Noodles & Company Announces Fourth Quarter and Fiscal Year 2013 Financial Results

Noodles & Company Announces Fourth Quarter and Fiscal Year 2013 Financial
Results

BROOMFIELD, Colo., Feb. 26, 2014 (GLOBE NEWSWIRE) -- Noodles & Company
(Nasdaq:NDLS) today announced financial results for the fourth quarter and
fiscal year ended December 31, 2013.

Key highlights for the fourth quarter of 2013 compared to the fourth quarter
of 2012 include:

  *Adjusted net income^(1) increased 65.9% to $3.5 million, or $0.11 per
    diluted share, from $2.1 million.
  *GAAP net income increased to $2.4 million, from $1.6 million.
  *Adjusted EBITDA^(1) increased 31.8% to $12.0 million, from $9.1 million.
  *Total revenue increased 17.4% to $91.5 million from $77.9 million.
  *Comparable restaurant sales increased 4.3% for company-owned restaurants,
    1.5% for franchise restaurants and 3.9% system-wide.
  *Restaurant contribution margin decreased 30 basis points to 21.0%.
  *12 new restaurants opened system-wide, including eight company-owned and
    four franchise restaurants.

Key highlights for the fiscal year of 2013 compared to the fiscal year of 2012
include:

  *Adjusted net income^(1) increased 30.9% to $12.1 million, or $0.40 per
    diluted share, from $9.3 million, or $0.32 per diluted share.
  *GAAP net income increased to $6.7 million, or $0.24 per diluted share,
    from $5.2 million.
  *Adjusted EBITDA^(1) increased 30.1% to $47.2 million, from $36.3 million.
  *Total revenue increased 16.8% to $350.9 million from $300.4 million.
  *Comparable restaurant sales increased 3.4% for company-owned restaurants,
    0.6% for franchise restaurants and 3.0% system-wide.
  *Restaurant contribution margin decreased 50 basis points to 20.7%.
  *53 net new restaurants opened system-wide, including 42 company-owned and
    11 franchise restaurants, resulting in 16.2% system-wide unit growth.

(1) Adjusted net income and Adjusted EBITDA are non-GAAP measures. A
reconciliation of US GAAP net income to each of these measures is included in
the accompanying financial data. See "Non-GAAP Financial Measures."

"We're pleased to have maintained our operating momentum in the fourth quarter
with our 18^th straight quarter of comparable restaurant sales growth and a
66% increase in our adjusted net income for the quarter," said Kevin Reddy,
Chairman and Chief Executive Officer of Noodles & Company. "Our ongoing
success is a testament to the hard work of our entire team to deliver our
globally inspired menu with an elevated level of service at an exceptional
value, which we believe has distinguished Noodles as a 'Category of One' in
the restaurant industry."

Reddy continued, "Looking ahead to 2014, we have faced an unusual amount of
severe winter weather during the first quarter to date. Nearly 80% of our
restaurants are located in areas severely impacted by atypical weather,
including the Mid-Atlantic, Upper Midwest and Rocky Mountain West. In fact,
over 30% of our operating days thus far have seen either measurable
precipitation or temperatures at least twenty degrees below normal. As a
result, in the first quarter we anticipate a roughly 300 to 350 bps negative
impact to revenue and $0.03 impact to diluted earnings per share. Still, we
remain confident that we can deliver on our 25% annual adjusted diluted
earnings per share growth goal for 2014. We have tested and begun implementing
a number of initiatives over the past year, centered on our dinner daypart
strength, the introduction of catering and improving throughput and
operational efficiency, which we believe will continue to move our brand
forward. Additionally, our development pipeline is in great shape with plans
to open 42 to 50 new company-owned restaurants this year while our franchisees
expect to open 10 to 15 new restaurants, representing approximately 16% new
unit growth system-wide. With a long runway of expansion potential, and a
consistent track record of sales and earnings growth, we are excited about
2014 and beyond."

