Cover
Cover - shares | 6 Months Ended | |
Jun. 29, 2021 | Jul. 30, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 29, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-35987 | |
Entity Registrant Name | NOODLES & COMPANY | |
Entity Central Index Key | 0001275158 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-28 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q2 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 84-1303469 | |
Entity Address, Address Line One | 520 Zang Street, Suite D | |
Entity Address, City or Town | Broomfield | |
Entity Address, State or Province | CO | |
Entity Address, Postal Zip Code | 80021 | |
City Area Code | 720 | |
Local Phone Number | 214-1900 | |
Title of 12(b) Security | Class A Common Stock, $0.01 par value per share | |
Trading Symbol | NDLS | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 45,634,224 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 29, 2021 | Dec. 29, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 17,324 | $ 7,840 |
Accounts receivable | 4,348 | 3,428 |
Inventories | 9,527 | 9,643 |
Prepaid expenses and other assets | 3,695 | 2,759 |
Income tax receivable | 70 | 44 |
Total current assets | 34,964 | 23,714 |
Property and equipment, net | 122,399 | 122,917 |
Operating lease assets, net | 191,410 | 195,618 |
Goodwill | 7,154 | 7,154 |
Intangibles, net | 732 | 757 |
Other assets, net | 3,496 | 3,471 |
Total long-term assets | 325,191 | 329,917 |
Total assets | 360,155 | 353,631 |
Current liabilities: | ||
Accounts payable | 12,586 | 6,402 |
Accrued payroll and benefits | 18,241 | 12,876 |
Accrued expenses and other current liabilities | 12,293 | 11,632 |
Current operating lease liabilities | 26,141 | 26,094 |
Current portion of long-term debt | 1,500 | 1,125 |
Total current liabilities | 70,761 | 58,129 |
Long-term debt, net | 35,754 | 40,949 |
Long-term operating lease liabilities, net | 206,977 | 210,454 |
Deferred tax liabilities, net | 256 | 240 |
Other long-term liabilities | 10,964 | 14,160 |
Total liabilities | 324,712 | 323,932 |
Stockholders’ equity: | ||
Preferred stock—$0.01 par value, 1,000,000 shares authorized and undesignated as of June 29, 2021 and December 29, 2020; no shares issued or outstanding | 0 | 0 |
Common stock—$0.01 par value, 180,000,000 shares authorized as of June 29, 2021 and December 29, 2020; 48,011,761 issued and 45,587,890 outstanding as of June 29, 2021 and 46,807,587 issued and 44,383,716 outstanding as of December 29, 2020 | 480 | 468 |
Treasury stock, at cost, 2,423,871 shares as of June 29, 2021 and December 29, 2020 | (35,000) | (35,000) |
Additional paid-in capital | 204,996 | 202,970 |
Accumulated deficit | (135,033) | (138,739) |
Total stockholders’ equity | 35,443 | 29,699 |
Total liabilities and stockholders’ equity | $ 360,155 | $ 353,631 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 29, 2021 | Dec. 29, 2020 |
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 | 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 | 48,011,761 | 46,807,587 |
Common stock, shares, outstanding | 45,587,890 | 44,383,716 |
Treasury stock, shares | 2,423,871 | 2,423,871 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2021 | Jun. 30, 2020 | Jun. 29, 2021 | Jun. 30, 2020 | |
Revenue: | ||||
Total revenue | $ 125,649 | $ 80,157 | $ 235,226 | $ 180,505 |
Restaurant operating costs (exclusive of depreciation and amortization shown separately below): | ||||
Other restaurant operating costs | 21,082 | 15,789 | 41,287 | 32,478 |
General and administrative | 12,978 | 10,034 | 23,907 | 20,588 |
Depreciation and amortization | 5,576 | 5,397 | 11,163 | 10,732 |
Pre-opening | 163 | 71 | 221 | 144 |
Restaurant impairments, closure costs and asset disposals | 390 | 2,558 | 1,621 | 3,614 |
Total costs and expenses | 119,439 | 92,682 | 230,381 | 197,884 |
Income (loss) from operations | 6,210 | (12,525) | 4,845 | (17,379) |
Interest expense, net | 498 | 920 | 1,120 | 1,888 |
Income (loss) before taxes | 5,712 | (13,445) | 3,725 | (19,267) |
Provision for income taxes | 29 | 33 | 19 | 46 |
Net income (loss) | $ 5,683 | $ (13,478) | $ 3,706 | $ (19,313) |
Earnings (loss) per Class A and Class B common stock, combined | ||||
Basic (USD per share) | $ 0.12 | $ (0.30) | $ 0.08 | $ (0.44) |
Diluted (USD per share) | $ 0.12 | $ (0.30) | $ 0.08 | $ (0.44) |
Weighted average shares of Class A and Class B common stock outstanding, combined: | ||||
Basic (in shares) | 45,506,476 | 44,212,751 | 45,303,160 | 44,177,648 |
Diluted (in shares) | 46,246,169 | 44,212,751 | 45,992,119 | 44,177,648 |
Restaurant revenue | ||||
Revenue: | ||||
Total revenue | $ 123,715 | $ 80,021 | $ 231,459 | $ 178,737 |
Restaurant operating costs (exclusive of depreciation and amortization shown separately below): | ||||
Restaurant operating costs | 30,805 | 20,020 | 57,782 | 45,224 |
Franchising royalties and fees, and other | ||||
Revenue: | ||||
Total revenue | 1,934 | 136 | 3,767 | 1,768 |
Labor | ||||
Restaurant operating costs (exclusive of depreciation and amortization shown separately below): | ||||
Restaurant operating costs | 36,926 | 27,137 | 71,232 | 61,368 |
Occupancy | ||||
Restaurant operating costs (exclusive of depreciation and amortization shown separately below): | ||||
Restaurant operating costs | $ 11,519 | $ 11,676 | $ 23,168 | $ 23,736 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Treasury Stock | Additional Paid-in Capital | Accumulated Deficit | ||
Beginning balance (in shares) at Dec. 31, 2019 | 46,557,934 | [1] | 2,423,871 | ||||
Beginning balance at Dec. 31, 2019 | $ 50,571 | $ 466 | [1] | $ (35,000) | $ 200,585 | $ (115,480) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Stock plan transactions and other (in shares) | [1] | 220,748 | |||||
Stock plan transactions and other | (272) | $ 2 | [1] | (274) | |||
Stock-based compensation expense | 1,290 | 1,290 | |||||
Net income (loss) | (19,313) | (19,313) | |||||
Ending balance (in shares) at Jun. 30, 2020 | 46,778,682 | [1] | 2,423,871 | ||||
Ending balance at Jun. 30, 2020 | 32,276 | $ 468 | [1] | $ (35,000) | 201,601 | (134,793) | |
Beginning balance (in shares) at Mar. 31, 2020 | 46,583,879 | [1] | 2,423,871 | ||||
Beginning balance at Mar. 31, 2020 | 44,906 | $ 466 | [1] | $ (35,000) | 200,755 | (121,315) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Stock plan transactions and other (in shares) | [1] | 194,803 | |||||
Stock plan transactions and other | (271) | $ 2 | [1] | (273) | |||
Stock-based compensation expense | 1,119 | 1,119 | |||||
Net income (loss) | (13,478) | (13,478) | |||||
Ending balance (in shares) at Jun. 30, 2020 | 46,778,682 | [1] | 2,423,871 | ||||
Ending balance at Jun. 30, 2020 | 32,276 | $ 468 | [1] | $ (35,000) | 201,601 | (134,793) | |
Beginning balance (in shares) at Dec. 29, 2020 | 46,807,587 | [1] | 2,423,871 | ||||
Beginning balance at Dec. 29, 2020 | 29,699 | $ 468 | [1] | $ (35,000) | 202,970 | (138,739) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
