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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Noodles and Company | NASDAQ:NDLS | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 1.55 | 1.21 | 2.15 | 0 | 09:00:01 |
x
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
84-1303469
|
(State or other jurisdiction of
incorporation or organization)
|
|
(IRS Employer
Identification No.)
|
|
|
|
520 Zang Street, Suite D
|
|
80021
|
Broomfield, CO
|
|
|
(Address of Principal Executive Offices)
|
|
(Zip Code)
|
Title of each class
|
|
Name of each exchange on which registered
|
Common stock, par value $0.01 per share
|
|
Nasdaq (Global Select Market)
|
Large accelerated filer
o
|
|
Accelerated filer
x
|
|
|
|
Non-accelerated filer
o
|
|
Smaller reporting company
o
|
(Do not check if a smaller reporting company)
|
|
Emerging growth company
x
|
|
|
Page
|
|
PART I
|
|
ITEM 1.
|
||
ITEM 1A.
|
||
ITEM 1B.
|
||
ITEM 2.
|
||
ITEM 3.
|
||
ITEM 4.
|
||
|
PART II
|
|
ITEM 5.
|
||
ITEM 6.
|
||
ITEM 7.
|
||
ITEM 7A.
|
||
ITEM 8.
|
||
ITEM 9.
|
||
ITEM 9A.
|
||
ITEM 9B.
|
||
|
PART III
|
|
ITEM 10.
|
||
ITEM 11.
|
||
ITEM 12.
|
||
ITEM 13.
|
||
ITEM 14.
|
||
|
PART IV
|
|
ITEM 15.
|
||
SIGNATURES
|
|
|
EXHIBITS
|
|
|
•
|
Focusing on our global flavors and menu offerings.
We believe that our globally inspired menu, focused on noodle and pasta dishes, differentiates us from other restaurants. We also believe this global variety, which includes a range of healthy to indulgent dishes that are cooked to order with fresh, high-quality ingredients, remains a competitive strength. In 2017 our limited-time offers included Spicy Chipotle Adobo and Thai Green Curry with shrimp, both of which are new dishes with distinctive flavor profiles. Also, in October of 2017 we launched nationally a Macaroni & Cheese menu which incorporated a higher quality cheese sauce into our top-selling Wisconsin Mac & Cheese. With this launch we also featured a Buffalo Mac & Cheese, Truffle Mac & Cheese and Barbecue Pork Mac. While we will continue to execute on our culinary initiatives we also believe that we have opportunities to better communicate our positioning to our customers, both inside our restaurants and through digital, social and media outlets.
|
•
|
Improving efficiencies and unit-level margins.
We believe that there is significant opportunity to improve our operational consistency as well as our overall unit level margins. In October 2016, we reduced the size of our core menu from 28 entrée items to 19 entrée items, removing menu items that did not sell well and were challenging for our teams to execute. During 2017, we improved several processes inside our restaurants, such as the introduction of a produce chopper to improve consistency and labor efficiency in our restaurants. We believe we have additional opportunity to improve efficiencies in our business and economic models. As an example, in 2018 we intend to complete the national roll out of self-bussing stations, which we believe will reduce labor hours and improve cleanliness in our restaurants. We also believe that we have opportunity in our supply chain and food preparation procedures to reduce inbound ingredient costs and improve labor efficiency.
|
•
|
Enhancing convenience for our customers
. We believe there is significant opportunity in increasing convenience for our customers. In 2017, we launched nationally our NoodlesREWARDS program, a loyalty program that also allows our
|
•
|
Improving manager selection, training and development of our teams
. We have increased the focus on the selection, training and development of our restaurant teams. We have initiated the use of new assessment tools in management hiring, and we have implemented certain changes to our restaurant compensation program to encourage team member retention. We have also begun rolling out new training tools and learning management systems to improve execution and encourage career development within our teams. Finally, we have begun a thorough, disciplined process of sharing best practices throughout the organization.
|
•
|
Our Menu Offerings.
We focus some of our marketing efforts on new menu offerings to broaden our appeal to our customers. We promote these items through a variety of formats including market-wide public relations events, social media marketing, radio promotions, tastings and messaging to our NoodlesREWARDS members. In addition to increasing brand awareness, these promotions also encourage prompt consumer action, resulting in more immediate increases in our customer traffic.
|
•
|
Online, Social and Other Media Tools.
We rely on our website,
www.noodles.com
, to promote our business and increase brand awareness. The information on or available through our website is not, and should not be considered, a part of this report. Our customers are encouraged to sign up to receive communications through our NoodlesREWARDS program, updating them on new menu offerings and promotional opportunities. As of
January 2, 2018
, more than
1.8 million
of our customers have signed up to receive communication either through our rewards or e-club programs. We also communicate with our customers using social media, such as our Facebook and Instagram pages, our YouTube and Vimeo channels and our Twitter feed. Our media tools also include advertising and direct mail in local, regional and national print/online media and mass communications including radio and out of home. In July 2017, we launched our NoodlesREWARDS program nationally which has provided a significant opportunity to create deeper relationships with our customers and increase frequency and average spend. Our online and social media engagement provides exciting opportunities to engage with our customers.
|
•
|
Digital Advertising.
We use targeted digital advertising in many of our markets. We believe this helps to increase top of mind awareness with potential customers and drives both frequency and trial. In addition, digital advertising provides us with the opportunity to promote specific product platforms and offerings such as online ordering.
|
•
|
Creating New Meal Occasions.
We also focus on ways Noodles & Company can serve customers at different times and in new places. For example, our Kids Meal menu was created for the future foodies of the world, children aged ten and under are invited to design their own meal made fresh-to-order, with quality ingredients, by choosing their entrée, two sides and a drink for around $5. Customers who want to feed a large group can enjoy our catering options comprised of main entrées, sides and desserts. We market these offerings in a variety of ways, including through in-restaurant posters, email, NoodlesREWARDS messages, Facebook posts and other communications outside of our restaurants.
|
•
|
Making Noodles & Company Easier to Use.
Some of our marketing efforts focus on making our restaurants easier to use. We seek to deliver superior customer service at every opportunity, generating consumer awareness of menu offerings with in-restaurant communications such as displays of our menu offerings that are visible upon entry and table top cards that highlight healthy food offerings. We also continue to implement initiatives to improve convenience for our customers, such as expanding the availability of third party delivery and introducing dedicated pick-up shelving units to increase the speed of the to-go transaction.
|
Name
|
|
Age
(1)
|
|
Position
|
Dave Boennighausen
|
|
40
|
|
Chief Executive Officer
|
Paul Murphy
|
|
63
|
|
Executive Chairman
|
Susan Daggett
|
|
57
|
|
Interim Chief Financial Officer
|
Chas Hermann
|
|
55
|
|
Chief Brand Officer
|
Brad West
|
|
60
|
|
Executive Vice President of Operations
|
Kathy Lockhart
|
|
53
|
|
Vice President and Controller
|
(1)
|
As of March 15, 2018
|
State
|
|
Company-
owned |
|
Franchised
|
|
Total
|
|||
Arizona
|
|
5
|
|
|
—
|
|
|
5
|
|
California
|
|
20
|
|
|
—
|
|
|
20
|
|
Colorado
|
|
61
|
|
|
—
|
|
|
61
|
|
Connecticut
|
|
—
|
|
|
4
|
|
|
4
|
|
District of Columbia
|
|
1
|
|
|
—
|
|
|
1
|
|
Florida
|
|
5
|
|
|
1
|
|
|
6
|
|
Idaho
|
|
6
|
|
|
—
|
|
|
6
|
|
Illinois
|
|
50
|
|
|
5
|
|
|
55
|
|
Indiana
|
|
25
|
|
|
—
|
|
|
25
|
|
Iowa
|
|
10
|
|
|
1
|
|
|
11
|
|
Kansas
|
|
10
|
|
|
—
|
|
|
10
|
|
Kentucky
|
|
2
|
|
|
5
|
|
|
7
|
|
Maryland
|
|
26
|
|
|
—
|
|
|
26
|
|
Michigan
|
|
—
|
|
|
23
|
|
|
23
|
|
Minnesota
|
|
45
|
|
|
1
|
|
|
46
|
|
Missouri
|
|
5
|
|
|
8
|
|
|
13
|
|
Montana
|
|
—
|
|
|
2
|
|
|
2
|
|
Nebraska
|
|
—
|
|
|
6
|
|
|
6
|
|
New York
|
|
—
|
|
|
1
|
|
|
1
|
|
North Carolina
|
|
15
|
|
|
—
|
|
|
15
|
|
North Dakota
|
|
—
|
|
|
3
|
|
|
3
|
|
Ohio
|
|
18
|
|
|
—
|
|
|
18
|
|
Oregon
|
|
6
|
|
|
—
|
|
|
6
|
|
Pennsylvania
|
|
9
|
|
|
—
|
|
|
9
|
|
South Dakota
|
|
—
|
|
|
3
|
|
|
3
|
|
Tennessee
|
|
5
|
|
|
—
|
|
|
5
|
|
Utah
|
|
15
|
|
|
—
|
|
|
15
|
|
Virginia
|
|
28
|
|
|
—
|
|
|
28
|
|
Washington
|
|
2
|
|
|
—
|
|
|
2
|
|
Wisconsin
|
|
43
|
|
|
3
|
|
|
46
|
|
|
|
412
|
|
|
66
|
|
|
478
|
|
ITEM 5.
