Good afternoon, and thank you for standing by. Welcome to today's Noodles & Company second quarter 2013 earnings conference call. All participants are now in a listen only mode. After the presenters' remarks, there will be a question-and-answer session. As a reminder, this call is being recorded. On the call today is Kevin Reddy, Chairman and Chief Executive Officer, Keith Kinsey, President and Chief Operating Officer and Dave Boennighausen, Chief Financial Officer. Now I would like to turn the call over to Mr. Dave Boennighausen. Please go ahead, sir.

Thank you, Jamie. Good afternoon, everyone, and welcome to our second quarter 2013 earnings call. Let me start by going over a few regulatory matters. I would like to note that during our opening remarks and responses to your questions, we may make forward-looking statements regarding future events or the future financial performance of the company. Any such items including targeted results for 2013 and details related to our future performance should be considered forward-looking statements within the meaning of the Private Litigation Security Reform Act of 1995. Such statements are only projections and actual events or results could differ materially from those projections due to a number of risks and uncertainties. I refer you to the documents the company files with the Securities and Exchange Commission, specifically the company's final prospectus for its initial public offering, which was filed on June 28, 2013. This document contains and identifies important factors that could cause actual results to differ materially from those contained in our projections or forward-looking statements. Now, I would like to turn it over to Kevin.

Thanks, Dave. Hello, everyone. Since this is our first earnings call as a new public company, I thought I would take the opportunity to briefly introduce you to Noodles & Company and then we will provide commentary our performance, current initiatives and strategy. For those of you who are not as familiar with Noodles, at the end of the quarter two we operated 348 restaurants around the United States that offer a globally inspired menu including a wide variety of high-quality, cooked to order dishes including noodles, pasta, soups, salads and sandwiches which are served on china by our friendly team members. While we believe our wide variety is one of our strong attributes, we also offer our customers great value with a per person spend of approximately $8 without any tipping. Our globally inspired flavors and differentiated dining experience have resonated with our guests and have resulted in a long track record of strong growth through a combination of new restaurant openings and comparable restaurant sales increases while maintaining stable gross margins despite minimum price increases, all of which are allowing us to stay true to our principal of quality food at a price we believe is attractive to our guests. Now let me turn to our financial results. We are very pleased with the results from the second quarter. Our teams continue to create a dining experience we are proud of in our restaurants, resulting in our 15th consecutive quarter and 29 out of 30 quarters of positive comparable restaurant sales growth. As we look at our second quarter results for sales total revenue increased 18% on the strength of new restaurant openings, as well as an increase in company-owned comparable restaurant sales of 4.7%. We reported net income of $68,000 for the quarter, however, when adjusted to…

Thank you, Kevin. As Kevin mentioned, the team and affiliates did an excellent job bringing Your World Kitchen to life within the restaurants in the second quarter. Just as we continued to raise the bar on the culinary offerings, we are committed to advancing the dining experience through outstanding people and operations as well. The team is in various stages of several operations initiatives including improving the design and flow of our kitchen in order to enhance throughput as well as leveraging our strength in the dinner day part. While lunch and dinner are currently at about 50% of our sales each, we feel we are uniquely positioned to excel at dinner. Aside from the great variety of our menu offerings, a world of flavors under one roof, we also offer an enhanced service model, compared to many of our competitors. Preparing each dish to order and delivering them to their table on real china. All of this is, as Kevin said, without the need to tip. During the third quarter, we anticipate expanding the test we currently have in several of our restaurants to further enhance our service levels in the dinner day part. On the throughput side, the operations team continues to work on optimizing our labor deployment in our restaurants. We find that we continue to have opportunities to ensure that the proper number of registers are being utilized, an important part of executing throughput at a high level, particularly during that busy lunch rush. Currently we are testing various deployment scenarios to maximize throughput while maintaining our standards for high-quality made to order foods and dishes. Turning to development. We are very pleased with the team's progress in maintaining a solid pipeline for the future while balancing our restaurant openings more evenly throughout the year. During…

