Noodles & pany(NDLS) - 2026 Q1 - Quarterly Results

Noodles & Company First Quarter 2025 Financial Results First Quarter 2025 Financial Highlights In the first quarter of 2025, Noodles & Company reported a 2.0% increase in total revenue to $123.8 million and a 4.4% rise in system-wide comparable restaurant sales Despite this top-line growth, the company experienced a wider net loss of $9.1 million, compared to $6.1 million in the prior year's quarter Profitability metrics declined, with restaurant contribution margin falling to 10.3% from 13.1% and Adjusted EBITDA decreasing to $2.4 million from $5.5 million year-over-year Financial Highlights Summary | Financial Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $123.8 million | $121.4 million | +2.0% | | System-Wide Comparable Sales | +4.4% | -5.4% | Up | | - Company-Owned | +4.7% | -5.7% | Up | | - Franchise | +2.9% | -4.5% | Up | | Net Loss | ($9.1 million) | ($6.1 million) | Increased Loss | | Loss per Diluted Share | ($0.20) | ($0.14) | Increased Loss | | Restaurant Contribution Margin | 10.3% | 13.1% | -2.8 p.p. | | Adjusted EBITDA | $2.4 million | $5.5 million | -56.4% | - One new company-owned restaurant was opened during the first quarter of 2025[5] Management Commentary CEO Drew Madsen expressed satisfaction with the strong comparable sales and traffic in Q1, attributing the momentum to a reimagined new menu launched on March 12th, supported by increased marketing The company is confident in its new brand strategy, growing loyalty program, and focus on operational excellence Combined with reduced capital spending and cost savings, management believes the company is well-positioned to strengthen its balance sheet and capitalize on future growth - The introduction of a new menu on March 12th, backed by a new brand strategy and increased marketing, has driven a comparable sales increase of approximately 5% through April[3] - The company's strategy focuses on leveraging the new menu, growing the loyalty program, improving guest experience through operational excellence, reducing capital spending, and implementing cost savings to improve financial health[3] Liquidity Update As of April 1, 2025, the company reported $1.4 million in cash and cash equivalents Total outstanding debt stood at $102.7 million, with an additional $19.3 million available for borrowing under its revolving credit facility Liquidity Position | Liquidity Item | Amount (as of April 1, 2025) | | :--- | :--- | | Cash and Cash Equivalents | $1.4 million | | Outstanding Debt | $102.7 million | | Available Borrowing Capacity | $19.3 million | Full Year 2025 Business Outlook Noodles & Company has revised its full-year 2025 guidance The company now expects a restaurant level contribution margin between 12.0% and 14.0%, a slight downward revision It also increased its forecast for company-owned restaurant closures to a range of 13 to 17 Other guidance points, including total revenue projections of $503 million to $512 million, remain unchanged Business Outlook Guidance | Guidance Metric | Full Year 2025 Outlook | Previous Guidance | | :--- | :--- | :--- | | Total Revenue | $503M - $512M | Unchanged | | Comparable Restaurant Sales | Mid-single digit growth | Unchanged | | Restaurant Level Contribution Margins | 12.0% - 14.0% | 12.5% - 14% | | G&A Expenses | $49M - $52M | Unchanged | | Net Interest Expense | $8M - $10M | Unchanged | | Company-Owned Restaurant Closures | 13 to 17 | 12 to 15 | | Capital Expenditures | $11M - $13M | Unchanged | Consolidated Financial Statements The consolidated financial statements detail the company's performance The Statement of Operations shows a revenue increase but a wider net loss for Q1 2025 compared to Q1 2024 The Balance Sheet indicates a stockholders' deficit, and operating data highlights a positive turn in comparable restaurant sales Condensed Consolidated Statements of Operations For the first quarter ended April 1, 2025, total revenue increased to $123.8 million from $121.4 million in the prior year However, total costs and expenses rose to $130.2 million, resulting in a loss from operations of $6.4 million and a net loss of $9.1 million, compared to a net loss of $6.1 million in Q1 2024 Statements of Operations Summary | (in thousands) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Revenue | $123,794 | $121,395 | | Total Costs and Expenses | $130,181 | $125,491 | | Loss from Operations | $(6,387) | $(4,096) | | Net Loss | $(9,057) | $(6,140) | | Diluted