Fourth Quarter 2013 Financial Results

Revenue Growth of 17.4%

Total revenue increased $13.5 million in the fourth quarter of 2013, or 17.4%,
to $91.5 million, compared with $77.9 million in the fourth quarter of 2012.
This increase was the result of new restaurants opened system-wide since the
beginning of the fourth quarter of 2012, in addition to an increase in sales
at our comparable base restaurants. In the fourth quarter of 2013, comparable
restaurant sales increased 4.3% for company-owned restaurants, 1.5% for
franchise restaurants and 3.9% system-wide.

The company-owned comparable restaurant sales increase of 4.3% in the fourth
quarter 2013 was comprised of a price increase of approximately 2.5% and a
combination of traffic and menu mix increases.

Adjusted Net Income^(2) Growth of 65.9%

Adjusted net income increased 65.9% to $3.5 million, from $2.1 million in the
prior period. GAAP Net income was $2.4 million in the fourth quarter of 2013,
compared with net income of $1.6 million in the fourth quarter of 2012.

Restaurant contribution margin decreased to 21.0% in the fourth quarter of
2013, compared with 21.3% in the fourth quarter of 2012. The decrease was
primarily due to increased operating and occupancy costs, resulting from
investment in our limited-time offering, repairs and maintenance, as well as
expenses related to the increased number of new restaurants.

Follow-on Offering

On December 5, 2013, we completed a follow-on offering of 4,500,000 shares of
our Class A common stock at a price of $39.50 per share. All of the shares in
the offering were offered by selling stockholders, except for 108,267 shares
offered by us, the net proceeds of which were used to repurchase the same
number of shares from certain officers at the same net price per share. We did
not receive any of the proceeds from the offering. The selling stockholders
paid all of the underwriting discounts and commissions associated with the
sale of their shares; however, we incurred approximately $696,000 in costs and
expenses related to this offering during the fourth quarter of 2013.

Fiscal Year Ended 2013 Financial Results

Revenue Growth of 16.8%

Total revenue increased $50.5 million during fiscal year 2013, or 16.8%, to
$350.9 million, compared with $300.4 million in the same period of 2012. This
increase was the result of new restaurants opened system-wide since the
beginning of the fourth quarter of 2012, in addition to an increase in sales
at our comparable base restaurants. Comparable restaurant sales increased 3.4%
for company-owned restaurants, 0.6% for franchise restaurants and 3.0%
system-wide.

Adjusted Net Income^(2) Growth of 30.9%

Adjusted net income increased 30.9% to $12.1 million. GAAP Net income was $6.7
million during fiscal year 2013, compared to net income of $5.2 million in the
same period of 2012.

Restaurant contribution margin was 20.7% as a percentage of restaurant revenue
during fiscal year 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.

(2) Adjusted net income is a non-GAAP measure. A reconciliation of US GAAP net
income to adjusted net income is included in the accompanying financial data.
See "Non-GAAP Financial Measures."

2014 Outlook

For 2014, management expects the following:

  *42 to 50 new company-owned restaurant openings, reflecting 13% to 16% unit
    growth
  *10 to 15 new franchise restaurant openings, reflecting 16% to 24% unit
    growth
  *2.5% to 3.0% comparable restaurant sales growth
  *Total revenue between $406 million and $412 million
  *Approximately 25% adjusted diluted earnings per share growth
  *An estimated tax rate between 39% and 40%

Key Definitions:

Comparable Restaurant Sales represent year-over-year sales comparisons for
restaurants open for at least 18 full periods.

Restaurant Contribution Margin represents restaurant revenue less restaurant
operating costs which are costs of sales, labor, occupancy and other
restaurant operating costs.

Adjusted EBITDA represents net income before interest expense, debt
extinguishment expense, provision for income taxes, asset disposals, closure
costs and restaurant impairments, depreciation and amortization, stock-based
compensation expense, management fees, IPO related expenses and follow-on
offering expenses. Adjusted EBITDA is presented because: (i) management
believes it is a useful measure for investors to assess the operating
performance of our business without the effect of non-cash charges such as
depreciation and amortization expenses and asset disposals, closure costs and
restaurant impairments and (ii) management uses it internally as a benchmark
for certain of our cash incentive plans and to evaluate our operating
performance or compare performance to that of the competitors. See "Non-GAAP
Financial Measures" below.

