Good afternoon, and welcome to today's Noodles & Company first quarter 2024 Earnings Conference Call. All participants are in listen-only mode. After the presenter's remarks, there will be a question-and-answer session. As a reminder, this call is being recorded. I would now like to introduce Noodles & Company's Chief Financial Officer, Mike Hynes. Thank you, and good afternoon, everyone. Welcome to our first quarter 2024 earnings call. Here with me this afternoon is Drew Madsen, our Chief Executive Officer. I'd like to start by going over a few regulatory matters. During our remarks, we may make forward-looking statements regarding future events or the future financial performance of the company. Any such items should be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act. Such statements are only projections, and actual events or results could differ materially from those projections due to a number of risks and uncertainties, including those referred to in this afternoon's news release and the cautionary statement in the company's quarterly report on Form 10-Q and subsequent filings with the SEC. During the call, we will discuss non-GAAP measures, which we believe can be useful in evaluating the company's operating performance. These measures should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP. A reconciliation of these measures to the most directly comparable GAAP measures is available in our first Quarter 2024 Earnings Release. To the extent that the company provides guidance, it does so only on a non-GAAP basis and does not provide reconciliations of forward-looking non-GAAP measures. Quantitative reconciling information for these measures is unavailable without unreasonable efforts. With that, I would like to turn the call over to Drew Madsen, our Chief Executive Officer. Thanks, Mike, and good afternoon, everyone. We are definitely encouraged by our first quarter results as we continue to make progress against all five of our strategic priorities. I use the word encouraged because of the improving trends we saw in traffic and sales as we moved through the first quarter and into April. More specifically, traffic during Q4 of 2023 was down 9%. This year, traffic during Q1 was down 7.3%, only modestly better than Q4 of 2023. What we find encouraging is the improving month-to-month trend during the quarter and into April. January traffic was -12% and heavily impacted by severe weather in the Midwest, where we have a disproportionate number of our restaurants, as well as a difficult comp prior to last year's price increase in February. February traffic improved to -4.9%.quarter March was about the same as February at -5.5%, despite Easter shifting into the month and negatively impacting results. Most notably, traffic in April increased 0.3%. Driven by this improvement in traffic, our same-store sales gap to the fast-casual benchmark narrowed sequentially each month of the quarter, with a significant improvement in April. Also, in April, we exceeded the fast-casual and industry benchmarks on same-store sales for the first time since early 2023. Of course, this is only one month. We expect that our progress going forward will continue to see variability until we fully activate our strategic priorities, but we are encouraged by what we've seen thus far. Combining these sales results with strong cost management and favorable commodity costs helped us to deliver restaurant contribution margin and Adjusted EBITDA above our expectations for the quarter. Now, let's talk about the progress on our five strategic priorities. Like all successful restaurant companies, creating a foundation of operations excellence is our top priority. In last quarter, we reviewed our plans to focus our operations teams on the guest experience attributes and related operations team behaviors that correlate most strongly with traffic growth. Those guest experience attributes are overall satisfaction, accuracy, and taste of food. We also talked about the need to focus more on the dinner day part, where we have lower guest satisfaction and have experienced greater traffic loss than during the lunch daypart. During the first quarter, we introduced biweekly training sessions across the system to review proper execution of a new service standard, a new accuracy standard, and a new food execution standard during each training session. We also improved the execution of our general manager and assistant general manager scheduling guidelines to ensure these critical positions were in our restaurants more often during our busiest times, especially to coach and reinforce the standards that we're just trained. These efforts have paid off. Overall guest satisfaction ratings at dinner, after being flat every quarter in 2023, improved significantly in the 1st quarter this year. Food taste and accuracy guest ratings also both improved. And most importantly, we believe these guest satisfaction improvements led to improved dinner traffic versus prior year that slightly outpaced lunch during the quarter. We will continue to focus on improving guest satisfaction across all our restaurants in these areas going forward. Supporting this guest experience progress is improved staffing and retention. In particular, our general manager retention is significantly better than the industry and at a 10-year high for Noodles. Our second priority is to stimulate more guest desire for noodles and make our brand more relevant, primarily through a comprehensive menu