Noodles & Company (NASDAQ:NDLS) Q3 2023 Earnings Conference Call November 7, 2023 4:30 PM ET

Company Participants

Mike Hynes - Chief Financial Officer

Dave Boennighausen - Chief Executive Officer

Conference Call Participants

Tyler Prause - Stephens

Andrew Barish - Jefferies

Jake Bartlett - Truist

Operator

Good day and thank you for standing by. Welcome to the Noodles & Company Third Quarter 2023 Conference Call. [Operator Instructions] Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your first speaker today, Mike Hynes, CFO. Mike, you have the floor.

Mike Hynes

Thank you, and good afternoon, everyone. Welcome to our third quarter 2023 earnings call. Here with me this afternoon is Dave Boennighausen, our Chief Executive Officer.

I’d like to start by going over a few regulatory matters. During our remarks, we may make forward-looking statements regarding future events or the future financial performance of the company. Any such items should be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act. Such statements are only projections, and actual events or results could differ materially from those projections due to a number of risks and uncertainties, including those referred to in this afternoon’s news release and the cautionary statement in the company’s annual report on Form 10-K for its 2022 fiscal year and subsequent filings with the SEC.

During the call, we will discuss non-GAAP measures, which we believe can be useful in evaluating the company’s operating performance. These measures should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP. A reconciliation of these measures to the most directly comparable GAAP measures is available in our third quarter 2023 earnings release. To the extent that the company provides guidance, it does so only on a non-GAAP basis and does not provide reconciliations of forward-looking non-GAAP measures, specifically forecasted adjusted EBITDA, adjusted EPS and contribution margin. Quantitative reconciling information for these measures is unavailable without unreasonable efforts. The corresponding GAAP measures are not accessible on a forward-looking basis, and such information is likely to be significant to an investor.

Now, I would like to turn it over to Dave Boennighausen, our Chief Executive Officer.

Dave Boennighausen

Thanks, Mike, and good afternoon, everyone. During the third quarter, Noodles & Company gained meaningful traction improving our financial performance, culminating in adjusted EBITDA of $11.7 million, nearly 20% above the third quarter of 2022. This growth can primarily be attributed to restaurant-level margin improvement of 200 basis points relative to prior year to 16.4%. Compared to the second quarter of 2023, adjusted EBITDA grew 26% and restaurant-level margin improved 160 basis points.