L Catterton warrants exercised (in shares) | [1] | 975,458 | |||||
L Catterton warrants exercised | 0 | $ 10 | [1] | (10) | |||
Stock plan transactions and other (in shares) | [1] | 228,716 | |||||
Stock plan transactions and other | (279) | $ 2 | [1] | (281) | |||
Stock-based compensation expense | 2,317 | 2,317 | |||||
Net income (loss) | 3,706 | 3,706 | |||||
Ending balance (in shares) at Jun. 29, 2021 | 48,011,761 | [1] | 2,423,871 | ||||
Ending balance at Jun. 29, 2021 | 35,443 | $ 480 | [1] | $ (35,000) | 204,996 | (135,033) | |
Beginning balance (in shares) at Mar. 30, 2021 | 47,890,488 | [1] | 2,423,871 | ||||
Beginning balance at Mar. 30, 2021 | 28,125 | $ 479 | [1] | $ (35,000) | 203,362 | (140,716) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Stock plan transactions and other (in shares) | [1] | 121,273 | |||||
Stock plan transactions and other | 56 | $ 1 | [1] | 55 | |||
Stock-based compensation expense | 1,579 | 1,579 | |||||
Net income (loss) | 5,683 | 5,683 | |||||
Ending balance (in shares) at Jun. 29, 2021 | 48,011,761 | [1] | 2,423,871 | ||||
Ending balance at Jun. 29, 2021 | $ 35,443 | $ 480 | [1] | $ (35,000) | $ 204,996 | $ (135,033) | |
[1] | Unless otherwise noted, activity relates to Class A common stock. |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 29, 2021 | Jun. 30, 2020 | |
Operating activities | ||
Net income (loss) | $ 3,706 | $ (19,313) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 11,163 | 10,732 |
Deferred income taxes | 16 | 47 |
Restaurant impairments, closure costs and asset disposals | 898 | 3,029 |
Amortization of debt issuance costs | 222 | 149 |
Stock-based compensation | 2,283 | 1,253 |
Gain on insurance proceeds | (406) | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (521) | 1,190 |
Inventories | (1) | 306 |
Prepaid expenses and other assets | (961) | 87 |
Accounts payable | 3,060 | 2,722 |
Income taxes | (26) | (77) |
Operating lease assets and liabilities | 830 | 7,507 |
Accrued expenses and other liabilities | 2,983 | (925) |
Net cash provided by operating activities | 23,246 | 6,707 |
Investing activities | ||
Purchases of property and equipment | (7,476) | (6,810) |
Net cash used in investing activities | (7,476) | (6,810) |
Financing activities | ||
Proceeds from issuance of long-term debt | 0 | 55,500 |
Payments on long-term debt | (5,042) | (2,375) |
Payments on finance leases | (965) | (402) |
Debt issuance costs | 0 | (731) |
Stock plan transactions and tax withholding on share-based compensation awards | (279) | (272) |
Net cash (used in) provided by financing activities | (6,286) | 51,720 |
Net increase in cash and cash equivalents | 9,484 | 51,617 |
Cash and cash equivalents | ||
Beginning of period | 7,840 | 10,459 |
End of period | $ 17,324 | $ 62,076 |
Business Summary and Basis of P
Business Summary and Basis of Presentation | 6 Months Ended |
Jun. 29, 2021 | |
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 June 29, 2021, the Company had 451 restaurants system-wide in 29 states, comprised of 374 company-owned restaurants and 77 franchise restaurants. 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 December 29, 2020 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 December 29, 2020. 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 2021, which ends on December 28, 2021, and fiscal year 2020, which ended on December 29, 2020, both contain 52 weeks. The Company’s fiscal quarter that ended June 29, 2021 is referred to as the second quarter of 2021, and the fiscal quarter ended June 30, 2020 is referred to as the second quarter of 2020. Risks and Uncertainties We are subject to risks and uncertainties as a result of the ongoing COVID-19 pandemic. The onset of the COVID-19 pandemic resulted in significant disruption to the restaurant industry and adversely affected our business. The greatest impact to our sales and overall financial results was during the initial stages of the pandemic, beginning the third week of March 2020 through the second quarter of 2020. During this period, we temporarily closed nearly all of our dining rooms, driven by local government imposed restrictions in areas where we operate our restaurants and migrated to an almost completely off-premise model. Since the initial disruption, we have seen sequential improvement in our financial performance due in part to our investments in our off-premise and digital channels. In 2021, we saw further improvement as vaccine availability was more widespread and social distancing restrictions were softened. The extent of the impact of the COVID-19 pandemic on our operations and financial results depends on future developments and is highly uncertain due to the unknown duration and severity of the outbreak, including the potential impact of the COVID-19 delta variant. The situation is changing rapidly and future impacts may materialize that are not yet known. As of the date of this filing, substantially all of our restaurants continue to operate, with dining rooms open at varying capacities. We intend to continue to actively monitor the evolving situation and may take further actions that alter our business operations as may be required by federal, state or local authorities or that we determine are in the best interests of our team members, customers, suppliers and shareholders. Recent Accounting Pronouncements In March 2020, the FASB issued ASU No. 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). ASU 2020-04 is intended to provide temporary optional expedients and exceptions to the U.S. GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. The Company may elect to apply the amendments prospectively through December 31, 202 2. The Company is currently evaluating the impact this guidance may have on its consolidated financial statements and related disclosures. Recently Adopted Accounting Pronouncements In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 was issued as a means to reduce the complexity of accounting for income taxes for those entities that fall within the scope of the accounting standard. This guidance is effective for public companies for annual reporting periods beginning after December 15, 2020 and interim periods within those reporting periods. Interim period adoption is permitted. The guidance is to be applied using a prospective method, excluding amendments related to franchise taxes, which should be applied on either a retrospective basis for all periods presented or a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The Company adopted this standard on Decembe r 30, 2020. The adoption of this standard did not have a material impact on our consolidated financial statements or disclosures. |
Supplemental Financial Informat
Supplemental Financial Information | 6 Months Ended |
Jun. 29, 2021 | |
Supplemental Financial Information [Abstract] | |
