Document and Entity Information
Document and Entity Information Document and Entity Information - shares | 3 Months Ended | |
Apr. 02, 2019 | May 03, 2019 | |
Document Information [Line Items] | ||
Entity Registrant Name | NOODLES & COMPANY | |
Entity Central Index Key | 0001275158 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Apr. 2, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Common Class A | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 43,947,080 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Apr. 02, 2019 | Jan. 02, 2019 | Jan. 01, 2019 | Apr. 03, 2018 | Jan. 02, 2018 |
Current assets: | |||||
Cash and cash equivalents | $ 1,800 | $ 4,655 | $ 4,655 | $ 2,624 | $ 3,361 |
Accounts receivable | 2,254 | 2,616 | 2,391 | ||
Inventories | 9,870 | 9,646 | 9,646 | ||
Prepaid expenses and other assets | 3,066 | 3,231 | 6,474 | ||
Income tax receivable | 191 | 185 | 185 | ||
Total current assets | 17,181 | 20,333 | 23,351 | ||
Property and equipment, net | 138,381 | 139,618 | 138,774 | ||
Operating lease assets, net | 218,311 | 219,883 | 0 | ||
Goodwill | 7,154 | 6,400 | 6,400 | ||
Intangibles, net | 1,179 | 1,224 | 1,291 | ||
Other assets, net | 2,360 | 2,216 | 2,216 | ||
Total long-term assets | 367,385 | 369,341 | 148,681 | ||
Total assets | 384,566 | 389,674 | 172,032 | ||
Current liabilities: | |||||
Accounts payable | 10,563 | 7,854 | 7,854 | ||
Accrued payroll and benefits | 7,833 | 13,391 | 13,391 | ||
Accrued expenses and other current liabilities | 8,524 | 10,630 | 11,183 | ||
Current operating lease liabilities | 21,528 | 0 | 0 | ||
Current portion of long-term debt | 750 | 719 | 719 | ||
Total current liabilities | 49,198 | 32,594 | 33,147 | ||
Long-term debt, net | 47,035 | 44,183 | 44,183 | ||
Long-term operating lease liabilities, net | 237,341 | 260,931 | 0 | ||
Deferred rent | 0 | 148 | 37,334 | ||
Deferred tax liabilities, net | 133 | 133 | 133 | ||
Other long-term liabilities | 5,263 | 4,996 | 4,554 | ||
Total liabilities | 338,970 | 342,985 | 119,351 | ||
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 | 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 | 464 | 464 | 464 | ||
Treasury stock, at cost, 2,423,871 shares as of October 2, 2018 and January 2, 2018 | (35,000) | (35,000) | (35,000) | ||
Additional paid-in capital | 199,110 | 198,352 | 198,352 | ||
Accumulated deficit | (118,978) | (117,127) | (111,135) | ||
Total stockholders’ equity | 45,596 | 46,689 | 52,681 | $ 31,407 | $ 35,861 |
Total liabilities and stockholders’ equity | $ 384,566 | $ 389,674 | $ 172,032 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 02, 2019 | Apr. 03, 2018 | |
Revenue: | ||
Total revenue | $ 110,046 | $ 110,526 |
Restaurant operating costs (exclusive of depreciation and amortization shown separately below): | ||
Occupancy | 12,430 | 12,763 |
Other restaurant operating costs | 16,456 | 16,898 |
General and administrative | 10,140 | 10,268 |
Depreciation and amortization | 5,507 | 5,820 |
Pre-opening | 0 | 47 |
Restaurant impairments, closure costs and asset disposals | 420 | 1,580 |
Total costs and expenses | 111,136 | 113,204 |
Income (loss) from operations | (1,090) | (2,678) |
Interest expense, net | 761 | 1,138 |
Income (loss) before income taxes | (1,851) | (3,816) |
(Benefit) provision for income taxes | 0 | (241) |
Net income (loss) | (1,851) | (3,575) |
Net income (loss) attributable to common stockholders | $ (1,851) | $ (3,575) |
Earnings (loss) per share of Class A and Class B common stock, combined: | ||
Basic (USD per share) | $ (0.04) | $ (0.09) |
Diluted (USD per share) | $ (0.04) | $ (0.09) |
Weighted average shares of Class A and Class B common stock outstanding, combined: | ||
Basic (in shares) | 43,933,235 | 41,128,473 |
Diluted (in shares) | 43,933,235 | 41,128,473 |
Restaurant revenue | ||
Revenue: | ||
Total revenue | $ 108,765 | $ 109,613 |
Restaurant operating costs (exclusive of depreciation and amortization shown separately below): | ||
Cost of goods and services sold | 29,091 | 29,256 |
Franchising royalties and fees, and other | ||
Revenue: | ||
Total revenue | 1,281 | 913 |
Labor | ||
Restaurant operating costs (exclusive of depreciation and amortization shown separately below): | ||
Cost of goods and services sold | $ 37,092 | $ 36,572 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Apr. 02, 2019 | Jan. 01, 2019 |
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) | 46,370,951 | 46,353,309 |
Common stock, shares, outstanding | 43,947,080 | 43,929,438 |
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 | |
Apr. 02, 2019 | Apr. 03, 2018 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (1,851) | $ (3,575) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders’ Equity - USD ($) $ in Thousands | Total | Common Stock | Treasury Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings (Accumulated Deficit) [Member] |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Cumulative catch-up adjustment for ASC 842 | Accounting Standards Update 2014-09 | $ (1,506) | $ (1,506) | |||
Beginning balance, shares at Jan. 02, 2018 | 43,550,329 | 2,423,871 | |||
Beginning balance at Jan. 02, 2018 | $ 35,861 | $ 436 | $ (35,000) | 171,613 | $ (101,188) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Proceeds from exercise of stock options, warrants and employee stock purchase plan (in shares) | 35,000 | 8,983 | |||
Proceeds from exercise of stock options, warrants and employee stock purchase plan | $ 0 | 35 | |||
Stock-based compensation expense | 592 | ||||
Net loss | $ (3,575) | (3,575) | |||
Ending balance at Apr. 03, 2018 | 31,407 | $ 436 | $ (35,000) | 172,240 | (106,269) |
Ending balance, shares at Apr. 03, 2018 | 43,559,312 | 2,423,871 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Cumulative catch-up adjustment for ASC 842 | Accounting Standards Update 2016-02 | (5,992) | (5,992) | |||
Beginning balance, shares at Jan. 01, 2019 | 46,353,309 | 2,423,871 | |||
Beginning balance at Jan. 01, 2019 | $ 52,681 | $ 464 | $ (35,000) | 198,352 | (111,135) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Proceeds from exercise of stock options, warrants and employee stock purchase plan (in shares) | 21,000 | 17,642 | |||
Proceeds from exercise of stock options, warrants and employee stock purchase plan | $ 0 | 21 | |||
Stock-based compensation expense | $ 737 | 737 | |||
Net loss | (1,851) | (1,851) | |||
Ending balance at Apr. 02, 2019 | $ 45,596 | $ 464 | $ (35,000) | $ 199,110 | $ (118,978) |
Ending balance, shares at Apr. 02, 2019 | 46,370,951 | 2,423,871 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 02, 2019 | Apr. 03, 2018 | |
Operating activities | ||
Net loss | $ (1,851) | $ (3,575) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 5,507 | 5,820 |
Deferred income taxes | 0 | (245) |
Restaurant impairments, closure costs and asset disposals | 145 | 1,419 |
Amortization of debt issuance costs | 125 | 210 |
