NOODLES & Co
For the period ended Jul 2, 2024. Filed Aug 8, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jul 2, 2024 · Filed Aug 8, 2024
NDLS$14.05-6.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-04-02; filed 2024-05-09.
0001275158-24-000041
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-07-02; filed 2024-08-08.
0001275158-24-000084
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 101 previous paragraphs and 126 current paragraphs.
70 unchanged; 24 reworded; 29 added; 6 removed; 1 previous and 3 current paragraphs rearranged.
Tables are not compared: 6 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (29)
Current report
Revenue. Previous to the second quarter of 2024, we experienced system-wide comparable sales declines from the second quarter of 2023 through the first quarter of 2024. During the second quarter of 2024, we saw improvement in system-wide comparable restaurant sales, and correspondingly in total revenue. System-wide comparable restaurant sales increased 2.0% in the second quarter of 2024 compared to the same period of 2023, comprised of a 1.3% increase at company-owned restaurants and a 4.7% increase at franchise-owned restaurants. In the second quarter and into July, restaurant industry indices have shown declining traffic trends.
Current report
Impairments and Certain Restaurant Closures. In the second quarter of 2024, we performed a review of underperforming restaurants. Through this review, we identified a group of restaurants that we will seek to close on or before their next lease renewal dates, and are unlikely to recover the net book value of their assets. As a result, we impaired twelve restaurants in the second quarter of 2024. We permanently closed two company-owned restaurants in the first two quarters of 2024. We had three franchise restaurants close in the first two quarters of 2024. We continue to evaluate our portfolio of restaurants, which will likely result in more closures over the next twelve months. In 2024, we expect to close a total of 10 to 15 company-owned restaurants.
Current report
•local and national competition;
Current report
(1) Represents six company-owned restaurants sold to a franchisee in 2024.
Current report
*Not meaningful.
Current report
Total revenue increased $2.2 million in the second quarter of 2024, or 1.8%, to $127.4 million, compared to $125.2 million in the second quarter of 2023. This increase was primarily due to same store sales increasing and new restaurant openings since the second quarter of 2023. This was partially offset by the refranchising of six company-owned restaurants in the Oregon market with the DND Sale. System-wide comparable restaurant sales increased 2.0% in the second quarter of 2024 compared to the same period of 2023, comprised of a 1.3% increase at company-owned restaurants and a 4.7% increase at franchise-owned restaurants.
Current report
Cost of sales increased by $0.2 million, or 0.5%, in the second quarter of 2024 compared to the same period of 2023. As a percentage of restaurant revenue, cost of sales decreased to 24.7% in the second quarter of 2024 compared to 25.1% in second quarter of 2023 primarily due to a 0.4% impact from an increase in menu prices.
Current report
Labor costs decreased by $0.7 million, or 1.8%, in the second quarter of 2024 compared to the same period of 2023. As a percentage of restaurant revenue, labor cost decreased to 31.2% in the second quarter of 2024 compared to 32.4% in the second quarter of 2023 due to a 1.1% impact from hourly labor efficiency and a 0.5% impact from an increase in menu prices, partially offset by a 0.4% impact from wage inflation.
Current report
Restaurant impairments, closure costs and asset disposals increased $10.4 million in the second quarter of 2024 compared to the second quarter of 2023. The increase was largely due to an increase in fixed asset impairment charges with twelve restaurants impaired in the second quarter of 2024 and no restaurants impaired in the second quarter of 2023. In the second quarter of 2024, we performed a review of underperforming restaurants. Through this review, we identified a group of restaurants that we will seek to close on or before their next lease renewal dates, and are unlikely to recover the net book value of their assets.
Current report
Two Quarters Ended July 2, 2024 Compared to Two Quarters Ended July 4, 2023
Current report
*Not meaningful.