Adjusted Net Income represents net income plus: i) a net savings in interest
expense as a result of the pay down of debt using IPO proceeds, ii) IPO
related expenses, iii) follow-on offering expenses, iv) pre-IPO management
fees v) the tax impact of follow-on offering expenses and other miscellaneous
tax items; less: i) estimated incremental costs of being a public company and
ii) the tax effects of these adjustments. Adjusted net income is presented
because management believes it helps convey supplemental information to
investors regarding the Company's performance excluding the impact of the IPO
and other special items that affect the comparability of results in past
quarters and expected in future quarters. See "Non-GAAP Financial Measures"
below.

Conference Call

Noodles & Company will host a conference call to discuss the fourth quarter
financial results on Wednesday, February 26, 2014 at 4:30 PM Eastern Time.

The conference call can be accessed live over the phone by dialing (877)
303-1298 or for international callers by dialing (253) 237-1032. A replay will
be available after the call and can be accessed by dialing (855) 859-2056 or
for international callers by dialing (404) 537-3406; the passcode is 76657739.
The replay will be available until Tuesday, March 11, 2014. The conference
call will also be webcast live from the Company's corporate website at
investor.noodles.com, under the "Events & Presentations" page. An archive of
the webcast will be available at the same location on the corporate website
shortly after the call has concluded.

Non-GAAP Financial Measures

To supplement its consolidated financial statements, which are prepared and
presented in accordance with Generally Accepted Accounting Principles
("GAAP"), the Company uses the following non-GAAP financial measures: adjusted
EBITDA, adjusted net income and adjusted EPS (collectively the "non-GAAP
financial measures"). The presentation of this financial information is not
intended to be considered in isolation or as a substitute for, or superior to,
the financial information prepared and presented in accordance with GAAP. The
Company uses these non-GAAP financial measures for financial and operational
decision making and as a means to evaluate period-to-period comparisons. The
Company believes that they provide useful information about operating results,
enhance the overall understanding of past financial performance and future
prospects, and allow for greater transparency with respect to key metrics used
by management in its financial and operational decision making. Adjusted net
income is presented because management believes it helps convey supplemental
information to investors regarding the Company's performance excluding the
impact of the IPO and follow-on offering as well as other special items that
affect the comparability of results in past quarters and expected in future
quarters, such as the adjustment to eliminate the historical interest expense
for all periods presented that were based upon actual outstanding balances
before the application of the net proceeds from our IPO. The non-GAAP measures
used by the Company in this press release may be different from the methods
used by other companies.

For more information on the non-GAAP financial measures, please see the
Reconciliation of GAAP to non-GAAP Financial Measures tables in this press
release. These accompanying tables have more details on the GAAP financial
measures that are most directly comparable to non-GAAP financial measures and
the related reconciliations between these financial measures.

About Noodles & Company

Founded in 1995, Noodles & Company is a fast-casual restaurant chain that
serves classic noodle and pasta dishes from around the world with 380
locations system-wide in 29 states and the District of Columbia as of December
31, 2013. Known as Your World Kitchen, Noodles & Company's globally inspired
menu consists of more than 25 fresh, customizable noodle bowls, salads, soups
and sandwiches that are prepared quickly using quality ingredients. From
healthy to indulgent, spicy to comforting, the menu provides favorites for
everyone from kids to adults. Popular dishes include the Med Salad with
naturally raised pork, Spicy Indonesian Peanut Sauté, and creamy Wisconsin Mac
& Cheese.