Stock-based compensation | 726 | 580 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 362 | 745 |
Inventories | (223) | (44) |
Prepaid expenses and other assets | 50 | 651 |
Accounts payable | 2,798 | 539 |
Deferred rent | 15 | (288) |
Income taxes | (6) | (26) |
Operating lease assets and liabilities | (343) | 0 |
Accrued expenses and other liabilities | (7,191) | (6,790) |
Net cash used in operating activities | 114 | (1,004) |
Investing activities | ||
Purchases of property and equipment | (4,164) | (4,805) |
Franchise restaurant acquisition, net of cash acquired | (1,387) | 0 |
Net cash used in investing activities | (5,551) | (4,805) |
Financing activities | ||
Net (payments) borrowings from swing line loan | 3,071 | 5,038 |
Payments on long-term debt | (313) | 0 |
Payments on finance leases | (197) | 0 |
Proceeds from exercise of stock options and employee stock purchase plan | 21 | 35 |
Debt issuance costs | 0 | (1) |
Net cash provided by financing activities | 2,582 | 5,072 |
Net (decrease) increase in cash and cash equivalents | (2,855) | (737) |
Cash and cash equivalents | ||
Beginning of period | 4,655 | 3,361 |
End of period | $ 1,800 | $ 2,624 |
Business Summary and Basis of P
Business Summary and Basis of Presentation | 3 Months Ended |
Apr. 02, 2019 | |
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 April 2, 2019 , the Company had 395 company-owned restaurants and 64 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 1, 2019 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 1, 2019 . Fiscal Year The Company operates on a 52- or 53-week fiscal year ending on the Tuesday closest to December 31. 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. Fiscal year 2019 , which ends on December 31, 2019 , and fiscal year 2018 , which ended on January 1, 2019 , both contain 52 weeks. The Company’s fiscal quarter that ended April 2, 2019 is referred to as the first quarter of 2019 , and the fiscal quarter ended April 3, 2018 is referred to as the first quarter of 2018 . Recent Accounting Pronouncements The Company reviewed recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a material impact on the Company’s financial position or results of operations and cash flows. Recently Adopted Accounting Pronouncements On January 2, 2019, the Company adopted ASU 2016-02, “Leases (Topic 842),” along with related clarifications and improvements. This pronouncement requires a lessee to recognize a liability for lease obligations, which represents the discounted obligation to make future lease payments, and a corresponding right-of-use asset on the balance sheet. The guidance also requires certain qualitative and quantitative disclosures about the amount, timing and uncertainty of cash flows arising from leases. The Company elected the alternative transition method to apply the standard as of the beginning of the period of adoption; therefore, the Company has not applied the standard to the comparative periods presented on its condensed consolidated financial statements. The adoption of this lease guidance did have a material impact on the Company’s Consolidated Balance Sheets by materially increasing its non-current assets and current and non-current liabilities due to the recognition of the right-of-use assets and related lease liabilities primarily related to the Company’s restaurant operating leases and corporate office space. Upon adoption, the right-of-use assets were based upon the operating lease liabilities adjusted for prepaid and deferred rent, liabilities associated with lease termination costs and impairment of right-of-use assets. The impairment of right-of-use assets upon adoption was recognized in retained earnings as of January 2, 2019. The adoption of the standard did not have a material impact on the Company’s Condensed Consolidated Statements of Operations in the first quarter of 2019 . The adoption also included the enhancement of the Company’s disclosures related to leases. See disclosure in Note 9, Leases. The impact on the Condensed Consolidated Balance Sheet on the date of adoption was as follows: January 1, Adjustments Due to the Adoption of Topic 842 (unaudited) January 2, 2019 (unaudited) Assets Current assets: Cash and cash equivalents $ 4,655 $ — $ 4,655 Accounts receivable 2,391 225 2,616 Inventories 9,646 — 9,646 Prepaid expenses and other assets 6,474 (3,243 ) 3,231 Income tax receivable 185 — 185 Total current assets 23,351 (3,018 ) 20,333 Property and equipment, net 138,774 844 139,618 Operating lease assets, net — 219,883 219,883 Goodwill 6,400 — 6,400 Intangibles, net 1,291 (67 ) 1,224 Other assets, net 2,216 — 2,216 Total long-term assets 148,681 220,660 369,341 Total assets $ 172,032 $ 217,642 $ 389,674 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 7,854 $ — $ 7,854 Accrued payroll and benefits 13,391 — 13,391 Accrued expenses and other current liabilities 11,183 (553 ) 10,630 Current operating lease liabilities — — — Current portion of long-term debt 719 — 719 Total current liabilities 33,147 (553 ) 32,594 Long-term debt, net 44,183 — 44,183 Long-term operating lease liabilities, net — 260,931 260,931 Deferred rent 37,334 (37,186 ) 148 Deferred tax liabilities, net 133 — 133 Other long-term liabilities 4,554 442 4,996 Total liabilities 119,351 223,634 342,985 Stockholders’ equity: Preferred stock—$0.01 par value, 1,000,000 shares authorized and undesignated as of January 1, 2019; no shares issued or outstanding — — — Common stock—$0.01 par value, 180,000,000 shares authorized as of January 1, 2019; 46,353,309 issued and 43,929,438 outstanding as of January 1, 2019 464 — 464 Treasury stock, at cost, 2,423,871 shares as of January 1, 2019 (35,000 ) — (35,000 ) Additional paid-in capital 198,352 — 198,352 Accumulated deficit (111,135 ) (5,992 ) (117,127 ) Total stockholders’ equity 52,681 (5,992 ) 46,689 Total liabilities and stockholders’ equity $ 172,032 $ 217,642 $ 389,674 |
Supplemental Financial Informat
Supplemental Financial Information | 3 Months Ended |
Apr. 02, 2019 | |
Supplemental Financial Information [Abstract] | |