Loss Per Share | $(0.20) | $(0.14) | Consolidated Selected Balance Sheet Data As of April 1, 2025, the company's balance sheet showed total assets of $319.5 million and total liabilities of $333.4 million This resulted in a total stockholders' deficit of $13.9 million, an increase from the $5.6 million deficit at the end of fiscal 2024 Balance Sheet Summary | (in thousands) | April 1, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total Assets | $319,450 | $324,648 | | Total Liabilities | $333,355 | $330,227 | | Total Stockholders' (Deficit) | $(13,905) | $(5,579) | Selected Operating Data System-wide comparable restaurant sales grew 4.4% in Q1 2025, a significant recovery from a 5.4% decline in Q1 2024 Company-owned comparable sales increased by 4.7% The total number of restaurants decreased slightly to 460 (369 company-owned, 91 franchise) at the end of the quarter Operating Data Summary | Comparable Restaurant Sales | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Company-owned | 4.7% | (5.7)% | | Franchise | 2.9% | (4.5)% | | System-wide | 4.4% | (5.4)% | Operating Data Summary | Restaurant Count | End of Q1 2025 | End of Q1 2024 | | :--- | :--- | :--- | | Company-owned | 369 | 380 | | Franchise | 91 | 89 | | Total | 460 | 469 | Reconciliation of Non-GAAP Financial Measures This section provides reconciliations for non-GAAP measures used by management to evaluate performance For Q1 2025, Adjusted EBITDA was $2.4 million, down from $5.5 million year-over-year Adjusted Net Loss was $9.1 million The Restaurant Contribution Margin, a key metric of store-level profitability, declined to 10.3% from 13.1% in Q1 2024 Reconciliation of Net Loss to EBITDA and Adjusted EBITDA For Q1 2025, the company reported a net loss of $9.1 million After adjusting for interest, taxes, depreciation, amortization, and other items such as impairments and stock-based compensation, Adjusted EBITDA was $2.4 million This represents a significant decrease from the $5.5 million Adjusted EBITDA in Q1 2024 EBITDA and Adjusted EBITDA Reconciliation | (in thousands) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Loss | $(9,057) | $(6,140) | | EBITDA | $703 | $3,274 | | Adjustments | $1,701 | $2,225 | | Adjusted EBITDA | $2,404 | $5,499 | Reconciliation of Net Loss to Adjusted Net Loss Adjusted Net Loss for Q1 2025 was $9.1 million, or ($0.20) per diluted share This compares to an Adjusted Net Loss of $5.8 million, or ($0.13) per diluted share, in Q1 2024 Adjustments from GAAP Net Loss were minor, primarily related to impairments, lease exit costs, and severance Adjusted Net Loss Reconciliation | (in thousands, except per share) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Loss | $(9,057) | $(6,140) | | Adjusted Net Loss | $(9,109) | $(5,827) | | Adjusted Loss per Share (Diluted) | $(0.20) | $(0.13) | Reconciliation of Operating Loss to Restaurant Contribution The company's restaurant contribution, a measure of store-level profitability, was $12.5 million in Q1 2025, down from $15.6 million in Q1 2024 This resulted in a restaurant contribution margin of 10.3%, a decrease from 13.1% in the prior-year period, calculated by reconciling from the GAAP operating loss Restaurant Contribution Reconciliation | (in thousands) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Loss from Operations | $(6,387) | $(4,096) | | Restaurant Contribution | $12,487 | $15,592 | | Restaurant Revenue | $121,326 | $119,003 | | Restaurant Contribution Margin | 10.3% | 13.1% | Key Definitions The report defines several key metrics used to evaluate business performance These include 'Comparable Restaurant Sales' to measure year-over-year performance of existing stores, 'Restaurant Contribution Margin' to assess restaurant-level profitability, and 'Adjusted EBITDA' to gauge core operating performance by excluding certain non-cash or non-recurring items - Comparable Restaurant Sales: Represents year-over-year sales comparisons for restaurants open for at least 18 full periods, reflecting changes in traffic and per-person spending[9] - Restaurant Contribution Margin: Calculated as restaurant revenue less restaurant-level operating costs (cost of sales, labor, occupancy, etc.), used to evaluate restaurant-level efficiency and performance[10] - Adjusted EBITDA: Represents net income before interest, taxes, depreciation, amortization, and other adjustments like impairments, stock-based compensation, and severance costs, used to assess core operating performance[11]