Current report
Revenue
Current report
Total revenue decreased by $2.5 million, or 1.0%, in the first two quarters of 2024, to $248.7 million compared to $251.2 million in the same period of 2023. This decrease was primarily due a decline in comparable restaurant sales, restaurant closures and the refranchise of six company-owned restaurants in the Oregon market as part of the DND Sale, partially offset by an increase in restaurant openings since the second quarter of 2023.
Current report
Comparable restaurant sales decreased 2.2% at company-owned restaurants, decreased 0.1% at franchise-owned restaurants and decreased 1.8% system-wide in the first two quarters of 2024.
Current report
Cost of Sales
Current report
Labor Costs
Current report
Labor costs decreased by $2.1 million, or 2.7%, in the first two quarters of 2024 compared to the same period of 2023. As a percentage of restaurant revenue, labor costs decreased to 31.7% in the first two quarters of 2024 compared to 32.4% in the first two quarters of 2023 primarily due to a 1.0% impact from hourly labor efficiency and a 0.5% impact from an increase in menu prices, partially offset by a 0.5% impact from sales deleverage and a 0.4% impact from wage inflation.
Current report
Occupancy Costs
Current report
Occupancy costs increasedby $0.6 million, or 2.6%, in the first two quarters of 2024 compared to the first two quarters of 2023, due primarily to new restaurants opened. As a percentage of restaurant revenue, occupancy costs increased to 9.6% in the first two quarters of 2024 compared to 9.3% in the first two quarters of 2023 primarily due to sales deleverage.
Current report
Other Restaurant Operating Costs
Current report
Other restaurant operating costs increased by $0.8 million, or 1.7%, in the first two quarters of 2024 compared to the first two quarters of 2023. As a percentage of restaurant revenue, other restaurant operating costs increased to 19.4% in the first two quarters of 2024, compared to 19.0% in the first two quarters of 2023, due primarily to increased delivery fees. Third-party delivery fees were 6.2% and 5.8% of restaurant revenue for the first two quarters of 2024 and 2023, respectively.
Current report
General and Administrative Expense
Current report
General and administrative expense increased by $0.5 million, or 1.9%, in the first two quarters of 2024 compared to the first two quarters of 2023, primarily due to increases in executive transition costs and marketing spend, partially offset by a decline in employee related labor costs. As a percentage of revenue, general and administrative expense increased to 10.7% in the first two quarters of 2024 from 10.4% in the first two quarters of 2023.
Current report
Depreciation and Amortization
Current report
Depreciation and amortization increased by $2.1 million, or 16.2%, in the first two quarters of 2024 compared to the first two quarters of 2023, primarily due to new asset additions for new restaurant openings and information technology, partially offset by restaurant closures.
Current report
Restaurant impairments, closure costs and asset disposals increased by $10.1 million in the first two quarters of 2024 compared to the first two quarters of 2023. The increase was largely due to an increase in fixed asset impairment charges with twelve restaurants impaired in the first two quarters of 2024 compared to one restaurant impaired in the first two quarters of 2023. In the second quarter of 2024, we performed a review of underperforming restaurants. Through this review, we identified a group of restaurants that we will seek to close on or before their next lease renewal dates, and are unlikely to recover the net book value of their assets.
Current report
Interest Expense
Current report
Interest expense increased by $2.0 million in the first two quarters of 2024 compared to the same period of 2023. The increase was primarily due to higher average borrowings and higher interest rates in the first two quarters of 2024 compared to the first two quarters of 2023.
Current report
Provision for Income Taxes
Removed paragraphs (6)
Previous report
Revenue. During 2023 and the first quarter of 2024, we saw a decline in restaurant level traffic, and correspondingly in total revenue, that we believe was at least partially due to consumer response to our past price increases. We have taken actions to address this response including moderating the level of price increases and other initiatives, but there is no guarantee these actions will ultimately be successful.
Previous report
Certain Restaurant Closures. We permanently closed two company-owned restaurants in the first quarter of 2024. We had two franchise restaurants close in the first quarter of 2024. We may from time to time permanently close certain restaurants, including permanent closures at, or near, the expiration of the leases for these restaurants.