|
Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
|
|
High
|
|
Low
|
||||
|
|
|
|
|
||||
Fiscal Year 2017
|
|
|
|
|
|
|||
First quarter (January 4, 2017 - April 4, 2017)
|
|
$
|
5.95
|
|
|
$
|
3.30
|
|
Second quarter (April 5, 2017 - July 4, 2017)
|
|
$
|
5.95
|
|
|
$
|
3.50
|
|
Third quarter (July 5, 2017 - October 3, 2017)
|
|
$
|
4.85
|
|
|
$
|
3.60
|
|
Fourth quarter (October 4, 2017 - January 2, 2018)
|
|
$
|
5.70
|
|
|
$
|
4.25
|
|
Fiscal Year 2016
|
|
|
|
|
||||
First quarter (December 30, 2015 - March 29, 2016)
|
|
$
|
13.65
|
|
|
$
|
9.32
|
|
Second quarter (March 30, 2016 - June 28, 2016)
|
|
$
|
12.55
|
|
|
$
|
9.28
|
|
Third quarter (June 29, 2016 - September 27, 2016)
|
|
$
|
10.47
|
|
|
$
|
4.91
|
|
Fourth quarter (September 28, 2016 - January 3, 2017)
|
|
$
|
5.10
|
|
|
$
|
3.51
|
|
|
|
Fiscal Year Ended
|
||||||||||||||||||
|
|
January 2, 2018
|
|
January 3, 2017
|
|
December 29, 2015
|
|
December 30, 2014
|
|
December 31, 2013
|
||||||||||
|
|
(in thousands)
|
||||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Restaurant revenue
|
|
$
|
451,599
|
|
|
$
|
482,544
|
|
|
$
|
450,482
|
|
|
$
|
398,993
|
|
|
$
|
347,140
|
|
Franchising royalties and fees
|
|
4,893
|
|
|
4,930
|
|
|
4,969
|
|
|
4,748
|
|
|
3,784
|
|
|||||
Total revenue
|
|
456,492
|
|
|
487,474
|
|
|
455,451
|
|
|
403,741
|
|
|
350,924
|
|
|||||
Costs and Expenses:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Restaurant operating costs (exclusive of depreciation and amortization, shown separately below):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of sales
|
|
121,473
|
|
|
130,630
|
|
|
120,455
|
|
|
107,217
|
|
|
91,892
|
|
|||||
Labor
|
|
150,161
|
|
|
161,219
|
|
|
143,145
|
|
|
120,492
|
|
|
104,040
|
|
|||||
Occupancy
|
|
51,877
|
|
|
55,912
|
|
|
50,300
|
|
|
42,540
|
|
|
35,173
|
|
|||||
Other restaurant operating costs
|
|
64,091
|
|
|
73,011
|
|
|
63,549
|
|
|
52,580
|
|
|
44,078
|
|
|||||
General and administrative
(1)(2)
|
|
39,746
|
|
|
55,654
|
|
|
37,244
|
|
|
31,394
|
|
|
35,893
|
|
|||||
Depreciation and amortization
|
|
24,613
|
|
|
28,134
|
|
|
27,802
|
|
|
24,787
|
|
|
20,623
|
|
|||||
Pre-opening
|
|
935
|
|
|
3,131
|
|
|
4,407
|
|
|
4,425
|
|
|
3,809
|
|
|||||
Restaurant impairments, closure costs and asset disposals
(3)
|
|
37,446
|
|
|
47,311
|
|
|
29,616
|
|
|
1,391
|
|
|
1,164
|
|
|||||
Total costs and expenses
|
|
490,342
|
|
|
555,002
|
|
|
476,518
|
|
|
384,826
|
|
|
336,672
|
|
|||||
(Loss) income from operations
|
|
(33,850
|
)
|
|
(67,528
|
)
|
|
(21,067
|
)
|
|
18,915
|
|
|
14,252
|
|
|||||
Debt extinguishment expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
624
|
|
|||||
Interest expense, net
|
|
3,839
|
|
|
2,916
|
|
|
1,432
|
|
|
365
|
|
|
2,196
|
|
|||||
(Loss) income before income taxes
|
|
(37,689
|
)
|
|
(70,444
|
)
|
|
(22,499
|
)
|
|
18,550
|
|
|
11,432
|
|
|||||
(Benefit) provision for income taxes
|
|
(207
|
)
|
|
1,233
|
|
|
(8,734
|
)
|
|
7,122
|
|
|
4,767
|
|
|||||
Net (loss) income
|
|
(37,482
|
)
|
|
(71,677
|
)
|
|
(13,765
|
)
|
|
11,428
|
|
|
6,665
|
|
|||||
Accretion of preferred stock to redemption value
(4)
|
|
(7,967
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net (loss) income attributable to common stockholders
|
|
$
|
(45,449
|
)
|
|
$
|
(71,677
|
)
|
|
$
|
(13,765
|
)
|
|
$
|
11,428
|
|
|
$
|
6,665
|
|
(1)
|
General and administrative expenses in 2013 included $0.5 million of management fee expense in accordance with our management services agreement and through the Class C common stock dividend paid to the holder of the one outstanding share of our Class C common stock. In connection with our IPO, the management services agreement expired, and the one share of Class C common stock was redeemed. In the second quarter of 2013, we incurred $5.7 million of IPO-related expenses: $2.0 million of stock-based compensation related to accelerated vesting of outstanding stock options, $1.2 million of stock-based compensation related to stock options granted to our then-Chief Executive Officer and then-President and Chief Operating Officer of which 50% were vested at grant, $1.7 million of transaction bonuses and related payroll taxes and $0.8 million in transaction payments to our equity sponsors. Additionally, we incurred $0.7 million of expenses related to our follow-on offering which closed in December of 2013.
|
(2)
|
General and administrative expenses in 2016 include a
$10.6 million
charge for estimated losses associated with claims and anticipated claims by payment card companies from the data security incident, a $2.7 million charge for severance expenses and a $3.0 million charge for an employment-related litigation settlement.
|
(3)
|
Restaurant impairments, closure costs and asset disposals include
$16.2 million
,
$41.6 million
and
$25.4 million
of charges in 2017, 2016 and 2015, respectively related to
34
restaurants in 2017,
54
restaurants in 2016 and
39
restaurants in 2015 that were identified as impaired. Additionally, we recognized
$20.1 million
,
$2.3 million
and
$3.1 million
in 2017, 2016 and 2015, respectively, of closure costs which are also included in restaurant impairments, closure costs and asset disposals. The closure costs recognized during 2017 are related to the 55 restaurants closed during the first quarter of 2017, as well as ongoing costs of restaurants closed in the fourth quarter of 2015. The closure costs recognized in 2016 are related to the ongoing costs of restaurants closed in the fourth quarter of 2015. The closure costs recognized in 2015 relate to the 16 restaurants closed in the fourth quarter of 2015.
|
(4)
|
Represents the accretion of the preferred stock issued to
L
Catterton to its full redemption value. See Note 8, Stockholders’ Equity for additional information.
|
|
|
Fiscal Year Ended
|
||||||||||||||||||
|
|
January 2, 2018
|
|
January 3, 2017
|
|
December 29, 2015
|
|
December 30, 2014
|
|
December 31, 2013
|
||||||||||
|
|
(in thousands, except share and per share data and restaurants)
|
||||||||||||||||||
(Loss) earnings per Class A and Class B common share, combined:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
$
|
(1.20
|
)
|
|
$
|
(2.58
|
)
|
|
$
|
(0.48
|
)
|
|
$
|
0.38
|
|
|
$
|
0.25
|
|
Diluted
|
|
$
|
(1.20
|
)
|
|
$
|
(2.58
|
)
|
|
$
|
(0.48
|
)
|
|
$
|
0.37
|
|
|
$
|
0.24
|
|
Weighted average Class A and Class B common shares outstanding, combined:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
37,759,497
|
|
|
27,808,708
|
|
|
28,938,901
|
|
|
29,717,304
|
|
|
26,406,904
|
|
|||||
Diluted
|
|
37,759,497
|
|
|
27,808,708
|
|
|
28,938,901
|
|
|
31,001,099
|
|
|
27,688,629
|
|
|||||
Selected Operating Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Company-owned restaurants at end of period
|
|
412
|
|
|
457
|
|
|
422
|
|
|
386
|
|
|
318
|
|
|||||
Franchise-owned restaurants at end of period
|
|
66
|
|
|
75
|
|
|
70
|
|
|
53
|
|
|
62
|
|
|||||
Company-owned:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Average unit volumes
(1)
|
|
$
|
1,072
|
|
|
$
|
1,075
|
|
|
$
|
1,103
|
|
|
$
|
1,147
|
|
|
$
|
1,179
|
|
Comparable restaurant sales
(2)
|
|
(2.7
|
)%
|
|
(0.9
|
)%
|
|
(0.2
|
)%
|
|
0.3
|
%
|
|
3.4
|
%
|
|||||
Restaurant contribution
(3)
|
|
$
|
63,997
|
|
|
$
|
61,772
|
|
|
$
|
73,033
|
|
|
$
|
76,164
|
|
|
$
|
71,957
|
|
as a percentage of restaurant revenue
|
|
14.2
|
%
|
|
12.8
|
%
|
|
16.2
|
%
|
|
19.1
|
%
|
|
20.7
|
%
|
|
|
As of
|
||||||||||||||||||
|
|
January 2, 2018
|
|
January 3, 2017
|
|
December 29, 2015
|
|
December 30, 2014
|
|
December 31, 2013
|
||||||||||
|
|
(in thousands)
|
||||||||||||||||||
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total current assets
|
|
$
|
22,058
|
|
|
$
|
25,788
|
|
|
$
|
25,401
|
|
|
$
|
22,776
|
|
|
$
|
18,333
|
|
Total assets
|
|
185,233
|
|
|
209,461
|
|
|
239,961
|
|
|
238,539
|
|
|
187,350
|
|
|||||
Total current liabilities
|
|
43,869
|
|
|
49,033
|
|
|
32,914
|
|
|
25,831
|
|
|
24,165
|
|
|||||
Total long-term debt
|
|
57,624
|
|
|
84,676
|
|
|
67,732
|
|
|
27,136
|
|
|
5,860
|
|
|||||
Total liabilities
|
|
149,372
|
|
|
183,643
|
|
|
146,189
|
|
|
98,424
|
|
|
62,877
|
|
|||||
Total stockholders' equity
|
|
35,861
|
|
|
25,818
|
|
|
93,772
|
|
|
140,115
|
|
|
124,473
|
|
(1)
|
AUVs consist of average annualized sales of all company-owned restaurants over the trailing 12 periods in a typical operating year.
|
(2)
|
Comparable restaurant sales represent year-over-year sales for restaurants open for at least 18 full periods.
|
(3)
|
Restaurant contribution represents restaurant revenue less restaurant operating costs, which are the cost of sales, labor, occupancy and other operating items. Restaurant contribution is a non-GAAP measure that is neither required by, nor presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”), and the calculation thereof may not be comparable to similar measures reported by other companies. Restaurant contribution is a supplemental measure of the operating performance of our restaurants and is not reflective of the underlying performance of our business because corporate-level expenses are excluded from this measure.
|
|
|
Fiscal Year Ended
|
||||||||||||||||||
|
|
January 2, 2018
|
|
January 3, 2017
|
|
December 29, 2015
|
|
December 30, 2014
|
|
December 31, 2013
|
||||||||||
|
|
(in thousands)
|
||||||||||||||||||
(Loss) income from operations
|
|
$
|
(33,850
|
)
|
|
$
|
(67,528
|
)
|
|
$
|
(21,067
|
)
|
|
$
|
18,915
|
|
|
$
|
14,252
|
|
Less: Franchising royalties and fees
|
|
4,893
|
|
|
4,930
|
|
|
4,969
|
|
|
4,748
|
|
|
3,784
|
|
|||||
Add: General and administrative
|
|
39,746
|
|
|
55,654
|
|
|
37,244
|
|
|
31,394
|
|
|
35,893
|
|
|||||
Depreciation and amortization
|
|
24,613
|
|
|
28,134
|
|
|
27,802
|
|
|
24,787
|
|
|
20,623
|
|
|||||
Pre-opening
|
|
935
|
|
|
3,131
|
|
|
4,407
|
|
|
4,425
|
|
|
3,809
|
|
|||||
Restaurant impairments, closure costs and asset disposals
|
|
37,446
|
|
|
47,311
|
|
|
29,616
|
|
|
1,391
|
|
|
1,164
|
|
|||||
Restaurant contribution
|
|
$
|
63,997
|
|
|
$
|
61,772
|
|
|
$
|
73,033
|
|
|
$
|
76,164
|
|
|
$
|
71,957
|
|
•
|
consumer recognition of our brand and our ability to respond to changing consumer preferences;
|
•
|
overall economic trends, particularly those related to consumer spending;
|
•
|
our ability to operate restaurants effectively and efficiently to meet consumer expectations;
|
•
|
pricing;
|
•
|
the number of restaurant transactions, per-person spend and average check amount;
|
•
|
marketing and promotional efforts;
|
•
|
local competition;
|
•
|
trade area dynamics;
|
•
|
introduction of new and seasonal menu items and limited time offerings; and
|
•
|
opening of new restaurants in the vicinity of existing locations.