transformation that is guided by our Contemporary Comfort Kitchen North Star. We will also use compelling LTOs to bridge the gap until our core menu testing plan has been successfully completed. We have finished the first two phases of our menu transformation test plan, and we are really excited about the opportunities this will present. As a reminder, phase one of our menu transformation plan involved a rigorous concept testing process with a best-in-class vendor, Datassential, to identify the highest potential concepts to take into actual menu development. We completed this phase in late February, and The Culinary Edge began development against the strongest ideas for both new and improved dishes. During phase two, we placed the new and improved dishes created by The Culinary Edge in a central location test where Noodles customers, who were also concept acceptors, tasted and rated each dish. To move forward, improvements to existing dishes had to be preferred compared to the existing dish and score higher than our current menu average. New dishes also had to score higher than our current menu average. The result of all this work is very encouraging. We have identified multiple new dishes that address gaps in our current menu, plus improvements to existing dishes that meet our concept and central location excellence standards and are ready for in-market testing, which will begin this summer as we ensure operations and our supply chain can support an in-market test. We are also working on a new menu board design that is much easier for guests to navigate, easier to place an order, and more contemporary in look and feel. Results from our menu design test will be available at the end of May. Phase three of our core menu transformation will marry our new and improved dishes with our new menu board design in a three-market in-restaurant test this summer. Our goal is to keep the number of menu items and operational complexity close to the current menu, so the addition of new items will likely result in the elimination of some existing weaker performers. Managing both the guest and operator reaction to these menu additions and deletions is one of the most important reasons to do an in-market test. Assuming positive in-market test results, we will introduce these new and improved dishes as well as our new menu design nationally early in Q1 of 2025 as we develop significant marketing plans, necessary operational training and supply chain capabilities, and get past the holidays, which would not be the right time for a full product rollout. We plan to introduce a second phase of new dishes and product improvements nationally during Q2 of 2025 once our guests and restaurant teams have had a chance to acclimate to the changes, both additions and deletions introduced during Q1 of 2025. Product testing is already underway for this second phase. Now let's talk about our LTO plans. I mentioned earlier our plan to regularly introduce LTOs as a bridge to excite guests and help drive traffic until our menu transformation is complete. Our current LTO, Steak Stroganoff, has been very successful with sales almost 50% higher than our forecast, so successful, in fact, that we ran out of product several weeks before we intended to end the promotion. A new production run is in process, and we will bring Steak Stroganoff back in mid-May. Our next LTO will be Baked Alfredo with Grilled Chicken. This will launch in early June and is another broadly appealing comfort dish similar to Chicken Parmesan and Steak Stroganoff. Concept scores for Baked Alfredo with Grilled Chicken are meaningfully higher than Chicken Parmesan, which was a strong LTO last year, so we're excited about what this dish can do. Finally, to bridge Q4 to early 2025, two of the new TCE dishes going into test in late June will be introduced nationally in early Q4 this year and remain on the menu. Our third strategic priority is to broaden our guest base by further leveraging our strong digital ecosystem. As a reminder, Noodles has 53% of sales from digital channels and 26% of orders from loyalty members, and our loyalty members spend twice as much per year as non-loyalty members. Our strategy for 2024 is to build on this strength by increasing active membership and frequency in our loyalty program, leverage personalized data from our new customer data platform to increase conversion and build frequency, and extend our reach by expanding digital marketing touchpoints. During Q1, we increased our active rewards audience and transactions while reducing our discount rate by using smart, segmented, and personalized offers. During the quarter, active users and their transactions increased roughly 7%, while our related discounts dropped by approximately 15%. To accelerate our progress here, we plan to launch SMS communication channels during the second half of 2024. This allows us to send text messages to anyone who has opted in to this communication channel. They do not need to have downloaded our app or be a loyalty member, so it's a great way to expand our reach to non-loyalty members. To drive greater brand awareness and attract more new customers to our digital assets, we're testing additional investment in digital media channels that have broader reach and can tell a more compelling brand story. Connected TV refers to any device that can stream content from the internet, including services like Hulu, Amazon Prime, and Disney +. Our first test on connected TV showed a 2.8% lift in incremental