Previous report
•local competition;
Previous report
Total revenue decreased $4.7 million in the first quarter of 2024, or 3.7%, to $121.4 million, compared to $126.1 million in the first quarter of 2023. This decrease was primarily due to a decline in comparable restaurant sales due to lower guest traffic, partially offset by growth in new restaurant openings. System-wide comparable restaurant sales decreased 5.4% in the first quarter of 2024 compared to the same period of 2023, comprised of a 5.7% decrease at company-owned restaurants and a 4.5% decrease at franchise-owned restaurants.
Previous report
Labor costs decreased by $1.4 million, or 3.5%, in the first quarter of 2024 compared to the same period of 2023, due primarily to lower restaurant revenue. As a percentage of restaurant revenue, labor cost was flat at 32.3% in the first quarter of 2024 compared to the first quarter of 2023 due to labor efficiency and lower benefits costs, offset by wage inflation and the impact of sales deleverage.
Previous report
Restaurant impairments, closure costs and asset disposals decreased $0.3 million in the first quarter of 2024 compared to the first quarter of 2023 due primarily to a decrease in write downs of lease related assets. No restaurants were impaired in the first quarter of 2024 or 2023.
Reworded paragraphs (24)
Previous wording
In addition to historical information, this discussion and analysis contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties such as the number of restaurants we intend to open, projected capital expenditures and estimates of our effective tax rates. In some cases, you can identify forward-looking statements by terms such as “may,” “might,” “will,” “objective,” “intend,” “should,” “could,” “can,” “would,” “expect,” “believe,” “design,” “estimate,” “predict,” “potential,” “plan” or the negative of these terms and similar expressions intended to identify forward-looking statements. These statements reflect our current views with respect to future events and are based on currently available operating, financial and competitive information. Examples of forward-looking statements include all matters that are not historical facts, such as statements regarding expectations with respect to unit growth and planned restaurant openings and projected capital expenditures. Our actual results may differ materially from those anticipated in these forward-looking statements due to reasons including, but not limited to, our ability to sustain our overall growth, including, our digital sales growth; our ability to open new restaurants on schedule and cause those newly opened restaurants to be successful; our ability to achieve and maintain increases in comparable restaurant sales and to successfully execute our business strategy, including new restaurant initiatives and operational strategies to improve the performance of our restaurant portfolio; the success of our marketing efforts, including our ability to introduce new products; current economic conditions including any impact from inflation, an economic recession or a continued elevated interest rate environment; price and availability of commodities and other supply chain challenges; our ability to adequately staff our restaurants; changes in labor costs; other conditions beyond our control such as global conflicts, wars, terrorist activity, weather, natural disasters, disease outbreaks, epidemics or pandemics impacting our customer or food supplies; and consumer reaction to industry related public health issues and health pandemics, including perceptions of food safety and those discussed in “Special Note Regarding Forward-Looking Statements” and “Risk Factors” as filed in our Annual Report on Form 10-K for our fiscal year ended January 2, 2024.
Current wording
In addition to historical information, this discussion and analysis contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties such as the number of restaurants we intend to open, projected capital expenditures and estimates of our effective tax rates. In some cases, you can identify forward-looking statements by terms such as “may,” “might,” “will,” “objective,” “intend,” “should,” “could,” “can,” “would,” “expect,” “believe,” “design,” “estimate,” “predict,” “potential,” “plan” or the negative of these terms and similar expressions intended to identify forward-looking statements. These statements reflect our current views with respect to future events and are based on currently available operating, financial and competitive information. Examples of forward-looking statements include all matters that are not historical facts, such as statements regarding expectations with respect to unit growth and planned restaurant openings and projected capital expenditures. Our actual results may differ materially from those anticipated in these forward-looking statements due to reasons including, but not limited to, our ability to sustain our overall growth, including, our digital sales growth; our ability to open new restaurants on schedule and cause those newly opened restaurants to be successful; our ability to achieve and maintain increases in comparable restaurant sales and to successfully execute our business strategy, including new restaurant initiatives and operational strategies to improve the performance of our restaurant portfolio; the success of our marketing efforts, including our ability to introduce new products; current economic conditions including any impact from inflation, an economic recession or a continued elevated interest rate environment; price and availability of commodities and other supply chain challenges; our ability to adequately staff our restaurants; changes in labor costs; other conditions beyond our control such as domestic or global conflicts, wars, terrorist activity, weather, natural disasters, disease outbreaks, epidemics or pandemics impacting our customer or food supplies; and consumer reaction to industry related public health issues and health pandemics, including perceptions of food safety and those discussed in “Special Note Regarding Forward-Looking Statements” and “Risk Factors” as filed in our Annual Report on Form 10-K for our fiscal year ended January 2, 2024.
