NOODLES & Co
For the period ended Dec 31, 2024. Filed Mar 7, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 7, 2025
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-K
Period ended 2024-01-02; filed 2024-03-08.
0001275158-24-000007
Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-07.
0001275158-25-000016
Item 7. 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 128 previous paragraphs and 126 current paragraphs.
89 unchanged; 30 reworded; 7 added; 8 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 5 previous and 5 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 (7)
Current report
Comparable Restaurant Sales. In fiscal 2024, system-wide comparable restaurant sales decreased 1.5%, comprised of a 1.8% decrease for company-owned restaurants and a 0.2% decrease for franchise restaurants. Restaurant industry sales remain volatile, with elevated levels of discounting targeting increasingly price-sensitive consumers. Our sales have been impacted by the challenging consumer environment and we responded with added promotional support in the fourth quarter of 2024. The consumer environment has caused many restaurant companies to report a decreased level of same store sales in 2024, and our sales trends have followed. We are focusing on revitalizing our menu options and began implementing menu changes late in 2024 and into the first half of 2025 when the substantial portion of the rollout is to be completed nationally. We are taking these and other actions to address these declines, but there is no guarantee these actions will ultimately be successful and we cannot predict the extent and duration of this decline.
Current report
Certain Restaurant Closures. We closed thirteen and six company-owned restaurants in 2024 and 2023, respectively, most of which were either generating low or negative cash flows, at or approaching the expiration of their leases or in trade areas that are not as well positioned for current consumer trends. We continue to analyze our restaurant portfolio and expect toclose certain restaurants that areeither generating low or negative cash flows, at or approaching the expiration of their leases or in trade areas that are not as well positioned for current consumer trends.
Current report
•local and national competition;
Current report
Labor costs decreased by $3.4 million, or 2.1%, in 2024 compared to 2023. As a percentage of restaurant revenue, labor costs decreased to 31.9% in 2024 compared to 32.0% in 2023, primarily due to a 0.5% benefit from menu price increases, a 0.5% benefit from labor efficiencies and a 0.5% benefit from a combination of lower incentive pay and benefits, partially offset by increases of 0.8% from traffic deleverage and 0.6% from wage inflation.
Current report
General and administrative expense decreased by $1.0 million, or 1.9%, in 2024 compared to 2023, due primarily to decreases in wages and labor expenses of $1.5 million partially offset by increases in marketing spend and expenses related to our bi-annual manager conference. As a percentage of revenue, general and administrative expense remained flat at 10.3% in 2024 and 2023.
Current report
Net cash used in investing activities decreased $25.1 million to $26.7 million in 2024 compared to 2023. This decrease was primarily due to decreased investment in new restaurant openings and the completion of installation for our digital menu boards in 2023. We opened ten and eighteen company-owned restaurants in 2024 and 2023, respectively.
Current report
Net cash provided by financing activities was $17.3 million in 2024, compared to $25.8 million in 2023. The decrease from 2023 was primarily due to a reduction in net borrowings to fund capital spending in 2024.
Removed paragraphs (8)
Previous report
Comparable Restaurant Sales. In fiscal 2023, system-wide comparable restaurant sales decreased 1.9%, comprised of a 2.0% decrease for company-owned restaurants and a 1.1% decrease for franchise restaurants. During 2022 and in the beginning of 2023, we implemented greater menu price increases relative to historical years as a result of meaningful inflation in our cost of food, wages and general restaurant expenses. During 2023, 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 recent price increases. We have taken actions to address this response including moderating the level of price increases and offering value oriented options, but there is no guarantee these actions will ultimately be successful and we cannot predict the extent and duration of this decline.
Previous report
Certain Restaurant Closures. We closed six and five company-owned restaurants in 2023 and 2022, respectively, most of which were at or approaching the expiration of their leases. We currently do not anticipate significant restaurant closures for the foreseeable future; however, we may from time to time close certain restaurants, including closures at, or near, the expiration of their leases.