Supplemental Financial Information | Supplemental Financial Information Accounts receivable consist of the following (in thousands): June 29, December 29, Delivery program receivables $ 1,778 $ 1,268 Insurance receivable 586 74 Vendor rebate receivables 704 641 Franchise receivables 687 564 Other receivables 593 881 Accounts receivable $ 4,348 $ 3,428 Prepaid expenses and other assets consist of the following (in thousands): June 29, December 29, Prepaid insurance $ 992 $ 744 Prepaid occupancy related costs 34 884 Other prepaid expenses 2,552 1,092 Other current assets 117 39 Prepaid expenses and other assets $ 3,695 $ 2,759 Property and equipment, net, consists of the following (in thousands): June 29, December 29, Leasehold improvements $ 200,646 $ 199,782 Furniture, fixtures and equipment 134,461 132,756 Construction in progress 8,212 1,713 343,319 334,251 Accumulated depreciation and amortization (220,920) (211,334) Property and equipment, net $ 122,399 $ 122,917 Accrued payroll and benefits consist of the following (in thousands): June 29, December 29, Accrued payroll and related liabilities $ 10,286 $ 6,812 Accrued bonus 3,699 2,364 Insurance liabilities 4,256 3,700 Accrued payroll and benefits $ 18,241 $ 12,876 Accrued expenses and other current liabilities consist of the following (in thousands): June 29, December 29, Gift card liability $ 2,270 $ 2,551 Occupancy related 1,792 1,322 Utilities 1,399 1,338 Deferred revenue 291 427 Current portion of finance lease liability 1,958 1,800 Other accrued expenses 4,583 4,194 Accrued expenses and other current liabilities $ 12,293 $ 11,632 |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Jun. 29, 2021 | |
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 consisted of a term loan facility in an aggregate principal amount of $25.0 million and a revolving credit facility of $65.0 million, which included a letter of credit subfacility in the amount of $15.0 million and a swingline subfacility in the amount of $10.0 million. On November 20, 2019, the Company amended its 2018 Credit Facility by entering into the First Amendment to the Credit Agreement (the “Amendment” and the 2018 Credit Facility, as amended, the “First Amended Credit Facility”). Among other things, the Amendment: (i) extended the maturity date to November 20, 2024; (ii) increased the revolving credit facility from $65.0 million to $75.0 million; (iii) delayed step downs of the Company’s leverage covenant; and (iv) increased the limit on capital expenditures to $37.0 million in 2020 and to $45.0 million in 2021 and each fiscal year thereafter. Borrowings under the First Amended Credit Facility, including the term loan facility, bear interest annually, at the Company’s option, at either (i) LIBOR plus a margin of 2.00% to 2.75% per annum, based upon the consolidated total lease-adjusted leverage ratio or (ii) the highest of the following base rates plus a margin of 1.00% to 1.75% 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 Amendment includes a commitment fee of 0.20% to 0.35% per annum, based upon the consolidated total lease-adjusted leverage ratio, on any unused portion of the revolving credit facility. On June 16, 2020 (the “Effective Date”), the Company amended its First Amended Credit Facility by entering into the Second Amendment to the Credit Agreement (the “Second Amendment” and the First Amended Credit Facility, as amended, or the “Second Amended Credit Facility”). Beginning on the Effective Date and through the third quarter of 2021 (the “Amendment Period”), borrowings under the Second Amended Credit Facility, including the term loan facility (“Borrowings”), will bear interest at LIBOR plus 3.25% per annum. Following the Amendment Period, borrowings will bear interest at LIBOR plus a margin of 2.00% to 3.00% per annum, based upon the consolidated total lease-adjusted leverage ratio. Among other things, the Second Amendment (i) waives the lease-adjusted leverage ratio and fixed charge ratio covenants through the first quarter of 2021; (ii) amends the Company’s lease-adjusted leverage ratio and fixed coverage ratio covenant thresholds beginning in the second quarter of 2021 through the third quarter of 2022 and the first quarter of 2022, respectively; and (iii) limits capital expenditures to $12.0 million in 2020, $12.0 million plus a liquidity-based performance basket up to an additional $12.0 million in 2021, $34.0 million in 2022, $37.0 million in 2023 and $45.0 million annually thereafter. As of June 29, 2021, the Company had $38.8 million of indebtedness (excluding $1.5 million of unamortized debt issuance costs) and $3.2 million of letters of credit outstanding under the Second Amended Credit Facility reflecting debt repayments of $5.0 million in the first two quarters of 2021. As of June 29, 2021, the Company had cash on hand of $17.3 million. The term loan requires principal payments of $187,500 per quarter through the third quarter of 2021, $375,000 per quarter through the third quarter of 2022, $531,250 per quarter through the third quarter of 2023 and $625,000 per quarter thereafter through maturity. Aggregate maturities for debt outstanding as of June 29, 2021 are as follows (in thousands): Year 1 $ 1,500 Year 2 1,969 Year 3 2,406 Year 4 32,889 Total $ 38,764 The Company’s outstanding indebtedness bore interest at rates between 3.40% to 3.52% during the first two quarters of 2021. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 29, 2021 | |
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 and term borrowings are 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 condensed 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. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 29, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The following table presents the Company’s provision for income taxes (in thousands): Fiscal Quarter Ended Two Fiscal Quarters Ended June 29, June 30, June 29, June 30, Provision for income taxes $ 29 $ 33 $ 19 $ 46 Effective tax rate 0.5 % (0.2) % 0.5 % (0.2) % The effective tax rate for the second quarter of 2021 and the first two quarters of 2021 ref lects the impact of the previously recorded valuation allowance. For the remainder of fiscal 2021, the Company does not anticipate material income tax expense or benefit as a result of the valuation allowance recorded. The Company will maintain the 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 | 6 Months Ended |
Jun. 29, 2021 | |
Share-based Payment Arrangement [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”), performance share units (“PSUs”) and incentive bonuses to employees, officers, non-employee directors and other service providers. As of June 29, 2021, approximatel y 3.0 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 Two Fiscal Quarters Ended June 29, June 30, June 29, June 30, Stock-based compensation expense $ 1,611 $ 1,094 $ 2,413 $ 1,253 Capitalized stock-based compensation expense $ 16 $ 25 $ 34 $ 37 |
Restaurant Impairments, Closure
Restaurant Impairments, Closure Costs and Asset Disposals | 6 Months Ended |
Jun. 29, 2021 | |
Property, Plant and Equipment Impairment or Disposal [Abstract] | |