|
|
|
Fiscal Year Ended
|
||||||||||
|
|
January 2, 2018
|
|
January 3, 2017
|
|
December 29, 2015
|
||||||
|
|
(in thousands)
|
||||||||||
Net loss
|
|
$
|
(37,482
|
)
|
|
$
|
(71,677
|
)
|
|
$
|
(13,765
|
)
|
Depreciation and amortization
|
|
24,613
|
|
|
28,134
|
|
|
27,802
|
|
|||
Interest expense, net
|
|
3,839
|
|
|
2,916
|
|
|
1,432
|
|
|||
(Benefit) provision for income taxes
|
|
(207
|
)
|
|
1,233
|
|
|
(8,734
|
)
|
|||
EBITDA
|
|
$
|
(9,237
|
)
|
|
$
|
(39,394
|
)
|
|
$
|
6,735
|
|
Restaurant impairments, closure costs and asset disposals
|
|
37,446
|
|
|
47,311
|
|
|
29,616
|
|
|||
Data breach liabilities
|
|
20
|
|
|
10,622
|
|
|
—
|
|
|||
Litigation settlement
(1)
|
|
(421
|
)
|
|
3,000
|
|
|
200
|
|
|||
Fees and costs related to the registration statement and related transactions
(2)
|
|
679
|
|
|
—
|
|
|
—
|
|
|||
Severance costs
(3)
|
|
581
|
|
|
2,034
|
|
|
—
|
|
|||
Stock-based compensation expense
(4)
|
|
1,513
|
|
|
2,319
|
|
|
1,469
|
|
|||
Adjusted EBITDA
|
|
$
|
30,581
|
|
|
$
|
25,892
|
|
|
$
|
38,020
|
|
(1)
|
Fiscal year 2017 includes a gain on an employment-related litigation settlement due to final settlement being less than what the Company had previously accrued. Fiscal year 2016 includes the initial charge of $3.0 million recorded to cover the estimated costs of the employment-related litigation settlement.
|
(2)
|
Includes expenses related to the registration statement the Company filed in the first quarter of 2017, which registration statement was later withdrawn.
|
(3)
|
Fiscal year 2017 includes severance costs related to the departure of our Chief Operations Officer and additional changes to operations departmental structure. Fiscal year 2016 includes severance costs related to the departures of our Chief Executive Officer and Chief Marketing Officer and from a reduction in headcount as a result of reducing new restaurant development.
|
(4)
|
Fiscal year 2016 includes a $0.7 million charge for modifying the outstanding stock options for Kevin Reddy, who resigned from his positions as the Chairman of the Board and Chief Executive Officer of the Company in July 2016.
|
|
|
Fiscal Year Ended
|
|||||||
|
|
January 2, 2018
|
|
January 3, 2017
|
|
December 29, 2015
|
|||
Company-Owned Restaurant Activity
|
|
|
|
|
|
|
|||
Beginning of period
|
|
457
|
|
|
422
|
|
|
386
|
|
Openings
|
|
12
|
|
|
38
|
|
|
51
|
|
Acquisitions
(1)
|
|
—
|
|
|
—
|
|
|
1
|
|
Closures
|
|
(57
|
)
|
|
(3
|
)
|
|
(16
|
)
|
Restaurants at end of period
|
|
412
|
|
|
457
|
|
|
422
|
|
Franchise Restaurant Activity
|
|
|
|
|
|
|
|||
Beginning of period
|
|
75
|
|
|
70
|
|
|
53
|
|
Openings
|
|
3
|
|
|
6
|
|
|
19
|
|
Divestitures
(1)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
Closures
|
|
(12
|
)
|
|
(1
|
)
|
|
(1
|
)
|
Restaurants at end of period
|
|
66
|
|
|
75
|
|
|
70
|
|
Total restaurants
|
|
478
|
|
|
532
|
|
|
492
|
|
(1)
|
Represents one franchise restaurant acquired by us in 2015.
|
|
|
Fiscal Year Ended
|
|||||||
|
|
January 2, 2018
|
|
January 3, 2017
|
|
December 29, 2015
|
|||
Revenue:
|
|
|
|
|
|
|
|||
Restaurant revenue
|
|
98.9
|
%
|
|
99.0
|
%
|
|
98.9
|
%
|
Franchising royalties and fees
|
|
1.1
|
%
|
|
1.0
|
%
|
|
1.1
|
%
|
Total revenue
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Costs and expenses:
|
|
|
|
|
|
|
|||
Restaurant operating costs (exclusive of depreciation and amortization, shown separately below):
(1)
|
|
|
|
|
|
|
|||
Cost of sales
|
|
26.9
|
%
|
|
27.1
|
%
|
|
26.7
|
%
|
Labor
|
|
33.3
|
%
|
|
33.4
|
%
|
|
31.8
|
%
|
Occupancy
|
|
11.5
|
%
|
|
11.6
|
%
|
|
11.2
|
%
|
Other restaurant operating costs
|
|
14.2
|
%
|
|
15.1
|
%
|
|
14.1
|
%
|
General and administrative
|
|
8.7
|
%
|
|
11.4
|
%
|
|
8.2
|
%
|
Depreciation and amortization
|
|
5.4
|
%
|
|
5.8
|
%
|
|
6.1
|
%
|
Pre-opening
|
|
0.2
|
%
|
|
0.6
|
%
|
|
1.0
|
%
|
Restaurant impairments, closure costs and asset disposals
|
|
8.2
|
%
|
|
9.7
|
%
|
|
6.5
|
%
|
Total costs and expenses
|
|
107.4
|
%
|
|
113.9
|
%
|
|
104.6
|
%
|
Loss from operations
|
|
(7.4
|
)%
|
|
(13.9
|
)%
|
|
(4.6
|
)%
|
Interest expense, net
|
|
0.8
|
%
|
|
0.6
|
%
|
|
0.3
|
%
|
Loss before income taxes
|
|
(8.3
|
)%
|
|
(14.5
|
)%
|
|
(4.9
|
)%
|
(Benefit) provision for income taxes
|
|
(0.1
|
)%
|
|
0.2
|
%
|
|
(1.9
|
)%
|
Net loss
|
|
(8.2
|
)%
|
|
(14.7
|
)%
|
|
(3.0
|
)%
|
(1)
|
As a percentage of restaurant revenue.
|
|
|
Fiscal Year Ended
|
|
Increase / (Decrease)
|
|||||||||||
|
|
January 2,
2018 |
|
January 3,
2017 |
|
$
|
|
%
|
|||||||
|
|
(in thousands)
|
|||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|||||||
Restaurant revenue
|
|
$
|
451,599
|
|
|
$
|
482,544
|
|
|
$
|
(30,945
|
)
|
|
(6.4
|
)%
|
Franchising royalties and fees
|
|
4,893
|
|
|
4,930
|
|
|
(37
|
)
|
|
(0.8
|
)%
|
|||
Total revenue
|
|
456,492
|
|
|
487,474
|
|
|
(30,982
|
)
|
|
(6.4
|
)%
|
|||
Costs and Expenses:
|
|
|
|
|
|
|
|
|
|||||||
Restaurant operating costs (exclusive of depreciation and amortization, shown separately below):
|
|
|
|
|
|
|
|
|
|||||||
Cost of sales
|
|
121,473
|
|
|
130,630
|
|
|
(9,157
|
)
|
|
(7.0
|
)%
|
|||
Labor
|
|
150,161
|
|
|
161,219
|
|
|
(11,058
|
)
|
|
(6.9
|
)%
|
|||
Occupancy
|
|
51,877
|
|
|
55,912
|
|
|
(4,035
|
)
|
|
(7.2
|
)%
|
|||
Other restaurant operating costs
|
|
64,091
|
|
|
73,011
|
|
|
(8,920
|
)
|
|
(12.2
|
)%
|
|||
General and administrative
|
|
39,746
|
|
|
55,654
|
|
|
(15,908
|
)
|
|
(28.6
|
)%
|
|||
Depreciation and amortization
|
|
24,613
|
|
|
28,134
|
|
|
(3,521
|
)
|
|
(12.5
|
)%
|
|||
Pre-opening
|
|
935
|
|
|
3,131
|
|
|
(2,196
|
)
|
|
(70.1
|
)%
|
|||
Restaurant impairments, closure costs and asset disposals
|
|
37,446
|
|
|
47,311
|
|
|
(9,865
|
)
|
|
(20.9
|
)%
|
|||
Total costs and expenses
|
|
490,342
|
|
|
555,002
|
|
|
(64,660
|
)
|
|
(11.7
|
)%
|
|||
Loss from operations
|
|
(33,850
|
)
|
|
(67,528
|
)
|
|
33,678
|
|
|
49.9
|
%
|
|||
Interest expense, net
|
|
3,839
|
|
|
2,916
|
|
|
923
|
|
|
31.7
|
%
|
|||
Loss before income taxes
|
|
(37,689
|
)
|
|
(70,444
|
)
|
|
32,755
|
|
|
46.5
|
%
|
|||
(Benefit) provision for income taxes
|
|
(207
|
)
|
|
1,233
|
|
|
(1,440
|
)
|
|
*
|
|
|||
Net loss
|
|
$
|
(37,482
|
)
|
|
$
|
(71,677
|
)
|
|
$
|
34,195
|
|
|
47.7
|
%
|
Company-owned:
|
|
|
|
|
|
|
|
|
|||||||
Average unit volumes
|
|
$
|
1,072
|
|
|
$
|
1,075
|
|
|
$
|
(3
|
)
|
|
(0.3
|
)%
|
Comparable restaurant sales
|
|
(2.7
|
)%
|
|
(0.9
|
)%
|
|
|
|
|
*
|
Not meaningful.