Thank you, Keith. As Kevin and Keith mentioned, we are pleased with our second quarter financial results. Our restaurants continue to create a dining experience we are proud of while increasing shareholder value by driving profitability. Overall revenue growth increased 18.2% in the quarter to $89.2 million and year-to-date sales are $170.5 million, a 17.3% increase over the same timeframe in 2012. Our comparable restaurant sales were up 4.4% system wide in the second quarter with company-owned restaurants up 4.7% and franchise restaurants up 2.3%, respectively. Average sales of our company-owned restaurants have now increased to $1,184,000 on a trailing 12 month basis. Our company owned quarterly comp was driven by an increase in traffic of 2.4% and an increase in per person spend of 2.3%. The quarterly traffic comp did include the benefit of approximately 80 basis points due to one additional operating day this quarter compared with the second quarter of 2012. Turning to the increase in per person spend of 2.3%, roughly three quarters of that increase was due to an increase in menu prices that rolled out last July along with the internal signage and menu redesign that Kevin discussed, with the balance of the increase coming from the success in increased attachment associated with our limited time offering. Of note, we have rolled over a modest price increase at the beginning of the third quarter and are currently running price of roughly 1%. We do not anticipate any further menu price increases in the third quarter, however we do anticipate a modest incremental price increase in the fourth quarter. Restaurant level margin for the quarter was 21.3%, an increase of 40 basis points from last year. This increase was primarily a result of lower food costs. Our food cost in the second quarter of 26.1%…

Thanks, Dave. Again, we really appreciate your willingness to join in on the call, your interest in the company and for those of you that we are fortunate enough to serve in our restaurants, each week, we really appreciate your patronage and support every guest. I am going to close our prepared remarks by saying that I remain confident and determined in our beliefs and expectations over the long-term. Noodles & Company's continued track record of quality growth and comparable restaurant sales and margins, combined with the unique sustainable runway of new unit growth remains one of the best opportunities in the restaurant space. Our management team remains focused and disciplined on the deployment of initiatives to increase topline sales and improve margins while supporting our passionate team members in bringing the Noodles & Company dining experience to life for each and every guest. With that, I now want to urn it over to any questions you may have. So if the operator would please open the lines. Thank you.

(Operator Instructions) Our first question comes from John Glass from Morgan Stanley.

Relating to just your comp guidance, as you think about the back half of the year, 3% for the full year seems conservative given where you are, year-to-date, particularly with the comp in the second quarter. Any texture around that in terms of being conservative and you have got a little less pricing in the back half, has July been more challenging as it has been for the restaurants Anyway we can frame how you view three in terms of the context of the first half?

Sure, John. This is Dave, and I will start and then get Kevin some thoughts on the company's performance. So I will start the macro perspective. One way in which we evaluate our comp performances is through Black Box which we feel is pretty representative of what the industry is doing as whole. We have maintained our differential with industry over the past couple months. When we look a the Black Box index and have actually increased that gap a bit. That said, when we look at those results, as well as our own, there does seem to be some consumer headwinds and a little bit of a general slowdown in the industry, particularly in the first part of this quarter.

Yes, John, this is Kevin. I would echo that. As I look at quarter three and some of the other concepts, we did see a slight deceleration in comparable restaurant sales trends early in July. We think that’s partially due to just a subtle shift of July 4 from a Wednesday to a Thursday which changed a little bit of that as a weekend patterns, but the other thing for us, a lot of extreme heat in the upper Midwest and mid-Atlantic and we have a large percentage of restaurants that are located there. Since then, our comp trends have accelerated again and they are approaching some normalized rates and in Q2. While we maintain the guidance that we outlined in our earnings release which is approximately 3% for the second half of the year, we do think that’s influenced by modest price increase, the fall LTO, really not starting till the end of the quarter and some of the initiatives taking root, just the timing of that. We expect that we will have an increased momentum actually in Q4 from Q3. But we think the prudent guidance is to stay with the 3%.

That’s very helpful. Then, just one other question. Can you talk about the year two experience at your restaurants that have had the Your World Kitchen menu boards and positioning implement, as I think you are lapping that now if I am not mistaken. Is there enough data to talk about how those stores do in year two?

Sure, John. This is Dave. So we actually began testing of the Your World Kitchen merchandising, for those of you not familiar, in June of last year in the Raleigh market. It's still pretty early but we are very pleased with what the recent performance is at that market. It is only a handful of restaurants. So it’s a little bit early. We don’t start overlapping some of the larger markets going into Your World Kitchen merchandising until December really.

