Grows Revenue and Adjusted EBITDA in the
Quarter
Opens Four Restaurants in the Quarter;
Introduces 2024 Targets and Authorizes Additional Share
Repurchase
The ONE Group Hospitality, Inc. (“The ONE Group” or the
“Company”) (Nasdaq: STKS) today reported its financial results for
the fourth quarter and full year ended December 31, 2023.
Highlights for the fourth quarter compared to the same
quarter in 2022 are as follows:
- Total GAAP revenues increased 1.8% to $89.9 million from
$88.3 million;
- Comparable sales* decreased 4.3% compared to 2022 and
increased 40.1% compared to 2019;
- GAAP net income attributable to The ONE Group was $4.6
million, or $0.15 per share ($0.17 adjusted net income per share)
****, compared to GAAP net income of $5.1 million, or $0.15 per
share ($0.19 adjusted net income per share) ****
- Restaurant Operating Profit*** increased 3.8% to $16.5
million from $15.9 million; and
- Adjusted EBITDA** increased 11.3% to $14.5 million from
$13.0 million.
Highlights for the full year 2023 compared to 2022 are as
follows:
- Total GAAP revenues increased 5.1% to $332.8 million
from $316.6 million;
- Consolidated comparable sales* decreased 2.7% and
increased 43.8% compared to 2019;
- GAAP net income attributable to The ONE Group was $4.7
million, or $0.15 per share ($0.24 adjusted net income per
share)****, compared to GAAP net income of $13.5 million, or $0.40
per share ($0.55 adjusted net income per share)****
- Restaurant Operating Profit*** decreased slightly to
$50.4 million compared to $50.8 million;
- Adjusted EBITDA** was $40.1 million compared to $41.3
million.
“We are pleased with our fourth quarter results, especially our
focus to improve restaurant-level margins and leverage our G&A.
During the fourth quarter, we increased restaurant operating profit
by 40 basis points to 19.3% of Company-owned restaurant net
revenues, reduced G&A by 80 basis points to 8.8% of revenue and
grew adjusted EBITDA by 11.3%. As we continue our expansion, we
should benefit from greater leverage through the best practices and
operating efficiencies we have put in place across our
organization,” said Emanuel “Manny” Hilario, President and CEO of
The ONE Group.
Hilario continued, “2023 marked a year of robust unit
development. We added four new restaurants during the fourth
quarter. Importantly, these locations and restaurant locations we
opened earlier this year are performing well, bolstering our
confidence in the long-term EBITDA and earnings power of our
pipeline. In 2024, we plan to open six to eight new restaurants,
including one or two managed and licensed restaurants. Earlier
today, we opened an STK in Washington DC at the Marriott Grand
Marquis and currently have three Company-owned restaurants under
construction. Our strong reception in new geographies gives us line
of sight towards our total addressable market of 400 venues
consisting of 200 STKs globally and 200 Kona Grills
domestically.”
*Comparable sales represent total U.S. food and beverage sales
at owned and managed units opened for at least a full 18-months.
This measure includes total revenue from our owned and managed
locations. The Company monitors sales growth at its established
restaurant base in addition to growth that results from restaurant
acquisitions. **We define Adjusted EBITDA as net income
before interest expense, provision for income taxes, depreciation
and amortization, non-cash impairment loss, non-cash rent expense,
pre-opening expenses, non-recurring gains and losses including
incremental costs related to COVID-19, stock-based compensation and
certain transactional costs. Adjusted EBITDA has been presented in
this press release and is a supplemental measure of financial
performance that is not required by, or presented in accordance
with, GAAP. Refer to the reconciliation of Net Income to Adjusted
EBITDA in this release. ***We define Restaurant Operating
Profit as owned restaurant net revenue minus owned restaurant cost
of sales and owned restaurant operating expenses. Restaurant
Operating Profit has been presented in this press release and is a
supplemental measure of financial performance that is not required
by, or presented in accordance with, GAAP. Refer to the
reconciliation of Operating income to Restaurant Operating Profit
in this release. ****We define Adjusted Net Income as net
income before COVID-19 costs, lease termination expenses, one-time
stock-based compensation, non-recurring costs, non-cash rent during
the pre-opening period and the income tax effect of any
adjustments. Adjusted Net Income has been presented in this press
release and is a supplemental measure of financial performance that
is not required by, or presented in accordance with, GAAP. Refer to
the reconciliation of Net Income to Adjusted Net Income in this
release.