Restaurant Impairments, 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 Two Fiscal Quarters Ended June 29, June 30, June 29, June 30, Restaurant impairments (1) $ 178 $ 2,135 $ 680 $ 2,262 Closure costs (1) 288 299 593 512 (Gain) loss on disposal of assets and other (76) 124 348 840 $ 390 $ 2,558 $ 1,621 $ 3,614 _____________________________ (1) Restaurant impairments and closure costs in all periods presented above include amounts related to restaurants previously impaired or closed. The Company did not impair any restaurants in t he second quarter of 2021 and had five restaurant impairments in the second quarter of 2020. The Company impaired one restaurant in the first two quarters of 2021 and five restaurants in the first two quarters of 2020. I mpairment 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 value of the restaurant assets at resale value and the right-of-use asset based on a discounted cash flow analysis utilizing market lease rates. The Company will continue to monitor the impact from the COVID-19 pandemic as it relates to recoverability of long-lived assets. Although the Company has seen an improvement in sales, the Company is unable to predict how long these conditions will persist, what additional measures may be introduced by governments or what effect any such additional measures may have on restaurants and our business. Any measure that encourages consumers to stay in their homes, engage in social distancing or avoid larger gatherings of people for an extended period of time is and has been highly likely to continue to be harmful to the restaurant industry in general. Closure costs in the second quarter of 2021 and the first two quarters of 2021 include ongoing costs related to restaurants closed in previous years as well as six company-owned restaurant closures during the first two quarters of 2021 . Closure costs in the second quarter of 2020 and first two quarters of 2020 include ongoing costs related to restaurants closed in previous years as well as one company-owned restaurant closure during the second quarter of 2020 that was near the end of its lease term. In addition, closure costs were offset by gains resulting from adjustments to liabilities as lease terminations occur. Loss on disposal of assets and other for the second quarter 2021 includes a gain on insurance proceeds from property damage. Loss on disposal of assets and other includes expenses recognized during the first two quarters of 2020 related to the divestiture of company-owned restaurants to a franchisee. |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 6 Months Ended |
Jun. 29, 2021 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | Earnings (Loss) Per ShareBasic 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 Two Fiscal Quarters Ended June 29, June 30, June 29, June 30, Net income (loss) $ 5,683 $ (13,478) $ 3,706 $ (19,313) Shares: Basic weighted average shares outstanding 45,506,476 44,212,751 45,303,160 44,177,648 Effect of dilutive securities 739,693 — 688,959 — Diluted weighted average shares outstanding 46,246,169 44,212,751 45,992,119 44,177,648 Earnings (loss) per share: Basic earnings (loss) per share $ 0.12 $ (0.30) $ 0.08 $ (0.44) Diluted earnings (loss) per share $ 0.12 $ (0.30) $ 0.08 $ (0.44) 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. 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 earnings per share because the effect of their inclusion would have been anti-dilutive totaled 478,353 and 4,142,754 for the second quarters of 2021 and 2020, respectively, and totaled 730,847 and 3,309,278 for the first two quarters of 2021 and 2020, respectively. |
Leases
Leases | 6 Months Ended |
Jun. 29, 2021 | |
Leases [Abstract] | |
Leases | Leases Supplemental balance sheet information related to leases is as follows (in thousands): Classification June 29, December 29, Assets Operating Operating lease assets, net $ 191,410 $ 195,618 Finance Finance lease assets, net (1) 7,456 7,822 Total leased assets $ 198,866 $ 203,440 Liabilities Current lease liabilities Operating Current operating lease liabilities $ 26,141 $ 26,094 Finance Current finance lease liabilities (2) 1,958 1,800 Long-term lease liabilities Operating Long-term operating lease liabilities 206,977 210,454 Finance Long-term finance lease liabilities (2) 5,632 6,056 Total lease liabilities $ 240,708 $ 244,404 _____________________ (1) The finance lease assets are included in property and equipment (2) The current portion of the finance lease liabilities is included in accrued expenses and other current liabilities other long-term liabilities Sublease income recognized in the Condensed Consolidated Statements of Operations was $0.5 million and $0.1 million for the second quarter of 2021 and 2020, and $0.9 million and $0.5 million for the first two quarters of 2021 and 2020, respectively. During 2020, the onset of the COVID-19 pandemic impacted the Company’s business significantly, including temporary closures of our dining rooms starting in March 2020. During the second quarter of 2020, we were able to negotiate with the majority of our landlords to obtain rent abatements, or defer rent amounts due during the second quarter, and in some cases, the periods of the respective lease terms were extended earlier than as proscribed in the lease as part of the rent concessions. In the case where the lease term was extended, we remeasured the remaining consideration in the contract. The total rent that was deferred for lease amendments that have been executed was $4.0 million. For certain of the Company’s restaurants, the COVID-19 pandemic has had an impact on the underlying asset values. In the first quarter of 2021, the Company recorded a right-of-use asset impairment charge for one restaurant to reduce the carrying value of operating lease assets to its respective estimated fair value. There was no impairment to the Company’s right-of-use assets during the second quarter of 2021. In the second quarter of 2020, we recorded an impairment charge of $0.3 million on the right-of-use assets. Supplemental disclosures of cash flow information related to leases are as follows (in thousands): Fiscal Quarter Ended Two Fiscal Quarters Ended June 29, June 30, June 29, June 30, Cash paid for lease liabilities: Operating leases $ 7,929 $ 6,066 $ 19,595 $ 13,574 Finance leases 699 270 1,224 452 $ 8,628 $ 6,336 $ 20,819 $ 14,026 Right-of-use assets obtained in exchange for lease liabilities: Operating leases $ 6,123 $ 4,557 $ 6,696 $ 10,281 Finance leases 49 1,238 700 2,842 $ 6,172 $ 5,795 $ 7,396 $ 13,123 |