Previous report
•competition;
Previous report
(1) Amounts for fiscal year 2022 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 report
Labor costs increased by $2.6 million, or 1.7%, in 2023 compared to 2022. As a percentage of restaurant revenue, labor costs increased to 32.0% in 2023 compared to 31.1% in 2022, primarily due to a 1.6% impact from wage and benefits inflation, partially offset by a 0.6% impact from labor productivity.
Previous report
General and administrative expense increased by $1.9 million, or 3.9%, in 2023 compared to 2022, due primarily to increases in third party services of $1.5 million, executive severance costs of $1.1 million and bad debt expense of $0.5 million, partially offset by a decrease in incentive-based compensation expense of $1.2 million. As a percentage of revenue, general and administrative expense increased to 10.3% in 2023 compared to 9.8% in 2022, due primarily to a decline in revenue.
Previous report
Net cash used in investing activities was primarily related to information technology expenses including digital menu boards, new restaurant capital expenditures for the opening of eighteen and sixteen company-owned restaurants in 2023 and 2022, respectively, as well as investments in restaurant equipment and restaurant upgrades.
Previous report
Net cash provided by financing activities was $25.8 million in 2023 largely related to draws on our revolving credit facility and swingline to fund new restaurant openings, partially offset by the $5.0 million repurchase of the Company’s common stock in the open market, debt issuance costs and payments on finance leases.
Reworded paragraphs (30)
Previous wording
We operate on a 52- or 53-week fiscal year ending on the Tuesday closest to December 31. Fiscal year 2023, which ended on January 2, 2024 contained 52 weeks. Fiscal year 2022, which ended on January 3, 2023 contained 53 weeks. We refer to our fiscal years as 2023 and 2022. Our fiscal quarters each contained 13 operating weeks, with the exception of the fourth fiscal quarter of 2022 which contained 14 operating weeks.
Current wording
We operate on a 52- or 53-week fiscal year ending on the Tuesday closest to December 31. Fiscal years 2024 and 2023, which ended on December 31, 2024 and January 2, 2024, respectively, contained 52 weeks. We refer to our fiscal years as 2024 and 2023. Our fiscal quarters each contained 13 operating weeks.
Previous wording
Noodles & Company is a restaurant concept offering lunch and dinner within the fast-casual segment of the restaurant industry. We opened our first location in 1995, offering noodle and pasta dishes, staples of many different cuisines, with the goal of delivering fresh ingredients and flavors from around the world under one roof. Today, our globally-inspired menu includes a wide variety of high quality, cooked-to-order dishes, including noodles and pasta, soups, salads and appetizers. We believe we offer our customers value with per person spend of $13.21 in 2023.
Current wording
Noodles & Company is a restaurant concept offering lunch and dinner within the fast-casual segment of the restaurant industry. We opened our first location in 1995, offering noodle and pasta dishes, staples of many different cuisines, with the goal of delivering fresh ingredients and flavors from around the world under one roof. Today, our globally-inspired menu includes a wide variety of high quality, cooked-to-order dishes, including noodles and pasta, soups, salads and appetizers. We believe we offer our customers value with a per-person spend of $13.31 in 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 in regards 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. 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. The commodity markets underlying our cost of food have improved since the historically high costs in 2022. Our commodity inflation in 2024 was less than 2%. 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.
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. In 2024, we have seen the rate of wage inflation decrease. Our wage inflation in 2024 was less than 3%. We have been able to partially mitigate the impact of wage inflation through a continued focus on maximizing efficiencies of labor hour usage per restaurant.
Previous wording
Other Restaurant Operating Costs. We have and expect to continue to incur additional third-party delivery fees resulting from a significant expansion of our use of third-party delivery services. In addition, during 2023 we increased marketing expenses related primarily to digital advertising.
Current wording
Other Restaurant Operating Costs. We have and expect to continue to incur third-party delivery fees resulting from a significant and increasing use of third-party delivery services.
Previous wording
Restaurant Development. In 2023, we opened eighteen company-owned restaurants. As of January 2, 2024, we had 380 company-owned restaurants and 90 franchise restaurants in 31 states. In 2024, we plan to open 10-12 new company-owned restaurants.