Fourth Quarter 2023 Financial Results
Total GAAP revenues increased $1.6 million, or 1.8%, to $89.9
million in the fourth quarter of 2023 from $88.3 million in the
fourth quarter of 2022.
Total owned restaurant net revenues increased $1.3 million, or
1.5%, to $85.2 million in the fourth quarter of 2023 from $83.9
million in the fourth quarter of 2022. The increase was primarily
attributable to the six Company owned venues opened in 2023.
Consolidated comparable sales* decreased 4.3% compared to the
fourth quarter of 2022. STK same store sales decreased 4.6% while
Kona Grill same store sales decreased 3.9%. Compared to 2019, our
pre-pandemic base year, same store sales for the fourth quarter of
2023 increased 40.1% compared to the fourth quarter of 2019; STK
same store sales increased 55.4%, including a 41.3% increase in
traffic, while Kona Grill same store sales increased 22.7%.
Management, license and incentive fee revenues increased $0.3
million, or 7.6%, to $4.8 million in the fourth quarter of 2023
from $4.4 million in the fourth quarter of 2022. The increase was
primarily driven by increased revenue and profit at our North
American managed and license properties and STK Stratford.
Restaurant Operating Profit*** increased $0.6 million or 3.8% to
$16.5 million in the fourth quarter of 2023 from $15.9 million in
the fourth quarter of 2022. As a percentage of Company-owned
restaurant net revenues, operating profit margin increased 40 basis
points to 19.3% in the fourth quarter of 2023 from 18.9% in the
fourth quarter of 2022. The increase was related to price increases
and operational cost reduction initiatives partially offset by
increased commodity prices and labor inflation.
General and administrative costs decreased $0.5 million, or
6.5%, to $7.9 million in the fourth quarter of 2023 from $8.5
million in the fourth quarter of 2022. The decrease was
attributable to decreases in travel and incentive-based performance
compensation expenses. As a percentage of revenues, general and
administrative costs were 8.8% compared to 9.6%.
Pre-opening expenses were $2.9 million in the fourth quarter of
2023 compared to $1.7 million in the fourth quarter of 2022. The
increase was related to payroll, training, and non-cash pre-open
rent for STK Charlotte, Kona Grill Phoenix, STK Boston and STK Salt
Lake City, all of which opened in the fourth quarter, and for STK
and Kona Grill restaurants currently under development.
GAAP net income attributable to The ONE Group Hospitality, Inc.
in the fourth quarter of 2023 was $4.6 million, or $0.15 per share,
compared to GAAP net income of $5.1 million, or $0.15 per share, in
the fourth quarter of 2022.
Adjusted Net Income**** attributable to The ONE Group
Hospitality, Inc. in the fourth quarter of 2023 was $5.3 million,
or $0.17 per share, compared to Adjusted Net Income of $6.5
million, or $0.19 per share, in the fourth quarter of 2022.
Adjusted EBITDA** increased $1.5 million, or 11.3%, to $14.5
million in the fourth quarter of 2023 from $13.0 million in the
fourth quarter of 2022.
Full Year 2023 Financial Results
Total GAAP revenues increased $16.1 million, or 5.1%, to $332.8
million in 2023 from $316.6 million in 2022.
Total owned restaurant net revenues increased $16.5 million, or
5.5%, to $317.4 million in 2023 from $300.9 million for 2022. The
increase was primarily attributable to a full year of sales for two
STK restaurants that opened in the second half of 2022, the opening
of three STK restaurants in the fourth quarter of 2023 and the
opening of three Kona Grill restaurants during 2023.