Leases | Leases Supplemental balance sheet information related to leases is as follows (in thousands): Classification June 29, December 29, Assets Operating Operating lease assets, net $ 191,410 $ 195,618 Finance Finance lease assets, net (1) 7,456 7,822 Total leased assets $ 198,866 $ 203,440 Liabilities Current lease liabilities Operating Current operating lease liabilities $ 26,141 $ 26,094 Finance Current finance lease liabilities (2) 1,958 1,800 Long-term lease liabilities Operating Long-term operating lease liabilities 206,977 210,454 Finance Long-term finance lease liabilities (2) 5,632 6,056 Total lease liabilities $ 240,708 $ 244,404 _____________________ (1) The finance lease assets are included in property and equipment (2) The current portion of the finance lease liabilities is included in accrued expenses and other current liabilities other long-term liabilities Sublease income recognized in the Condensed Consolidated Statements of Operations was $0.5 million and $0.1 million for the second quarter of 2021 and 2020, and $0.9 million and $0.5 million for the first two quarters of 2021 and 2020, respectively. During 2020, the onset of the COVID-19 pandemic impacted the Company’s business significantly, including temporary closures of our dining rooms starting in March 2020. During the second quarter of 2020, we were able to negotiate with the majority of our landlords to obtain rent abatements, or defer rent amounts due during the second quarter, and in some cases, the periods of the respective lease terms were extended earlier than as proscribed in the lease as part of the rent concessions. In the case where the lease term was extended, we remeasured the remaining consideration in the contract. The total rent that was deferred for lease amendments that have been executed was $4.0 million. For certain of the Company’s restaurants, the COVID-19 pandemic has had an impact on the underlying asset values. In the first quarter of 2021, the Company recorded a right-of-use asset impairment charge for one restaurant to reduce the carrying value of operating lease assets to its respective estimated fair value. There was no impairment to the Company’s right-of-use assets during the second quarter of 2021. In the second quarter of 2020, we recorded an impairment charge of $0.3 million on the right-of-use assets. Supplemental disclosures of cash flow information related to leases are as follows (in thousands): Fiscal Quarter Ended Two Fiscal Quarters Ended June 29, June 30, June 29, June 30, Cash paid for lease liabilities: Operating leases $ 7,929 $ 6,066 $ 19,595 $ 13,574 Finance leases 699 270 1,224 452 $ 8,628 $ 6,336 $ 20,819 $ 14,026 Right-of-use assets obtained in exchange for lease liabilities: Operating leases $ 6,123 $ 4,557 $ 6,696 $ 10,281 Finance leases 49 1,238 700 2,842 $ 6,172 $ 5,795 $ 7,396 $ 13,123 |
Supplemental Disclosures to Con
Supplemental Disclosures to Condensed Consolidated Statements of Cash Flows | 6 Months Ended |
Jun. 29, 2021 | |
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 two quarters ended June 29, 2021 and June 30, 2020 (in thousands): June 29, June 30, Interest paid (net of amounts capitalized) $ 864 $ 1,666 Income taxes paid 28 25 Purchases of property and equipment accrued in accounts payable 4,002 1,793 |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Jun. 29, 2021 | |
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 is recognized when sales occur. The Company reports revenue net of sales tax 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 June 29, 2021 and December 29, 2020, the current portion of the gift card liability, $2.3 million and $2.6 million, respectively, was included in accrued expenses and other current liabilities, and the long-term portion, $0.4 million and $0.6 million, respectively, was included in other long-term liabilities in the Condensed Consolidated Balance Sheets. Revenue recognized in the Condensed Consolidated Statements of Operations for the redemption of gift cards was $0.8 million and $0.6 million for the second quarter of 2021 and 2020, and $1.9 million and $2.1 million for the first two quarters of 2021 and 2020, respectively. 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. In the second quarter of 2020, the Company forgave the franchise royalties due for the quarter due to the impact of the COVID-19 pan demic. Royalties were reinstated in the third quarter of 2020. Dev elopment 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. Loyalty Program The Company operates the Noodles Rewards program, which is primarily a spend-based loyalty program. With each purchase, Noodles Rewards members earn loyalty points that can be redeemed for rewards, including free products. Using an estimate of the value of reward redemptions, we defer revenue associated with points earned, net of estimated points that will not be redeemed based upon the Company’s historical redemption patterns. Points generally expire after six months. Revenue is recognized in a future period when the reward points are redeemed. As of June 29, 2021 and December 29, 2020, the deferred revenue related to the rewards was $0.3 million and $0.4 million, respectively, and was included in accrued expenses and other current liabilities in the Condensed Consolidated Balance Sheets. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 29, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and ContingenciesIn 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 June 29, 2021. These matters could affect the operating results of any one financial reporting period when resolved in future periods. The Company believes that an unfavorable outcome with respect to these matters is remote or a potential range of loss is not material to its consolidated financial statements. Significant increases in the number of these claims, or one or more successful claims that result in greater liabilities than the Company currently anticipates, could materially and adversely affect its business, financial condition, results of operations or cash flows. |
Business Summary and Basis of_2
Business Summary and Basis of Presentation (Policies) | 6 Months Ended |
Jun. 29, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | 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 December 29, 2020 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 |
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 2021, which ends on December 28, 2021, and fiscal year 2020, which ended on December 29, 2020, both contain 52 weeks. The Company’s fiscal quarter that ended June 29, 2021 is referred to as the second quarter of 2021, and the fiscal quarter ended June 30, 2020 is referred to as the second quarter of 2020. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In March 2020, the FASB issued ASU No. 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). ASU 2020-04 is intended to provide temporary optional expedients and exceptions to the U.S. GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. The Company may elect to apply the amendments prospectively through December 31, 202 2. The Company is currently evaluating the impact this guidance may have on its consolidated financial statements and related disclosures. Recently Adopted Accounting Pronouncements In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 was issued as a means to reduce the complexity of accounting for income taxes for those entities that fall within the scope of the accounting standard. This guidance is effective for public companies for annual reporting periods beginning after December 15, 2020 and interim periods within those reporting periods. Interim period adoption is permitted. The guidance is to be applied using a prospective method, excluding amendments related to franchise taxes, which should be applied on either a retrospective basis for all periods presented or a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The Company adopted this standard on Decembe r 30, 2020. The adoption of this standard did not have a material impact on our consolidated financial statements or disclosures. |