Current wording
Restaurant Development. In 2024, we opened ten company-owned restaurants andthree franchise restaurants. As of December 31, 2024, we had 371 company-owned restaurants and 92 franchise restaurants in 31 states. In 2025, we plan to open two new company-owned restaurants.
Previous wording
Impairment of Long-lived Assets. We impaired two restaurants in 2023 and four restaurants in 2022. Impairment is based on our current assessment of the expected future cash flows of various restaurants based on recent results and other specific market factors.
Current wording
Impairment of Long-lived Assets. We impaired sixteen restaurants in 2024 and two restaurants in 2023. We performed a detailed review of significantly underperforming restaurants in 2024 and based on this review, recorded impairments on certain restaurants that we believed had fair market values below their net book values. Impairment is based on our current assessment of the expected future cash flows of various restaurants based on recent results and other specific market factors.
Previous wording
Comparable restaurant sales refer to year-over-year sales comparisons for the comparable restaurant base. We define the comparable restaurant base to include restaurants open for at least 18 full periods. As of the end of 2023, 2022 and 2021, there were 355, 347 and 359 restaurants, respectively, in our comparable restaurant base for company-owned locations. This measure highlights performance of existing restaurants, as the impact of new restaurant openings is excluded. Restaurants that were temporarily closed or operating at reduced hours and dining capacity due to the COVID-19 Pandemic remained in comparable restaurant sales. Changes incomparable restaurant sales are generated by changes in traffic, which we calculate as the number of entrées sold, and changes in per-person spend, calculated as sales divided by traffic. Per-person spend can be influenced by changes in menu prices and the mix and number of items sold per person.
Current wording
Comparable restaurant sales refer to year-over-year sales comparisons for the comparable restaurant base. We define the comparable restaurant base to include restaurants open for at least 18 full periods. As of the end of 2024, 2023 and 2022, there were 350, 355 and 347 restaurants, respectively, in our comparable restaurant base for company-owned locations. This measure highlights performance of existing restaurants, as the impact of new restaurant openings is excluded. Changes incomparable restaurant sales are generated by changes in traffic, which we calculate as the number of entrées sold, and changes in per-person spend, calculated as sales divided by traffic. Per-person spend can be influenced by changes in menu prices and the mix and number of items sold per person.
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 net interest expense, provision (benefit) for income taxes and depreciation and amortization. We define adjusted EBITDA as net income (loss) before net interest expense, 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 net interest expense, provision (benefit) for income taxes and depreciation and amortization. We define adjusted EBITDA as net income (loss) before net interest expense, 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)During 2022, we sold fifteen company-owned restaurants to a franchisee.
Current wording
(1)During 2024, we sold six company-owned restaurants to a franchisee.
Previous wording
The following table summarizes key components of our results of operations for the periods indicated as a percentage of our total revenue, except for the components of restaurant operating costs, which are expressed as a percentage of restaurant revenue. Fiscal year 2023 contained 52 operating weeks and fiscal year 2022 contained 53 operating weeks.
Current wording
The following table summarizes key components of our results of operations for the periods indicated as a percentage of our total revenue, except for the components of restaurant operating costs, which are expressed as a percentage of restaurant revenue.
Previous wording
Fiscal year 2023 contained 52 operating weeks and fiscal year 2022 contained 53 operating weeks. The table below presents our operating results for 2023 and 2022, and the related year-over-year changes:
Current wording
The table below presents our operating results for 2024 and 2023, and the related year-over-year changes:
Previous wording
Total revenue decreased by $6.1 million, or 1.2%, in 2023 compared to 2022. This decrease was primarily due to: $10.0 million from a decline in company same store sales, $9.1 million from overlapping the impact of an additional operating week in 2022, and $3.1 million due to permanent restaurant closures, partially offset by $17.0 million from growth in new restaurant revenue.
Current wording
Total revenue decreased by $10.1 million, or 2.0%, in 2024 compared to 2023. This decrease was primarily due to: $8.3 million from a decline in company same store sales, $7.1 million due to refranchising and $6.7 million due to permanent restaurant closures, partially offset by $12.0 million from growth in new restaurant revenue.