traffic and delivered a solid return on investment. We will continue to learn and refine this new tactic in preparation for our new menu launch. Additionally, we are increasing our focus and investment in search engine optimization to ensure our brand is outperforming competitors in search results. We believe there is significant opportunity to drive digital traffic by strengthening organic search and investing in tactics that build top-of-mind brand awareness. Third-party delivery was one of our strongest channels this quarter, especially in April. We will continue to invest in a multi-pronged strategy that is yielding profitable incremental traffic. Our fourth strategic priority is to maintain double-digit quarterly growth in our catering business while we also fix the fundamentals as a prerequisite before driving even more aggressive growth in the future. Noodles has never made a sustained commitment to grow catering sales, and it shows in our fundamentals. In particular, we want to reduce friction for operations and ultimately create a culture where we can confidently say yes to every order. This will include revisiting our shift processes to clarify who delivers a catering order, removing additional steps required to input an order into our POS, and updating our catering menu offerings and pricing. We now have an industry-experienced catering leader for the first time, and I am excited about the focus she has already brought to this area where Noodles should excel. Catering is roughly 1.5% of sales today. We believe it can be 5% of sales or more, but we need to reduce the complexity in our operating model and enhance our menu offering before aggressively pursuing new growth opportunities later this year and in the next year. Our final strategic priority is to strengthen our financial foundation with proactive cash management and an increased emphasis on operational efficiency across the business. We have reduced our capital spending from $51 million in 2023 to a projection of $28 million-$32 million this year. This is largely driven by a reduction in new restaurants and the completion of our digital menu boards rollout. In addition, during January, we implemented a major cost reduction effort that will save approximately $4 million this year, which was reflected in our guidance. This cost reduction initiative includes headcount reduction in areas we have deprioritized in the short term, like new unit openings, plus benefit adjustments that save money while still keeping us competitive in the marketplace, and supply chain savings through improved vendor management and product optimization. None of this was easy, but it was necessary, and our cost structure is now more closely aligned with the size of our current business. We have also created a smart cost savings team to continue to look for cost savings opportunities going forward. As you can see, we've made substantial progress and are excited about the future of our brand as we implement and execute on our strategic priorities and restore a culture of winning. Now I'll turn it over to Mike to review our financial results in more detail. Thank you, Drew. In the first quarter, our total revenue decreased 3.7% compared to last year to $121.4 million. Company average unit volumes in the first quarter were $1.25 million. System-wide comp restaurant sales during the first quarter decreased 5.4%, including a decrease of 5.7% at company-owned restaurants and a decrease of 4.5% at franchise restaurants. Company comp traffic during the first quarter declined 7.3%, and pricing contributed 1.4%. We estimate that severe weather during the first quarter, primarily in January, negatively impacted our first quarter comp sales by approximately 60 basis points. We also experienced a shift in the Easter holiday from the second quarter in 2023 to the first quarter in 2024. We estimate that the Easter holiday shift negatively impacted our first quarter comp sales by approximately 30 basis points. As Drew mentioned, we are encouraged by recent sales trends turning positive in April, fueled by an enthusiastic guest response to our Steak Stroganoff LTO and as we have fully lapped last year's price increase. April company-owned comp sales increased 2.7%, and traffic increased 0.3%. Turning back to our first quarter, restaurant-level contribution margin was 13.1%, down from 13.7% in the first quarter of 2023. The decrease in our restaurant contribution margin was primarily due to sales deleverage. As a reminder, our first quarter is historically seasonally slower than our second and third quarters, which has a negative impact on our first quarter restaurant contribution margin compared to the full year. Costs in the first quarter were 25% of sales, a 20 basis point improvement from last year, with year-over-year food inflation coming in below 1% for the quarter. Labor costs for the first quarter were 32.3% of sales, which was flat to prior year. Labor productivity and lower benefit costs contributed 80 basis points to restaurant contribution margin when compared to 2023, which was offset by wage inflation and sales deleverage. Wage inflation continued to moderate in the first quarter, with year-over-year hourly rate growth of 2.1% for the full quarter. Primarily due to sales deleverage, occupancy costs increased 60 basis points over prior year to 9.9%, and other restaurant operating costs increased by 20 basis points in the first quarter to 19.7%. G&A for the first quarter was $13 million