Previous wording
Cost of Sales. In recent years, we incurred incremental costs of sales driven by volatility in the commodity and food ingredients markets, particularly with our chicken products, in addition to an increase in packaging costs and distribution. However, in 2023, the commodity markets underlying our cost of food improved substantially, particularly related to the price of chicken. Throughout these periods of volatility, we have continued to work with our suppliers for ongoing supply chain efficiencies, including managing food waste and adding additional suppliers as necessary.
Current wording
Cost of Sales. The commodity markets underlying our cost of food have improved since the historically high costs in 2022. Throughout these periods of volatility, we have worked with our suppliers to identify ongoing supply chain efficiencies, including adding additional suppliers as necessary.
Previous wording
Labor Costs. Similar to much of the restaurant industry, our base labor costs have risen in recent years. In 2023, wage inflation decelerated as we progressed throughout the year. However, we continue to see a highly competitive environment for restaurant workers. We have been able to partially mitigate the impact of these market factors through a continued focus on our hiring process and retaining existing employees, in addition to maximizing efficiencies of labor hour usage per restaurant.
Current wording
Labor Costs. Similar to much of the restaurant industry, our base labor costs have risen in recent years. Recently, we have seen the rate of wage inflation decrease. We have been able to partially mitigate the impact of these market factors through a continued focus on maximizing efficiencies of labor hour usage per restaurant.
Previous wording
Restaurant Development. In the first quarter of 2024, we opened two new company-owned restaurants. As of April 2, 2024, we had 380 company-owned restaurants and 89 franchise restaurants in 31 states. In 2024, we plan to open 10-12 new company-owned restaurants which is a reduced number of openings relative to recent years and could be reduced further in 2025 as we focus on improvements to our operating model and reducing the cost of new store development.
Current wording
Restaurant Development. In the first two quarters of 2024, we opened seven new company-owned restaurants and one new franchise restaurant, and we sold six company-owned restaurants to a franchisee (the “DND Sale”). As part of the DND Sale, we entered into a six-year development plan commitment that includes development of ten new locations throughout Oregon and Washington. As of July 2, 2024, we had 379 company-owned restaurants and 94 franchise restaurants in 31 states. In 2024, we plan to open approximately 10 new company-owned restaurants which is a reduced number of openings relative to recent years and could be reduced further in 2025 as we focus on improvements to our operating model and reducing the cost of new store development.
Previous wording
Seasonal factors cause our revenue to fluctuate from quarter to quarter. Our revenue per restaurant is typically lower in the first and fourth quarters, due to reduced winter and holiday traffic, and is typically higher in the second and third quarters. As a result of these factors, our quarterly operating results and comparable restaurant sales may fluctuate significantly.
Current wording
Seasonal factors cause our revenue to fluctuate from quarter to quarter. Our revenue per restaurant is typically lower in the first and fourth quarters, due to reduced winter and holiday traffic, and is typically higher in the second and third quarters. As a result of these factors, our quarterly operating results and restaurant sales may fluctuate significantly.