Consolidated comparable sales* decreased 2.7% compared to 2022.
STK same store sales decreased 3.0% while Kona Grill same store
sales decreased 2.2%. Compared to 2019, the pre-pandemic base year,
consolidated comparable sales increased 43.8%; STK same store sales
increased 64.1%, including a 39.1% increase in traffic, while Kona
Grill same store sales increased 23.6%.
Management, license and incentive fee revenues decreased $0.4
million, or 2.4%, to $15.4 million in 2023 compared to $15.8
million in 2022. The decrease was primarily attributable to the
non-renewal of the management agreement for Radio at the ME London
hotel.
Restaurant Operating Profit*** decreased to $50.4 million and
represented 15.9% of Company-owned restaurant net revenues in 2023
compared to $50.8 million and 16.9% of Company-owned restaurant net
revenues in 2022. The decrease was primarily due to consolidated
higher average wage and operating costs which were subject to
inflationary pressures during 2023 that affected the restaurant
industry.
STK Restaurant operating profit was $38.5 million and
represented 20.9% of Company-owned STK restaurant net revenues
compared to 21.5% in 2022. Kona Grill operating profit was $12.3
million and represented 9.3% of Company-owned Kona Grill restaurant
net revenues compared to 10.8% in 2022.
GAAP net income attributable to The ONE Group Hospitality, Inc.
was $4.7 million in 2023, or $0.15 per share, compared to $13.5
million, or $0.40 per share in 2022.
Adjusted Net Income**** attributable to The ONE Group
Hospitality, Inc. was $7.8 million in 2023, or $0.24 per share,
compared to $18.7 million, or $0.55 per share in 2022.
Adjusted EBITDA** decreased $1.2 million, or 2.9%, to $40.1
million in 2023 from $41.3 million in 2022.
Restaurant Development – STK and Kona Grill
Restaurants
The Company opened six new restaurants in 2023:
- Owned STK restaurant in Charlotte, North Carolina
- Owned STK restaurant in Boston, Massachusetts
- Owned STK restaurant in Salt Lake City, Utah
- Owned Kona Grill restaurant in Columbus, Ohio
- Owned Kona Grill restaurant in Riverton, Utah
- Owned Kona Grill restaurant in Phoenix, Arizona
The Company intends to add six to eight new restaurants in 2024,
inclusive of one owned STK restaurant in Washington, DC that opened
in March 2024.
There are currently three restaurants under construction in the
following cities:
- Owned STK restaurant in Aventura, Florida
- Owned Kona Grill restaurant in Tigard, Oregon
- Owned Salt Water Social restaurant in Denver, Colorado
Share Repurchase Program
On September 7, 2022, the Company commenced a share repurchase
program for up to $10 million of its outstanding common stock, and
subsequently increased authorized repurchases by $5 million. During
the years ended December 31, 2023 and 2022, the Company purchased
1.2 million and 1.1 million shares for aggregate consideration of
$7.9 million and $7.1 million, respectively. As of December 31,
2023, the Company repurchased 2.3 million shares for $15.0 million
under the program. The Company’s board has authorized an additional
$5 million to this program.
2024 Targets
The Company is providing the following targets for 2024:
Financial Results and Other Select
Data
2024 Guidance
Total GAAP revenues
$360M to $380M
Managed, license and incentive fee
revenues
$15M to $16M
Total owned operating expenses as a
percentage of owned restaurant net revenue
Approximately 83.0%
Total G&A excluding stock-based
compensation
Approximately $30M
Consolidated Adjusted EBITDA
Approximately $45M
Restaurant pre-opening expenses
$4M to $5M
Operating income
$13M to $15M
Effective income tax rate
5% to 10%
Total capital expenditures, net of
allowances received by landlords
$30M to $35M
Number of new system-wide venues
Six to Eight
Conference Call and Webcast
Emanuel “Manny” Hilario, President and Chief Executive Officer,
and Tyler Loy, Chief Financial Officer, will host a conference call
and webcast today at 4:30 PM Eastern Time.