Supplemental Financial Information | Supplemental Financial Information Property and equipment, net, consists of the following (in thousands): April 2, January 1, Leasehold improvements $ 197,812 $ 197,571 Furniture, fixtures and equipment 122,939 121,479 Construction in progress 5,501 3,620 326,252 322,670 Accumulated depreciation and amortization (187,871 ) (183,896 ) $ 138,381 $ 138,774 Accrued expenses and other current liabilities consist of the following (in thousands): April 2, January 1, Gift card liability $ 1,906 $ 3,284 Occupancy related - other 1,164 2,600 Utilities 1,491 1,582 Other accrued expenses 3,963 3,717 $ 8,524 $ 11,183 |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Apr. 02, 2019 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt 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 April 2, 2019 , the Company had $49.3 million of indebtedness (excluding $1.5 million of unamortized debt issuance costs) and $3.2 million of letters of credit outstanding under the 2018 Credit Facility. The term loan requires principal payments of $156,250 per quarter 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 April 2, 2019 are as follows (in thousands): Year 1 $ 750 Year 2 1,500 Year 3 2,125 Year 4 44,959 Total $ 49,334 The Company’s outstanding indebtedness bore interest at rates between 5.59% to 7.25% during the first quarter of 2019 . Upon execution of the 2018 Credit Facility, the Company repaid in full its outstanding indebtedness under its existing credit facility using funds drawn on its 2018 Credit Facility. Upon repayment, the existing credit facility and all related agreements were terminated. 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 April 2, 2019 |
Leases
Leases | 3 Months Ended |
Apr. 02, 2019 | |
Leases [Abstract] | |
Leases | Leases The Company leases restaurant facilities, office space and certain equipment that expire on various dates through September 2034. Lease terms for restaurants in traditional shopping centers generally include a base term of 10 years, with options to extend these leases for additional periods of five to 15 years. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. The Company’s leases typically contain rent escalations over the lease term. The Company recognizes expense for these leases on a straight-line basis over the lease term. Additionally, tenant incentives used to fund leasehold improvements are recognized when earned and reduce the right-of-use asset related to the lease. These are amortized through the right-of-use asset as reductions of expense over the lease term. Some of the Company’s leases include rent escalations based on inflation indexes and fair market value adjustments. Certain leases contain contingent rental provisions that include a fixed base rent plus an additional percentage of the restaurant’s sales in excess of stipulated amounts. Operating lease liabilities are calculated using the prevailing index or rate at lease commencement. Subsequent escalations in the index or rate and contingent rental payments are recognized as variable lease expenses. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company elected the practical expedient to account for lease and non-lease components as a single component for substantially all lease types. As most of the Company’s leases do not provide an implicit rate, the Company used its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Supplemental balance sheet information related to leases is as follows (in thousands): Classification April 2, Assets Operating Operating lease assets, net $ 218,311 Finance Finance lease assets, net (1) 1,057 Total leased assets $ 219,368 Liabilities Current lease liabilities Operating Current operating lease liabilities $ 21,528 Finance Current finance lease liabilities (2) 811 Long-term lease liabilities Operating Long-term operating lease liabilities 237,341 Finance Long-term finance lease liabilities (2) 271 Total lease liabilities $ 259,951 _____________________ (1) The finance lease assets are included in property and equipment, net in the Consolidated Balance Sheets. (2) The current portion of the finance lease liabilities is included in accrued expenses and other current liabilities, and the long-term portion is included in other long-term liabilities in the Consolidated Balance Sheets. The components of lease costs are as follows (in thousands): Classification April 2, Operating lease cost Occupancy, other restaurant operating costs, and general and administrative expenses $ 10,144 Finance lease cost Amortization of lease assets Depreciation and amortization 171 Interest on lease liabilities Interest expense, net 20 10,335 Sublease income Franchising royalties and fees, and other (112 ) Total lease cost, net $ 10,223 Future minimum lease payments required under existing leases as of April 2, 2019 are as follows (in thousands): Operating Leases Finance Leases Total Remainder of 2019 $ 32,178 $ 497 $ 32,675 2020 42,686 471 43,157 2021 42,188 151 42,339 2022 42,024 23 42,047 2023 40,695 14 40,709 Thereafter 182,453 9 182,462 Total lease payments 382,224 1,165 383,389 Less: Imputed interest 123,355 83 123,438 Present value of lease liabilities $ 258,869 $ 1,082 $ 259,951 Operating lease payments include $92.3 million related to options to extend lease terms that are reasonably certain of being exercised and exclude $10.7 million of legally binding minimum lease payments for leases signed but not yet commenced. Lease term and discount rate for the first quarter ended April 2, 2019 are as follows: April 2, Weighted average remaining lease term (years): Operating 9.4 Finance 2.2 Weighted average discount rate: Operating 8.66 % Finance 7.11 % Supplemental disclosures of cash flow information related to leases for the first quarter ended April 2, 2019 are as follows (in thousands): April 2, Cash paid for lease liabilities: Operating leases $ 10,693 Finance leases 217 $ 10,910 Right-of-use assets obtained in exchange for new lease liabilities: Operating leases $ 3,161 Finance leases 50 $ 3,211 |
Leases | Leases The Company leases restaurant facilities, office space and certain equipment that expire on various dates through September 2034. Lease terms for restaurants in traditional shopping centers generally include a base term of 10 years, with options to extend these leases for additional periods of five to 15 years. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. The Company’s leases typically contain rent escalations over the lease term. The Company recognizes expense for these leases on a straight-line basis over the lease term. Additionally, tenant incentives used to fund leasehold improvements are recognized when earned and reduce the right-of-use asset related to the lease. These are amortized through the right-of-use asset as reductions of expense over the lease term. Some of the Company’s leases include rent escalations based on inflation indexes and fair market value adjustments. Certain leases contain contingent rental provisions that include a fixed base rent plus an additional percentage of the restaurant’s sales in excess of stipulated amounts. Operating lease liabilities are calculated using the prevailing index or rate at lease commencement. Subsequent escalations in the index or rate and contingent rental payments are recognized as variable lease expenses. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company elected the practical expedient to account for lease and non-lease components as a single component for substantially all lease types. As most of the Company’s leases do not provide an implicit rate, the Company used its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Supplemental balance sheet information related to leases is as follows (in thousands): Classification April 2, Assets Operating Operating lease assets, net $ 218,311 Finance Finance lease assets, net (1) 1,057 Total leased assets $ 219,368 Liabilities Current lease liabilities Operating Current operating lease liabilities $ 21,528 Finance Current finance lease liabilities (2) 811 Long-term lease liabilities Operating Long-term operating lease liabilities 237,341 Finance Long-term finance lease liabilities (2) 271 Total lease liabilities $ 259,951 _____________________ (1) The finance lease assets are included in property and equipment, net in the Consolidated Balance Sheets. (2) The current portion of the finance lease liabilities is included in accrued expenses and other current liabilities, and the long-term portion is included in other long-term liabilities in the Consolidated Balance Sheets. The components of lease costs are as follows (in thousands): Classification April 2, Operating lease cost Occupancy, other restaurant operating costs, and general and administrative expenses $ 10,144 Finance lease cost Amortization of lease assets Depreciation and amortization 171 Interest on lease liabilities Interest expense, net 20 10,335 Sublease income Franchising royalties and fees, and other (112 ) Total lease cost, net $ 10,223 Future minimum lease payments required under existing leases as of April 2, 2019 are as follows (in thousands): Operating Leases Finance Leases Total Remainder of 2019 $ 32,178 $ 497 $ 32,675 2020 42,686 471 43,157 2021 42,188 151 42,339 2022 42,024 23 42,047 2023 40,695 14 40,709 Thereafter 182,453 9 182,462 Total lease payments 382,224 1,165 383,389 Less: Imputed interest 123,355 83 123,438 Present value of lease liabilities $ 258,869 $ 1,082 $ 259,951 Operating lease payments include $92.3 million related to options to extend lease terms that are reasonably certain of being exercised and exclude $10.7 million of legally binding minimum lease payments for leases signed but not yet commenced. Lease term and discount rate for the first quarter ended April 2, 2019 are as follows: April 2, Weighted average remaining lease term (years): Operating 9.4 Finance 2.2 Weighted average discount rate: Operating 8.66 % Finance 7.11 % Supplemental disclosures of cash flow information related to leases for the first quarter ended April 2, 2019 are as follows (in thousands): April 2, Cash paid for lease liabilities: Operating leases $ 10,693 Finance leases 217 $ 10,910 Right-of-use assets obtained in exchange for new lease liabilities: Operating leases $ 3,161 Finance leases 50 $ 3,211 |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Apr. 02, 2019 | |
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 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 borrowings is measured using Level 2 inputs. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis Assets recognized or disclosed at fair value in the consolidated financial statements on a non-recurring basis include items such as leasehold improvements, property and equipment, operating lease assets, goodwill, and other intangible assets. These assets are measured at fair value if determined to be impaired or when acquired. Adjustments to the fair value of assets measured at fair value on a non-recurring basis as of April 2, 2019 and April 3, 2018 |
Income Taxes
Income Taxes | 3 Months Ended |
Apr. 02, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The following table presents the Company’s provision (benefit) for income taxes (in thousands): Fiscal Quarter Ended April 2, April 3, Provision (benefit) for income taxes $ — $ (241 ) Effective tax rate — % 6.3 % The effective tax rate for the first quarter of 2019 |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Apr. 02, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation The Company’s Stock Incentive Plan (the “Plan”), as amended and restated in May of 2013, authorizes the grant of non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”) and incentive bonuses to employees, officers, non-employee directors and other service providers. As of April 2, 2019 , approximately 3.5 million share-based awards were available to be granted under the Plan. The following table shows total stock-based compensation expense (in thousands): Fiscal Quarter Ended April 2, April 3, Stock-based compensation expense $ 726 $ 580 Capitalized stock-based compensation expense $ 11 $ 12 |
Restaurant Impairment, Closure
Restaurant Impairment, Closure Costs and Asset Disposals Restaurant Impairment, Closure Costs and Asset Disposals | 3 Months Ended |
Apr. 02, 2019 | |
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 April 2, April 3, Restaurant impairments (1) $ 189 $ 598 Closure costs (1) (39 ) 554 Loss on disposal of assets and other 270 428 $ 420 $ 1,580 _____________________________ (1) Restaurant impairments and closure costs in all periods presented above include amounts related to restaurants previously impaired or closed. During the first quarter of 2019 , there were no restaurants identified as impaired, compared to one restaurant impairment during the first quarter of 2018 . Both periods include ongoing equipment costs for restaurants previously impaired. 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. Closure costs in the first quarter of 2019 were comprised of a $0.3 million gain primarily relating to changes in the Company’s assessment of remaining operating lease terms, offset by $0.3 million of ongoing costs related to restaurants closed in previous years. The first quarter of 2018 included $0.6 million related to the ongoing costs of restaurants closed in previous years. These ongoing costs include adjustments to the liabilities to landlords as lease terminations occur. |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 3 Months Ended |
Apr. 02, 2019 | |
Earnings Per Share [Abstract] | |
Loss Per Share | 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 April 2, April 3, Net loss $ (1,851 ) $ (3,575 ) Shares: Basic weighted average shares outstanding 43,933,235 41,128,473 Effect of dilutive securities — — Diluted weighted average shares outstanding 43,933,235 41,128,473 Loss per share: Basic loss per share $ (0.04 ) $ (0.09 ) Diluted loss per share $ (0.04 ) $ (0.09 ) 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 per share when the effect would be anti-dilutive. The shares issuable on the vesting or exercise of share-based awards or exercise of outstanding warrants that were excluded from the calculation of diluted loss per share because the effect of their inclusion would have been anti-dilutive totaled 3,245,418 and 3,106,710 for the first quarter of 2019 and 2018 |
Supplemental Disclosures to Con
Supplemental Disclosures to Condensed Consolidated Statements of Cash Flows | 3 Months Ended |
Apr. 02, 2019 | |