|
|
|
Fiscal Year Ended
|
|
Increase / (Decrease)
|
|||||||||||
|
|
January 3,
2017 |
|
December 29,
2015 |
|
$
|
|
%
|
|||||||
|
|
(in thousands)
|
|||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|||||||
Restaurant revenue
|
|
$
|
482,544
|
|
|
$
|
450,482
|
|
|
$
|
32,062
|
|
|
7.1
|
%
|
Franchising royalties and fees
|
|
4,930
|
|
|
4,969
|
|
|
(39
|
)
|
|
(0.8
|
)%
|
|||
Total revenue
|
|
487,474
|
|
|
455,451
|
|
|
32,023
|
|
|
7.0
|
%
|
|||
Costs and Expenses:
|
|
|
|
|
|
|
|
|
|||||||
Restaurant operating costs (exclusive of depreciation and amortization, shown separately below):
|
|
|
|
|
|
|
|
|
|||||||
Cost of sales
|
|
130,630
|
|
|
120,455
|
|
|
10,175
|
|
|
8.4
|
%
|
|||
Labor
|
|
161,219
|
|
|
143,145
|
|
|
18,074
|
|
|
12.6
|
%
|
|||
Occupancy
|
|
55,912
|
|
|
50,300
|
|
|
5,612
|
|
|
11.2
|
%
|
|||
Other restaurant operating costs
|
|
73,011
|
|
|
63,549
|
|
|
9,462
|
|
|
14.9
|
%
|
|||
General and administrative
|
|
55,654
|
|
|
37,244
|
|
|
18,410
|
|
|
49.4
|
%
|
|||
Depreciation and amortization
|
|
28,134
|
|
|
27,802
|
|
|
332
|
|
|
1.2
|
%
|
|||
Pre-opening
|
|
3,131
|
|
|
4,407
|
|
|
(1,276
|
)
|
|
(29.0
|
)%
|
|||
Restaurant impairments, closure costs and asset disposals
|
|
47,311
|
|
|
29,616
|
|
|
17,695
|
|
|
59.7
|
%
|
|||
Total costs and expenses
|
|
555,002
|
|
|
476,518
|
|
|
78,484
|
|
|
16.5
|
%
|
|||
Loss from operations
|
|
(67,528
|
)
|
|
(21,067
|
)
|
|
(46,461
|
)
|
|
*
|
|
|||
Interest expense, net
|
|
2,916
|
|
|
1,432
|
|
|
1,484
|
|
|
*
|
|
|||
Loss before income taxes
|
|
(70,444
|
)
|
|
(22,499
|
)
|
|
(47,945
|
)
|
|
*
|
|
|||
Provision (benefit) for income taxes
|
|
1,233
|
|
|
(8,734
|
)
|
|
9,967
|
|
|
*
|
|
|||
Net loss
|
|
$
|
(71,677
|
)
|
|
$
|
(13,765
|
)
|
|
$
|
(57,912
|
)
|
|
*
|
|
Company-owned:
|
|
|
|
|
|
|
|
|
|||||||
Average unit volumes
|
|
$
|
1,075
|
|
|
$
|
1,103
|
|
|
$
|
(28
|
)
|
|
(2.5
|
)%
|
Comparable restaurant sales
|
|
(0.9
|
)%
|
|
(0.2
|
)%
|
|
|
|
|
*
|
Not meaningful.
|
|
Quarter Ended
|
||||||||||||||||||||||||||||||
|
January 2, 2018
|
|
October 3, 2017
|
|
July 4, 2017
|
|
April 4, 2017
|
|
January 3, 2017
|
|
September 27, 2016
|
|
June 28, 2016
|
|
March 29, 2016
|
||||||||||||||||
|
(in thousands, except restaurants, unaudited)
|
||||||||||||||||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Restaurant revenue
|
$
|
111,424
|
|
|
$
|
113,020
|
|
|
$
|
111,628
|
|
|
$
|
115,527
|
|
|
$
|
128,033
|
|
|
$
|
121,442
|
|
|
$
|
120,204
|
|
|
$
|
112,865
|
|
Franchising royalties and fees
|
1,350
|
|
|
1,191
|
|
|
1,164
|
|
|
1,188
|
|
|
1,367
|
|
|
1,239
|
|
|
1,203
|
|
|
1,121
|
|
||||||||
Total revenue
|
$
|
112,774
|
|
|
$
|
114,211
|
|
|
$
|
112,792
|
|
|
$
|
116,715
|
|
|
$
|
129,400
|
|
|
$
|
122,681
|
|
|
$
|
121,407
|
|
|
$
|
113,986
|
|
Net loss
(1)(2)(3)(4)
|
$
|
(487
|
)
|
|
$
|
(8,335
|
)
|
|
$
|
(1,815
|
)
|
|
$
|
(26,845
|
)
|
|
$
|
(45,376
|
)
|
|
$
|
(9,841
|
)
|
|
$
|
(14,087
|
)
|
|
$
|
(2,373
|
)
|
Selected Operating Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Company-owned restaurants at end of period
|
412
|
|
|
413
|
|
|
413
|
|
|
409
|
|
|
457
|
|
|
455
|
|
|
443
|
|
|
436
|
|
||||||||
Franchise-owned restaurants at end of period
|
66
|
|
|
66
|
|
|
73
|
|
|
73
|
|
|
75
|
|
|
73
|
|
|
71
|
|
|
71
|
|
||||||||
Company-owned:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Average unit volumes
|
$
|
1,072
|
|
|
$
|
1,066
|
|
|
$
|
1,065
|
|
|
$
|
1,067
|
|
|
$
|
1,075
|
|
|
$
|
1,087
|
|
|
$
|
1,092
|
|
|
$
|
1,101
|
|
Comparable restaurant sales
|
(0.9
|
)%
|
|
(3.8
|
)%
|
|
(3.9
|
)%
|
|
(2.5
|
)%
|
|
(1.8
|
)%
|
|
(0.9
|
)%
|
|
(0.9
|
)%
|
|
—
|
%
|
||||||||
Restaurant contribution as a percentage of restaurant revenue
(5)
|
15.1
|
%
|
|
15.6
|
%
|
|
15.0
|
%
|
|
11.0
|
%
|
|
11.9
|
%
|
|
12.4
|
%
|
|
13.7
|
%
|
|
13.3
|
%
|
(1)
|
The first quarter of 2017 includes
$19.9 million
of closure costs primarily related to the
55
restaurants closed during the first quarter of 2017. See Note 6, Restaurant Impairments, Closure Costs and Asset Disposals, for additional disclosure on closures.
|
(2)
|
Includes the impact of impairing
three
restaurants in the fourth quarter of 2017,
18
restaurants in the third quarter of 2017,
nine
restaurants in the second quarter of 2017 and
four
restaurants in the first quarter of 2017. The impairment costs recognized were
$1.1 million
in the fourth quarter of 2017,
$9.1 million
in the third quarter of 2017,
$4.0 million
in the second quarter of 2017 and
$1.9 million
in the first quarter of 2017. See Note 6, Restaurant Impairments, Closure Costs and Asset Disposals, for additional disclosure on impairments.
|
(3)
|
Includes the impact of impairing
42
restaurants in the fourth quarter of 2016,
11
restaurants in the second quarter of 2016 and
one
restaurant in the first quarter of 2016. The impairment costs recognized were
$31.1 million
in the fourth quarter of 2016,
$10.3 million
in the second quarter of 2016 and
$0.2 million
in the first quarter of 2016. See Note 6, Restaurant Impairments, Closure Costs and Asset Disposals, for additional disclosure on impairments.
|
(4)
|
The fourth quarter of 2016 includes charges of
$10.6 million
for estimated losses associated with claims and anticipated claims by payment card companies from our data security incident, and the third quarter of 2016 includes a
$2.5 million
charge for severance expenses and a
$3.0 million
charge for an employment-related litigation settlement.
|
(5)
|
Restaurant contribution represents restaurant revenue less restaurant operating costs, which are the cost of sales, labor, occupancy and other operating items. Restaurant contribution is a non-GAAP measure that is neither required by, nor presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”), and the calculation thereof may not be comparable to similar measures reported by other companies. Restaurant contribution is a supplemental measure of the operating performance of our restaurants and is not reflective of the underlying performance of our business because corporate-level expenses are excluded from this measure.
|
|
Quarter Ended
|
||||||||||||||||||||||||||||||
|
January 2, 2018
|
|
October 3, 2017
|
|
July 4, 2017
|
|
April 4, 2017
|
|
January 3, 2017
|
|
September 27, 2016
|
|
June 28, 2016
|
|
March 29, 2016
|
||||||||||||||||
|
(in thousands, unaudited)
|
||||||||||||||||||||||||||||||
Income (loss) from operations
|
$
|
87
|
|
|
$
|
(7,483
|
)
|
|
$
|
(808
|
)
|
|
$
|
(25,646
|
)
|
|
$
|
(44,315
|
)
|
|
$
|
(9,062
|
)
|
|
$
|
(11,312
|
)
|
|
$
|
(2,839
|
)
|
Less: Franchising royalties and fees
|
1,350
|
|
|
1,191
|
|
|
1,164
|
|
|
1,188
|
|
|
1,367
|
|
|
1,239
|
|
|
1,203
|
|
|
1,121
|
|
||||||||
Add: General and administrative
|
9,880
|
|
|
9,807
|
|
|
9,393
|
|
|
10,666
|
|
|
20,526
|
|
|
15,251
|
|
|
9,840
|
|
|
10,037
|
|
||||||||
Depreciation and amortization
|
5,884
|
|
|
6,183
|
|
|
6,279
|
|
|
6,267
|
|
|
7,151
|
|
|
7,006
|
|
|
7,071
|
|
|
6,906
|
|
||||||||
Pre-opening
|
75
|
|
|
69
|
|
|
246
|
|
|
545
|
|
|
442
|
|
|
856
|
|
|
796
|
|
|
1,037
|
|
||||||||
Restaurant impairments, closure costs and asset disposals
|
2,299
|
|
|
10,263
|
|
|
2,830
|
|
|
22,054
|
|
|
32,764
|
|
|
2,283
|
|
|
11,248
|
|
|
1,016
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Restaurant contribution
|
$
|
16,875
|
|
|
$
|
17,648
|
|
|
$
|
16,776
|
|
|
$
|
12,698
|
|
|
$
|
15,201
|
|
|
$
|
15,095
|
|
|
$
|
16,440
|
|
|
$
|
15,036
|
|
|
|
Fiscal Year Ended
|
||||||||||
|
|
January 2, 2018
|
|
January 3, 2017
|
|
December 29, 2015
|
||||||
|
|
(in thousands)
|
||||||||||
Net cash provided by operating activities
|
|
$
|
4,102
|
|
|
$
|
24,737
|
|
|
$
|
44,506
|
|
Net cash used in investing activities
|
|
(20,828
|
)
|
|
(42,757
|
)
|
|
(50,721
|
)
|
|||
Net cash provided by financing activities
|
|
18,265
|
|
|
17,904
|
|
|
6,355
|
|
|||
Effect of exchange rate changes on cash
|
|
(15
|
)
|
|
41
|
|
|
(134
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
|
$
|
1,524
|
|
|
$
|
(75
|
)
|
|
$
|
6
|
|
|
|
|
|
Payments Due by Period
|
||||||||||||||||
|
|
Total
|
|
1 Year
|
|
2 - 3
Years
|
|
4 - 5
Years
|
|
After 5
Years
|
||||||||||
|
|
(in thousands)
|
||||||||||||||||||
Lease obligations
(1)
|
|
$
|
244,651
|
|
|
$
|
44,371
|
|
|
$
|
75,888
|
|
|
$
|
59,810
|
|
|
$
|
64,582
|
|
Purchase obligations
(2)
|
|
31,412
|
|
|
20,392
|
|
|
6,936
|
|
|
4,084
|
|
|
—
|
|
|||||
Long-term debt
(3)
|
|
58,818
|
|
|
—
|
|
|
58,818
|
|
|
—
|
|
|
—
|
|
|||||
Other liabilities
(4)
|
|
790
|
|
|
67
|
|
|
683
|
|
|
20
|
|
|
20
|
|
|||||
Total contractual obligations
|
|
$
|
335,671
|
|
|
$
|
64,830
|
|
|
$
|
142,325
|
|
|
$
|
63,914
|
|
|
$
|
64,602
|
|
(1)
|
We are obligated under non-cancellable leases for our restaurants, administrative offices and equipment. Some restaurant leases provide for contingent rental payments based on sales thresholds, which are excluded from this table. We also include capital leases for computer equipment of approximately $0.5 million.