The conference call can be accessed live over the phone by
dialing 412-542-4186. A replay will be available after the call and
can be accessed by dialing 412-317-6671; the passcode is 10186635.
The replay will be available until Tuesday, March 26, 2024.
The webcast can be accessed from the Investor Relations tab of
The ONE Group’s website at www.togrp.com under “News / Events”.
About The ONE Group
The ONE Group Hospitality, Inc. (Nasdaq: STKS) is an
international restaurant company that develops and operates upscale
and polished casual, high-energy restaurants and lounges and
provides hospitality management services for hotels, casinos and
other high-end venues both in the U.S. and internationally. The ONE
Group’s focus is to be the global leader in Vibe Dining, and its
primary restaurant brands and operations are:
- STK, a modern twist on the American steakhouse concept with 28
restaurants in major metropolitan cities in the U.S., Europe and
the Middle East, featuring premium steaks, seafood and specialty
cocktails in an energetic upscale atmosphere.
- Kona Grill, a polished casual, bar-centric grill concept with
27 restaurants in the U.S., featuring American favorites,
award-winning sushi, and specialty cocktails in an upscale casual
atmosphere.
- ONE Hospitality, The ONE Group’s food and beverage hospitality
services business, develops, manages and operates premier
restaurants and turnkey food and beverage services within high-end
hotels and casinos currently operating 8 venues in the U.S. and
Europe.
Additional information about The ONE Group can be found at
www.togrp.com.
Cautionary Statement on Forward-Looking Statements
This press release includes “forward-looking statements” within
the meaning of the “safe harbor” provisions of the United States
Private Securities Litigation Reform Act of 1995, including with
respect to restaurant openings and 2024 financial targets.
Forward-looking statements may be identified by the use of words
such as “target,” “intend,” “anticipate,” “believe,” “expect,”
“estimate,” “plan,” “outlook,” and “project” and other similar
expressions that predict or indicate future events or trends or
that are not statements of historical matters. A number of factors
could cause actual results or outcomes to differ materially from
those indicated by such forward-looking statements, including but
not limited to: (1) our ability to open new restaurants and food
and beverage locations in current and additional markets, grow and
manage growth profitably, maintain relationships with suppliers and
obtain adequate supply of products and retain employees; (2)
factors beyond our control that affect the number and timing of new
restaurant openings, including weather conditions and factors under
the control of landlords, contractors and regulatory and/or
licensing authorities; (3) our ability to successfully improve
performance and cost, realize the benefits of our marketing efforts
and achieve improved results as we focus on developing new
management and license deals; (4) changes in applicable laws or
regulations; (5) the possibility that The ONE Group may be
adversely affected by other economic, business, and/or competitive
factors; and (6) other risks and uncertainties indicated from time
to time in our filings with the Securities and Exchange Commission,
including our Annual Report on Form 10-K filed for the year ended
December 31, 2023 and Quarterly Reports on Form 10-Q.
Investors are referred to the most recent reports filed with the
Securities and Exchange Commission by The ONE Group Hospitality,
Inc. Investors are cautioned not to place undue reliance upon any
forward-looking statements, which speak only as of the date made,
and we undertake no obligation to update or revise the
forward-looking statements, whether as a result of new information,
future events or otherwise.