Supplemental Financial Inform_2
Supplemental Financial Information (Tables) | 6 Months Ended |
Jun. 29, 2021 | |
Supplemental Financial Information [Abstract] | |
Schedule of Accounts Receivable | Accounts receivable consist of the following (in thousands): June 29, December 29, Delivery program receivables $ 1,778 $ 1,268 Insurance receivable 586 74 Vendor rebate receivables 704 641 Franchise receivables 687 564 Other receivables 593 881 Accounts receivable $ 4,348 $ 3,428 |
Schedule of Prepaid Expenses and Other Assets | Prepaid expenses and other assets consist of the following (in thousands): June 29, December 29, Prepaid insurance $ 992 $ 744 Prepaid occupancy related costs 34 884 Other prepaid expenses 2,552 1,092 Other current assets 117 39 Prepaid expenses and other assets $ 3,695 $ 2,759 |
Schedule of Property and Equipment | Property and equipment, net, consists of the following (in thousands): June 29, December 29, Leasehold improvements $ 200,646 $ 199,782 Furniture, fixtures and equipment 134,461 132,756 Construction in progress 8,212 1,713 343,319 334,251 Accumulated depreciation and amortization (220,920) (211,334) Property and equipment, net $ 122,399 $ 122,917 |
Schedule of Accrued Payroll and Benefits | Accrued payroll and benefits consist of the following (in thousands): June 29, December 29, Accrued payroll and related liabilities $ 10,286 $ 6,812 Accrued bonus 3,699 2,364 Insurance liabilities 4,256 3,700 Accrued payroll and benefits $ 18,241 $ 12,876 |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consist of the following (in thousands): June 29, December 29, Gift card liability $ 2,270 $ 2,551 Occupancy related 1,792 1,322 Utilities 1,399 1,338 Deferred revenue 291 427 Current portion of finance lease liability 1,958 1,800 Other accrued expenses 4,583 4,194 Accrued expenses and other current liabilities $ 12,293 $ 11,632 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 6 Months Ended |
Jun. 29, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Aggregate Maturities for Debt Outstanding | Aggregate maturities for debt outstanding as of June 29, 2021 are as follows (in thousands): Year 1 $ 1,500 Year 2 1,969 Year 3 2,406 Year 4 32,889 Total $ 38,764 |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Jun. 29, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of Provision for Income Taxes | The following table presents the Company’s provision for income taxes (in thousands): Fiscal Quarter Ended Two Fiscal Quarters Ended June 29, June 30, June 29, June 30, Provision for income taxes $ 29 $ 33 $ 19 $ 46 Effective tax rate 0.5 % (0.2) % 0.5 % (0.2) % |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 29, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock-Based Compensation Expense | The following table shows total stock-based compensation expense (in thousands): Fiscal Quarter Ended Two Fiscal Quarters Ended June 29, June 30, June 29, June 30, Stock-based compensation expense $ 1,611 $ 1,094 $ 2,413 $ 1,253 Capitalized stock-based compensation expense $ 16 $ 25 $ 34 $ 37 |
Restaurant Impairments, Closu_2
Restaurant Impairments, Closure Costs and Asset Disposals (Tables) | 6 Months Ended |
Jun. 29, 2021 | |
Property, Plant and Equipment Impairment or Disposal [Abstract] | |
Schedule of Restaurant Impairments, Closure Costs and Asset Disposals | The following table presents restaurant impairments, closure costs and asset disposals (in thousands): Fiscal Quarter Ended Two Fiscal Quarters Ended June 29, June 30, June 29, June 30, Restaurant impairments (1) $ 178 $ 2,135 $ 680 $ 2,262 Closure costs (1) 288 299 593 512 (Gain) loss on disposal of assets and other (76) 124 348 840 $ 390 $ 2,558 $ 1,621 $ 3,614 _____________________________ |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 6 Months Ended |
Jun. 29, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted EPS | The following table sets forth the computations of basic and diluted EPS (in thousands, except share and per share data): Fiscal Quarter Ended Two Fiscal Quarters Ended June 29, June 30, June 29, June 30, Net income (loss) $ 5,683 $ (13,478) $ 3,706 $ (19,313) Shares: Basic weighted average shares outstanding 45,506,476 44,212,751 45,303,160 44,177,648 Effect of dilutive securities 739,693 — 688,959 — Diluted weighted average shares outstanding 46,246,169 44,212,751 45,992,119 44,177,648 Earnings (loss) per share: Basic earnings (loss) per share $ 0.12 $ (0.30) $ 0.08 $ (0.44) Diluted earnings (loss) per share $ 0.12 $ (0.30) $ 0.08 $ (0.44) |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 29, 2021 | |
Leases [Abstract] | |
Schedule of Supplemental Lease Information | Supplemental balance sheet information related to leases is as follows (in thousands): Classification June 29, December 29, Assets Operating Operating lease assets, net $ 191,410 $ 195,618 Finance Finance lease assets, net (1) 7,456 7,822 Total leased assets $ 198,866 $ 203,440 Liabilities Current lease liabilities Operating Current operating lease liabilities $ 26,141 $ 26,094 Finance Current finance lease liabilities (2) 1,958 1,800 Long-term lease liabilities Operating Long-term operating lease liabilities 206,977 210,454 Finance Long-term finance lease liabilities (2) 5,632 6,056 Total lease liabilities $ 240,708 $ 244,404 _____________________ (1) The finance lease assets are included in property and equipment (2) The current portion of the finance lease liabilities is included in accrued expenses and other current liabilities other long-term liabilities Supplemental disclosures of cash flow information related to leases are as follows (in thousands): Fiscal Quarter Ended Two Fiscal Quarters Ended June 29, June 30, June 29, June 30, Cash paid for lease liabilities: Operating leases $ 7,929 $ 6,066 $ 19,595 $ 13,574 Finance leases 699 270 1,224 452 $ 8,628 $ 6,336 $ 20,819 $ 14,026 Right-of-use assets obtained in exchange for lease liabilities: Operating leases $ 6,123 $ 4,557 $ 6,696 $ 10,281 Finance leases 49 1,238 700 2,842 $ 6,172 $ 5,795 $ 7,396 $ 13,123 |
Supplemental Disclosures to C_2
Supplemental Disclosures to Condensed Consolidated Statements of Cash Flows (Tables) | 6 Months Ended |