|
(2)
|
We enter into various purchase obligations in the ordinary course of business. Our binding purchase obligations relate to volume commitments for beverage and food products, as well as binding commitments for the construction of new restaurants.
|
(3)
|
Reflects full payment of our long-term debt at maturity of our credit facility in 2019. Interest payments associated with variable-rate long-term debt have not been included in the table. Assuming that our
$58.8 million
of variable-rate long-term debt as of
January 2, 2018
is held to maturity and utilizing interest rates in effect as of
January 2, 2018
, our annual interest payments (including commitment fees and letter of credit fees) on variable-rate long-term debt as of
January 2, 2018
is anticipated to be approximately
$3.3 million
for 2018 and approximately
$1.4 million
for 2019. The future annual interest obligations noted herein are estimated only in relation to debt outstanding as of
January 2, 2018
and do not reflect interest obligations on potential future debt. See “Liquidity and Capital Resources” for a discussion of the terms of the revolving credit facility.
|
(4)
|
Reflects the expected payments associated with severance expense and our commitment under our non-qualified deferred compensation plan.
|
ITEM 8.
|
Financial Statements and Supplementary Data
|
Consolidated Financial Statements
|
|
|
|
January 2, 2018
|
|
January 3, 2017
|
||||
Assets
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
3,361
|
|
|
$
|
1,837
|
|
Accounts receivable
|
|
2,434
|
|
|
5,438
|
|
||
Inventories
|
|
9,929
|
|
|
11,285
|
|
||
Prepaid expenses and other assets
|
|
6,258
|
|
|
6,972
|
|
||
Income tax receivable
|
|
76
|
|
|
256
|
|
||
Total current assets
|
|
22,058
|
|
|
25,788
|
|
||
Property and equipment, net
|
|
152,593
|
|
|
173,533
|
|
||
Goodwill
|
|
6,400
|
|
|
6,400
|
|
||
Intangibles, net
|
|
1,565
|
|
|
1,715
|
|
||
Other assets, net
|
|
2,617
|
|
|
2,025
|
|
||
Total long-term assets
|
|
163,175
|
|
|
183,673
|
|
||
Total assets
|
|
$
|
185,233
|
|
|
$
|
209,461
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Accounts payable
|
|
$
|
10,929
|
|
|
$
|
10,601
|
|
Accrued payroll and benefits
|
|
11,719
|
|
|
10,723
|
|
||
Accrued expenses and other current liabilities
|
|
21,221
|
|
|
27,709
|
|
||
Total current liabilities
|
|
43,869
|
|
|
49,033
|
|
||
Long-term debt, net
|
|
57,624
|
|
|
84,676
|
|
||
Deferred rent
|
|
38,872
|
|
|
44,929
|
|
||
Deferred tax liabilities, net
|
|
416
|
|
|
435
|
|
||
Other long-term liabilities
|
|
8,591
|
|
|
4,570
|
|
||
Total liabilities
|
|
149,372
|
|
|
183,643
|
|
||
Commitments and contingencies
|
|
|
|
|
|
|
||
Stockholders’ equity:
|
|
|
|
|
||||
Preferred stock—$0.01 par value, 1,000,000 shares authorized and undesignated as of January 2, 2018 and January 3, 2017; no shares issued or outstanding
|
|
—
|
|
|
—
|
|
||
Common stock—$0.01 par value, authorized 180,000,000 shares as of January 2, 2018 and January 3, 2017; 43,550,329 issued and 41,126,458 outstanding as of January 2, 2018 and 30,300,925 issued and 27,877,054 outstanding as of January 3, 2017
|
|
436
|
|
|
303
|
|
||
Treasury stock, at cost, 2,423,871 shares as of January 2, 2018 and January 3, 2017, respectively
|
|
(35,000
|
)
|
|
(35,000
|
)
|
||
Additional paid-in capital
|
|
171,613
|
|
|
124,272
|
|
||
Accumulated other comprehensive loss
|
|
—
|
|
|
(51
|
)
|
||
Accumulated deficit
|
|
(101,188
|
)
|
|
(63,706
|
)
|
||
Total stockholders’ equity
|
|
35,861
|
|
|
25,818
|
|
||
Total liabilities and stockholders’ equity
|
|
$
|
185,233
|
|
|
$
|
209,461
|
|
|
|
Fiscal Year Ended
|
||||||||||
|
|
January 2, 2018
|
|
January 3, 2017
|
|
December 29, 2015
|
||||||
Revenue:
|
|
|
|
|
|
|
||||||
Restaurant revenue
|
|
$
|
451,599
|
|
|
$
|
482,544
|
|
|
$
|
450,482
|
|
Franchising royalties and fees
|
|
4,893
|
|
|
4,930
|
|
|
4,969
|
|
|||
Total revenue
|
|
456,492
|
|
|
487,474
|
|
|
455,451
|
|
|||
Costs and expenses:
|
|
|
|
|
|
|
||||||
Restaurant operating costs (exclusive of depreciation and amortization shown separately below):
|
|
|
|
|
|
|
||||||
Cost of sales
|
|
121,473
|
|
|
130,630
|
|
|
120,455
|
|
|||
Labor
|
|
150,161
|
|
|
161,219
|
|
|
143,145
|
|
|||
Occupancy
|
|
51,877
|
|
|
55,912
|
|
|
50,300
|
|
|||
Other restaurant operating costs
|
|
64,091
|
|
|
73,011
|
|
|
63,549
|
|
|||
General and administrative
|
|
39,746
|
|
|
55,654
|
|
|
37,244
|
|
|||
Depreciation and amortization
|
|
24,613
|
|
|
28,134
|
|
|
27,802
|
|
|||
Pre-opening
|
|
935
|
|
|
3,131
|
|
|
4,407
|
|
|||
Restaurant impairments, closure costs and asset disposals
|
|
37,446
|
|
|
47,311
|
|
|
29,616
|
|
|||
Total costs and expenses
|
|
490,342
|
|
|
555,002
|
|
|
476,518
|
|
|||
Loss from operations
|
|
(33,850
|
)
|
|
(67,528
|
)
|
|
(21,067
|
)
|
|||
Interest expense, net
|
|
3,839
|
|
|
2,916
|
|
|
1,432
|
|
|||
Loss before income taxes
|
|
(37,689
|
)
|
|
(70,444
|
)
|
|
(22,499
|
)
|
|||
(Benefit) provision for income taxes
|
|
(207
|
)
|
|
1,233
|
|
|
(8,734
|
)
|
|||
Net loss
|
|
(37,482
|
)
|
|
(71,677
|
)
|
|
(13,765
|
)
|
|||
Accretion of preferred stock to redemption value
|
|
(7,967
|
)
|
|
—
|
|
|
—
|
|
|||
Net loss attributable to common stockholders
|
|
$
|
(45,449
|
)
|
|
$
|
(71,677
|
)
|
|
$
|
(13,765
|
)
|
|
|
|
|
|
|
|
||||||
Loss per Class A and Class B common stock, combined
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
(1.20
|
)
|
|
$
|
(2.58
|
)
|
|
$
|
(0.48
|
)
|
Diluted
|
|
$
|
(1.20
|
)
|
|
$
|
(2.58
|
)
|
|
$
|
(0.48
|
)
|
Weighted average Class A and Class B common stock outstanding, combined
|
|
|
|
|
|
|
||||||
Basic
|
|
37,759,497
|
|
|
27,808,708
|
|
|
28,938,901
|
|
|||
Diluted
|
|
37,759,497
|
|
|
27,808,708
|
|
|
28,938,901
|
|
|
|
Fiscal Year Ended
|
||||||||||
|
|
January 2, 2018
|
|
January 3, 2017
|
|
December 29, 2015
|
||||||
Net loss
|
|
$
|
(37,482
|
)
|
|
$
|
(71,677
|
)
|
|
$
|
(13,765
|
)
|
Other comprehensive (loss) income:
|
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
|
(109
|
)
|
|
83
|
|
|
(134
|
)
|
|||
Other comprehensive (loss) income
|
|
(109
|
)
|
|
83
|
|
|
(134
|
)
|
|||
Comprehensive loss
|
|
$
|
(37,591
|
)
|
|
$
|
(71,594
|
)
|
|
$
|
(13,899
|
)
|
|
|
Common Stock
(1) (2)
|
|
Treasury
|
|
Additional
Paid-In Capital |
|
Accumulated
Other Comprehensive Loss |
|
Retained
Earnings (Accumulated Deficit) |
|
Total
Stockholders’ Equity |
Temporary Equity
|
||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||||||
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
||||||||||||||||||||||||
Balance—December 30, 2014
|
|
29,820,340
|
|
|
$
|
298
|
|
|
67,586
|
|
|
$
|
(2,848
|
)
|
|
$
|
120,929
|
|
|
$
|
—
|
|
|
$
|
21,736
|
|
|
$
|
140,115
|
|
$
|
—
|
|
Proceeds from exercise of stock options, warrants and employee stock purchase plan
|
|
318,332
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
949
|
|
|
—
|
|
|
—
|
|
|
952
|
|
—
|
|
|||||||
Treasury shares acquired, net
|
|
—
|
|
|
—
|
|
|
2,356,285
|
|
|
(32,152
|
)
|
|
(2,848
|
)
|
|
—
|
|
|
—
|
|
|
(35,000
|
)
|
—
|
|
|||||||
Stock-based compensation expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,698
|
|
|
—
|
|
|
—
|
|
|
1,698
|
|
—
|
|
|||||||
Other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(94
|
)
|
|
—
|
|
|
—
|
|
|
(94
|
)
|
—
|
|
|||||||
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,765
|
)
|
|
(13,765
|
)
|
—
|
|
|||||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(134
|
)
|
|
—
|
|
|
(134
|
)
|
—
|
|
|||||||
Balance—December 29, 2015
|
|
30,138,672
|
|
|
301
|
|
|
2,423,871
|
|
|
(35,000
|
)
|
|
120,634
|
|
|
(134
|
)
|
|
7,971
|
|
|
93,772
|
|
—
|
|
|||||||
Proceeds from exercise of stock options and employee stock purchase plan
|
|
162,253
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
1,098
|
|
|
—
|
|
|
—
|
|
|
1,100
|
|
—
|
|
|||||||
Stock-based compensation expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,540
|
|
|
—
|
|
|
—
|
|
|
2,540
|
|
—
|
|
|||||||
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(71,677
|
)
|
|
(71,677
|
)
|
—
|
|
|||||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
83
|
|
|
—
|
|
|
83
|
|
—
|
|
|||||||
Balance—January 3, 2017
|
|
30,300,925
|
|
|
303
|
|
|
2,423,871
|
|
|
(35,000
|
)
|
|
124,272
|
|
|
(51
|
)
|
|
(63,706
|
)
|
|
25,818
|
|
—
|
|
|||||||
Issuance of preferred stock and warrants to
L
Catterton in connection with the private placement, net of transaction expenses
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,056
|
|
|
—
|
|
|
—
|
|
|
6,056
|
|
10,533
|
|
|||||||
Issuance of common stock in connection with the Mill Road private placement, net of transaction expenses
|
|
8,873,240
|
|
|
89
|
|
|
—
|
|
|
—
|
|
|
29,021
|
|
|
—
|
|
|
—
|
|
|
29,110
|
|
—
|
|
|||||||
Accretion of preferred stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,967
|
)
|
|
—
|
|
|
—
|
|
|
(7,967
|
)
|
7,967
|
|
|||||||
Conversion of preferred stock to
L
Catterton
|
|
4,252,873
|
|
|
43
|
|
|
—
|
|
|
—
|
|
|
18,457
|
|
|
—
|
|
|
—
|
|
|
18,500
|
|
(18,500
|
)
|
|||||||
Proceeds from exercise of stock options and employee stock purchase plan
|
|
123,291
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
82
|
|
|
—
|
|
|
—
|
|
|
83
|
|
—
|
|
|||||||
Stock-based compensation expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,692
|
|
|
—
|
|
|
—
|
|
|
1,692
|
|
—
|
|
|||||||
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(37,482
|
)
|
|
(37,482
|
)
|
—
|
|
|||||||
Other comprehensive income, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
51
|
|
|
—
|
|
|
51
|
|
—
|
|
|||||||
Balance—January 2, 2018
|
|
43,550,329
|
|
|
$
|
436
|
|
|
2,423,871
|
|
|
$
|
(35,000
|
)
|
|
$
|
171,613
|
|
|
$
|
—
|
|
|
$
|
(101,188
|
)
|
|
$
|
35,861
|
|
$
|
—
|
|
(1)
|
Unless otherwise noted, activity relates to Class A common stock
|
(2)
|
Includes
1,522,098
shares of Class B common stock for all periods presented.