Previous wording
Average unit volumes decreased 2.3% to $1.3 million in 2023 compared to $1.4 million in 2022 primarily due to decreases in traffic. System-wide comparable restaurant sales decreased 1.9% in 2023, comprised of a 2.0% decrease at company-owned restaurants and a 1.1% decrease at franchise-owned restaurants.
Current wording
Average unit volumes decreased 3.0% to $1.29 million in 2024 compared to $1.33 million in 2023 primarily due to decreases in traffic. System-wide comparable restaurant sales decreased 1.5% in 2024, comprised of a 1.8% decrease at company-owned restaurants and a 0.2% decrease at franchise-owned restaurants.
Previous wording
Cost of sales decreased by $13.8 million, or 10.0%, in 2023 compared to 2022. As a percentage of restaurant revenue, cost of sales decreased to 25.2% in 2023 from 27.7% in 2022, primarily due to a 1.8% impact from a combination of menu price increases and menu mix and a 0.7% impact from lower commodities prices.
Current wording
Cost of sales decreased by $0.4 million, or 0.3%, in 2024 compared to 2023. As a percentage of restaurant revenue, cost of sales increased to 25.6% in 2024 from 25.2% in 2023, primarily due to a 0.8% impact from a combination of menu mix shifts and inflation, partially offset by a 0.4% benefit from menu price increases.
Previous wording
Occupancy costs increased by $0.7 million, or 1.6%, in 2023 compared to 2022, due primarily to new restaurant openings. As a percentage of restaurant revenue, occupancy costs increased to 9.3% in 2023 from 9.1% in 2022, due primarily to a decrease in restaurant revenue.
Current wording
Occupancy costs increased by $0.4 million, or 1.0%, in 2024 compared to 2023, due primarily to new restaurant openings. As a percentage of restaurant revenue, occupancy costs increased to 9.6% in 2024 from 9.3% in 2023, due primarily to a decrease in restaurant revenue.
Previous wording
Other restaurant operating costs increased by $0.3 million, or 0.4%, in 2023 compared to 2022, due primarily to planned increased marketing spend in 2023. As a percentage of restaurant revenue, other restaurant operating costs increased to 18.6% in 2023 from 18.3% in 2022.
Current wording
Other restaurant operating costs increased by $3.5 million, or 3.8%, in 2024 compared to 2023. As a percentage of restaurant revenue, other restaurant operating costs increased to 19.7% in 2024 from 18.6% in 2023, primarily due to a 0.5% impact from higher delivery fees driven by higher delivery sales, a 0.4% impact from sales deleverage, and a 0.3% impact from increased marketing spend in 2024.
Previous wording
Depreciation and amortization increased by $3.5 million, or 15.1%, in 2023 compared to 2022, due primarily to new restaurant and technology investments, partially offset by restaurants impaired or closed. As a percentage of revenue, depreciation and amortization increased to 5.3% in 2023 compared to 4.6% in 2022.
Current wording
Depreciation and amortization increased by $2.3 million, or 8.5%, in 2024 compared to 2023, due primarily to new restaurant and technology investments, partially offset by restaurants impaired or closed. As a percentage of revenue, depreciation and amortization increased to 5.9% in 2024 compared to 5.3% in 2023.
Previous wording
Pre-opening costs increased $0.6 million in 2023 compared to 2022 due to timing of new restaurant openings in 2023 compared to 2022.
Current wording
Pre-opening costs decreased $0.7 million in 2024 compared to 2023 due to less new restaurant openings in 2024 compared to 2023.
Previous wording
Restaurant impairments, closure costs and asset disposals increased by $2.2 million, or 36.3%, in 2023 compared to 2022. The increase was largely due to an increase in write-downs of lease related assets partially offset by lower fixed asset impairment charges with only two restaurants impaired in 2023 compared to four restaurants impaired in 2022, Both years include ongoing equipment costs for restaurants previously impaired and lease related costs and expenses in connection with the divestiture of company-owned restaurants in previous years.