THE ONE GROUP HOSPITALITY,
INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(in thousands, except earnings
per share and related share information)
For the three months ended
December 31,
For the year ended December
31,
2023
2022
2023
2022
Revenues:
(unaudited)
(unaudited)
Owned restaurant net revenue
$
85,165
$
83,874
$
317,366
$
300,859
Management, license and incentive fee
revenue
4,772
4,437
15,403
15,779
Total revenues
89,937
88,311
332,769
316,638
Cost and expenses:
Owned operating expenses:
Owned restaurant cost of sales
19,426
20,134
75,727
75,365
Owned restaurant operating expenses
49,266
47,870
191,250
174,689
Total owned operating expenses
68,692
68,004
266,977
250,054
General and administrative (including
stock-based compensation of $1,234, $1,195, $5,032 and $3,985 for
the quarters and years ended December 31, 2023 and 2022,
respectively)
7,947
8,495
30,751
29,081
Depreciation and amortization
4,770
3,562
15,664
12,134
Pre-opening expenses
2,850
1,687
8,855
5,519
Transaction costs
207
72
207
123
Lease termination expenses
—
2
—
257
COVID-19 related expenses
—
—
—
2,534
Other expenses
543
630
1,021
630
Total costs and expenses
85,009
82,452
323,475
300,332
Operating income
4,928
5,859
9,294
16,306
Other expenses, net
Interest expense, net of interest
income
1,927
726
7,028
2,113
Total other expenses, net
1,927
726
7,028
2,113
Income before provision for income
taxes
3,001
5,133
2,266
14,193
(Benefit) provision for income taxes
(1,533
)
153
(1,760
)
874
Net income
4,534
4,980
4,026
13,319
Less: net loss attributable to
noncontrolling interest
(109
)
(98
)
(692
)
(215
)
Net income attributable to The ONE Group
Hospitality, Inc.
$
4,643
$
5,078
$
4,718
$
13,534
Currency translation gain (loss)
68
124
(61
)
(224
)
Comprehensive income attributable to The
One Group Hospitality, Inc.
$
4,711
$
5,202
$
4,657
$
13,310
Net income attributable to The ONE Group
Hospitality, Inc. per share:
Basic net income per share
$
0.15
$
0.16
$
0.15
$
0.42
Diluted net income per share
$
0.15
$
0.15
$
0.15
$
0.40
Shares used in computing basic income per
share
31,249,833
32,114,857
31,556,437
32,400,515
Shares used in computing diluted income
per share
31,689,332
33,195,525
32,287,864
33,871,797
The following table sets forth certain statements of operations
data as a percentage of total revenues for the periods indicated.
Certain percentage amounts may not sum to total due to
rounding.
For the three months ended
December 31,
For the year ended December
31,
2023
2022
2023
2022
Revenues:
Owned restaurant net revenue
94.7
%
95.0
%
95.4
%
95.0
%
Management, license and incentive fee
revenue
5.3
%
5.0
%
4.6
%
5.0
%
Total revenues
100.0
%
100.0
%
100.0
%
100.0
%
Cost and expenses:
Owned operating expenses:
Owned restaurant cost of sales (1)
22.8
%
24.0
%
23.9
%
25.0
%
Owned restaurant operating expenses
(1)
57.8
%
57.1
%
60.3
%
58.1
%
Total owned operating expenses (1)
80.7
%
81.1
%
84.1
%
83.1
%
General and administrative (including
stock-based compensation of 1.4%, 1.4%, 1.5% and 1.3% for the
quarters and years ended December 31, 2023 and 2022,
respectively)
8.8
%
9.6
%
9.2
%
9.2
%
Depreciation and amortization
5.3
%
4.0
%
4.7
%
3.8
%
Pre-opening expenses
3.2
%
1.9
%
2.7
%
1.7
%
Transaction costs
0.2
%
0.1
%
0.1
%
—
%
Lease termination expenses
—
%
0.0
%
—
%
0.1
%
COVID-19 related expenses
—
%
—
%
—
%
0.8
%
Other expenses
0.6
%
0.7
%
0.3
%
0.2
%
Total costs and expenses
94.5
%
93.4
%
97.2
%
94.9
%
Operating income
5.5
%
6.6
%
2.8
%
5.1
%
Other expenses, net
Interest expense, net of interest
income
2.1
%
0.8
%
2.1
%
0.7
%
Total other expenses, net
2.1
%
0.8
%
2.1
%
0.7
%
Income before provision for income
taxes
3.3
%
5.8
%
0.7
%
4.5
%
(Benefit) provision for income taxes
(1.7
)%
0.2
%
(0.5
)%
0.3
%
Net income
5.0
%
5.6
%
1.2
%
4.2
%
Less: net loss attributable to
noncontrolling interest
(0.1
)%
(0.1
)%
(0.2
)%
(0.1
)%
Net income attributable to The ONE Group
Hospitality, Inc.