|
|
|
Fiscal Year Ended
|
||||||||||
|
|
January 2, 2018
|
|
January 3, 2017
|
|
December 29, 2015
|
||||||
Operating activities
|
|
|
|
|
|
|
||||||
Net loss
|
|
$
|
(37,482
|
)
|
|
$
|
(71,677
|
)
|
|
$
|
(13,765
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
|
|
|
||||||
Depreciation and amortization
|
|
24,613
|
|
|
28,134
|
|
|
27,802
|
|
|||
Deferred income taxes, net
|
|
(228
|
)
|
|
1,099
|
|
|
(8,878
|
)
|
|||
Restaurant impairments, closure costs and asset disposals
|
|
30,859
|
|
|
45,536
|
|
|
28,927
|
|
|||
Amortization of debt issuance costs
|
|
465
|
|
|
140
|
|
|
98
|
|
|||
Stock-based compensation
|
|
1,514
|
|
|
2,319
|
|
|
1,469
|
|
|||
Loss on liquidation of Canadian subsidiary
|
|
70
|
|
|
—
|
|
|
—
|
|
|||
Gain on insurance proceeds received for property damage
|
|
—
|
|
|
(494
|
)
|
|
—
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
||||||
Accounts receivable
|
|
2,976
|
|
|
(443
|
)
|
|
(437
|
)
|
|||
Inventories
|
|
(387
|
)
|
|
(790
|
)
|
|
(1,058
|
)
|
|||
Prepaid expenses and other assets
|
|
332
|
|
|
162
|
|
|
(1,025
|
)
|
|||
Accounts payable
|
|
(1,302
|
)
|
|
(2,440
|
)
|
|
2,794
|
|
|||
Deferred rent
|
|
1,597
|
|
|
5,328
|
|
|
7,143
|
|
|||
Income taxes
|
|
180
|
|
|
564
|
|
|
(193
|
)
|
|||
Accrued expenses and other liabilities
|
|
(19,105
|
)
|
|
17,299
|
|
|
1,629
|
|
|||
Net cash provided by operating activities
|
|
4,102
|
|
|
24,737
|
|
|
44,506
|
|
|||
Investing activities
|
|
|
|
|
|
|
||||||
Purchases of property and equipment
|
|
(20,828
|
)
|
|
(43,335
|
)
|
|
(50,093
|
)
|
|||
Acquisitions of franchise restaurants
|
|
—
|
|
|
—
|
|
|
(628
|
)
|
|||
Insurance proceeds received for property damage
|
|
—
|
|
|
578
|
|
|
—
|
|
|||
Net cash used in investing activities
|
|
(20,828
|
)
|
|
(42,757
|
)
|
|
(50,721
|
)
|
|||
Financing activities
|
|
|
|
|
|
|
||||||
Net (repayments) borrowings from swing line loan
|
|
(96
|
)
|
|
(1,649
|
)
|
|
1,846
|
|
|||
Proceeds from borrowings on long-term debt
|
|
10,532
|
|
|
19,800
|
|
|
55,600
|
|
|||
Payments on long-term debt
|
|
(37,015
|
)
|
|
(1,000
|
)
|
|
(16,700
|
)
|
|||
Debt issuance costs
|
|
(938
|
)
|
|
(347
|
)
|
|
(249
|
)
|
|||
Issuance of preferred stock and common stock warrants, net of transaction expenses (see Note 8)
|
|
16,589
|
|
|
—
|
|
|
—
|
|
|||
Issuance of common stock, net of transaction expenses (see Note 8)
|
|
29,110
|
|
|
—
|
|
|
—
|
|
|||
Acquisition of treasury stock
|
|
—
|
|
|
—
|
|
|
(35,000
|
)
|
|||
Proceeds from exercise of stock options and employee stock purchase plan
|
|
83
|
|
|
1,100
|
|
|
952
|
|
|||
Other financing activities
|
|
—
|
|
|
—
|
|
|
(94
|
)
|
|||
Net cash provided by financing activities
|
|
18,265
|
|
|
17,904
|
|
|
6,355
|
|
|||
Effect of exchange rate changes on cash
|
|
(15
|
)
|
|
41
|
|
|
(134
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
|
1,524
|
|
|
(75
|
)
|
|
6
|
|
|||
Cash and cash equivalents
|
|
|
|
|
|
|
||||||
Beginning of year
|
|
1,837
|
|
|
1,912
|
|
|
1,906
|
|
|||
End of year
|
|
$
|
3,361
|
|
|
$
|
1,837
|
|
|
$
|
1,912
|
|
Property and Equipment
|
|
Estimated Useful Lives
|
Leasehold improvements
|
|
Shorter of lease term or estimated useful life, not to exceed 20 years
|
Furniture and fixtures
|
|
3 to 15 years
|
Equipment
|
|
3 to 7 years
|
|
|
2017
|
|
2016
|
||||
Tenant improvement receivables
|
|
$
|
216
|
|
|
$
|
1,205
|
|
Vendor rebate receivables
|
|
869
|
|
|
1,590
|
|
||
Franchise and other receivables
|
|
1,349
|
|
|
2,643
|
|
||
|
|
$
|
2,434
|
|
|
$
|
5,438
|
|
|
|
2017
|
|
2016
|
||||
Prepaid occupancy related costs
|
|
$
|
4,091
|
|
|
$
|
4,405
|
|
Other prepaid expenses
|
|
2,126
|
|
|
2,364
|
|
||
Other current assets
|
|
41
|
|
|
203
|
|
||
|
|
$
|
6,258
|
|
|
$
|
6,972
|
|
|
|
2017
|
|
2016
|
||||
Leasehold improvements
|
|
$
|
199,211
|
|
|
$
|
205,687
|
|
Furniture, fixtures and equipment
|
|
120,234
|
|
|
120,248
|
|
||
Construction in progress
|
|
2,592
|
|
|
8,044
|
|
||
|
|
322,037
|
|
|
333,979
|
|
||
Accumulated depreciation and amortization
|
|
(169,444
|
)
|
|
(160,446
|
)
|
||
|
|
$
|
152,593
|
|
|
$
|
173,533
|
|
|
|
2017
|
|
2016
|
||||
Accrued payroll and related liabilities
|
|
$
|
6,594
|
|
|
$
|
6,935
|
|
Accrued bonus
|
|
1,947
|
|
|
1,460
|
|
||
Insurance liabilities
|
|
3,178
|
|
|
2,328
|
|
||
|
|
$
|
11,719
|
|
|
$
|
10,723
|
|
|
|
2017
|
|
2016
|
||||
Gift card liability
|
|
$
|
4,078
|
|
|
$
|
3,857
|
|
Occupancy related
|
|
3,733
|
|
|
2,069
|
|
||
Utilities
|
|
1,705
|
|
|
1,753
|
|
||
Data breach liabilities (Note 14)
|
|
7,605
|
|
|
11,622
|
|
||
Legal settlement
|
|
—
|
|
|
3,000
|
|
||
Other accrued expenses
|
|
4,100
|
|
|
5,408
|
|
||
|
|
$
|
21,221
|
|
|
$
|
27,709
|
|
|
|
2017
|
|
2016
|
||||
Balance at beginning of year
|
|
$
|
6,400
|
|
|
$
|
6,400
|
|
Acquisitions
|
|
—
|
|
|
—
|
|
||
Balance at end of year
|
|
$
|
6,400
|
|
|
$
|
6,400
|
|
|
|
2017
|
|
2016
|
||||
Amortized intangible assets:
|
|
|
|
|
||||
Reacquired franchise rights
|
|
$
|
1,271
|
|
|
$
|
1,306
|
|
Favorable leases
|
|
150
|
|
|
185
|
|
||
Less accumulated amortization
|
|
(375
|
)
|
|
(277
|
)
|
||
|
|
1,046
|
|
|
1,214
|
|
||
Non-amortized intangible assets:
|
|
|
|
|
||||
Trademark rights and transferable liquor licenses
|
|
519
|
|
|
501
|
|
||
|
|
$
|
1,565
|
|
|
$
|
1,715
|
|
2018
|
|
$
|
107
|
|
2019
|
|
105
|
|
|
2020
|
|
102
|
|
|
2021
|
|
102
|
|
|
2022
|
|
99
|
|
|
Thereafter
|
|
531
|
|
|
|
|
$
|
1,046
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Restaurant impairments
(1)
|
$
|
16,154
|
|
|
$
|
41,615
|
|
|
$
|
25,436
|
|
Closure costs
(1)
|
20,052
|
|
|
2,251
|
|
|
3,076
|
|
|||
Loss on disposal of assets and other
(2)
|
1,240
|
|
|
3,445
|
|
|
1,104
|
|
|||
|
$
|
37,446
|
|
|
$
|
47,311
|
|
|
$
|
29,616
|
|
(1)
|
Restaurant impairments and closure costs can include expenditures related to restaurants previously impaired or closed.