Current wording
Restaurant impairments, closure costs and asset disposals increased by $11.9 million, or 141.3%, in 2024 compared to 2023. The increase was largely due to an increase in write-downs of lease related assets and fixed asset impairment charges with sixteen restaurants impaired in 2024 compared to two restaurants impaired in 2023. We performed a detailed review of significantly underperforming restaurants in 2024 and based on this review, recorded impairments on certain restaurants that we believed had fair market values below their net book values. Both years include ongoing equipment costs for restaurants previously impaired and lease related costs and expenses in connection with the divestiture of company-owned restaurants in previous years.
Previous wording
Interest expense increased by $2.4 million, or 96.4% in 2023 compared to 2022. The increase was mainly due to higher average borrowings and a higher average interest rate in 2023 compared to 2022. Interest rates for all amounts outstanding are variable.
Current wording
Interest expense increased by $3.6 million, or 74.5% in 2024 compared to 2023. The increase was mainly due to higher average borrowings and a higher average interest rate in 2024 compared to 2023. Interest rates for all amounts outstanding are variable.
Previous wording
The effective tax rate was (0.2)% in 2023 compared to (1.1)% in 2022. We will continue to 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 was (0.1)% in 2024 compared to (0.2)% in 2023. We will continue to 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
As of January 2, 2024, our available cash and cash equivalents balance was $3.0 million, and $39.9 million was available for future borrowings underour A&R Credit Agreement (defined below).
Current wording
As of December 31, 2024, our available cash and cash equivalents balance was $1.1 million, and $19.0 million was available for future borrowings underour A&R Credit Agreement (defined below).
Previous wording
On July 27, 2022, we amended and restated our Credit Agreement by entering into the Amended and Restated Credit Agreement as further amended, restated, extended, supplemented, modified and otherwise in effect from time to time, the (“A&R Credit Agreement”), with each other Loan Party (as defined in the A&R Credit Agreement) party thereto, each lender from time to time party thereto, and U.S. Bank National Association, as Administrative Agent, L/C Issuer and Swing Line Lender (each as defined in the A&R Credit Agreement). The A&R Credit Agreement matures on July 27, 2027. Among other things, the A&R Credit Agreement: (i) increased the credit facility from $100.0 million to $125.0 million; (ii) eliminated the term loan and principal amortization components of the credit facility; (iii) removed the capital expenditure covenant; (iv) enhanced flexibility for certain covenants and restrictions; and (v) lowered the spread within our cost of borrowing and transitioned from LIBOR to SOFR plus a margin of 1.50% to 2.50% per annum, based upon the consolidated total lease-adjusted leverage ratio. In connection with the entry into the A&R Credit Agreement, we wrote off a portion of the unamortized debt issuance costs related to the Credit Agreement in the amount of $0.3 million in the third quarter of 2022. The A&R Credit Agreement is secured by a pledge of stock of substantially all of our subsidiaries and a lien on substantially all of our and our subsidiaries’ personal property assets.
Current wording
On May 9, 2018, we entered into a Credit Agreement (the “Credit Agreement”) with each other Loan Party (as defined in the Credit Agreement) party thereto, each lender from time to time party thereto, and U.S. Bank National Association, as Administrative Agent, L/C Issuer and Swing Line Lender (each as defined in the Credit Agreement). The Credit Agreement consisted of a term loan facility in an aggregate principal amount of $25.0 million and a revolving line of credit of $65.0 million, which included a letter of credit subfacility in the amount of $15.0 million and a swingline subfacility in the amount of $10.0 million. The Credit Agreement was subsequently amended on November 20, 2019 and June 16, 2020. On July 27, 2022, we amended and restated our Credit Agreement by entering into the Amended and Restated Credit Agreement (as further amended, restated, extended, supplemented, modified and otherwise in effect from time to time, the “A&R Credit Agreement”), with each other Loan Party (as defined in the A&R Credit Agreement) party thereto, each lender from time to time party thereto, and U.S. Bank National Association, as Administrative Agent, L/C Issuer and Swing Line Lender (each as defined in the A&R Credit Agreement). The A&R Credit Agreement matures on July 27, 2027. Among other things, the A&R Credit Agreement: (i) increased the credit facility from $100.0 million to $125.0 million and (ii) eliminated the term loan and principal amortization components of the credit facility. The A&R Credit Agreement was subsequently amended on December 21, 2023.