Hi, John, I will just add something on the consumer side of that. What I found encouraging in both the research from our team and from the guests is that how they think about the brand has really been different. They really get the broader appeal. They think about different use occasions. So the flavor profiles, the fact that we have this limited but focused line of soups, salads and sandwiches, there is a much greater awareness of that. So what I think is compelling and which will take time to change habits, and we are all kind of creatures of habit. We go in and order our favorites. What I am really encouraged by, is that I believe it will continue to increase trial and experimentation, which builds upon our strengths of world of flavors under one roof.

The next question comes from David Tarantino from Robert W. Baird.

My question is really about the new store productivity. I am just wondering if you can comment on the productivity you are seeing on some of the recent openings and what the contribution in the second quarter looked like relative to your expectations?

Hi, Dave, this is Keith. What we are seeing is, it is pretty consistent with what we have talked about during the road show, relative to the newer markets, are a little bit less as far as some of the new openings but in that range of the 85% and we are seeing that consistently. I think the difference than you might see is with that mix might be of new openings and new markets versus existing markets where you bring that balance up to that 90% that we talked about during the road show. But we are seeing that pretty consistently so far in Q2.

Yes, we have had a few openings, this is Dave again, that we are particularly excited about. We get one that set a new record with over $10,000 for a day from one of our franchise markets. Then a couple of others that have come really close to it. So especially the most recent openings, it's really looking solid.

As Keith mentioned, it really becomes a mix issue a little bit because what we mentioned and guided to that the newer markets and as you begin to fill in some of the mature markets, you have that 85% instead of 90% but the returns are there, and the new markets have a little more volatility but it is encouraging because we have had some really exciting strong openings. Then we have had the typical pattern with some other new markets. So I think its about the same.

Great, and then perhaps could you just maybe give an update on the pipeline for the openings as you look further out into 2014? I assume you are already working on real estate. How is it looking at this stage?

Yes, Dave, this is Keith again. We just had a meeting about that about two hours ago. Kevin, myself and the development team. We feel pretty good about what we are doing in 2014. I think if you talked to any real estate people, the market is tightening up some, but we are far and up ahead of that curve for '14 that we feel pretty good about the numbers that, again, we talked about during the road show. Our ability to spread that across, not only the geographies but also we feel pretty good about where they will balance themselves out as far as during the calendar year of 2014.

The next question comes from Michael Lasser from UBS.

Good afternoon, and thanks a lot for taking my question and congrats on becoming a publicly traded company. I had just a couple of questions. First, on the summer choppiness in July. Presumably that was more traffic related and lesser on the ticket side?

Hi, Michael. This is Dave. Yes, from the traffic side, actually we were relatively consistent a little bit less volatility there. As we said, we did overlap some price. So we are not currently only running at about 1%. We have been running 1.6% to 1.8%, somewhere in that neighborhood. As Kevin mentioned, a lot of that was really those first few weeks and we have seen some acceleration back to the same normalized traffic patterns that you saw in Q2.

Okay, my second question is on some of your learnings from the limited time offers, what are you learning about the consumer's willingness to accept menu enhancement and maybe menu extensions from you and how are you going to apply those lessons moving forward?

What we are finding is the platform inflexibility that we have particularly versus other fast casual restaurants is a pretty compelling offering for us because we introduced our limited time offerings generally with an entrée, our flatbread format has turned out to be really compelling. It’s a nice shareable dish. Flatbreads are kind of trendy and hot right now. So we are able to take a seasonal or enticing ingredient that’s compelling and people want to try and place it into different product formats. So what we were learning is that something we always knew is that diets, preferences, what people are hungry for at different times of the day, sometimes are preferred in an appetizer or an entrée and that our flexibility with our menu to meet those different needs is compelling and we are getting trial not always on the same item but through a variety of ways. It's encouraging. We are getting great feedback around quality and freshness because we can offer it and provide it in a variety of different formats.

I think the other pieces, it's Keith, and Kevin is spot on with all those pieces and what culminated for us is a competitive advantage as our ability that we really cook in our restaurants. That flexibility with those elements and our ability to produce and develop these items that are fresh and we can make to order really is one of the competitive advantages that we can really take advantage of and do taking advantage of with these LTOs.

Okay, my last question is, you discussed briefly the test of a service enhancement on the dinner day part. Can you just provide a little more detail on that? Thank you very much.