5.2
%
5.8
%
1.4
%
4.3
%
_______________________
(1)
These expenses are being shown as a
percentage of owned restaurant net revenue.
THE ONE GROUP HOSPITALITY,
INC.
CONSOLIDATED BALANCE
SHEETS
(in thousands, except share
information)
December 31,
December 31,
2023
2022
ASSETS
Current assets:
Cash and cash equivalents
$
21,047
$
55,121
Accounts receivable
17,264
15,220
Inventory
6,184
5,728
Other current assets
1,809
2,091
Due from related parties
376
376
Total current assets
46,680
78,536
Property and equipment, net
139,908
94,087
Operating lease right-of-use assets
95,075
85,161
Deferred tax assets, net
14,757
12,323
Intangibles, net
15,306
15,290
Other assets
4,636
4,774
Security deposits
883
853
Total assets
$
317,245
$
291,024
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
19,089
$
13,055
Accrued expenses
28,333
22,409
Deferred gift card revenue and other
2,077
2,115
Current portion of operating lease
liabilities
6,897
6,336
Current portion of long-term debt
1,500
1,500
Other current liabilities
266
256
Total current liabilities
58,162
45,671
Operating lease liabilities, net of
current portion
120,481
105,247
Long-term debt, net of current portion
70,410
70,544
Other long-term liabilities
832
972
Total liabilities
249,885
222,434
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.0001 par value,
75,000,000 shares authorized; 33,560,428 issued and 31,283,975
outstanding at December 31, 2023 and 32,829,995 shares issued and
31,735,423 outstanding at December 31, 2022
3
3
Preferred stock, $0.0001 par value,
10,000,000 shares authorized; no shares issued and outstanding at
December 31, 2023 and December 31, 2022, respectively
—
—
Treasury stock, 2,276,453 and 1,094,572
shares at cost at December 31, 2023 and December 31, 2022,
respectively
(15,051
)
(7,169
)
Additional paid-in capital
58,270
55,583
Retained earnings
28,884
24,166
Accumulated other comprehensive loss
(2,930
)
(2,869
)
Total stockholders’ equity
69,176
69,714
Noncontrolling interests
(1,816
)
(1,124
)
Total equity
67,360
68,590
Total liabilities and equity
$
317,245
$
291,024
Reconciliation of Non-GAAP Measures
We prepare our financial statements in accordance with generally
accepted accounting principles (GAAP). In this press release, we
also make references to the following non-GAAP financial measures:
total food and beverage sales at owned and managed units, Adjusted
EBITDA, Restaurant Operating Profit and Adjusted Net Income
(Loss).
Total food and beverage sales at owned and managed units. Total
food and beverage sales at owned and managed units represents our
total revenue from our owned operations as well as the revenue
reported to us with respect to sales at our managed locations,
where we earn management and incentive fees at these locations. We
believe that this measure represents a useful internal measure of
performance as it identifies total sales associated with our brands
and hospitality services that we provide. Accordingly, we include
this non-GAAP measure so that investors can review financial data
that management uses in evaluating performance, and we believe that
it will assist the investment community in assessing performance of
restaurants and other services we operate, whether or not the
operation is owned by us. However, because this measure is not
determined in accordance with GAAP, it is susceptible to varying
calculations and not all companies calculate these measures in the
same manner. As a result, this measure as presented may not be
directly comparable to a similarly titled measure presented by
other companies. This non-GAAP measure is presented as supplemental
information and not as an alternative to any GAAP measurements. The
following table includes a reconciliation of our GAAP revenue to
total food and beverage sales at our owned and managed units (in
thousands):
For the three months ended
December 31,
For the year ended December
31,
2023
2022
2023
2022
(unaudited)
(unaudited)
(unaudited)
(unaudited)
Owned restaurant net revenue (1)
$
85,165
$
83,874
$
317,366
$
300,859
Management, license and incentive fee
revenue
4,772
4,437
15,403
15,779
GAAP revenues
$
89,937
$
88,311
$
332,769
$
316,638
Food and beverage sales from managed units
(1)
29,805
34,985
119,024
125,904
Total food and beverage sales at owned and
managed units
$
114,970
$
118,859
$
436,390
$
426,763
_________________________
(1)
Components of total food and beverage
sales at owned and managed units.