Previous wording
•overall economic trends, particularly those related to consumer spending;
Current wording
•overall economic trends, particularly those that impact consumer financial health and spending;
Previous wording
•opening new restaurants in the vicinity of existing locations.
Current wording
•opening and closing restaurants in the vicinity of other restaurant locations.
Previous wording
We define EBITDA as net income (loss) before interest expense, net, provision (benefit) for income taxes and depreciation and amortization. We define adjusted EBITDA as net income (loss) before interest expense, net, provision (benefit) for income taxes, depreciation and amortization, restaurant impairments, loss on disposal of assets, net lease exit costs (benefits), loss on sale of restaurants, severance and executive transition costs and stock-based compensation.
Current wording
We define EBITDA as net income (loss) before interest expense, net, provision (benefit) for income taxes and depreciation and amortization. We define adjusted EBITDA as net income (loss) before interest expense, net, provision (benefit) for income taxes, depreciation and amortization, restaurant impairments, loss on disposal of assets, net lease exit costs (benefits), (gain) loss on sale of restaurants, severance and executive transition costs and stock-based compensation.
Previous wording
(1)Amounts for the fiscal quarter ended April 4, 2023 include modifications to the adjusted EBITDA calculation to remove adjustments for non-cash rent expense related to sub-leases, certain costs associated with closed restaurants and costs related to corporate matters to conform to the current year presentation.
Current wording
(1)Amounts for the fiscal quarter and first two fiscal quarters ended July 4, 2023 include modifications to the adjusted EBITDA calculation to remove adjustments for non-cash rent expense related to sub-leases, certain costs associated with closed restaurants and costs related to corporate matters to conform to the current year presentation.
Previous wording
First Quarter Ended April 2, 2024 Compared to First Quarter Ended April 4, 2023
Current wording
Second Quarter Ended July 2, 2024 Compared to Second Quarter Ended July 4, 2023
Previous wording
The table below presents our unaudited operating results for the first quarters of 2024 and 2023, and the related quarter-over-quarter changes.
Current wording
The table below presents our unaudited operating results for the second quarters of 2024 and 2023, and the related quarter-over-quarter changes.
Previous wording
Occupancy costs increased by $0.3 million, or 3.0%, in the first quarter of 2024 compared to the first quarter of 2023, primarily due to new restaurants opened since the first quarter of 2023. As a percentage of revenue, occupancy costs increased to 9.9% in the first quarter of 2024, compared to 9.3% in the first quarter of 2023 due primarily to a decrease in restaurant revenue.
Current wording
Occupancy costs increased by $0.2 million, or 2.2%, in the second quarter of 2024 compared to the second quarter of 2023, primarily due to new restaurants opened since the second quarter of 2023. As a percentage of restaurant revenue, occupancy costs remained flat at 9.3% in the second quarter of 2024, compared to the second quarter of 2023.
Previous wording
Other restaurant operating costs decreased by $0.5 million, or 2.3%, in the first quarter of 2024 compared to the first quarter of 2023. As a percentage of restaurant revenue, other restaurant operating costs increased to 19.7% in the first quarter of 2024 compared to 19.5% in the first quarter of 2023 primarily due to a decrease in restaurant revenue and an increase in third-party delivery fees.
Current wording
Other restaurant operating costs increased by $1.3 million, or 5.9%, in the second quarter of 2024 compared to the second quarter of 2023. As a percentage of restaurant revenue, other restaurant operating costs increased to 19.2% in the second quarter of 2024 compared to 18.5% in the second quarter of 2023 primarily due to an increase in third-party delivery fees. Third-party delivery fees were 6.2% and 5.5% of restaurant revenue in the second quarter of 2024 and 2023, respectively.
Previous wording
General and administrative expense decreased by $0.6 million, or 4.4%, in the first quarter of 2024 compared to the first quarter of 2023, due primarily to a decrease in employee related costs, including incentive-related costs, partially offset by an increase in marketing spend. As a percentage of revenue, general and administrative expense decreased to 10.7% in the first quarter of 2024 from 10.8% in the first quarter of 2023.