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 first quarter ended April 2, 2019 and April 3, 2018 (in thousands): April 2, April 3, Interest paid (net of amounts capitalized) $ 713 $ 1,315 Income taxes paid 6 29 Changes in purchases of property and equipment accrued in accounts payable, net (68 ) (1,753 ) |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Apr. 02, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition Revenue Revenue consists of sales from restaurant operations, franchise royalties and fees, and sublease income. 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. 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 9% 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 24 months . Gift card liability balances are typically highest at the end of each calendar year following increased gift card purchases during the holiday season. As of April 2, 2019 and January 1, 2019 , the current portion of the gift card liability, $1.9 million and $3.3 million , respectively, is included in accrued expenses and other current liabilities, and the long-term portion, $0.7 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 $1.8 million during both the first quarters of 2019 and 2018. 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 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 are recognized as revenue over the term of each respective franchise agreement, which is typically 20 years . |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Apr. 02, 2019 | |
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. 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 April 2, 2019 |
Business Summary and Basis of_2
Business Summary and Basis of Presentation (Policies) | 3 Months Ended |
Apr. 02, 2019 | |
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 April 2, 2019 , the Company had 395 company-owned restaurants and 64 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 1, 2019 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 1, 2019 |
Fiscal year | Fiscal Year The Company operates on a 52- or 53-week fiscal year ending on the Tuesday closest to December 31. 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. Fiscal year 2019 , which ends on December 31, 2019 , and fiscal year 2018 , which ended on January 1, 2019 , both contain 52 weeks. The Company’s fiscal quarter that ended April 2, 2019 is referred to as the first quarter of 2019 , and the fiscal quarter ended April 3, 2018 is referred to as the first quarter of 2018 |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The Company reviewed recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a material impact on the Company’s financial position or results of operations and cash flows. Recently Adopted Accounting Pronouncements On January 2, 2019, the Company adopted ASU 2016-02, “Leases (Topic 842),” along with related clarifications and improvements. This pronouncement requires a lessee to recognize a liability for lease obligations, which represents the discounted obligation to make future lease payments, and a corresponding right-of-use asset on the balance sheet. The guidance also requires certain qualitative and quantitative disclosures about the amount, timing and uncertainty of cash flows arising from leases. The Company elected the alternative transition method to apply the standard as of the beginning of the period of adoption; therefore, the Company has not applied the standard to the comparative periods presented on its condensed consolidated financial statements. The adoption of this lease guidance did have a material impact on the Company’s Consolidated Balance Sheets by materially increasing its non-current assets and current and non-current liabilities due to the recognition of the right-of-use assets and related lease liabilities primarily related to the Company’s restaurant operating leases and corporate office space. Upon adoption, the right-of-use assets were based upon the operating lease liabilities adjusted for prepaid and deferred rent, liabilities associated with lease termination costs and impairment of right-of-use assets. The impairment of right-of-use assets upon adoption was recognized in retained earnings as of January 2, 2019. The adoption of the standard did not have a material impact on the Company’s Condensed Consolidated Statements of Operations in the first quarter of 2019 . The adoption also included the enhancement of the Company’s disclosures related to leases. See disclosure in Note 9, Leases. The impact on the Condensed Consolidated Balance Sheet on the date of adoption was as follows: January 1, Adjustments Due to the Adoption of Topic 842 (unaudited) January 2, 2019 (unaudited) Assets Current assets: Cash and cash equivalents $ 4,655 $ — $ 4,655 Accounts receivable 2,391 225 2,616 Inventories 9,646 — 9,646 Prepaid expenses and other assets 6,474 (3,243 ) 3,231 Income tax receivable 185 — 185 Total current assets 23,351 (3,018 ) 20,333 Property and equipment, net 138,774 844 139,618 Operating lease assets, net — 219,883 219,883 Goodwill 6,400 — 6,400 Intangibles, net 1,291 (67 ) 1,224 Other assets, net 2,216 — 2,216 Total long-term assets 148,681 220,660 369,341 Total assets $ 172,032 $ 217,642 $ 389,674 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 7,854 $ — $ 7,854 Accrued payroll and benefits 13,391 — 13,391 Accrued expenses and other current liabilities 11,183 (553 ) 10,630 Current operating lease liabilities — — — Current portion of long-term debt 719 — 719 Total current liabilities 33,147 (553 ) 32,594 Long-term debt, net 44,183 — 44,183 Long-term operating lease liabilities, net — 260,931 260,931 Deferred rent 37,334 (37,186 ) 148 Deferred tax liabilities, net 133 — 133 Other long-term liabilities 4,554 442 4,996 Total liabilities 119,351 223,634 342,985 Stockholders’ equity: Preferred stock—$0.01 par value, 1,000,000 shares authorized and undesignated as of January 1, 2019; no shares issued or outstanding — — — Common stock—$0.01 par value, 180,000,000 shares authorized as of January 1, 2019; 46,353,309 issued and 43,929,438 outstanding as of January 1, 2019 464 — 464 Treasury stock, at cost, 2,423,871 shares as of January 1, 2019 (35,000 ) — (35,000 ) Additional paid-in capital 198,352 — 198,352 Accumulated deficit (111,135 ) (5,992 ) (117,127 ) Total stockholders’ equity 52,681 (5,992 ) 46,689 Total liabilities and stockholders’ equity $ 172,032 $ 217,642 $ 389,674 |
Business Summary and Basis of_3
Business Summary and Basis of Presentation (Tables) | 3 Months Ended |