The following table presents the elements of the quarterly and
annual Same Store Sales measure for 2022 and 2023:
2022 vs. 2021
2023 vs. 2022
Q1
Q2
Q3
Q4
YTD
Q1
Q2
Q3
Q4
YTD
US STK Owned Restaurants
57.1
%
17.8
%
4.0
%
0.2
%
15.7
%
1.0
%
(10.1
)%
(7.8
)%
(6.5
)%
(6.0
)%
US STK Managed Restaurants
103.6
%
26.6
%
2.1
%
(0.8
)%
21.9
%
15.4
%
2.5
%
0.7
%
0.7
%
4.9
%
US STK Total Restaurants
66.7
%
19.8
%
3.5
%
0.0
%
17.1
%
5.3
%
(6.8
)%
(5.5
)%
(4.6
)%
(3.0
)%
Kona Grill Total Restaurants
21.9
%
3.7
%
(3.6
)%
(7.6
)%
2.5
%
(4.3
)%
(1.5
)%
1.1
%
(3.9
)%
(2.2
)%
Combined Same Store Sales
45.1
%
12.8
%
0.5
%
(3.1
)%
10.8
%
1.6
%
(4.7
)%
(3.0
)%
(4.3
)%
(2.7
)%
Adjusted EBITDA. We define Adjusted EBITDA as net income before
interest expense, provision for income taxes, depreciation and
amortization, non-cash impairment loss, non-cash rent expense,
pre-opening expenses, non-recurring gains and losses, stock-based
compensation, COVID-19 related expense and certain transactional
costs. Not all the aforementioned items defining Adjusted EBITDA
occur in each reporting period but have been included in our
definitions of terms based on our historical activity. Adjusted
EBITDA has been presented in this press release and is a
supplemental measure of financial performance that is not required
by, or presented in accordance with, GAAP.
The following table presents a reconciliation of net income to
EBITDA and Adjusted EBITDA for the periods indicated (in
thousands):
For the three months ended
December 31,
For the year ended December
31,
2023
2022
2023
2022
Net income attributable to The ONE Group
Hospitality, Inc.
$
4,643
$
5,078
$
4,718
$
13,534
Net loss attributable to noncontrolling
interest
(109
)
(98
)
(692
)
(215
)
Net income
4,534
4,980
4,026
13,319
Interest expense, net of interest
income
1,927
726
7,028
2,113
(Benefit) provision for income taxes
(1,533
)
153
(1,760
)
874
Depreciation and amortization
4,770
3,562
15,664
12,134
EBITDA
9,698
9,421
24,958
28,440
Pre-opening expenses
2,850
1,687
8,855
5,519
Stock-based compensation
1,234
1,195
5,032
3,985
Transaction costs
207
72
207
123
COVID-19 related expenses
—
—
—
2,534
Lease termination expense (1)
—
2
—
257
Non-cash rent (2)
(61
)
(4
)
(340
)
(164
)
Other expenses
543
630
1,021
630
Adjusted EBITDA
14,471
13,003
39,733
41,324
Adjusted EBITDA attributable to
noncontrolling interest
(13
)
(5
)
(339
)
72
Adjusted EBITDA attributable to The ONE
Group Hospitality, Inc.
$
14,484
$
13,008
$
40,072
$
41,252
_________________________
(1)
Lease termination expense are costs
associated with closed, abandoned and disputed locations or
leases.
