Noodles & Co. reports huge losses, turn-around plan
Noodles & Company reported this week a net loss of $71 million in 2016, according to a company press release. Total revenue increased 7 percent to $487.5 million in fiscal year 2016, from $455.5 million in fiscal-year 2015, however.
"Although fourth quarter results were impacted by one-time charges and the negative influence of under-performing restaurants, we feel Noodles & Company has made strong progress over the past several months in improving our guest and team member experience, evidenced by strengthening guest satisfaction and people metrics," Dave Boennighausen, CFO and interim CEO, said in the release.
The company recently announced that it has been burdened by under-performing restaurants and will close 55 of them during the first half of 2017. Thirty-nine of those locations were closed by Mar. 1.
"These 55 locations in their entirety had a collective restaurant contribution loss of $8.2 million during the 2016 fiscal year and their closure will strengthen our cash flow profile and allow us to focus on the hundreds of strong, profitable locations remaining in our portfolio," Boennighausen said.
Other 2016 highlights included:
- Adjusted net loss was $4.8 million, or $0.17 per diluted share in fiscal-year 2016, compared to adjusted net income of $3.9 million, or $0.13 per diluted share in fiscal-year 2015.
- Adjusted EBITDA decreased to $25.9 million in fiscal-year 2016 from $38.0 million in fiscal-year 2015.
- Comparable restaurant sales decreased 0.8 percent system-wide, decreased 0.9 percent for company-owned restaurants, and increased 0.1 percent for franchise restaurants.
- Restaurant contribution margin of 12.8 percent in fiscal-year 2016.
- 44 restaurants opened system-wide in fiscal-year 2016, including 38 company-owned and six franchise restaurants.
4Q highlights included:
- Total revenue increased 10.5 percent to $129.4 million in the fourth quarter of 2016 from $117.1 million in the fourth quarter of 2015
- Net loss of $45.4 million in the fourth quarter of 2016, which includes pre-tax closure, impairment and asset disposal costs of $32.8 million and a $10.6 million charge for estimated losses associated with claims and anticipated claims by payment card companies from the data security incident the company experienced in 2016.
- Adjusted net loss of $1.1 million, or $0.04 per diluted share in the fourth quarter of 2016, compared to adjusted net loss of $.1 million in the fourth quarter of 2015.
- Adjusted EBITDA decreased to $6.8 million in the fourth quarter of 2016 from $7.8 million in the fourth quarter of 2015.
- Comparable restaurant sales decreased 1.3 percent system-wide, decreased 1.8 percent for company-owned restaurants, and increased 2 percent for franchise restaurants.
- Restaurant contribution margin of 11.9 percent in the fourth quarter of 2016.
- Six restaurants opened system-wide in the fourth quarter of 2016, including four company-owned and two franchise restaurants.
Topics: Operations Management