compared to $13.6 million in 2023, primarily due to a decrease in employee-related costs, partially offset by an increase in planned marketing spend. G&A in the first quarter of 2024 was also negatively impacted by $473,000 of severance and executive transition costs. Net loss for the first quarter was $6.1 million, or a loss of $0.14 per diluted share, compared to a net loss of $3.1 million and a loss of $0.07 per diluted share last year. Adjusted EBITDA for the first quarter was $5.5 million compared to $6.2 million in the first quarter of 2023. In the first quarter, we opened two new company-owned restaurants and closed two restaurants at or near lease expiration. One franchise restaurant was opened, and two were closed in the first quarter of 2024. In April, we opened two new company-owned restaurants, bringing our year-to-date total company openings to four. We continue to expect to open 10-12 total new company-owned restaurants in 2024 for the full year. Subsequent to the end of the quarter, we refranchised six restaurants in the Portland, Oregon area to a new franchise group. These units were geographically distant from the rest of our company-operated system. In addition, our franchise partner has signed a development agreement to open a total of 10 new restaurants in the Portland, Oregon area through 2030. Turning to the balance sheet, at quarter end, we had cash and cash equivalents of $1.3 million and a total debt balance of $83 million. This is just $800,000 higher than our debt balance from the previous quarter, despite a seasonally low quarter for operating cash flows. We currently have over $30 million of incremental liquidity available for future borrowings under our credit facility. We are committed to strengthening our balance sheet, and our goal is to be free cash flow positive on a sustainable basis heading into 2025. With capital expenditures forecasted to decrease in the back half of the year, we feel positive about our ability to make debt paydowns in the fourth quarter of 2024. With that, I'll turn the call back over to Drew for final remarks. Thanks, Mike. We've made substantial progress across all five of our strategic pillars and are confident in our ability to regain consistent, profitable growth with this unique brand. Our foundation of operations excellence is improving. The guest reception of our LTOs like Steak Stroganoff has showcased that when we get our menu offerings right, we can drive traffic into our stores and close the gap to and even exceed the industry. Accordingly, our core menu update continues to progress on track with a market test scheduled for this summer. And finally, we believe continued improvement in our sales trends, combined with smart cost savings and thoughtful investment, will position us to be free cash flow positive by the fourth quarter of 2024. Thank you for your time today. Operator, please open the lines for Q&A. Thank you. At this time, we will conduct a question-and-answer session. As a reminder, to ask a question, you'll need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Todd Brooks of The Benchmark Company. Your line is now open. Hey, thanks for taking my question, and congrats on the progress that started with this quarter, good to see. Quick question on kind of the LTO bridge that you talked about, Drew. I think you talked about, obviously, Steak Stroganoff returning later in May and then rolling into the baked Alfredo with grilled chicken in June. And then I think you talked about 2 new items that have been developed and tested, possibly rolling late in the year. But is there an LTO gap between that happening, or do you have a series of almost monthly type of offerings to build that bridge until we get to the start of 2025? Yeah, you're exactly right on the first two points. Steak Stroganoff will be coming back late next week and stay probably three weeks or so until supplies run out. That's followed by baked Alfredo with chicken. And then in terms of LTOs, we do have two dishes coming in early in the fourth quarter that were developed by TCE. In between those two things, we've got some sponsorships and some related dishes that we think will bridge the gap as well. Okay, great. I'm just wondering, I know you said you've progressed through the first two phases of the process with the menu. Are there any commonalities with what's working well out of the Culinary Edge development? Anything from a flavor profile or big holes that have been identified within the menu that have tested really well that you're excited about, and then the reworks of existing recipes, just the magnitude of improvement that you're seeing there as well. Thanks. Yeah, we're working on three broad opportunity areas. One is a light and fresh menu gap in our current menu. Second is what we call twisted classics, which is essentially just updating and making more contemporary some of the classic dishes on our menu to fit consumer tastes today. And the third is flavor profiles that are a little trendier but still approachable. And we've made progress in each of the three buckets and are looking for, by the first quarter next year, probably touching and improving 40% of our menu in a significant way. Maybe more than that if we can get a couple more dishes that meet our excellence standards between now and then, but 40% is a big number. That's great. Thanks. Continued success. Thank you. Please stand by for our next question. Our next question comes from the line of Jake Bartlett of