Jun. 29, 2021 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Supplemental Disclosures to the Condensed Consolidated Statements of Cash Flows | The following table presents the supplemental disclosures to the Condensed Consolidated Statements of Cash Flows for the two quarters ended June 29, 2021 and June 30, 2020 (in thousands): June 29, June 30, Interest paid (net of amounts capitalized) $ 864 $ 1,666 Income taxes paid 28 25 Purchases of property and equipment accrued in accounts payable 4,002 1,793 |
Business Summary and Basis of_3
Business Summary and Basis of Presentation (Details) | 6 Months Ended |
Jun. 29, 2021restaurantsegmentstate | |
Franchisor Disclosure [Line Items] | |
Number of restaurants | 451 |
Number of states with operations | state | 29 |
Number of operating segments | segment | 1 |
Number of reportable segments | segment | 1 |
Company-owned | |
Franchisor Disclosure [Line Items] | |
Number of restaurants | 374 |
Franchise | |
Franchisor Disclosure [Line Items] | |
Number of restaurants | 77 |
Supplemental Financial Inform_3
Supplemental Financial Information - Accounts Receivable (Details) - USD ($) $ in Thousands | Jun. 29, 2021 | Dec. 29, 2020 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | $ 4,348 | $ 3,428 |
Delivery program receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | 1,778 | 1,268 |
Insurance receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | 586 | 74 |
Vendor rebate receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | 704 | 641 |
Franchise receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | 687 | 564 |
Other receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | $ 593 | $ 881 |
Supplemental Financial Inform_4
Supplemental Financial Information - Prepaid Expenses and Other Assets (Details) - USD ($) $ in Thousands | Jun. 29, 2021 | Dec. 29, 2020 |
Supplemental Financial Information [Abstract] | ||
Prepaid insurance | $ 992 | $ 744 |
Prepaid occupancy related costs | 34 | 884 |
Other prepaid expenses | 2,552 | 1,092 |
Other current assets | 117 | 39 |
Prepaid expenses and other assets | $ 3,695 | $ 2,759 |
Supplemental Financial Inform_5
Supplemental Financial Information - Property and Equipment, Net (Details) - USD ($) $ in Thousands | Jun. 29, 2021 | Dec. 29, 2020 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 343,319 | $ 334,251 |
Accumulated depreciation and amortization | (220,920) | (211,334) |
Property and equipment, net | 122,399 | 122,917 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 200,646 | 199,782 |
Furniture, fixtures and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 134,461 | 132,756 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 8,212 | $ 1,713 |
Supplemental Financial Inform_6
Supplemental Financial Information - Accrued Payroll and Benefits (Details) - USD ($) $ in Thousands | Jun. 29, 2021 | Dec. 29, 2020 |
Supplemental Financial Information [Abstract] | ||
Accrued payroll and related liabilities | $ 10,286 | $ 6,812 |
Accrued bonus | 3,699 | 2,364 |
Insurance liabilities | 4,256 | 3,700 |
Accrued payroll and benefits | $ 18,241 | $ 12,876 |
Supplemental Financial Inform_7
Supplemental Financial Information - Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Jun. 29, 2021 | Dec. 29, 2020 |
Supplemental Financial Information [Abstract] | ||
Gift card liability | $ 2,270 | $ 2,551 |
Occupancy related | 1,792 | 1,322 |
Utilities | 1,399 | 1,338 |
Deferred revenue | 291 | 427 |
Current portion of finance lease liability | 1,958 | 1,800 |
Other accrued expenses | 4,583 | 4,194 |
Accrued expenses and other current liabilities | $ 12,293 | $ 11,632 |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) - USD ($) | Nov. 20, 2019 | Sep. 28, 2021 | Jun. 29, 2021 | Jun. 30, 2020 | Oct. 03, 2023 | Sep. 27, 2022 | Nov. 20, 2024 | Sep. 28, 2021 | Nov. 20, 2024 | Dec. 29, 2020 | Jun. 16, 2020 | May 09, 2018 |
Line of Credit Facility [Line Items] | ||||||||||||
Indebtedness | $ 38,764,000 | |||||||||||
Unamortized debt issuance costs | 1,500,000 | |||||||||||
Letters of credit outstanding | 3,200,000 | |||||||||||
Payments on long-term debt | 5,042,000 | $ 2,375,000 | ||||||||||
Cash on hand | $ 17,324,000 | $ 7,840,000 | ||||||||||
Frequency of periodic payment | quarter | |||||||||||
Forecast | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Quarterly principal payments | $ 187,500 | $ 531,250 | $ 375,000 | $ 625,000 | ||||||||
Minimum | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Interest rate during period | 3.40% | |||||||||||
Maximum | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Interest rate during period | 3.52% | |||||||||||
2018 Swingline Subfacility | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Maximum borrowing capacity | $ 10,000,000 | |||||||||||
First Amended Credit Facility | Federal Funds Rate | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Basis spread on variable rate | 0.50% | |||||||||||
First Amended Credit Facility | Prime Rate | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Basis spread on variable rate | 1.00% | |||||||||||
First Amended Credit Facility | Minimum | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Commitment fee percentage | 0.20% | |||||||||||
First Amended Credit Facility | Minimum | LIBOR | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Basis spread on variable rate | 2.00% | |||||||||||
First Amended Credit Facility | Minimum | Base Rate | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Basis spread on variable rate | 1.00% | |||||||||||
First Amended Credit Facility | Maximum | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Commitment fee percentage | 0.35% | |||||||||||
First Amended Credit Facility | Maximum | LIBOR | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Basis spread on variable rate | 2.75% | |||||||||||
First Amended Credit Facility | Maximum | Base Rate | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Basis spread on variable rate | 1.75% | |||||||||||
Second Amended Credit Facility | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Capital expenditure limit in current fiscal year per agreement | $ 12,000,000 | |||||||||||
Capital expenditure limit in next fiscal year per agreement | 12,000,000 | |||||||||||
Liquidity-based performance basket in next fiscal year per agreement | 12,000,000 | |||||||||||
Capital expenditure limit in 2022 per agreement | 34,000,000 | |||||||||||
Capital expenditure limit in 2023 per agreement | 37,000,000 | |||||||||||
Capital expenditure limit after 2023 per agreement | $ 45,000,000 | |||||||||||
Second Amended Credit Facility | LIBOR | Forecast | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Basis spread on variable rate | 3.25% | |||||||||||
Second Amended Credit Facility | Minimum | LIBOR | Forecast | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Basis spread on variable rate | 2.00% | |||||||||||
Second Amended Credit Facility | Maximum | LIBOR | Forecast | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Basis spread on variable rate | 3.00% | |||||||||||
