Operations

Noodles & Co in recovery mode

Provided

August 7, 2020

Recovery was the theme for Noodles & Company's second quarter, ending June 30.

"Our second quarter saw a consistent sales recovery led by the strength and evolution of our digital and off-premise business, and I'm pleased to report that the recovery has continued into the third quarter," CEO Dave Boennighausen said in a press release. "In addition, average unit volumes, normalized for the impact of temporary closures, were nearly flat year-over-year during the recently completed July fiscal period."

That improvement, coupled with the potential to utilize a smaller, off-premise focused footprint, signaled to Boennighausen that the company should continue to gain momentum through 2020 and beyond.

The company, however, reported a net loss of $13.5 million, or $0.30 per diluted share, compared with net income of $0.4 million in the second quarter of 2019, or $0.01 per diluted share. Loss from operations for the second quarter of 2020 was $12.5 million, compared to income of $1.2 million in the second quarter of 2019, according to the release.

Triggered by the pandemic, digital sales during the second quarter grew 135% over last year and accounted for 74% of total sales. The company, however, had to close two locations because of the pandemic but by the end of the second quarter, 40% of company-owned restaurants and 100% of franchised restaurants offered seating either in-restaurant or patio seating. On-premise dining continues to re-open, and the company now has 92% of company locations and 100% of franchise locations offering either in-dining room or patio seating.

Key highlights of second quarter of 2020 versus the second quarter of 2019:

Total revenue was $80.2 million compared to $120.2 million.
Comparable restaurant sales decreased 30.9% systemwide, comprised of a 30.1% decrease at company-owned restaurants and a 35.4% decrease at franchise restaurants.
Digital sales grew 135% and accounted for 74% of sales.
Net loss was $13.5 million, or $0.30 per diluted share, compared to net income of $0.4 million, or $0.01 per diluted share.
Adjusted net loss was $8.1 million, or $0.18 per diluted share, compared to an adjusted net income of $2.1 million, or $0.05 per diluted share.
EBITDA was $7.1 million compared to $6.9 million for the second quarter of 2019.
Adjusted EBITDA was $3.3 million compared to $10.9 million for the second quarter of 2019.

There were 456 Noodles & Co. restaurants at the end of the second quarter, with 380 company-owned and 76 franchise restaurants.