Apr. 02, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Table Text Block] | The impact on the Condensed Consolidated Balance Sheet on the date of adoption was as follows: January 1, Adjustments Due to the Adoption of Topic 842 (unaudited) January 2, 2019 (unaudited) Assets Current assets: Cash and cash equivalents $ 4,655 $ — $ 4,655 Accounts receivable 2,391 225 2,616 Inventories 9,646 — 9,646 Prepaid expenses and other assets 6,474 (3,243 ) 3,231 Income tax receivable 185 — 185 Total current assets 23,351 (3,018 ) 20,333 Property and equipment, net 138,774 844 139,618 Operating lease assets, net — 219,883 219,883 Goodwill 6,400 — 6,400 Intangibles, net 1,291 (67 ) 1,224 Other assets, net 2,216 — 2,216 Total long-term assets 148,681 220,660 369,341 Total assets $ 172,032 $ 217,642 $ 389,674 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 7,854 $ — $ 7,854 Accrued payroll and benefits 13,391 — 13,391 Accrued expenses and other current liabilities 11,183 (553 ) 10,630 Current operating lease liabilities — — — Current portion of long-term debt 719 — 719 Total current liabilities 33,147 (553 ) 32,594 Long-term debt, net 44,183 — 44,183 Long-term operating lease liabilities, net — 260,931 260,931 Deferred rent 37,334 (37,186 ) 148 Deferred tax liabilities, net 133 — 133 Other long-term liabilities 4,554 442 4,996 Total liabilities 119,351 223,634 342,985 Stockholders’ equity: Preferred stock—$0.01 par value, 1,000,000 shares authorized and undesignated as of January 1, 2019; no shares issued or outstanding — — — Common stock—$0.01 par value, 180,000,000 shares authorized as of January 1, 2019; 46,353,309 issued and 43,929,438 outstanding as of January 1, 2019 464 — 464 Treasury stock, at cost, 2,423,871 shares as of January 1, 2019 (35,000 ) — (35,000 ) Additional paid-in capital 198,352 — 198,352 Accumulated deficit (111,135 ) (5,992 ) (117,127 ) Total stockholders’ equity 52,681 (5,992 ) 46,689 Total liabilities and stockholders’ equity $ 172,032 $ 217,642 $ 389,674 |
Supplemental Financial Inform_2
Supplemental Financial Information (Tables) | 3 Months Ended |
Apr. 02, 2019 | |
Supplemental Financial Information [Abstract] | |
Schedule of Property and Equipment | Property and equipment, net, consists of the following (in thousands): April 2, January 1, Leasehold improvements $ 197,812 $ 197,571 Furniture, fixtures and equipment 122,939 121,479 Construction in progress 5,501 3,620 326,252 322,670 Accumulated depreciation and amortization (187,871 ) (183,896 ) $ 138,381 $ 138,774 |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consist of the following (in thousands): April 2, January 1, Gift card liability $ 1,906 $ 3,284 Occupancy related - other 1,164 2,600 Utilities 1,491 1,582 Other accrued expenses 3,963 3,717 $ 8,524 $ 11,183 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Apr. 02, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Maturities of Long-term Debt | Aggregate maturities for debt outstanding as of April 2, 2019 are as follows (in thousands): Year 1 $ 750 Year 2 1,500 Year 3 2,125 Year 4 44,959 Total $ 49,334 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Apr. 02, 2019 | |
Leases [Abstract] | |
Lease, Cost | Supplemental balance sheet information related to leases is as follows (in thousands): Classification April 2, Assets Operating Operating lease assets, net $ 218,311 Finance Finance lease assets, net (1) 1,057 Total leased assets $ 219,368 Liabilities Current lease liabilities Operating Current operating lease liabilities $ 21,528 Finance Current finance lease liabilities (2) 811 Long-term lease liabilities Operating Long-term operating lease liabilities 237,341 Finance Long-term finance lease liabilities (2) 271 Total lease liabilities $ 259,951 _____________________ (1) The finance lease assets are included in property and equipment, net in the Consolidated Balance Sheets. (2) The current portion of the finance lease liabilities is included in accrued expenses and other current liabilities, and the long-term portion is included in other long-term liabilities in the Consolidated Balance Sheets. The components of lease costs are as follows (in thousands): Classification April 2, Operating lease cost Occupancy, other restaurant operating costs, and general and administrative expenses $ 10,144 Finance lease cost Amortization of lease assets Depreciation and amortization 171 Interest on lease liabilities Interest expense, net 20 10,335 Sublease income Franchising royalties and fees, and other (112 ) Total lease cost, net $ 10,223 first quarter ended April 2, 2019 are as follows: April 2, Weighted average remaining lease term (years): Operating 9.4 Finance 2.2 Weighted average discount rate: Operating 8.66 % Finance 7.11 % Supplemental disclosures of cash flow information related to leases for the first quarter ended April 2, 2019 are as follows (in thousands): April 2, Cash paid for lease liabilities: Operating leases $ 10,693 Finance leases 217 $ 10,910 Right-of-use assets obtained in exchange for new lease liabilities: Operating leases $ 3,161 Finance leases 50 $ 3,211 |
Finance Lease, Liability, Maturity | Future minimum lease payments required under existing leases as of April 2, 2019 are as follows (in thousands): Operating Leases Finance Leases Total Remainder of 2019 $ 32,178 $ 497 $ 32,675 2020 42,686 471 43,157 2021 42,188 151 42,339 2022 42,024 23 42,047 2023 40,695 14 40,709 Thereafter 182,453 9 182,462 Total lease payments 382,224 1,165 383,389 Less: Imputed interest 123,355 83 123,438 Present value of lease liabilities $ 258,869 $ 1,082 $ 259,951 |
Lessee, Operating Lease, Liability, Maturity | Future minimum lease payments required under existing leases as of April 2, 2019 are as follows (in thousands): Operating Leases Finance Leases Total Remainder of 2019 $ 32,178 $ 497 $ 32,675 2020 42,686 471 43,157 2021 42,188 151 42,339 2022 42,024 23 42,047 2023 40,695 14 40,709 Thereafter 182,453 9 182,462 Total lease payments 382,224 1,165 383,389 Less: Imputed interest 123,355 83 123,438 Present value of lease liabilities $ 258,869 $ 1,082 $ 259,951 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Apr. 02, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Provision for Income Taxes | The following table presents the Company’s provision (benefit) for income taxes (in thousands): Fiscal Quarter Ended April 2, April 3, Provision (benefit) for income taxes $ — $ (241 ) Effective tax rate — % 6.3 % |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Apr. 02, 2019 | |
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 April 2, April 3, Stock-based compensation expense $ 726 $ 580 Capitalized stock-based compensation expense $ 11 $ 12 |
Restaurant Impairment, Closur_2
Restaurant Impairment, Closure Costs and Asset Disposals Restaurant Impairment, Closure Costs and Asset Disposals (Tables) | 3 Months Ended |
Apr. 02, 2019 | |
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 April 2, April 3, Restaurant impairments (1) $ 189 $ 598 Closure costs (1) (39 ) 554 Loss on disposal of assets and other 270 428 $ 420 $ 1,580 _____________________________ (1) Restaurant impairments and closure costs in all periods presented above include amounts related to restaurants previously impaired or closed. |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 3 Months Ended |
Apr. 02, 2019 | |