Previous wording
On December 21, 2023, we amended our A&R Credit Agreement by entering into that certain First Amendment to Amended and Restated Credit Agreement (the “Amendment”). Among the modifications, the Amendment: (i) increased applicable rate ranges (A) with respect to SOFR loans, from 1.50% - 2.50% per annum to 1.75% - 3.00% per annum and (B) with respect to base rate loans, from 0.50% - 1.50% per annum to 0.75% - 2.00% per annum, in each case as determined by the Consolidated Total Lease Adjusted Leverage Ratio (as defined in the A&R Credit Agreement), (ii) amended the Consolidated Fixed Charge Coverage Ratio (as defined in the A&R Credit Agreement) in order to limit the deduction of capital expenditures to “Non-Growth Capital Expenditures”, (iii) added a defined term for “Non-Growth Capital Expenditures” (along with certain related definitions), (iv) added a new capital expenditures covenant governing entry into new lease agreements and (v) increased the Consolidated Total Lease Adjusted Leverage Ratio (as defined in the A&R Credit Agreement) to be no greater than (x) 4.50 to 1.00 for the period beginning on the last day of the fiscal quarter ending January 2, 2024 until and including the last day of the fiscal quarter ending December 30, 2025 and (y) 4.25 to 1.00 for the period beginning on the last day of the fiscal quarter ending March 31, 2026 until and including the last day of the fiscal quarter ending September 29, 2026.
Current wording
On October 29, 2024, the Company amended its A&R Credit Agreement, by entering into that certain Second Amendment to Amended and Restated Credit Agreement (the “Second Amendment”). Among the modifications, the Second Amendment: (i) increased the maximum applicable rate ranges (A) with respect to SOFR loans, from 1.75% - 3.00% to 1.75% - 3.75% per annum and (B) with respect to base rate loans, from 0.75% - 2.00% to 0.75% - 2.75% per annum, in each case as determined by the Consolidated Total Lease Adjusted Leverage Ratio (as defined in the A&R Credit Agreement), (ii) conditioned the use of the general restricted payment basket on satisfaction of a Consolidated Total Lease Adjusted Leverage Ratio (as defined in the A&R Credit Agreement) of less than or equal to 4.00 to 1.00 and a Consolidated Fixed Charge Coverage Ratio (as defined in the A&R Credit Agreement) of greater than or equal to 1.25 to 1.00, (iii) restricted entry into new lease agreements so long as the Consolidated Total Lease Adjusted Leverage Ratio (as defined in the A&R Credit Agreement) in Section 7.11(a) of the A&R Credit Agreement is greater than or equal to 4.50 to 1.00, (iv) increased the Consolidated Total Lease Adjusted Leverage Ratio (as defined in the A&R Credit Agreement) in Section 7.11(a) of the A&R Credit Agreement to be no greater than (x) 5.50 to 1.00 for the fiscal quarter ending on October 1, 2024 until and including the last day of the fiscal quarter ending September 30, 2025 and (y) stepping down to (1) 5.25 to 1.00 per annum for the fiscal quarter ending December 30, 2025, (2) 5.00 to 1.00 per annum for the fiscal quarters ending March 31, 2026 and June 30, 2026, (3) 4.75 to 1.00 for the fiscal quarters ending September 29, 2026 and December 29, 2026 and (4) 4.50 to 1.00 per annum for the fiscal quarter ended March 30, 2027 and thereafter and (v) amended the Consolidated Fixed Charge Coverage Ratio (as defined in the A&R Credit Agreement) in Section 7.11(b) of the A&R Credit Agreement to be no less than (x) 1.05 to 1.00 for the fiscal quarter ending on October 1, 2024 until and including the last day of the fiscal quarter ending September 30, 2025 and (y) stepping up to (1) 1.15 to 1.00 for the fiscal quarters ending December 30, 2025 and March 31, 2026 and (2) 1.25 to 1.00 for the fiscal quarter ending June 30, 2026 and thereafter.