Forward-Looking Statements

This press release contains a number of forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. Words, and
variations of words, such as "believe," "estimate," "anticipate," "expect,"
"intend," "may," "will," "would" and similar expressions are intended to
identify our forward-looking statements. Examples of forward-looking
statements include all matters that are not historical facts, such as
statements regarding 2014 guidance, comparable restaurant sales and operating
margins, new restaurant development, expected public company expense, and our
outlook, in particular, our target and adjusted net income, targeted
restaurant openings and effective tax rate. By their nature, forward-looking
statements involve risks and uncertainties that could cause actual results to
differ materially from the Company's forward-looking statements. These risks
and uncertainties include: our ability to maintain increases in comparable
restaurant sales and to successfully execute our growth strategy; our ability
to open new restaurants on schedule; current economic conditions; price and
availability of commodities; consumer confidence and spending patterns; the
assumptions used in the adjustment of interest expense and the adjustments for
certain incremental legal, accounting, insurance and other compliance costs
used in the calculation of adjusted net income; changes in consumer tastes and
the level of acceptance of the Company's restaurant concepts (including
consumer acceptance of prices); consumer reaction to public health issues and
perception of food safety; seasonal factors; and weather. For additional
information on these and other factors that could affect the Company's
forward-looking statements, see the Company's risk factors, as they may be
amended from time to time, set forth in its filings with the SEC, including
our final prospectus filed December 9, 2013. The Company disclaims and does
not undertake any obligation to update or revise any forward-looking statement
in this press release, except as may be required by applicable law or
regulation.


Noodles& Company
Consolidated Statements of Income
(in thousands, except share and per share data, unaudited)
                                                              
                     Fiscal Quarter Ended         Fiscal Year Ended
                     December31,    January1,   December31,   January1,
                     2013            2013         2013           2013
Revenue:                                                       
Restaurant revenue    $ 90,396        $ 77,003     $ 347,140      $ 297,264
Franchising royalties 1,072           926          3,784          3,146
and fees
Total revenue         91,468          77,929       350,924        300,410
Costs and expenses:                                            
Restaurant operating
costs (exclusive of
depreciation and                                               
amortization shown
separately below):
Cost of sales         24,367          20,574       91,892         78,997
Labor                 26,576          23,433       104,040        89,435
Occupancy             9,349           7,654        35,173         29,323
Other restaurant      11,116          8,930        44,078         36,380
operating costs ^(1)
General and
administrative ^(1)   8,084           7,656        35,893         29,081
(2)
Depreciation and      5,550           4,556        20,623         16,719
amortization
Pre-opening           936             1,145        3,809          3,145
Asset disposals,
closure costs and     328             613          1,164          1,278
restaurant
impairments
Total costs and       86,306          74,561       336,672        284,358
expenses
Income from           5,162           3,368        14,252         16,052
operations
Debt extinguishment   579             —            624            2,646
expense
Interest expense      42              1,133        2,196          5,028
Income before income  4,541           2,235        11,432         8,378
taxes
Provision for income  2,134           676          4,767          3,215
taxes
Net income            $ 2,407         $ 1,559      $ 6,665        $ 5,163
Earnings per share of
ClassA and ClassB                                            
common stock,
combined:
Basic                 $ 0.08          $ 0.07       $ 0.25         $ 0.22
Diluted               $ 0.08          $ 0.07       $ 0.24         $ 0.22
Weighted average
shares of ClassA and
ClassB common stock                                           
outstanding,
combined:
Basic                 29,479,084      23,238,984   26,406,904     23,238,984
Diluted               31,068,792      23,512,182   27,688,629     23,265,542
                                                              
(1) In the third quarter of 2013, we changed the manner in which we report
marketing expenses between general and administrative expenses and other
restaurant operating costs to more appropriately reflect only those costs
directly related to restaurant-level marketing in other restaurant operating
costs. Marketing costs previously reported as restaurant operating costs,
that were not directly related to restaurant-level marketing, have been
reclassified to general and administrative expense. The reclassification is
reflected in all periods presented herein, as well as by historical quarter in
the accompanying selected operating data and did not impact income from
operations.
                                                              
(2) 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 Chief Executive Officer and 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, the fourth quarter of 2012 and
the full years of 2013 and 2012 included $250,000, $500,000 and $1.0 million,
respectively, of management fee expense in accordance with our management
services agreement and through the ClassC common stock dividend paid to the
holder of the one outstanding share of our ClassC 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 fourth quarter of 2013, we incurred
$0.7 million of offering expenses related to our follow-on offering which
closed in December of 2013.