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 April 2, April 3, Net loss $ (1,851 ) $ (3,575 ) Shares: Basic weighted average shares outstanding 43,933,235 41,128,473 Effect of dilutive securities — — Diluted weighted average shares outstanding 43,933,235 41,128,473 Loss per share: Basic loss per share $ (0.04 ) $ (0.09 ) Diluted loss per share $ (0.04 ) $ (0.09 ) |
Supplemental Disclosures to C_2
Supplemental Disclosures to Condensed Consolidated Statements of Cash Flows (Tables) | 3 Months Ended |
Apr. 02, 2019 | |
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 first quarter ended April 2, 2019 and April 3, 2018 (in thousands): April 2, April 3, Interest paid (net of amounts capitalized) $ 713 $ 1,315 Income taxes paid 6 29 Changes in purchases of property and equipment accrued in accounts payable, net (68 ) (1,753 ) |
Business Summary and Basis of_4
Business Summary and Basis of Presentation - Narrative (Details) | 3 Months Ended |
Apr. 02, 2019segmentrestaurantstate | |
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 | 395 |
Franchise [Member] | |
Franchisor Disclosure [Line Items] | |
Number of restaurants | restaurant | 64 |
Business Summary and Basis of_5
Business Summary and Basis of Presentation - New Accounting Pronouncements (Details) - USD ($) $ in Thousands | Apr. 02, 2019 | Jan. 02, 2019 | Jan. 01, 2019 | Apr. 03, 2018 | Jan. 02, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Cash and cash equivalents | $ 1,800 | $ 4,655 | $ 4,655 | $ 2,624 | $ 3,361 |
Accounts receivable | 2,254 | 2,616 | 2,391 | ||
Inventories | 9,870 | 9,646 | 9,646 | ||
Prepaid expenses and other assets | 3,066 | 3,231 | 6,474 | ||
Income tax receivable | 191 | 185 | 185 | ||
Total current assets | 17,181 | 20,333 | 23,351 | ||
Property and equipment, net | 138,381 | 139,618 | 138,774 | ||
Operating lease assets, net | 218,311 | 219,883 | 0 | ||
Goodwill | 7,154 | 6,400 | 6,400 | ||
Goodwill | 1,179 | 1,224 | 1,291 | ||
Other assets, net | 2,360 | 2,216 | 2,216 | ||
Total long-term assets | 367,385 | 369,341 | 148,681 | ||
Total assets | 384,566 | 389,674 | 172,032 | ||
Accounts payable | 10,563 | 7,854 | 7,854 | ||
Accrued payroll and benefits | 7,833 | 13,391 | 13,391 | ||
Accrued expenses and other current liabilities | 8,524 | 10,630 | 11,183 | ||
Current operating lease liabilities | 21,528 | 0 | 0 | ||
Current portion of long-term debt | 750 | 719 | 719 | ||
Total current liabilities | 49,198 | 32,594 | 33,147 | ||
Long-term debt, net | 47,035 | 44,183 | 44,183 | ||
Long-term operating lease liabilities, net | 237,341 | 260,931 | 0 | ||
Deferred rent | 0 | 148 | 37,334 | ||
Deferred tax liabilities, net | 133 | 133 | 133 | ||
Other long-term liabilities | 5,263 | 4,996 | 4,554 | ||
Total liabilities | 338,970 | 342,985 | 119,351 | ||
Preferred stock—$0.01 par value, 1,000,000 shares authorized and undesignated as of January 1, 2019; no shares issued or outstanding | 0 | 0 | 0 | ||
Common stock—$0.01 par value, 180,000,000 shares authorized as of January 1, 2019; 46,353,309 issued and 43,929,438 outstanding as of January 1, 2019 | 464 | 464 | 464 | ||
Treasury stock, at cost, 2,423,871 shares as of January 1, 2019 | (35,000) | (35,000) | (35,000) | ||
Additional paid-in capital | 199,110 | 198,352 | 198,352 | ||
Accumulated deficit | (118,978) | (117,127) | (111,135) | ||
Total stockholders’ equity | 45,596 | 46,689 | 52,681 | $ 31,407 | $ 35,861 |
Total liabilities and stockholders’ equity | $ 384,566 | 389,674 | $ 172,032 | ||
Accounting Standards Update 2016-02 | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Cash and cash equivalents | 0 | ||||
Accounts receivable | 225 | ||||
Inventories | 0 | ||||
Prepaid expenses and other assets | (3,243) | ||||
Income tax receivable | 0 | ||||
Total current assets | (3,018) | ||||
Property and equipment, net | 844 | ||||
Operating lease assets, net | 219,883 | ||||
Goodwill | 0 | ||||
Goodwill | (67) | ||||
Other assets, net | 0 | ||||
Total long-term assets | 220,660 | ||||
Total assets | 217,642 | ||||
Accounts payable | 0 | ||||
Accrued payroll and benefits | 0 | ||||
Accrued expenses and other current liabilities | (553) | ||||
Current operating lease liabilities | 0 | ||||
Current portion of long-term debt | 0 | ||||
Total current liabilities | (553) | ||||
Long-term debt, net | 0 | ||||
Long-term operating lease liabilities, net | 260,931 | ||||
Deferred rent | (37,186) | ||||
Deferred tax liabilities, net | 0 | ||||
Other long-term liabilities | 442 | ||||
Total liabilities | 223,634 | ||||
Preferred stock—$0.01 par value, 1,000,000 shares authorized and undesignated as of January 1, 2019; no shares issued or outstanding | 0 | ||||
Common stock—$0.01 par value, 180,000,000 shares authorized as of January 1, 2019; 46,353,309 issued and 43,929,438 outstanding as of January 1, 2019 | 0 | ||||
Treasury stock, at cost, 2,423,871 shares as of January 1, 2019 | 0 | ||||
Additional paid-in capital | 0 | ||||
Accumulated deficit | (5,992) | ||||
Total stockholders’ equity | (5,992) | ||||
Total liabilities and stockholders’ equity | $ 217,642 |
Supplemental Financial Inform_3
Supplemental Financial Information (Details) - USD ($) $ in Thousands | Apr. 02, 2019 | Jan. 02, 2019 | Jan. 01, 2019 |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 326,252 | $ 322,670 | |
Accumulated depreciation and amortization | (187,871) | (183,896) | |
Property and equipment, net | 138,381 | $ 139,618 | 138,774 |
Leasehold Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 197,812 | 197,571 | |
Furniture, Fixtures, and Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 122,939 | 121,479 | |
Construction in Progress [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 5,501 | $ 3,620 |
Supplemental Financial Inform_4
Supplemental Financial Information - Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Apr. 02, 2019 | Jan. 02, 2019 | Jan. 01, 2019 |
Supplemental Financial Information [Abstract] | |||
Gift card liability | $ 1,906 | $ 3,284 | |
Occupancy related | 1,164 | 2,600 | |
Utilities | 1,491 | 1,582 | |
Other accrued expenses | 3,963 | 3,717 | |
Accrued liabilities, current | $ 8,524 | $ 10,630 | $ 11,183 |
Long-Term Debt - Narrative (De
Long-Term Debt - Narrative (Details) - USD ($) | May 09, 2018 | Apr. 02, 2019 | Jun. 28, 2022 | Mar. 30, 2021 | Mar. 31, 2020 |
Line of Credit Facility [Line Items] | |||||
Amount outstanding | $ 49,300,000 | ||||
Unamortized debt issuance costs | 1,500,000 | ||||
Letters of credit outstanding | 3,200,000 | ||||
Principal repayments through the first quarter of 2019 | 750,000 | ||||
Principal repayments through the first quarter of 2020 | 1,500,000 | ||||
Principal repayments through the first quarter of 2021 | 2,125,000 | ||||
Principal repayments through the first quarter of 2022 | $ 44,959,000 | ||||
Minimum | |||||
Line of Credit Facility [Line Items] | |||||
Interest rate | 5.59% | ||||
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 | |||||
