Business Context and Reporting Period
Company: Noodles & Company
Filing Type: Form 8-K (Current Report)
Date of Report: December 21, 2023
Event: Entry into a Material Definitive Agreement (First Amendment to Amended and Restated Credit Agreement).
Key Financial Metrics
This filing does not report revenue, profit, cash flow, or liquidity figures. It details specific modifications to the company's credit facility terms:
- Interest Rate Adjustments:
- SOFR loans: Increased from 1.50% - 2.50% to 1.75% - 3.00% per annum.
- Base rate loans: Increased from 0.50% - 1.50% to 0.75% - 2.00% per annum.
- Leverage Ratio Covenant: The Consolidated Total Lease Adjusted Leverage Ratio limit was increased to:
- 4.50 to 1.00 for the period ending December 30, 2025.
- 4.25 to 1.00 for the period ending September 29, 2026.
- Fixed Charge Coverage Ratio: Amended to limit capital expenditure deductions to "Non-Growth Capital Expenditures."
- New Covenants: Added a defined term for "Non-Growth Capital Expenditures" and a new covenant governing entry into new lease agreements.
Material Changes Versus Prior Period
The filing represents a modification of the Credit Agreement originally dated July 27, 2022. The primary material changes are the relaxation of leverage ratio limits and the adjustment of interest rate spreads, alongside stricter definitions regarding capital expenditures and lease agreements.
Guidance, Outlook, and Risks
Management Commentary: The filing contains no forward-looking guidance or management commentary regarding operational performance.
Risks and Contingencies: The amendment introduces higher interest rate floors and ceilings, which may increase borrowing costs depending on the company's leverage ratio. The new covenants restrict flexibility regarding capital expenditures and new lease agreements.
Investor Verification Checklist
- Verify the current Consolidated Total Lease Adjusted Leverage Ratio to assess proximity to the new 4.50:1.00 limit.
- Review the definition of "Non-Growth Capital Expenditures" to understand restrictions on future capital spending.
- Assess the impact of increased interest rate ranges on future interest expense projections.
- Confirm the status of any pending new lease agreements against the new covenant requirements.