This is Kevin, and I will let Keith jump in. I really like it. I am pleased with what we are seeing because it puts an operational focus on dinner and I believe that’s an opportunity for us, particularly positioned against other fast casuals and taking market share from casual dining. The nuances of it really being people driven, helping folks discern, how to interact, communicate, have purposeful interaction. We have been patient and slow with. Maybe a little too slow. I would admit that. We have that internal debate. You can tell I am losing that debate a little bit. But I have a lot of confidence and I am pleased with what we are saying. I think it's critical to our long-term positioning and long-term growth and you are going to see us probably step up that pace from an incredibly slow rollout to a little more disciplined expansion of that.

I would just echo everything Kevin said. I would everything that he just stated.

Thanks for the help. That’s the most support I have had for a moment. So, thank you.

The question comes from Joseph Buckley from Bank of America.

I just had a follow-up to another question. What are you doing differently at dinner in terms of service enhancement?

Hi, Joe, this is Keith. What we are doing is really having a focus on, if you think about the guest and that dinner experience and you think about the willingness to take a little bit longer at that day part. You are kind of entertaining your family or that person you are meeting or that date night kind of before the movie, what we are doing is really teaching our team to take advantage of that second glass of wine or talking about that appetizer or talking about some desserts, enhanced desserts that we are rolling out along with this new service enhancement project that we are doing and really teaching our team. Our team, as Kevin talked about, are friendly people. What we are doing is jut elevating that a little bit more to talk about some of the other options at that dinner day part that they can take part of, like that second glass of wine or that beer or that appetizer or that dessert and teaching the team too as they are going through and, as Kevin said, with the purpose to talk to that guest and follow-up and when you are taking that bowl away and say, would you like a cup of coffee tonight or would you like a little bit of dessert or would you like a second beer before you go tonight and really teaching that part of service interaction and that’s what makes it different.

This is Kevin. The consumer needs and behaviors are different at different day parts and we, I think, have to continue to challenge ourselves on how we position the brand from a day part segmentation standpoint. Our DNA is built to do this. We should be able to do it better than most and this is an area where the guests will choose and opt in to some of the new offerings, stay a little longer and spend more money. Where we have put this in restaurants, we have seen that come to life.

The beauty of that, to Kevin's point, is that they do it of their own discretion. It's something they opt in to and have choice and feel good about.

(Operator Instructions). The next question comes from Nicole Miller Regan from Piper Jaffray.

Thanks, good afternoon. Could you talk a little bit about how catering may have added to the comp and how you are growing that right now and how that might evolve and specifically kind of investments you might have to make in assets and people? Thank you.

Hi, Nicole, this is Keith. Right now, it's only a small part of what we do and right now we do it through our program called the Square Bowl, which really is an opportunity for us to feed anywhere from four to six people up to about 50, on that high end. What really the investment for us is going to be, Nicole, is really on getting the right packaging so we can make sure that our food will carry the way it does in the Square Bowl. So a lot of it is entered around that piece. Our marketing team, Dan and his team are putting some really good materials together. So we can talk about it. Get the guests to understand it. Really understand how great of a catering program we can have and how well several of our dishes carry and fulfill that need around catering. So a lot of its around that piece of just getting those elements out there and having our teams talk about it. Where that goes from a standpoint of having specific people who go out and build the catering business, we are not that far yet but I think just internally at the restaurant level and talking to our guests and in identifying those opportunities, I think we have got them upside there once we get the packaging and marketing materials to go with it.

On the franchise side, can you talk a little bit about the franchisees you have right now? How long they have been with you? Then if you have signed up any new franchisees and then any contractual growth obligations they may have?

Hi, Nicole, this is Keith. I think the beauty of where we are at now, I think following us, you know that we have a lot of spread between longer-term franchisees that were here probably six or seven years ago, and the team and what they have done and helped build the brand. Then we have got a group that's just come on probably in the last, anywhere from 12 to six months, as I call them the legacy franchisees have done very well. They have built their volumes, built their restaurant, continue to build out their ADAs. The second group that’s just starting to get onboard particularly the Long Island opening was a Doherty group. That’s one of the newer ones. We just had one open in New Jersey. We had one open up in West Hartford. We have a couple down the road that are going to open in the Boston market and then also the Philadelphia market. So those of the newer groups that are coming onboard that you will start to see them build into that restaurant growth on the franchise side. Those numbers are pretty substantial. If you look at them collectively on what their ADAs are, Area Development Agreements are and how many restaurants that we will be building into the future. But I don’t think it is going to change as we have always talked about and talked about on the road show. We are still going to be a significantly company operated restaurants, even with that growth that they are going to have on their side. As far as new franchisees entering into the system, we don’t have any right now.

