preferred stock, shares issued (in shares) | 18,500 | 18,500 |
Stockholder's Equity - Narrativ
Stockholder's Equity - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Jul. 31, 2018 | May 24, 2018 | Mar. 13, 2017 | Feb. 09, 2017 | Feb. 08, 2017 | Oct. 03, 2017 | Oct. 02, 2018 | Oct. 03, 2017 | Jan. 02, 2018 | Jul. 04, 2017 | Apr. 12, 2017 |
Class of Stock [Line Items] | |||||||||||
Preferred stock, shares issued (in shares) | 0 | 0 | |||||||||
Common stock, par value (USD per share) | $ 0.01 | $ 0.01 | |||||||||
Issuance of common stock, net of transaction expenses | $ 23,157 | $ 29,110 | |||||||||
Common Class A | |||||||||||
Class of Stock [Line Items] | |||||||||||
Price per share (in dollars per share) | $ 10 | ||||||||||
Issuance of common stock, net of transaction expenses | $ 23,800 | ||||||||||
Common stock, shares, issued (in shares) | 2,500,000 | ||||||||||
Common stock, transaction expenses | $ 600 | ||||||||||
Common Class B | |||||||||||
Class of Stock [Line Items] | |||||||||||
Common stock, par value (USD per share) | $ 0.01 | ||||||||||
Shares converted (in shares) | 1,522,098 | ||||||||||
L Catterton | |||||||||||
Class of Stock [Line Items] | |||||||||||
Net proceeds from issuance of private placement | $ 16,600 | ||||||||||
Transaction expenses | $ 1,900 | ||||||||||
Mill Road Capital II, L.P. | |||||||||||
Class of Stock [Line Items] | |||||||||||
Net proceeds from issuance of private placement | $ 29,100 | ||||||||||
Transaction expenses | $ 2,400 | ||||||||||
Mill Road Capital II, L.P. | Common Class A | |||||||||||
Class of Stock [Line Items] | |||||||||||
Common stock, shares, issued (in shares) | 8,873,240 | ||||||||||
Fair Value, Inputs, Level 2 | L Catterton | |||||||||||
Class of Stock [Line Items] | |||||||||||
Fair value of warrants | $ 3,100 | ||||||||||
Embedded beneficiary conversion | $ 3,100 | ||||||||||
Common Stock | L Catterton | Common Class A | |||||||||||
Class of Stock [Line Items] | |||||||||||
Convertible preferred stock, shares issued upon conversion (in shares) | 4,252,873 | 4,252,873 | |||||||||
Amortized discount | $ 8,000 | ||||||||||
Common stock, par value (USD per share) | $ 0.01 | ||||||||||
Price per share (in dollars per share) | $ 1,000 | ||||||||||
Common Stock | Mill Road Capital II, L.P. | Common Class A | |||||||||||
Class of Stock [Line Items] | |||||||||||
Price per share (in dollars per share) | $ 3.55 | ||||||||||
Preferred Stock | L Catterton | |||||||||||
Class of Stock [Line Items] | |||||||||||
Preferred stock, shares issued (in shares) | 18,500 | 18,500 | |||||||||
Proceeds from issuance of private placement | $ 18,500 | ||||||||||
Preferred Stock | Mill Road Capital II, L.P. | |||||||||||
Class of Stock [Line Items] | |||||||||||
Proceeds from issuance of private placement | $ 31,500 | ||||||||||
Common Stock | Warrant | L Catterton | |||||||||||
Class of Stock [Line Items] | |||||||||||
Number of securities called by each warrant or right (in shares) | 1,913,793 | ||||||||||
Exercise price of warrants or rights (in USD per share) | $ 4.35 |
Supplemental Disclosures to C_3
Supplemental Disclosures to Condensed Consolidated Statements of Cash Flows (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 02, 2018 | Oct. 03, 2017 | |
Class of Stock [Line Items] | ||
Interest paid (net of amounts capitalized) | $ 3,006 | $ 3,028 |
Income taxes paid (refunded) | 49 | (158) |
Changes in purchases of property and equipment accrued in accounts payable, net | 1,346 | 2,144 |
Common Stock | Common Class A | ||
Class of Stock [Line Items] | ||
Conversion of Series A convertible preferred stock to common stock | $ 0 | $ 18,500 |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Oct. 02, 2018 | Oct. 03, 2017 | Jan. 02, 2018 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Expected unredeemed percent | 8.00% | ||
Estimated redemption period | 18 months | ||
Gift card liability | $ 2,520 | $ 4,078 | |
Revenue recognized | 4,400 | $ 4,100 | |
Gift card breakage | $ 300 | ||
Period in which initial fees received from franchisees will be recognized as revenue | 20 years | ||
Retained earnings | $ (111,154) | (101,188) | |
Accrued Expenses and Other Current Liabilities | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Gift card liability | 2,500 | 4,100 | |
Other Long-term Liabilities | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Gift card liability, non-current | 300 | 400 | |
Calculated under Revenue Guidance in Effect on Adoption of Topic 606 | Accounting Standards Update 2014-09 | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Revenue recognized | $ 100 | ||
Retained earnings | $ 1,500 |
Revenue Recognition - Performan
Revenue Recognition - Performance Obligation (Details) $ in Millions | 9 Months Ended |
Oct. 02, 2018USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Performance obligation | $ 0.9 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-02-10 | |
Revenue from Contract with Customer [Abstract] | |
Performance obligation | $ 0.1 |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Performance obligation, period | 3 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Performance obligation | $ 0.1 |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Performance obligation, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Performance obligation | $ 0.1 |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Performance obligation, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Performance obligation | $ 0.1 |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Performance obligation, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Performance obligation | $ 0.1 |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Performance obligation, period |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 03, 2018 | Oct. 02, 2018 | Jun. 07, 2018 | Jan. 03, 2017 | |
Loss Contingencies [Line Items] | ||||
Data breach assessment | $ 11 | |||
Increase in accrual | $ 3.4 | |||
Liability under settlement | $ 0.3 | |||
Minimum | ||||
Loss Contingencies [Line Items] | ||||
Estimate of possible loss | $ 10.6 | |||
Estimate of possible loss net of insurance coverage | $ 1 |