|
(2)
|
Included in loss on disposal of assets and other for the fiscal year 2016 is a
$1.1 million
charge to reduce capitalized labor and overhead as a result of the reduced growth for new restaurant development and a
$0.5 million
gain from insurance proceeds received for property damage in excess of the loss recognized.
|
|
|
2017
|
|
2016
|
||||
Closed restaurant reserves, beginning of period
|
|
$
|
1,880
|
|
|
$
|
4,746
|
|
Additions—restaurant closing costs recognized and accretion
|
|
18,341
|
|
|
858
|
|
||
Decreases—payments
|
|
(12,042
|
)
|
|
(3,724
|
)
|
||
Closed restaurant reserves, end of period
|
|
$
|
8,179
|
|
|
$
|
1,880
|
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Domestic loss
|
|
$
|
(42,047
|
)
|
|
$
|
(67,626
|
)
|
|
$
|
(21,674
|
)
|
Foreign income (loss)
|
|
4,358
|
|
|
(2,818
|
)
|
|
(825
|
)
|
|||
|
|
$
|
(37,689
|
)
|
|
$
|
(70,444
|
)
|
|
$
|
(22,499
|
)
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Current tax provision:
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
State
|
|
21
|
|
|
134
|
|
|
144
|
|
|||
Foreign
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
|
|
21
|
|
|
134
|
|
|
144
|
|
|||
Deferred tax (benefit) provision:
|
|
|
|
|
|
|
||||||
Federal
|
|
(252
|
)
|
|
(1,979
|
)
|
|
(7,169
|
)
|
|||
State
|
|
24
|
|
|
2,854
|
|
|
(1,495
|
)
|
|||
Foreign
|
|
—
|
|
|
224
|
|
|
(214
|
)
|
|||
|
|
(228
|
)
|
|
1,099
|
|
|
(8,878
|
)
|
|||
Total (benefit) provision for income taxes
|
|
$
|
(207
|
)
|
|
$
|
1,233
|
|
|
$
|
(8,734
|
)
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Federal income tax benefit at federal rate
|
|
$
|
(12,814
|
)
|
|
$
|
(23,740
|
)
|
|
$
|
(7,650
|
)
|
State income tax benefit, net of federal tax
|
|
(1,790
|
)
|
|
(2,975
|
)
|
|
(960
|
)
|
|||
Other permanent differences
|
|
674
|
|
|
996
|
|
|
378
|
|
|||
Foreign rate differential
|
|
(463
|
)
|
|
214
|
|
|
66
|
|
|||
Tax credits
|
|
(808
|
)
|
|
(749
|
)
|
|
(423
|
)
|
|||
Change in valuation allowance
|
|
(159
|
)
|
|
27,353
|
|
|
—
|
|
|||
Tax rate change
|
|
13,632
|
|
|
—
|
|
|
—
|
|
|||
Deferred tax asset write-off
|
|
2,618
|
|
|
—
|
|
|
—
|
|
|||
Other items, net
|
|
(1,097
|
)
|
|
134
|
|
|
(145
|
)
|
|||
(Benefit) provision for income taxes
|
|
$
|
(207
|
)
|
|
$
|
1,233
|
|
|
$
|
(8,734
|
)
|
Effective income tax rate
|
|
0.5
|
%
|
|
(1.8
|
)%
|
|
38.8
|
%
|
|
|
2017
|
|
2016
|
||||
Deferred tax assets
|
|
$
|
47,027
|
|
|
$
|
43,853
|
|
Deferred tax liabilities
|
|
(11,632
|
)
|
|
(16,935
|
)
|
||
Total deferred tax liabilities
|
|
35,395
|
|
|
26,918
|
|
||
Valuation allowance
|
|
(35,811
|
)
|
|
(27,353
|
)
|
||
Net deferred tax liabilities
|
|
$
|
(416
|
)
|
|
$
|
(435
|
)
|
|
|
2017
|
|
2016
|
||||
Deferred tax assets (liabilities):
|
|
|
|
|
||||
Loss carry forwards
|
|
$
|
26,991
|
|
|
$
|
14,046
|
|
Deferred rent and franchise revenue
|
|
10,486
|
|
|
17,753
|
|
||
Property, equipment and intangible assets
|
|
(9,858
|
)
|
|
(14,130
|
)
|
||
Stock-based compensation
|
|
1,086
|
|
|
2,802
|
|
||
Tax credit carry forwards
|
|
3,123
|
|
|
2,636
|
|
||
Inventory smallwares
|
|
(1,774
|
)
|
|
(2,805
|
)
|
||
Other accrued expenses
|
|
4,320
|
|
|
5,022
|
|
||
Other
|
|
1,021
|
|
|
1,594
|
|
||
Total net deferred tax assets
|
|
35,395
|
|
|
26,918
|
|
||
Valuation allowance
|
|
(35,811
|
)
|
|
(27,353
|
)
|
||
Net deferred tax liabilities
|
|
$
|
(416
|
)
|
|
$
|
(435
|
)
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Risk-free interest rate
|
|
2.0
|
%
|
|
1.2
|
%
|
|
1.6
|
%
|
|||
Expected term (average in years)
|
|
6.1
|
|
|
5.0
|
|
|
5.0
|
|
|||
Expected dividend yield
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Expected volatility
|
|
39.6
|
%
|
|
37.0
|
%
|
|
36.8
|
%
|
|||
Weighted-average Black-Scholes fair value per share at date of grant
|
|
$
|
1.74
|
|
|
$
|
2.85
|
|
|
$
|
5.04
|
|
|
|
Awards
|
|
Weighted-
Average Exercise Price |
|
Weighted-Average Remaining Contractual Term
|
|
Aggregate
Intrinsic Value (1) (in thousands) |
|||||
Outstanding—January 3, 2017
|
|
2,574,932
|
|
|
$
|
12.34
|
|
|
|
|
|
||
Granted
|
|
232,000
|
|
|
4.25
|
|
|
|
|
|
|||
Forfeited or expired
|
|
(1,474,797
|
)
|
|
11.16
|
|
|
|
|
|
|||
Exercised
|
|
—
|
|
|
—
|
|
|
|
|
|
|||
Outstanding—January 2, 2018
|
|
1,332,135
|
|
|
$
|
12.23
|
|
|
6.50
|
|
$
|
—
|
|
Vested and expected to vest
|
|
1,305,060
|
|
|
$
|
12.20
|
|
|
6.47
|
|
$
|
219
|
|
Exercisable as of January 2, 2018
|
|
788,873
|
|
|
$
|
13.75
|
|
|
5.14
|
|
$
|
—
|
|
(1)
|
Aggregate intrinsic value represents the amount by which fair value of the Company’s stock exceeds the exercise price of the option as of
January 2, 2018
.
|
|
|
Awards
|
|
Weighted-
Average Grant Date Fair Value |
|||
Outstanding at January 3, 2017
|
|
122,765
|
|
|
$
|
10.20
|
|
Granted
|
|
328,106
|
|
|
3.42
|
|
|
Vested
|
|
(100,871
|
)
|
|
6.87
|
|
|
Forfeited
|
|
(21,641
|
)
|
|
9.15
|
|
|
Non-vested at January 2, 2018
|
|
328,359
|
|
|
$
|
5.44
|
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net loss attributable to common stockholders
|
|
$
|
(45,449
|
)
|
|
$
|
(71,677
|
)
|
|
$
|
(13,765
|
)
|
Shares:
|
|
|
|
|
|
|
||||||
Basic weighted average shares outstanding
|
|
37,759,497
|
|
|
27,808,708
|
|
|
28,938,901
|
|
|||
Effect of dilutive securities
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Diluted weighted average number of shares outstanding
|
|
37,759,497
|
|
|
27,808,708
|
|
|
28,938,901
|
|
|||
Loss per share:
|
|
|
|
|
|
|
||||||
Basic loss earnings per share
|
|
$
|
(1.20
|
)
|
|
$
|
(2.58
|
)
|
|
$
|
(0.48
|
)
|
Diluted loss earnings per share
|
|
$
|
(1.20
|
)
|
|
$
|
(2.58
|
)
|
|
$
|
(0.48
|
)
|
2018
|
$
|
44,371
|
|
2019
|
40,090
|
|
|
2020
|
35,798
|
|
|
2021
|
32,234
|
|
|
2022
|
27,576
|
|
|
Thereafter
|
64,582
|
|
|
|
$
|
244,651
|
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Interest paid (net of amounts capitalized)
|
|
$
|
3,482
|
|
|
$
|
2,394
|
|
|
$
|
839
|
|
Income taxes (refunded) paid
|
|
(158
|
)
|
|
(427
|
)
|
|
354
|
|
|||
Changes in purchases of property and equipment accrued in accounts payable, net
|
|
(842
|
)
|
|
(1,431
|
)
|
|
(1,414
|
)
|
|||
Conversion of Series A convertible preferred stock to common stock
|
|
18,500
|
|
|
—
|
|
|
—
|
|
|
Fiscal 2017
|
||||||||||||||
|
January 2, 2018
|
|
October 3, 2017
|
|
July 4, 2017
|
|
April 4, 2017
|
||||||||
Revenue
|
$
|
112,774
|
|
|
$
|
114,211
|
|
|
$
|
112,792
|
|
|
$
|
116,715
|
|
Operating income (loss)
(1)(2)
|
$
|
87
|
|
|
$
|
(7,483
|
)
|
|
$
|
(808
|
)
|
|
$
|
(25,646
|
)
|
Net loss
|
$
|
(487
|
)
|
|
$
|
(8,335
|
)
|
|
$
|
(1,815
|
)
|
|
$
|
(26,845
|
)
|
Net loss attributable to common stockholders
(3)
|
$
|
(487
|
)
|
|
$
|
(8,335
|
)
|
|
$
|
(8,816
|
)
|
|
$
|
(27,810
|
)
|
Basic loss per share
|
$
|
(0.01
|
)
|
|
$
|
(0.20
|
)
|
|
$
|
(0.22
|
)
|
|
$
|
(0.99
|
)
|
Diluted loss per share
|
$
|
(0.01
|
)
|
|
$
|
(0.20
|
)
|
|
$
|
(0.22
|
)
|
|
$
|
(0.99
|
)
|
|
|
||||||||||||||
|
Fiscal 2016
|
||||||||||||||
|
January 3, 2017
|
|
September 27, 2016
|
|
June 28, 2016
|
|
March 29, 2016
|
||||||||
Revenue
|
$
|
129,400
|
|
|
$
|
122,681
|
|
|
$
|
121,407
|
|
|
$
|
113,986
|
|
Operating loss
(4)(5)
|
$
|
(44,315
|
)
|
|
$
|
(9,062
|
)
|
|
$
|
(11,312
|
)
|
|
$
|
(2,839
|
)
|
Net loss
|
$
|
(45,376
|
)
|
|
$
|
(9,841
|
)
|
|
$
|
(14,087
|
)
|
|
$
|
(2,373
|
)
|
Basic loss per share
|
$
|
(1.63
|
)
|
|
$
|
(0.35
|
)
|
|
$
|
(0.51
|
)
|
|
$
|
(0.09
|
)
|
Diluted loss per share
|
$
|
(1.63
|
)
|
|
$
|
(0.35
|
)
|
|
$
|
(0.51
|
)
|
|
$
|
(0.09
|
)
|
(1)
|
The first quarter of 2017 includes
$19.9 million
of closure costs primarily related to the
55
restaurants closed during the first quarter of 2017. See Note 6, Restaurant Impairments, Closure Costs and Asset Disposals, for additional disclosure on closures.
