PNRA) and Chipotle ( CMG) are likely the first that come to mind. One of the first things investors might notice on inspection of each company's balance sheet, is that neither of them have any debt. Yep, zero long-term or short-term debt. So perhaps Noodles is making a good move by retiring debt now, even though it doesn't exactly have to. Also, now that the given range has been raised, perhaps the company will be able to retire debt and focus on growth, something that would truly be dynamic for investors. After the debt is repaid, Noodles will have approximately $20 million in proceeds to put towards whatever it wants, again assuming it prices in the middle of the $15 to $17 range. While young, the growth has been strong for Noodles, with earnings per share up 120% from 2010, where the company earned 10 cents a share, versus 22 cents in 2012. The company also increased its total store count from 255 to 327 in that time frame.
It started with just 57 stores in 2002. Of the 327 current stores, 276 are owned by the company and 51 are franchised. For 2013, the company plans to open between 38 and 42 stores of its own and only 6 to 8 franchises. This is good, since most of Noodles' revenues derive from its company-owned restaurants. Based on the current growth pattern, the company plans on opening up approximately 2,500 restaurants in the next 15 to 20 years. Assuming Noodles can maintain some form of control over its margins, this should create substantial long-term growth similar to that of Panera, which also has a similar long-term growth plan. But who are the people running the show at Noodles? After all, Cosi ( COSI) was a restaurant that was supposed to do as well as Panera, but has been completely left in the dust. Luckily, there are a couple of big names at Noodles who have had strong success within the restaurant industry. Kevin Reddy is the CEO and Keith Kinsey is the president and COO. Both went from McDonald's ( MCD) to Chipotle, before landing at Noodles in 2005. These two have gone from a strong brand with McDonald's to a high-growth chain at Chipotle, where Reddy served as COO. Now they are launching their talents with Noodles. Follow @BretKenwell