Noodles & Co reports strong showing in Q3

Noodles & Company, which went private July 2, 2013, today announced financial results for thethird quarter, including a45-percent earnings growth and a 14 percent revenue increase.

"Our excellent 45 percent earnings growth in the third quarter despite a tepid consumer environment is continued evidence of Noodles & Company's ability to sustain our long track record of strong, consistent growth.

Moreover, our investments in building the brand have us well positioned to increase our guidance on comparable restaurant sales and new unit growth  the full year 2013, supporting one of the
most attractive growth profiles in the industry,” said Kevin Reddy, chairman and CEO of Noodles & Company.

Key highlights for the third quarter of 2013Q3 this year compared to the Q3 of last year include:

GAAPnet incomeincreased to $3.3 million, from $0.1 million.

Adjusted net income increased 44.6 percent to $3.3 million or $0.11 per diluted share, from $2.3 million.

Adjusted EBITDA increased 24 percent to $11.3 million, from $9.1 million.

Total revenue increased 15.4 percent to $88.9 million from $77.1 million.

Comparablerestaurant salesincreased 2.4 percent for company-owned restaurants, 0.5 percent forfranchise restaurantsand 2.1 percent system-wide.  

Restaurantcontribution margindecreased 30 basis points to 20.7 percent

20 new restaurants opened system-wide, including 15 company-owned and five franchise restaurants.

First Three Quarters 2013 Financial Results

Revenue Growth of 16.6%

Total revenue increased $37.0 million in the first three quarters of 2013, or 16.6%, to $259.5 million, compared with $222.5 million in the same period of 2012. This increase was the result of new restaurants opened system-wide since the beginning of the third quarter of 2012, in addition to an increase in sales at our comparable base restaurants. Comparable restaurant sales increased 3.1% for company-owned restaurants, increased 0.3% for franchise restaurants and increased 2.7% system-wide.

Adjusted Net Income(2) Growth of 21.4%

Net income was $4.3 million for the first three quarters of 2013, compared to net income of $3.6 million in the same period of 2012. Adjusted net income increased 21.4% to $8.6 million.

Restaurant contribution margin was 20.6% as a percentage of restaurant revenue in the first three quarters of 2013, compared with 21.2% in the same period of 2012, due primarily to increases in occupancy and restaurant operating costs as a percentage of revenue.

Management is affirming its expectation of adjusted diluted net income per share between $0.39 and $0.41 for the full year of 2013. This compares to adjusted diluted net income per share of $0.31 in 2012., said Reddy.

"Our strong early performance in the fourth quarter has resulted in our increased guidance of company-owned comparable restaurant sales growth expected for the full year 2013. Also, our team's continued efforts in developing

the brand through productive new unit growth leads us to anticipate an increase in new units expected to open this year compared with prior guidance." 

The Company's current guidance is based, in part, on the following assumptions for fiscal year 2013:

41 to 42 new company-owned restaurant openings, net of one closure in first quarter of 2013.

Nine to 10 new franchise restaurant openings.

Net revenue of $348 million to $352 million .

Company-owned comparable restaurant sales growth of approximately 3.25 percent to 3.75 percent for the full year 2013, implying fourth quarter 2013 comparable restaurant sales growth of 3.75 to 4.25 percent

An effective full year tax rate of 39.2 percent.

Capital expenditures of approximately $46 to $50 million.

Annual weighted average adjusted diluted shares outstanding of 31.1 to 31.3 million.

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