Noodles & Company (NDLS) saw its loss almost stable for the quarter ended Sep. 27, 2016. In the previous year period, the company reported a loss of $9.82 million, or $0.35 a share. On an adjusted basis, net profit for the quarter was $1.15 million, when compared with $0.10 million in the last year period.
Revenue during the quarter grew 4.56 percent to $122.68 million from $117.33 million in the previous year period. Gross margin for the quarter contracted 213 basis points over the previous year period to 28.37 percent. Operating margin for the quarter stood at negative 7.39 percent as compared to a negative 13.04 percent for the previous year period.
Operating loss for the quarter was $9.06 million, compared with an operating loss of $15.30 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $6.19 million compared with $8.70 million in the prior year period. At the same time, adjusted EBITDA margin contracted 238 basis points in the quarter to 5.04 percent from 7.42 percent in the last year period.
Dave Boennighausen, chief financial officer and interim chief executive officer of Noodles & Company, stated, "Despite the results of the third quarter, I am convinced that we are making important progress, implementing strategies to increase operational consistency, enhance our menu, and improve our profitability. While the opportunity for substantial improvement in our financial performance will take time, we are seeing steady progress in our top-line results and are positioning the Company to improve long-term shareholder value."
For financial year 2016, Noodles & Company expects revenue to be in the range of $486 million to $490 million. The company projects diluted loss per share to be in the range of $0.15 to $0.19 on adjusted basis.
Working capital remains negative
Working capital of Noodles & Company was negative $8.32 million on Sep. 27, 2016 compared with negative $8.15 million on Sep. 29, 2015. Current ratio was at 0.77 as on Sep. 27, 2016, up from 0.75 on Sep. 29, 2015.
Days sales outstanding went down to 2 days for the quarter compared with 3 days for the same period last year.
Debt increases substantially
Noodles & Company has witnessed an increase in total debt over the last one year. It stood at $83.99 million as on Sep. 27, 2016, up 39.05 percent or $23.59 million from $60.40 million on Sep. 29, 2015. Noodles & Co has witnessed an increase in long-term debt over the last one year. It stood at $83.99 million as on Sep. 27, 2016, up 39.05 percent or $23.59 million from $60.40 million on Sep. 29, 2015. Total debt was 35.05 percent of total assets as on Sep. 27, 2016, compared with 25.79 percent on Sep. 29, 2015. Debt to equity ratio was at 1.19 as on Sep. 27, 2016, up from 0.62 as on Sep. 29, 2015.
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