Truist Securities. Your line is now open. Great. Thanks for taking the question. I really appreciate it. My first is just on the trajectory of the improvement. Thank you so much for the detail on the monthly traffic. I think really, really helpful. What stuck out for me was it’s nice to see the improvement, but March wasn’t that much better. I mean, it was a little worse, but maybe on an adjusted basis, it was a little better than February. So I guess the trajectory there. And it’s kind of been that makes April really stand out. And I’m wondering how much what was driving the real change in April? Is it primarily the Steak Stroganoff, or is it all the other things you’ve mentioned about improving execution and customer satisfaction and all that? Yeah, I'll start with what I think the big drivers are, and then Mike can add a little clarity in terms of the Easter holiday shift and what that did to March and why we're still so bullish on April, because even with that, we were up meaningfully in same-store sales in April with the Easter shift. Certainly, Steak Stroganoff. There's a lot of dynamics in April. Certainly, Steak Stroganoff and the appeal of bringing that back, new to our core customer, demonstrates what can happen when you introduce a dish that resonates like that does. And it certainly has had an impact, and we look forward to bringing it back. But what we don't talk about as much or what's maybe harder to model is the underlying improvement in operational excellence. When operational excellence improves and guest satisfaction goes up, transactions go up. That's exactly what is happening now. We were flat all of 2023 in overall satisfaction and largely in food taste as well. We changed our approach to what we focused our restaurant teams on, and we've made material improvement over the course of the first quarter into April in operations excellence and guest satisfaction. That should continue going forward. That's what everything is going to be built on. We're really encouraged by the progress we've made in operations excellence. We're also continuing to do a really good job in our digital ecosystem, being more efficient with our marketing dollars and helping drive transactions, particularly in our loyalty program. It's more than just Steak Stroganoff, for sure. Catering year-to-date is up 20% as well. It's on a small base, but it's up 20%. We have big opportunity to grow further there, and we've got a leader now that we think can really help us identify some of the operational inefficiencies that we've got to take more advantage of the catering demand that's out there. And Jake, just to build on that, April was really also benefited, and Drew mentioned this, by digital sales. Digital sales outperformed by a wide margin in April, which is encouraging. We think the LTO had a lot to do with that, but it was more than just the LTO, the strength we saw in digital in April. Then the Easter shift was about 100 basis point impact to both March and April, negative in March and positive in April. Great. That's all really helpful. My next question was about the build of restaurant-level margins, and I think still at the midpoint, a little bit of contraction in guidance. The question, I'm just hoping you could give us the pieces to that. There's menu price, whether you mentioned 1.4% in the first quarter. Does that essentially go to zero, or does it kind of maintain at roughly that level? Commodity inflation guidance for 2024, labor inflation, and then to the extent I know that there's still some lingering productivity improvements that we're going to benefit from in the first half of the year, but just what are the moving pieces to get to the restaurant-level margin guidance? Sure. You saw that we kept our guidance at 14%-15% per restaurant-level contribution. Four months into the year, we feel like that's still appropriate, and that's a good baseline expectation. There's still a lot to play out in front of us for the rest of the year. As far as the pieces, COGS we're looking at, low- to mid-single-digit inflation, we are locked for most of our proteins for the rest of the year, which we've all seen the market recently, especially with chicken. And so we feel good about our positioning with proteins for the rest of the year. Labor has come in. The inflation has moderated, like we mentioned in the prepared remarks. We continue to see that. That's been coming in at the low- to single digits, and we hope to continue to see that. We're really encouraged by the efforts around our cost savings initiatives. That's reflected in our guidance, but for us to find $4 million of savings this year is really encouraging. We're not going to stop there. We're going to keep looking, and that's going to be spread across the P&L, the $4 million of savings. About $2 million of that is in G&A with the balance spread among COGS, labor, and other operating costs. Great. Menu price, is that going to stay at 1.5 or so, or is that going to go to 0 over the next few quarters? Yeah, absent any new pricing decisions, it'll be around 1% Q2 and Q3 and then fall off a small amount in Q4. Okay. And then you're. We are testing a small amount, modest amount of pricing for the back half of 2024, and we'll have some more news on that next time we talk. Yeah, I mean, on the pricing, we're being very disciplined to take the amount of pricing we need to cover inflation and to do it in a very tactical, surgical way where we implement pricing in areas that have the