Noodles& Company
Consolidated Statements of Income as a Percentage of Revenue
(in thousands, unaudited)


                     Fiscal Quarter Ended         Fiscal Year Ended
                     December31,    January1,   December31,   January1,
                      2013           2013        2013          2013
Revenue:                                                       
Restaurant revenue    98.8%           98.8%        98.9%          99.0%
Franchising royalties 1.2             1.2          1.1            1.0
and fees
Total revenue         100.0           100.0        100.0          100.0
Costs and Expenses:                                            
Restaurant Operating
Costs (exclusive of
depreciation and                                               
amortization shown
separately
below):^(1)
Cost of sales         27.0            26.7         26.5           26.6
Labor                 29.4            30.4         30.0           30.1
Occupancy             10.3            9.9          10.1           9.9
Other restaurant     12.3            11.6         12.7           12.2
operating costs ^(2)
General and
administrative ^(2)   8.8             9.8          10.2           9.7
(3)
Depreciation and      6.1             5.8          5.9            5.6
amortization
Pre-opening           1.0             1.5          1.1            1.0
Asset disposals,
closure costs and     0.4             0.8          0.3            0.4
restaurant
impairments
Total costs and       94.4            95.7         95.9           94.7
expenses
Income from           5.6             4.3          4.1            5.3
operations
Debt extinguishment   0.6             —            0.2            0.9
expense
Interest expense      —               1.5          0.6            1.7
Income before income  5.0             2.9          3.3            2.8
taxes
Provision for income  2.3             0.9          1.4            1.1
taxes
Net income            2.6%            2.0%         1.9%           1.7%
                                                              
(1)As a percentage of restaurant revenue.

(2)In the third quarter of 2013, we changed the manner in which we report
marketing expenses between general and administrative expenses and other
restaurant operating costs to more appropriately reflect only those costs
directly related to restaurant-level marketing in other restaurant operating
costs. Marketing costs previously reported as restaurant operating costs,
that were not directly related to restaurant-level marketing, have been
reclassified to general and administrative expense. The reclassification is
reflected in all periods presented herein, as well as by historical quarter in
the accompanying selected operating data and did not impact income from
operations.

(3)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 Chief Executive Officer and 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, the fourth quarter of 2012 and
the full years of 2013 and 2012 included $250,000, $500,000 and $1.0 million,
respectively, of management fee expense in accordance with our management
services agreement and through the ClassC common stock dividend paid to the
holder of the one outstanding share of our ClassC 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 fourth quarter of 2013, we incurred
$0.7 million of offering expenses related to our follow-on offering which
closed in December of 2013.




Noodles& Company
Consolidated Selected Balance Sheet Data and Selected Operating Data
(in thousands, except restaurant activity and comparable restaurant sales,
unaudited)

                                      As of
                                      December31,         January1,
                                       2013                2013
Balance Sheet Data                                         
Total current assets                   $ 18,333             $ 16,154
Total assets                           169,469              156,995
Total current liabilities              24,165               23,760
Total long-term debt                   6,312                93,731
Total liabilities                      63,329               142,987
Temporary equity                       —                    3,601
Total stockholders' equity             124,473              10,407

                             
                             
                             Fiscal Quarter Ended
                             December31, October1, July2, April2, Jan.1,
                              2013         2013      2013   2013    2013
Selected Operating Data                                            
Restaurant Activity:                                               
Company-owned restaurants at  318          310        295     284      276
end of period
Franchise restaurants at end  62           58         53      51       51
of period
Revenue Data:                                                      
Company-owned average unit    $1,179       1,181      1,184   1,180    1,178
volumes
Franchise average unit        $1,133       1,132      1,123   1,121    1,128
volumes
Company-owned comparable      4.3%         2.4%       4.7%    2.2%     4.2%
restaurant sales
Franchise comparable          1.5%         0.5%       2.3%    (1.9)%   2.9%
restaurant sales
System-wide comparable        3.9%         2.1%       4.4%    1.5%     4.0%
restaurant sales
                                                                  

Reconciliations of Non-GAAP Measurements to US GAAP Results


Noodles& Company
Reconciliation of Net Income to EBITDA and Adjusted EBITDA
(in thousands, unaudited)