Nicole, we do have folks in the pipeline that (inaudible) is talking to but nothing to really announce as new entities. As Keith said, the ones that we have recently signed and particularly that have opened restaurants. These are large organizations with a lot of experience in the restaurant space that have a sizable commitment in their ADA.

Yes.

And I think that there is a possibility that that could potentially be upside for us.

The next question comes from Andy Barish from Jefferies.

I was wondering if you can give us a little color on the better than expected comp. Maybe if there was a demonstrable difference between lunch or dinner or the asparagus really, pulled through more than you expected and then just to continuing on the vein of questions on the LTOs, the fall LTO, I think that’s a new one, it sounds like the Parmesan Alfredo, how did that test relative to, say, something that you had before, like asparagus and then brought back?

Sure, this is Dave. I will start off talking about Q2 and then turn it over to Kevin to talk about the fall LTO. The asparagus definitely was a benefit but I think what was particularly powerful about that platform is its ability to expand the attachment rates. When we look at the flatbread, we look at the gluten-free noodles. Those are items that are, while they were part of a limited time offering, it really is a platform that we can carry on forward. So that’s much more of a long-term benefit than the LTO on its own. But overall, it was really just a very consistent quarter from week-to-week and then even by day part by market. There wasn’t a ton of volatility that we saw a little bit of that slowdown into the tail end of June and early July that we talked about earlier. But overall pretty consistent.

On the Alfredo dish, the majority of our testing was internal, a lot with our team and through just some culinary taste panels here at the office. We didn’t put it in restaurants and primarily because it, far in a way, month in, month out for a year is our most requested dish. It’s a dish that our guest want us to have and expect us to have. So we have a extremely high degree of confidence that it's going to be widely accepted and ordered and create some trade up. I think as we typically try to do in culinary is to create our own unique spin on an ordinary dish to make it just a little nicer and a little better than everybody else's. I had mentioned, Montemore Cheese, that we are going to use on it and it really is this sweet, creamy, slightly fruity cheese that gives it a unique wonderful flavor and the taste is phenomenal. For those that like Italy and just the romance they put around everything, it's actually named after the Dolomite mountains from this little town of Sartori in Italy where it's from, which, in the whole town, I think the rumor the whole mountain is about romance and falling in love with Italy. So maybe we are talking about the romance and falling in love with our Alfredo dish but it really is spectacular.

The next question comes from Nick Setyan from Wedbush Securities.

This is Colin Radke, in for Nick. Just wondering in terms f company and franchise mix. How do you think about development going forward? Are there markets that you see as more favorable in terms of franchising? Just sort of your thought processes as far the company and franchise development goes? Any commentary around that would be great. Thanks.

What we shared during the road show is still our belief today and that is we believe it will be predominantly a company operated market that we believe franchising and having a strong, passionate, provocative franchisees to help grow the brand is important and we have this barbell strategy with them, and that’s potentially some smaller markets that are more remote where there is a lot of windshield time between getting to them are very good for franchise models. Some of that losing that town and provides that local owner or entrepreneur. So in some of those cases where we can't get economies of scale and they are difficult restaurants to run from human capital, we will continue to franchise those markets. I would tell you those small markets are phenomenal. They do extremely well for us. Then on the other end of the barbell, some of the larger markets, there are opportunities to carve up those cities in a significant number of restaurants that can be built there in the quadrants and allow more than one ownership entity and in some of those we will share with franchisees and company markets and we will just create ADAs where there is a good convenient slide and we butt up against each other to sell in contiguous trading areas.

At this time, I am showing no further questions. I would now like to turn the call back over to management for closing remarks.

I kind of close with the prepared remarks with what I really believe in and want to leave you with and that is our management team, myself included, have a deep confidence and belief in the brand and our ability to continue to build Noodles & Company into an enduring quality brand over time. We are diligently focused on that and excited in getting up everyday and doing that. So again, we are pleased with our first quarter, getting out of the box and very pleased with everyone's commitment and time that you put on our behalf. So thank you very much.

Ladies and gentlemen, that does conclude the conference for today. Again, thank you for your participation. You may all disconnect. Have a good day.