Previous wording
As of January 2, 2024, we had $82.2 million of indebtedness (excluding $2.0 million of unamortized debt issuance costs) and $3.0 million of letters of credit outstanding under the A&R Credit Agreement.
Current wording
As of December 31, 2024, we had $103.0 million of indebtedness (excluding $2.3 million of unamortized debt issuance costs) and $3.0 million of letters of credit outstanding under the A&R Credit Agreement.
Previous wording
Net cash provided by operating activities in 2023 was $27.5 million compared to $9.6 million in 2022. The change in operating cash flows resulted primarily from working capital changes. The working capital variance includes uses of cash related to payroll timing and normal changes in accounts payable and other accrued expenses.
Current wording
Net cash provided by operating activities in 2024 was $7.6 million compared to $27.5 million in 2023. The decrease in operating cash flows resulted primarily from a decrease in net income as adjusted for non-cash items including depreciation and impairments, as well as changes in working capital related to payroll timing and normal changes in accounts payable and other accrued expenses.
Previous wording
Our total capital expenditures for 2023 were $52.0 million, which includes amounts for restaurants that will be opening in 2024. We expect our 2024 capital expenditures to be in the range of $28.0 million to $32.0 million. Our capital expenditures in 2024 are expected to be primarily related to our construction of new restaurants, which excludes landlord reimbursements that we typically receive, in addition to reinvestment in existing restaurants.
Current wording
Our total capital expenditures for 2024 were $28.8 million, which includes amounts for restaurants that will be opening in 2025. We expect our 2025 capital expenditures to be in the range of $11.0 million to $13.0 million. Our capital expenditures in 2025 are expected to be primarily related to our reinvestment in existing restaurants, the opening of two new restaurants and technology improvements.
Previous wording
Our contractual obligations consist of lease obligations, purchase obligations, long-term debt and other liabilities. See Note 4 Long-Term Debt and Note 12 Leases to our consolidated financial statements for further discussion. We are obligated under non-cancelable leases for our restaurants, administrative offices and equipment. In addition to those lease obligations, we have legally binding minimum lease payments for leases signed but not yet commenced amounting to $14.0 million as of January 2, 2024. We enter into various purchase obligations in the ordinary course of business. As of January 2, 2024, all of our binding purchase obligations are short-term amounting to$40.8 million. These amounts relate to volume commitments for beverage and food products, as well as binding commitments for the construction of new restaurants. Our other liabilities of $2.1 million as of January 2, 2024 includes our commitment under our non-qualified deferred compensation plan and severance.
Current wording
Our contractual obligations consist of lease obligations, purchase obligations, long-term debt and other liabilities. See Note 4 Long-Term Debt and Note 12 Leases to our consolidated financial statements for further discussion. We are obligated under non-cancelable leases for our restaurants, administrative offices and equipment. In addition to those lease obligations, we have legally binding minimum lease payments for leases signed but not yet commenced amounting to $1.1 million as of December 31, 2024. We enter into various purchase obligations in the ordinary course of business. As of December 31, 2024, our binding purchase obligations are approximately$49.4 million, which includes $29.1 million to be incurred within the next 12 months. These amounts relate to volume commitments for beverage and food products, as well as binding commitments for the construction of new restaurants. Our other liabilities of $2.2 million as of December 31, 2024 includes our commitment under our non-qualified deferred compensation plan and severance.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
On May 9, 2018, we entered into a Credit Agreement (the “Credit Agreement”) with each other Loan Party (as defined in the Credit Agreement) party thereto, each lender from time to time party thereto, and U.S. Bank National Association, as Administrative Agent, L/C Issuer and Swing Line Lender (each as defined in the Credit Agreement). The Credit Agreement consisted of a term loan facility in an aggregate principal amount of $25.0 million and a revolving line of credit of $65.0 million, which included a letter of credit subfacility in the amount of $15.0 million and a swingline subfacility in the amount of $10.0 million. The Credit Agreement was subsequently amended on November 20, 2019 and June 16, 2020.