Current wording
General and administrative expense increased by $1.1 million, or 8.9%, in the second quarter of 2024 compared to the second quarter of 2023, due primarily to increases in severance and executive transition costs and marketing spend. As a percentage of revenue, general and administrative expense increased to 10.7% in the second quarter of 2024 from 10.0% in the second quarter of 2023.
Previous wording
Depreciation and amortization increased by $1.1 million, or 17.9%, in the first quarter of 2024 compared to the first quarter of 2023, due primarily to new asset additions for restaurants opened, partially offset by restaurant closures since the first quarter of 2023.
Current wording
Depreciation and amortization increased by $0.9 million, or 14.4%, in the second quarter of 2024 compared to the second quarter of 2023, due primarily to new asset additions for restaurants opened and information technology additions, partially offset by restaurant closures since the second quarter of 2023.
Previous wording
Interest expense, net increased $1.0 million in the first quarter of 2024 compared to the first quarter of 2023, due primarily to higher interest rates in the first quarter of 2024 as compared to the first quarter of 2023.
Current wording
Interest expense, net increased $0.9 million in the second quarter of 2024 compared to the second quarter of 2023, due primarily to higher average debt balances and higher interest rates in the second quarter of 2024 as compared to the second quarter of 2023.
Previous wording
The effective tax rate for the first quarter of 2024 and for the first quarter of 2023 reflect the impact of the previously recorded valuation allowance. For the remainder of fiscal 2024, we do not anticipate material income tax expense or benefit as a result of the valuation allowance recorded. We will maintain a valuation allowance against deferred tax assets until there is sufficient evidence to support a full or partial reversal. The reversal of a previously recorded valuation allowance will generally result in a benefit from income tax.
Current wording
The effective tax rate for the second quarter of 2024 and for the second quarter of 2023 reflect the impact of the previously recorded valuation allowance. The primary components of the provision for income tax (for both quarters) are related to state tax and the change in our valuation allowance. For the remainder of fiscal 2024, we do not anticipate material income tax expense or benefit as a result of the valuation allowance recorded. We will maintain a valuation allowance against deferred tax assets until there is sufficient evidence to support a full or partial reversal. The reversal of a previously recorded valuation allowance will generally result in a benefit from income tax.
Previous wording
Cost of sales decreased by $1.3 million, or 4.3%, in the first quarter of 2024 compared to the same period of 2023, primarily due to the decrease in commodity costs and restaurant revenue. As a percentage of restaurant revenue, cost of sales decreased to 25.0% in the first quarter of 2024 compared to 25.2% in first quarter of 2023 primarily due to menu price leverage.
Current wording
Cost of sales decreased by $1.2 million, or 1.9%, in the first two quarters of 2024 compared to the same period of 2023. As a percentage of restaurant revenue, cost of sales decreased to 24.8% in the first two quarters of 2024 compared to 25.1% in the first two quarters of 2023 primarily due to a 0.4% impact from an increase in menu prices.
Previous wording
Net cash provided by operating activities was $7.0 million in the first quarter of 2024 compared to net cash provided by operating activities of $7.2 million in the first quarter of 2023. The slight decrease in operating cash flow resulted primarily from lower cash flows from an increased net loss adjusted for non-cash items, offset by changes in working capital.
Current wording
Net cash provided by operating activities was $11.7 million in the first two quarters of 2024 compared to net cash provided by operating activities of $10.4 million in the first two quarters of 2023. The increase in operating cash flow resulted primarily from changes in working capital related to the timing of accounts payable, payroll and accrued liabilities partially offset by a decrease in net income as adjusted for non cash items including depreciation and impairments.
Previous wording
Net cash used in investing activities decreased $1.8 million to $8.6 million in the first quarter of 2024 from $10.4 million in the first quarter of 2023. This decrease was primarily due to decreased spend for new restaurants and restaurant technology.