                              Fiscal Quarter Ended    Fiscal Year Ended
                              December 31, January 1, December 31, January 1,
                               2013         2013       2013         2013
                              (in thousands, unaudited)
Net income                     $ 2,407      $ 1,559    $ 6,665      $ 5,163
Depreciation and amortization  5,550        4,556      20,623       16,719
Interest expense               42           1,133      2,196        5,028
Provision for income taxes     2,134        676        4,767        3,215
EBITDA                         $ 10,133     $ 7,924    $ 34,251     $ 30,125
Debt extinguishment expense    579          —          624          2,646
Asset disposals, closure costs 328          613        1,164        1,278
and restaurant impairment
Management fees^(a)            —            250        500          1,000
Stock-based compensation       254          313        4,318        1,234
expense
IPO related expenses^(b)       —            —          5,667        —
Follow-on offering expenses    696          —          696          —
^(c)
Adjusted EBITDA                $ 11,990     $ 9,100    $ 47,220     $ 36,283
                                                                

EBITDA and adjusted EBITDA are supplemental measures of operating performance
that do not represent and should not be considered as alternatives to net
income or cash flow from operations, as determined by USGAAP and our
calculation thereof may not be comparable to that reported by other companies.
These measures are presented because we believe that investors' understanding
of our performance is enhanced by including these non-GAAP financial measures
as a reasonable basis for evaluating our ongoing results of operations.

EBITDA is calculated as net income before interest expense, provision for
income taxes and depreciation and amortization. Adjusted EBITDA further
adjusts EBITDA to reflect the additions and eliminations described below.

EBITDA and adjusted EBITDA are presented because: (i)we believe they are
useful measures for investors to assess the operating performance of our
business without the effect of non-cash charges such as depreciation and
amortization expenses and asset disposals, closure costs and restaurant
impairments and (ii)we use adjusted EBITDA internally as a benchmark for
certain of our cash incentive plans and to evaluate our operating performance
or compare our performance to that of our competitors. The use of adjusted
EBITDA as a performance measure permits a comparative assessment of our
operating performance relative to our performance based on our USGAAP
results, while isolating the effects of some items that vary from period to
period without any correlation to core operating performance or that vary
widely among similar companies. Companies within our industry exhibit
significant variations with respect to capital structures and cost of capital
(which affect interest expense and income tax rates) and differences in book
depreciation of property, plant and equipment (which affect relative
depreciation expense), including significant differences in the depreciable
lives of similar assets among various companies. Our management believes that
adjusted EBITDA facilitates company-to-company comparisons within our industry
by eliminating some of these foregoing variations. Adjusted EBITDA as
presented may not be comparable to other similarly-titled measures of other
companies, and our presentation of adjusted EBITDA should not be construed as
an inference that our future results will be unaffected by excluded or unusual
items.

(a)The fourth quarter of 2012 and the full years of 2013 and 2012 included
$250,000, $500,000 and $1.0 million, respectively, of management fee expense
in accordance with our management services agreement and through the ClassC
common stock dividend paid to the holder of the one outstanding share of our
ClassC common stock. In connection with our IPO, the management services
agreement expired and the one share of Class C common stock was redeemed.

(b)Reflects certain expenses incurred in conjunction with our initial public
offering. Amount includes $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 Chief Executive Officer
and President and Chief Operations Officer of which 50% were vested at grant,
$1.7 million of transaction bonuses and related payroll tax and $0.8 million
in transaction payments to our Equity Sponsors.

(c) Reflects $0.7 million of offering expenses related to our follow-on
offering completed in December of 2013.



Noodles& Company
Reconciliation of Net Income to Adjusted Net Income
(in thousands, except share and per share data, unaudited)


                              Fiscal Quarter Ended    Fiscal Year Ended
                              December 31, January 1, December 31, January 1,
                               2013         2013       2013         2013
                              (in thousands, unaudited)
Net income                     $ 2,407      $ 1,559    $ 6,665      $ 5,163
Interest expense ^(a)          —            1,133      2,067        5,028
Debt extinguishment expense    579          —          624          2,646
^(b)
Adjusted interest expense
using reduced debt balances    —            (86)       (301)        (475)
^(c)
Pre-IPO management fees ^(d)   —            250        500          1,000
IPO related expenses ^(e)      —            —          5,667        —
Follow-on offering expenses    696          —          696          —
^(f)
Tax impact of follow-on
offering, other miscellaneous  354          —          286          —
^(g)
Estimated incremental public   —            (357)      (714)        (1,428)
costs ^(h)
Tax effect of adjustments ^(i) (500)        (368)      (3,347)      (2,654)
Adjusted net income            $ 3,536      $ 2,131    $ 12,143     $ 9,280
                                                                