Line of Credit Facility [Line Items] | |||||
Principal repayments through the first quarter of 2019 | $ 156,250 | ||||
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 | ||||
Scenario, Forecast | |||||
Line of Credit Facility [Line Items] | |||||
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 | Apr. 02, 2019USD ($) |
Debt Disclosure [Abstract] | |
Year 1 (payments through third quarter of 2019) | $ 750 |
2020 | 1,500 |
2021 | 2,125 |
2022 | 44,959 |
Total | $ 49,334 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Millions | Apr. 02, 2019 | Apr. 03, 2018 |
Leases [Abstract] | ||
Term of contract | 10 years | |
Renewal term | 15 years | |
Option to extend lease term | $ 92.3 | |
Minimum lease payments signed but not yet commenced | $ 10.7 |
Leases - Schedule of Lease Cost
Leases - Schedule of Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Apr. 02, 2019 | Jan. 02, 2019 | Jan. 01, 2019 | Apr. 03, 2018 | |
Leases [Abstract] | ||||
Operating Lease, Payments | $ 10,693 | |||
Assets | ||||
Operating lease assets, net | 218,311 | $ 219,883 | $ 0 | |
Finance lease assets, net | 1,057 | |||
Total Leased Asset | 219,368 | |||
Liabilities [Abstract] | ||||
Current operating lease liabilities | 21,528 | 0 | 0 | |
Current finance lease liabilities | 811 | |||
Liabilities, Noncurrent [Abstract] | ||||
Long-term operating lease liabilities, net | 237,341 | $ 260,931 | $ 0 | |
Long-term finance lease liabilities | 271 | |||
Present value of lease liabilities | 259,951 | |||
Operating Lease Cost [Abstract] | ||||
Operating lease cost | 10,144 | |||
Finance lease cost | ||||
Amortization of lease assets | 171 | |||
Interest on lease liabilities | 20 | |||
Operating And Finance Lease Cost | 10,335 | |||
Sublease income | (112) | |||
Total lease cost, net | $ 10,223 | |||
Operating Lease, Weighted Average Remaining Lease Term | 9 years 4 months 24 days | |||
Finance Lease, Weighted Average Remaining Lease Term | 2 years 2 months 12 days | |||
Operating Lease, Weighted Average Discount Rate, Percent | 8.66% | |||
Finance Lease, Weighted Average Discount Rate, Percent | 7.11% | |||
Finance Lease, Principal Payments | $ 217 | |||
Cash Paid For Operating And Finance Lease Liabilities | 10,910 | |||
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | 3,161 | |||
Right-of-Use Asset Obtained in Exchange for Finance Lease Liability | 50 | |||
Right-of-Use Asset Obtained in Exchange for Operating And Finance Lease Liability | $ 3,211 |
Leases - Schedule of Lease Matu
Leases - Schedule of Lease Maturity (Details) $ in Thousands | Apr. 02, 2019USD ($) |
Operating Lease Liabilities, Payments Due [Abstract] | |
Remainder of 2019 | $ 32,178 |
2020 | 42,686 |
2021 | 42,188 |
2022 | 42,024 |
2023 | 40,695 |
Thereafter | 182,453 |
Total lease payments | 382,224 |
Less: Imputed interest | 123,355 |
Present value of lease liabilities | 258,869 |
Finance Lease Liabilities, Payments, Due [Abstract] | |
Remainder of 2019 | 497 |
2020 | 471 |
2021 | 151 |
2022 | 23 |
2023 | 14 |
Thereafter | 9 |
Total lease payments | 1,165 |
Less: Imputed interest | 83 |
Present value of lease liabilities | 1,082 |
Operating And Finance Lease Liabilities Payments Due [Abstract] | |
Remainder of 2019 | 32,675 |
2020 | 43,157 |
2021 | 42,339 |
2022 | 42,047 |
2023 | 40,709 |
Thereafter | 182,462 |
Total lease payments | 383,389 |
Less: Imputed interest | 123,438 |
Present value of lease liabilities | $ 259,951 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 02, 2019 | Apr. 03, 2018 | |
Income Tax Disclosure [Abstract] | ||
(Benefit) provision for income taxes | $ 0 | $ (241) |
Effective tax rate | 0.00% | 6.30% |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Apr. 02, 2019 | Apr. 03, 2018 | May 31, 2013 | |
IPO [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Maximum shares reserved for issuance | 3,500,000 | ||
Employee Stock Option [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Allocated Share-based Compensation Expense | $ 726 | $ 580 | |
Capitalized stock based compensation expense | $ 11 | $ 12 |
Restaurant Impairment, Closur_3
Restaurant Impairment, Closure Costs and Asset Disposals Restaurant Impairment, Closure Costs and Asset Disposals (Details) $ in Thousands | 3 Months Ended | |
Apr. 02, 2019USD ($)restaurant | Apr. 03, 2018USD ($)restaurant | |
Property, Plant and Equipment Impairment or Disposal [Abstract] | ||
Restaurant impairments | $ 189 | $ 598 |
Closure costs | (39) | 554 |
Loss on disposal of assets and other | (270) | (428) |
Asset Disposals, Closure Costs and Restaurant Impairments | $ 420 | $ 1,580 |
Number of restaurants impaired during the comparable periods | restaurant | 0 | 1 |
Closure costs relating to assessment of operating lease terms | $ (300) | |
Impairment closure costs and other | 300 | $ 600 |
Gain on disposal | $ 400 |
Earnings (Loss) Per Share (Deta
Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Apr. 02, 2019 | Apr. 03, 2018 | Jan. 01, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Document Period End Date | Apr. 2, 2019 | ||
Net Income (Loss) Available to Common Stockholders, Basic | $ (1,851) | $ (3,575) | |
Net loss | $ (1,851) | $ (3,575) | |
Shares: | |||
Basic weighted average shares outstanding (in shares) | 43,933,235 | 41,128,473 | |
Effect of dilutive securities (in shares) | 0 | 0 | |
Diluted weighted average number of shares outstanding (in shares) | 43,933,235 | 41,128,473 | |
Earnings (loss) per share: | |||
Basic loss per share (USD per share) | $ (0.04) | $ (0.09) | |
Diluted loss per share (USD per share) | $ (0.04) | $ (0.09) | |
Preferred stock, shares issued (in shares) | 0 | 0 | |
Antidilutive securities excluded from computation of earnings per share | 3,245,418 | 3,106,710 |
Supplemental Disclosures to C_3
Supplemental Disclosures to Condensed Consolidated Statements of Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 02, 2019 | Apr. 03, 2018 | |
Class of Stock [Line Items] | ||
Interest paid (net of amounts capitalized) | $ 713 | $ 1,315 |
Income taxes paid (refunded) | 6 | 29 |
Changes in purchases of property and equipment accrued in accounts payable, net | $ 68 | $ 1,753 |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Apr. 02, 2019 | Apr. 03, 2018 | Jan. 02, 2019 | Jan. 01, 2019 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Expected unredeemed percent | 9.00% | |||
Estimated redemption period | 24 months | |||
Gift card liability | $ 1,906 | $ 3,284 | ||
Gift card breakage | $ 1,800 | $ 1,800 | ||
Period in which initial fees received from franchisees will be recognized as revenue | 20 years | |||
Retained earnings | $ (118,978) | $ (117,127) | (111,135) | |
Accrued Expenses and Other Current Liabilities | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Gift card liability | 1,900 | 3,300 | ||
Other Long-term Liabilities | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Gift card liability, non-current | $ 700 | $ 400 |