|
(2)
|
Includes the impact of impairing
three
restaurants in the fourth quarter of 2017,
18
restaurants in the third quarter of 2017,
nine
restaurants in the second quarter of 2017 and
four
restaurants in the first quarter of 2017. The impairment costs recognized were
$1.1 million
in the fourth quarter of 2017,
$9.1 million
in the third quarter of 2017,
$4.0 million
in the second quarter of 2017 and
$1.9 million
in the first quarter of 2017. See Note 6, Restaurant Impairments, Closure Costs and Asset Disposals, for additional disclosure on impairments.
|
(3)
|
Represents net loss after accretion of the preferred stock issued to
L
Catterton to its full redemption value. See Note 8, Stockholders’ Equity for additional information.
|
(4)
|
Includes the impact of impairing
42
restaurants in the fourth quarter of 2016,
11
restaurants in the second quarter of 2016 and
one
restaurant in the first quarter of 2016. The impairment costs recognized were
$31.1 million
in the fourth quarter of 2016,
$10.3 million
in the second quarter of 2016 and
$0.2 million
in the first quarter of 2016. See Note 6, Restaurant Impairments, Closure Costs and Asset Disposals, for additional disclosure on impairments.
|
(5)
|
The fourth quarter of 2016 includes charges of
$10.6 million
for estimated losses associated with claims and anticipated claims by payment card companies from our data security incident, and the third quarter of 2016 includes a
$2.5 million
charge for severance expenses and a
$3.0 million
charge for an employment-related litigation settlement.
|
/s/ Ernst & Young LLP
|
|
|
ITEM 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
ITEM 14.
|
Principal Accounting Fees and Services
|
ITEM 15.
|
Exhibits, Financial Statement Schedules
|
1.
|
Our Consolidated Financial Statements and Notes thereto are included in Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K.
|
2.
|
All financial schedules have been omitted either because they are not applicable or because the required information is provided in our Consolidated Financial Statements and Notes thereto, included in Item 8 of this Annual Report on Form 10-K.
|
3.
|
The Index to Exhibits is incorporated herein by reference and is filed as part of this 10-K.
|
|
|
|
|
Description of Exhibit Incorporated Herein by Reference
|
|
|
||||||
Exhibit Number
|
|
Exhibit Description
|
|
Form
|
|
File No.
|
|
Filing Date
|
|
Exhibit Number
|
|
Filed Herewith
|
3.1
|
|
|
S-1
|
|
333-192402
|
|
November 19, 2013
|
|
3.1
|
|
|
|
3.2
|
|
|
8-K
|
|
001-35987
|
|
August 24, 2015
|
|
3.1
|
|
|
|
4.1
|
|
|
S-1/A
|
|
333-188783
|
|
June 17, 2013
|
|
4.1
|
|
|
|
4.2
|
|
|
8-K
|
|
001-35987
|
|
February 9, 2017
|
|
4.1
|
|
|
|
4.3
|
|
|
8-K
|
|
001-35987
|
|
February 9, 2017
|
|
4.2
|
|
|
|
10.1
|
|
|
S-1/A
|
|
333-188783
|
|
June 17, 2013
|
|
10.1
|
|
|
|
10.2
|
|
|
S-1/A
|
|
333-188783
|
|
June 17, 2013
|
|
10.2
|
|
|
|
10.3
|
|
|
S-1/A
|
|
333-188783
|
|
June 17, 2013
|
|
10.3
|
|
|
|
10.4
|
|
|
10-Q
|
|
001-35987
|
|
November 6, 2014
|
|
10.1
|
|
|
|
10.5
|
|
|
8-K
|
|
001-35987
|
|
November 26, 2013
|
|
10.1
|
|
|
|
10.6
|
|
|
8-K
|
|
001-35987
|
|
June 5, 2015
|
|
10.10
|
|
|
|
10.7
|
|
|
8-K
|
|
001-35987
|
|
November 24, 2015
|
|
10.10
|
|
|
10.8
|
|
|
10-Q
|
|
001-35987
|
|
August 5, 2016
|
|
10.2
|
|
|
|
10.9
|
|
|
10-Q
|
|
001-35987
|
|
November 7, 2016
|
|
10.3
|
|
|
|
10.10
|
|
|
8-K
|
|
001-35987
|
|
February 9, 2017
|
|
10.2
|
|
|
|
10.11
|
|
|
10-Q
|
|
001-35987
|
|
November 9, 2017
|
|
10.10
|
|
|
|
10.12
|
|
|
S-1
|
|
333-188783
|
|
May 23, 2013
|
|
10.13
|
|
|
|
10.13
|
|
|
S-1
|
|
333-188783
|
|
May 23, 2013
|
|
10.14
|
|
|
|
10.14
|
|
|
S-1/A
|
|
333-188783
|
|
June 17, 2013
|
|
10.15
|
|
|
|
10.15
|
|
|
10-K
|
|
001-35987
|
|
February 24, 2015
|
|
10.9
|
|
|
|
10.16
|
|
|
10-K
|
|
001-35987
|
|
February 24, 2015
|
|
10.10
|
|
|
|
10.17
|
|
|
10-Q
|
|
001-35987
|
|
November 9, 2017
|
|
10.7
|
|
|
|
10.18
|
|
|
10-Q
|
|
001-35987
|
|
November 9, 2017
|
|
10.8
|
|
|
|
10.19
|
|
|
10-Q
|
|
001-35987
|
|
November 9, 2017
|
|
10.9
|
|
|
|
10.20
|
|
|
10-Q
|
|
001-35987
|
|
August 11, 2017
|
|
10.1
|
|
|
|
10.21
|
|
|
S-1/A
|
|
333-188783
|
|
June 17, 2013
|
|
10.22
|
|
|
10.22
|
|
|
S-1
|
|
333-192402
|
|
November 19, 2013
|
|
10.18
|
|
|
|
10.23
|
|
|
10-K
|
|
001-35987
|
|
March 1, 2016
|
|
10.20
|
|
|
|
10.24
|
|
|
8-K
|
|
001-35987
|
|
December 6, 2017
|
|
10.1
|
|
|
|
10.25
|
|
|
8-K
|
|
001-35987
|
|
September 25, 2017
|
|
10.1
|
|
|
|
10.26
|
|
|
10-Q
|
|
001-35987
|
|
August 11, 2017
|
|
10.2
|
|
|
|
10.27
|
|
|
8-K
|
|
001-35987
|
|
July 26, 2016
|
|
10.3
|
|
|
|
10.28
|
|
|
8-K
|
|
001-35987
|
|
February 9, 2017
|
|
10.3
|
|
|
|
10.29
|
|
|
8-K
|
|
001-35987
|
|
March 14, 2017
|
|
10.2
|
|
|
|
10.30
|
|
|
8-K
|
|
001-35987
|
|
March 14, 2017
|
|
10.1
|
|
|
|
10.31
|
|
|
10-Q
|
|
001-35987
|
|
August 11, 2017
|
|
10.3
|
|
|
|
10.32
|
|
|
10-Q
|
|
001-35987
|
|
November 9, 2017
|
|
10.1
|
|
|
|
10.33
|
|
|
10-Q
|
|
001-35987
|
|
November 9, 2017
|
|
10.2
|
|
|
|
10.34
|
|
|
10-Q
|
|
001-35987
|
|
November 9, 2017
|
|
10.3
|
|
|
|
10.35
|
|
|
10-Q
|
|
001-35987
|
|
November 9, 2017
|
|
10.4
|
|
|
|
10.36
|
|
|
10-Q
|
|
001-35987
|
|
November 9, 2017
|
|
10.5
|
|
|
10.37
|
|
|
10-Q
|
|
001-35987
|
|
November 9, 2017
|
|
10.6
|
|
|
|
21.1
|
|
|
|
|
|
|
|
|
|
|
X
|
|
23.1
|
|
|
|
|
|
|
|
|
|
|
X
|
|
24.1
|
|
|
|
|
|
|
|
|
|
|
X
|
|
31.1
|
|
|
|
|
|
|
|
|
|
|
X
|
|
32.1
|
|
|
|
|
|
|
|
|
|
|
X
|
|
101.INS
|
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
|
|
|
|
|
|
|
|
|
|
X
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
|
|
|
|
|
|
X
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
ITEM 16.
|
Form 10-K Summary.
|
|
NOODLES & COMPANY
|
|
|
|
By: /s/ DAVE BOENNIGHAUSEN
|
|
Dave Boennighausen
|
|
Chief Executive Officer
|
Signature
|
Title
|
Date
|
/s/ DAVE BOENNIGHAUSEN
|
|
|
Dave Boennighausen
|
Director, Chief Executive Officer
(principal executive officer and principal financial officer)
|
March 15, 2018
|
/s/ KATHY LOCKHART
|
|
|
Kathy Lockhart
|
Vice President and Controller
(principal accounting officer)
|
March 15, 2018
|
/s/ PAUL MURPHY
|
|
|
Paul Murphy
|
Chairman
|
March 15, 2018
|
/s/ ROBERT HARTNETT
|
|
|
Robert Hartnett
|
Director
|
March 15, 2018
|
/s/ SCOTT DAHNKE
|
|
|
Scott Dahnke
|
Director
|
March 15, 2018
|
/s/ FRANÇOIS DUFRESNE
|
|
|
François Dufresne
|
Director
|
March 15, 2018
|
/s/ MARY EGAN
|
|
|
Mary Egan
|
Director
|
March 15, 2018
|
/s/ JEFFREY JONES
|
|
|
Jeffrey Jones
|
Director
|
March 15, 2018
|
/s/ THOMAS LYNCH
|
|
|
Thomas Lynch
|
Director
|
March 15, 2018
|
/s/ DREW MADSEN
|
|
|
Drew Madsen
|
Director
|
March 15, 2018
|
/s/ ANDREW TAUB
|
|
|
Andrew Taub
|
Director
|
March 15, 2018
|
|
|
|
1 Year Noodles Chart |
1 Month Noodles Chart |
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