Revolving Credit Facility | 2018 Term Loan Facility | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Maximum borrowing capacity | 25,000,000 | |||||||||||
Revolving Credit Facility | 2018 Credit Facility | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Maximum borrowing capacity | 65,000,000 | |||||||||||
Revolving Credit Facility | First Amended Credit Facility | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Maximum borrowing capacity | $ 75,000,000 | |||||||||||
Capital expenditure limit in current fiscal year per agreement | 37,000,000 | |||||||||||
Capital expenditure limit in each year after current fiscal year | $ 45,000,000 | |||||||||||
Letter of Credit | 2018 Letter of Credit Subfacility | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Maximum borrowing capacity | $ 15,000,000 |
Long-Term Debt - Aggregate Matu
Long-Term Debt - Aggregate Maturities (Details) $ in Thousands | Jun. 29, 2021USD ($) |
Aggregate Maturities for Debt Outstanding | |
Year 1 | $ 1,500 |
Year 2 | 1,969 |
Year 3 | 2,406 |
Year 4 | 32,889 |
Total | $ 38,764 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2021 | Jun. 30, 2020 | Jun. 29, 2021 | Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | ||||
Provision for income taxes | $ 29 | $ 33 | $ 19 | $ 46 |
Effective tax rate | 0.50% | (0.20%) | 0.50% | (0.20%) |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ in Thousands, shares in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2021 | Jun. 30, 2020 | Jun. 29, 2021 | Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | ||||
Shares awards available to be granted (in shares) | 3 | 3 | ||
Stock-based compensation expense | $ 1,611 | $ 1,094 | $ 2,413 | $ 1,253 |
Capitalized stock-based compensation expense | $ 16 | $ 25 | $ 34 | $ 37 |
Restaurant Impairments, Closu_3
Restaurant Impairments, Closure Costs and Asset Disposals - Schedule of Impairments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2021 | Jun. 30, 2020 | Jun. 29, 2021 | Jun. 30, 2020 | |
Property, Plant and Equipment Impairment or Disposal [Abstract] | ||||
Restaurant impairments | $ 178 | $ 2,135 | $ 680 | $ 2,262 |
Closure costs | 288 | 299 | 593 | 512 |
(Gain) loss on disposal of assets and other | (76) | 124 | 348 | 840 |
Restaurant impairments, closure costs and asset disposals | $ 390 | $ 2,558 | $ 1,621 | $ 3,614 |
Restaurant Impairments, Closu_4
Restaurant Impairments, Closure Costs and Asset Disposals - Narrative (Details) - restaurant | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2021 | Jun. 30, 2020 | Jun. 29, 2021 | Jun. 30, 2020 | |
Property, Plant and Equipment Impairment or Disposal [Abstract] | ||||
Number of restaurants impaired | 0 | 5 | 1 | 5 |
Number of restaurants closed | 6 | 1 |
Earnings (Loss) Per Share (Deta
Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2021 | Jun. 30, 2020 | Jun. 29, 2021 | Jun. 30, 2020 | |
Earnings Per Share [Abstract] | ||||
Net income (loss) | $ 5,683 | $ (13,478) | $ 3,706 | $ (19,313) |
Shares: | ||||
Basic weighted average shares outstanding (in shares) | 45,506,476 | 44,212,751 | 45,303,160 | 44,177,648 |
Effect of dilutive securities (in shares) | 739,693 | 0 | 688,959 | 0 |
Diluted weighted average shares outstanding (in shares) | 46,246,169 | 44,212,751 | 45,992,119 | 44,177,648 |
Earnings (loss) per share: | ||||
Basic earnings (loss) per share (USD per share) | $ 0.12 | $ (0.30) | $ 0.08 | $ (0.44) |
Diluted earnings (loss) per share (USD per share) | $ 0.12 | $ (0.30) | $ 0.08 | $ (0.44) |
Anti-dilutive securities | ||||
Antidilutive securities excluded from computation of earnings (loss) per share | 478,353 | 4,142,754 | 730,847 | 3,309,278 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Jun. 29, 2021 | Dec. 29, 2020 |
Assets | ||
Operating lease assets, net | $ 191,410 | $ 195,618 |
Finance lease assets, net | 7,456 | 7,822 |
Total leased assets | 198,866 | 203,440 |
Liabilities | ||
Current operating lease liabilities | 26,141 | 26,094 |
Current portion of finance lease liabilities | 1,958 | 1,800 |
Long-term operating lease liabilities, net | 206,977 | 210,454 |
Long-term finance lease liabilities | 5,632 | 6,056 |
Total lease liabilities | $ 240,708 | $ 244,404 |
Finance lease assets, line item | Property and equipment, net | Property and equipment, net |
Current finance lease liabilities, line item | Accrued expenses and other current liabilities | Accrued expenses and other current liabilities |
Long-term finance lease liabilities, line item | Other long-term liabilities | Other long-term liabilities |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 29, 2021USD ($)lease | Mar. 30, 2021lease | Jun. 30, 2020USD ($) | Jun. 29, 2021USD ($) | Jun. 30, 2020USD ($) | |
Leases [Abstract] | |||||
Sublease income | $ 0.5 | $ 0.1 | $ 0.9 | $ 0.5 | |
Rent deferred for executed lease amendments | 4 | $ 4 | |||
Number of restaurant lease assets impaired | lease | 0 | 1 | |||
Asset impairment charge for certain operating leases | $ 0.3 |
Leases - Supplemental Disclours
Leases - Supplemental Disclourses of Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2021 | Jun. 30, 2020 | Jun. 29, 2021 | Jun. 30, 2020 | |
Leases [Abstract] | ||||
Cash paid for operating lease liabilities | $ 7,929 | $ 6,066 | $ 19,595 | $ 13,574 |
Cash paid for finance lease liabilities | 699 | 270 | 1,224 | 452 |
Cash paid for lease liabilities | 8,628 | 6,336 | 20,819 | 14,026 |
Right-of-use assets obtained in exchange for operating lease liabilities | 6,123 | 4,557 | 6,696 | 10,281 |
Right-of-use assets obtained in exchange for finance lease liabilities | 49 | 1,238 | 700 | 2,842 |
Right-of-use assets obtained in exchange for lease liabilities | $ 6,172 | $ 5,795 | $ 7,396 | $ 13,123 |
Supplemental Disclosures to C_3
Supplemental Disclosures to Condensed Consolidated Statements of Cash Flows (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 29, 2021 | Jun. 30, 2020 | |
Supplemental Cash Flow Elements [Abstract] | ||
Interest paid (net of amounts capitalized) | $ 864 | $ 1,666 |
Income taxes paid | 28 | 25 |
Purchases of property and equipment accrued in accounts payable | $ 4,002 | $ 1,793 |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 29, 2021 | Jun. 30, 2020 | Jun. 29, 2021 | Jun. 30, 2020 | Dec. 29, 2020 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Expected unredeemed percent | 9.00% | ||||
Estimated redemption period | 24 months | ||||
Gift card liability, current | $ 2,270 | $ 2,270 | $ 2,551 | ||
Revenue recognized for redemption of gift cards | 800 | $ 600 | $ 1,900 | $ 2,100 | |
Period in which initial fees received from franchisees will be recognized as revenue | 20 years | ||||
Deferred revenue | 291 | $ 291 | 427 | ||
Accrued Expenses and Other Current Liabilities | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Gift card liability, current | 2,300 | 2,300 | 2,600 | ||
Other Long-term Liabilities | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Gift card liability, non-current | $ 400 | $ 400 | $ 600 |