Adjusted earnings per Class A
and Class B common stock,                                        
combined ^(i)
Basic                          $ 0.12       $ 0.07     $ 0.41       $ 0.32
Diluted                        $ 0.11       $ 0.07     $ 0.40       $ 0.32
Pro forma weighted average
Class A and Class B common                                       
stock outstanding, combined
^(j)
Basic                          29,479,084   29,399,698 29,419,536   29,399,698
Diluted                        31,068,792   29,672,896 30,701,262   29,426,256

Adjusted net income is a supplemental measure of financial performance that is
not required by, or presented in accordance with GAAP. We define adjusted net
income as net income plus: i) a net savings in interest expense as a result of
the pay down of debt using IPO proceeds, ii) IPO related expenses, iii)
follow-on offering expenses, iv) pre-IPO management fees v) the tax rate
impact follow-on offering expenses and other miscellaneous tax items; less: i)
estimated incremental costs of being a public company and ii) the tax effects
of these adjustments. Adjusted net income is presented because management
believes it helps convey supplemental information to investors regarding our
performance excluding the impact of the IPO and other special items that
affect the comparability of results in past quarters and expected in future
quarters. Adjusted net income as presented may not be comparable to other
similarly-titled measures of other companies and our presentation of adjusted
net income should not be construed as an inference that our future results
will be unaffected by excluded or unusual items. Our management uses this
non-GAAP financial measure in order to have comparable financial results to
analyze changes in our underlying business from quarter to quarter.

(a)Reflects the adjustment to eliminate the historical interest expense for
all periods presented that were based upon actual outstanding balances before
the application of the net proceeds from our IPO.

(b)Reflects debt extinguishment expense recognized in conjunction with
various amendments to our credit facility in 2013 and 2012 to extend the
maturity date and to reduce interest rates on borrowings, as well as the
repayment of our term loan in 2013.

(c) Reflects interest expense assuming no term loan balance and daily balances
outstanding on our revolver adjusted for the repayment of the revolver down to
$0.2 million.This balance reflects $100.2 million repayment of both term and
revolving debt from the net proceeds of our IPO.The interest adjustment is
based on the following assumptions:

  (1) Unused facility fees based on the daily revolver balances; and

  (2) Lower annual amortization of deferred loan costs due to the repayment of
  the term loan.

(d) Reflects the elimination of the management fees and Class C common stock
dividend paid to our sponsors for the periods presented.

(e) Reflects certain expenses incurred in conjunction with our initial public
offering.Amount includes $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 Chief Executive Officer
and President and Chief Operations Officer of which 50% were vested at grant,
$1.7 million of transaction bonuses and related payroll tax and $0.8 million
in transaction payments to our Equity Sponsors.

(f)Reflects $0.7 million of offering expenses related to our follow-on
offering completed in December of 2013.

(g)Reflects the impact follow-on offering expenses had on our effective tax
rate, as well as other miscellaneous tax rate adjustments.

(h)Reflects an adjustment of recurring incremental legal, accounting,
insurance and other compliance costs we expect to incur as a public company.
By its nature, this adjustment involves risks and uncertainties, and the
actual costs incurred could be different than this adjustment.

(i)Reflects the tax expense associated with the adjustments in a through f
and h above at the normalized tax rate of 39.2%, which reflects our estimated
long-term effective tax rate.

(j)Reflects weighted average shares outstanding as if all shares sold in our
IPO were outstanding as of the first day of our fiscal year.Adjusted per
share amounts are calculated by dividing adjusted net income by the adjusted
basic and diluted weighted average shares outstanding.

CONTACT: Investor Relations
         investorrelations@noodles.com
        
         Media
         Kristina Jorge
         (646) 277-1234
         press@noodles.com

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