Noodles & Company is facing possible delisting again.
The fast-casual chain was notified by the U.S. Securities and Exchange Commission this week that its stock price has fallen below the required minimum closing bid price of $1 per share for more than 30 business days, which means it is out of compliance with Nasdaq listing rules.
This is the second delisting warning the company has received in the past six months. The Broomfield, Colorado-based chain received a notification on Dec. 24 last year for the same problem.
Delisting can be a problem for publicly traded companies because they then are traded over the counter, which makes it more difficult for investors to purchase stock.
As it did the first time, Noodles has 180 calendar days, or until Dec. 22, to regain compliance. The company’s stock price must be at least $1 per share for at least 10 consecutive days during the grace period, though Noodles could also ask for an extension.
The company could also seek to transfer its listing to The Nasdaq Capital Market for another 180 days. But if Nasdaq doesn’t see a cure in the company’s future, Noodles could be delisted.
In the filing, Noodles said it would continue to monitor the closing bid price and will consider options that include proposing a reverse stock split, which would require stockholder approval.
Noodles, meanwhile, is in the midst of a turnaround effort. Earlier this year, the 460-unit chain launched its biggest menu overhaul in company history, attempting to burnish its reputation for pasta expertise.
That effort appeared to be showing results in the first quarter. Noodles reported same-store sales up 4.4%, including a 1.8% increase in traffic. CEO Drew Madsen said in May the momentum was continuing in the second quarter, despite the challenging economic climate.
That momentum, however, does not appear to be reflected in the chain’s stock price.
Noodles’ stock closed at about 73 cents per share on Thursday. Over the past 52 weeks, the shares have ranged from a low of 55 cents to $1.93.
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