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

Part I - Financial Information Financial Statements (unaudited) Q1 2025 revenue grew 2.0% to $123.8 million, but rising costs widened the net loss to $9.1 million and increased the stockholders' deficit Condensed Consolidated Balance Sheets Total assets decreased slightly to $319.5 million while liabilities rose, increasing the stockholders' deficit to $13.9 million as of April 1, 2025 Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | April 1, 2025 (unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $319,450 | $324,648 | | Total current assets | $20,508 | $20,192 | | Property and equipment, net | $137,579 | $137,237 | | Operating lease assets, net | $152,022 | $157,821 | | Total Liabilities | $333,355 | $330,227 | | Total current liabilities | $70,114 | $65,717 | | Long-term debt, net | $100,623 | $100,742 | | Long-term operating lease liabilities, net | $151,437 | $156,723 | | Total Stockholders' Deficit | $(13,905) | $(5,579) | Condensed Consolidated Statements of Operations Despite a 2.0% revenue increase to $123.8 million, higher costs drove the Q1 2025 net loss to $9.1 million, up from $6.1 million year-over-year Q1 2025 vs Q1 2024 Statement of Operations (in thousands, except per share data) | Metric | Q1 2025 (ended Apr 1) | Q1 2024 (ended Apr 2) | | :--- | :--- | :--- | | 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) | Condensed Consolidated Statements of Stockholders' Equity The stockholders' deficit grew to $13.9 million, driven primarily by the quarter's $9.1 million net loss which increased the accumulated deficit - The net loss of $9.1 million for the quarter was the main contributor to the increase in the accumulated deficit to $193.5 million and the total stockholders' deficit to $13.9 million[18] Condensed Consolidated Statements of Cash Flows Net cash from operations decreased to $4.0 million in Q1 2025, while significantly lower capital expenditures reduced cash used in investing Q1 2025 vs Q1 2024 Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2025 (ended Apr 1) | Q1 2024 (ended Apr 2) | | :--- | :--- | :--- | | Net cash provided by operating activities | $4,033 | $7,005 | | Net cash used in investing activities | $(2,918) | $(8,647) | | Net cash used in financing activities | $(868) | $(37) | | Net increase (decrease) in cash | $247 | $(1,679) | | Cash and cash equivalents, end of period | $1,396 | $1,334 | Notes to Condensed Consolidated Financial Statements The notes detail operations, accounting policies, outstanding debt, and revenue recognition for the company's single reportable segment - As of April 1, 2025, the company had 460 restaurants system-wide, consisting of 369 company-owned and 91 franchise locations, and operates as a single reportable segment[25][64] - The company had $102.7 million of indebtedness outstanding under its A&R Credit Agreement as of April 1, 2025, with interest rates on its revolver ranging from 8.15% to 10.25% during the quarter[36][37] - The company defers revenue from its Noodles Rewards loyalty program and recognizes it when points are redeemed; the deferred revenue liability for the program was $1.0 million as of April 1, 2025[62] - During Q1 2025, the company closed three restaurants and recognized a $0.7 million gain from a lease termination settlement on one closed restaurant[48] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses a 4.4% rise in comparable sales, menu upgrades, cost pressures, and a decline in Adjusted EBITDA to $2.4 million Q1 2025 Key Performance Indicators | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | System-wide comparable restaurant sales | 4.4% | N/A | | Company-owned comparable restaurant sales | 4.7% | (5.7)% | | Franchise-owned comparable restaurant sales | 2.9% | N/A | | Company-owned Average Unit Volume (AUV) | $1,314k | $1,253k | - The company implemented a comprehensive menu upgrade in March 2025, which is expected to increase food costs but is supported by increased marketing and a new brand strategy[72][73] Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss | $(9,057) | $(6,140) | | EBITDA | $703 | $3,274 | | Adjusted EBITDA | $2,404 | $5,499 | - The company estimates total capital expenditures for fiscal year 2025 to be between $11.0 million and $13.0 million, primarily for reinvestment in existing restaurants, technology, and one additional new restaurant[120] Quantitative and Qualitative Disclosures About Market Risk The company is exposed to market risks from interest rate fluctuations on its variable-rate debt, commodity prices, and general inflation - The company is exposed to interest rate risk on its $102.7 million of variable-rate debt; a 1.0% change in the interest rate would impact annualized pre-tax interest expense by approximately $1.0 million[129] - The company faces commodity price risk for food products, which it attempts to mitigate through purchasing contracts rather than financial hedging instruments; significant price increases may require menu price adjustments[130] - Inflationary factors affecting operations include food, labor, and energy costs, as well as construction materials; the company anticipates that inflation may continue to affect results in the near future[131] Controls and Procedures Management concluded that disclosure controls and procedures were effective as of April 1, 2025, with no material changes to internal controls - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of April 1, 2025[133] - No material changes were made to the company's internal control over financial reporting during the most recent fiscal quarter[134] Part II - Other Information Legal Proceedings The company is not currently a party to any material legal proceedings - As of the filing date, the company is not involved in any material legal proceedings[135] Risk Factors No material changes were made to risk factors disclosed in the company's 2024 Annual Report on Form 10-K - No material changes to the company's risk factors have occurred since the last Annual Report on Form 10-K[136] Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities during the period - None[137] Defaults Upon Senior Securities The company reported no defaults upon senior securities - None[138] Mine Safety Disclosures This item is not applicable to the company - Not applicable[139] Other Information No directors or officers adopted or terminated Rule 10b5-1 trading arrangements during the quarter - No director or officer adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter[140] Exhibits The report includes required officer certifications and Inline XBRL documents as exhibits - Exhibits filed with the report include CEO and CFO certifications (31.1, 31.2, 32.1) and various Inline XBRL files[141]