Current wording
Net cash used in investing activities decreased $8.0 million to $15.8 million in the first two quarters of 2024 from $23.8 million in the first two quarters of 2023. This decrease was primarily due to decreased spend for new restaurants and restaurant technology and proceeds from refranchising transactions.
Previous wording
Net cash used in financing activities was $37,000 in the first quarter of 2024, compared to net cash provided of $3.8 million in the first quarter of 2023. The decrease from the first quarter of 2023 was largely due to a reduction in net borrowings to fund capital spending.
Current wording
Net cash provided by financing activities was $2.8 million in the first two quarters of 2024, compared to $15.0 million in the first two quarters of 2023. The decrease from the first two quarters of 2023 was largely due to a reduction in net borrowings to fund capital spending.
Previous wording
We estimate capital expenditures will be approximately $28.0 million to $32.0 million for fiscal year 2024, including $19.0 million to $23.0 million for the remainder of the year, primarily for the openingof company-owned restaurants before any reductions for landlord reimbursements, reinvestment in existing restaurants and investments in technology. We expect such capital expenditures to be funded by currently available cash and cash equivalents, cash flows from operations and if necessary, undrawn capacity under our revolving credit line.
Current wording
We estimate capital expenditures will be approximately $28.0 million to $32.0 million for fiscal year 2024, including $10.0 million to $14.0 million for the remainder of the year, primarily for the openingof company-owned restaurants before any reductions for landlord reimbursements, reinvestment in existing restaurants and investments in technology. We expect such capital expenditures to be funded by currently available cash and cash equivalents, cash flows from operations and if necessary, undrawn capacity under our revolving credit line.
Previous wording
We believe that our current cash and cash equivalents, the expected cash flows from company-owned restaurant operations, the expected franchise fees and royalties and available borrowings under the credit facility will be sufficient to fund our cash requirements for working capital needs, new restaurant openings, and capital improvements and maintenance of existing restaurants for at least the next twelve months.
Current wording
Liquidity. As of July 2, 2024, we had a cash balance of $1.8 million compared to $3.0 million asof January 2, 2024. The amount available for future borrowings under our A&R Credit Agreement (defined below) was $35.5 million as of July 2, 2024. We believe that our current cash and cash equivalents, the expected cash flows from company-owned restaurant operations, the expected franchise fees and royalties and available borrowings under the credit facility will be sufficient to fund our cash requirements for working capital needs, new restaurant openings, and capital improvements and maintenance of existing restaurants for at least the next twelve months.
Previous wording
As of April 2, 2024, we had $83.0 million of indebtedness (excluding $1.8 million of unamortized debt issuance costs) and $3.0 million of letters of credit outstanding under our A&R Credit Agreement.
Current wording
As of July 2, 2024, we had $86.5 million of indebtedness (excluding $1.7 million of unamortized debt issuance costs) and $3.0 million of letters of credit outstanding under our A&R Credit Agreement.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
The table below presents our unaudited operating results for the first two quarters of 2024 and 2023, and the related period-over-period changes.
Current report — wording carried from elsewhere
Restaurant Impairments, Closure Costs and Asset Disposals
Current report — wording carried from elsewhere
The effective tax rate for the first two quarters of 2024 and for the first two quarters of 2023 reflect the impact of the previously recorded valuation allowance. The primary components of the provision for income tax (for both quarters) are related to state tax and the change in our valuation allowance. For the remainder of fiscal 2024, we do not anticipate material income tax expense or benefit as a result of the valuation allowance recorded. We will maintain a valuation allowance against deferred tax assets until there is sufficient evidence to support a full or partial reversal. The reversal of a previously recorded valuation allowance will generally result in a benefit from income tax. We estimate the annual effective tax rate for 2024 to be between (1.5%) and (0.5%).
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Liquidity. As of April 2, 2024, we had a cash balance of $1.3 million compared to $3.0 million asof January 2, 2024. The amount available for future borrowings under our A&R Credit Agreement (defined below) was $39.0 million as of April 2,