least amount of elasticity and, as a result, have the least amount of impact on traffic or menu shifting within the menu. Great. And the last question is on the refranchising. And back when you sold the stores in California, it was expected to be EBITDA neutral. There was also, I think, maybe a different way of accounting for the adjustments back then. But is this expected to be EBITDA neutral, the 6 stores that you sold? And then also, is this something that we could expect going forward? Is this part of the efforts to simplify the business, is to kind of shed some of these outlying markets? Anything more we should take from the refranchising transactions? Yeah, so for the six restaurants in Oregon, they represented just under $10 million of sales for us. They will create, initially, a small EBITDA headwind. You'll also see that we have a 10-unit development agreement with this franchise partner through 2030. As we progress through that development agreement, it will be incremental to EBITDA as our expectation. Then looking forward, I would say we're going to be opportunistic with refranchising. Our focus is on improving unit economics, including the cost to build new units. When we get that right, we think there'll be more opportunities down the road to refranchise. Great. Thank you so much. Thank you. Please stand by for our next question. Our next question comes from the line of Andy Barish of Jefferies. Your line is now open. Thanks. Hey, guys. I don't remember exactly, but was Alfredo a previous menu item that's being brought back at Noodles, or was this from some thoughts in a past life, Drew? Yeah, thoughts from Olive Garden. No, this is playing off the strength of our first big dish, Chicken Parmesan, and Baked Alfredo with Chicken is a new item for us. And we're very excited about it. Conceptually tested, strong, very popular with our operations teams, very popular in restaurants that we tried it in. But it's a new dish. Okay. Okay. Understood. And then what's been your kind of view in terms of the timeframe as you discuss some of these operational improvements? How quickly does that translate to traffic? You kind of put it another way. I mean, these are, I guess, leading indicators, but then when do you actually see the results in your viewpoint? Yeah, well, we saw a trend improvement in dinner traffic versus a year ago every month in the quarter through April where it was positive. And the same thing for lunch. But dinner did better than lunch every month during the quarter. And we think that's directly attributable to continued improvement in operations excellence and improvement in guest satisfaction. Now, with our purchase frequency, we're not going to see maybe an immediate impact on it, but we should continue to see improvements in guest satisfaction that do translate into improved traffic and stay with us, that we can build on as we introduce new menu items that create more guest desire for us. So I think it's essential, and I think the progress was meaningful so far, and it should continue. Okay. Thank you very much. Thank you. Please stand by for our next question. Our next question comes from the line of Jake Bartlett of Truist Securities. Your line is now open. Great. Thanks for taking the follow-up here. Mine was on the balance sheet. I know with your amendment to your credit agreement last December, you had changed the target or the covenant on your leverage. You're using a net adjusted leverage ratio. I think it's 4.5 is the covenant there. My question is where you stand as of the end of the first quarter, just so we can kind of get a sense of. I know you have a ton of liquidity available. I just want to get a sense as to how healthy the balance sheet is at this point. Sure. We are in compliance with our credit agreement and all the covenants associated with it, including the leverage ratio. We feel good about where we are with our credit agreement. We feel good about the liquidity it provides and meeting our business needs over the next few years. More importantly, we feel good about the way we've set up CapEx this year to where in the back half of the year, it tapers, and we're going to have an opportunity to pay down debt later this year and really carry that with the goal of carrying that forward into 2025 and be able to be free cash flow positive and have opportunities to pay down debt on a regular basis. All righty. Thank you so much. I appreciate it. Thank you. I'm showing no for the questions at this time. I would now like to hand the conference back over to Drew Madsen for any further remarks. Well, like I said, we are really encouraged by what we saw this quarter. It's very clear that we're making progress on all five of our strategic priorities, starting with operations excellence. We're excited about what we're seeing with our menu transformation, although it's early, and there's a lot of work to come. We're excited by that. We didn't talk about it today, but we're encouraged by some of the early test market or testing results that we've done to expand our reach and attract new guests by advertising on Connected TV. Really encouraged about what we can do with catering going forward, both at the end of this year and into 2025. So while we know there's a lot to do going forward, while we're not satisfied yet, we are definitely encouraged with the progress we've made and look forward to reporting more progress next time we're together. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.