(2)
Non-cash rent expense is included in owned
restaurant operating expenses and general and administrative
expense on the consolidated statements of operations and
comprehensive income.
Restaurant Operating Profit. We define Restaurant Operating
Profit as owned restaurant net revenue minus owned restaurant cost
of sales and owned restaurant operating expenses.
We believe Restaurant Operating Profit is an important component
of financial results because: (i) it is a widely used metric within
the restaurant industry to evaluate restaurant-level productivity,
efficiency, and performance, and (ii) we use Restaurant Operating
Profit as a key metric to evaluate our restaurant financial
performance compared to our competitors. We use these metrics to
facilitate a comparison of our operating performance on a
consistent basis from period to period, to analyze the factors and
trends affecting our business and to evaluate the performance of
our restaurants.
The following table presents a reconciliation of Operating
income to Restaurant Operating Profit for the period indicated (in
thousands):
For the three months ended
December 31,
For the year ended December
31,
2023
2022
2023
2022
Operating income as reported
$
4,928
$
5,859
$
9,294
$
16,306
Management, license and incentive fee
revenue
(4,772
)
(4,437
)
(15,403
)
(15,779
)
General and administrative
7,947
8,495
30,751
29,081
Depreciation and amortization
4,770
3,562
15,664
12,134
COVID-19 related expenses
-
-
-
2,534
Pre-opening expenses
2,850
1,687
8,855
5,519
Lease termination expense
-
2
-
257
Transaction costs
207
72
207
123
Other expenses
543
630
1,021
630
Restaurant Operating Profit
$
16,473
$
15,870
$
50,389
$
50,805
Restaurant Operating Profit as a
percentage of owned restaurant net revenue
19.3
%
18.9
%
15.9
%
16.9
%
Restaurant Operating Profit by brand is as follows (in
thousands):
For the three months ended
December 31,
For the year ended December
31,
2023
2022
2023
2022
STK restaurant operating profit (Company
owned)
$
12,547
$
11,740
$
38,531
$
37,259
STK restaurant operating profit (Company
owned) as a percentage of STK revenue (Company owned)
24.5
%
22.6
%
20.9
%
21.5
%
Kona Grill restaurant operating profit
$
4,117
$
4,151
$
12,305
$
13,695
Kona Grill restaurant operating profit as
a percentage of Kona Grill revenue
12.2
%
13.1
%
9.3
%
10.8
%
Adjusted Net Income. We define Adjusted Net Income as net income
before COVID-19 costs, lease termination expenses, one-time
stock-based compensation, non-recurring costs, non-cash rent during
the pre-opening period and the income tax effect of any
adjustments.
We believe that Adjusted Net Income is an appropriate measure of
operating performance, as it provides a clear picture of our
operating results by eliminating certain one-time expenses that are
not reflective of the underlying business performance. Adjusted Net
Income is included in this press release because it is a key metric
used by management, and we believe that it provides useful
information facilitating performance comparisons from period to
period. Adjusted Net Income has limitations as an analytical tool
and our calculation thereof may not be comparable to that reported
by other companies; accordingly, you should not consider it in
isolation or as a substitute for analysis of our results as
reported under GAAP.
For the three months ended
December 31,
For the year ended December
31,
2023
2022
2023
2022
Net income attributable to The One Group
Hospitality, Inc. as reported
$
4,643
$
5,078
$
4,718
$
13,534
Adjustments
COVID-19 related expenses
—
—
—
2,793
Non-recurring and non-cash pre-opening
expenses(1)
—
202
2,093
2,147
Non-recurring legal and professional
fees
—
—
—
617
Transaction expenses
207
72
207
123
Other expenses
543
630
1,021
630
Adjusted net income before income
taxes
5,393
5,982
8,039
19,844
Income tax effect on adjustments(2)
(120
)
470
(249
)
(1,105
)
Adjusted net income attributable to The
One Group Hospitality, Inc.
$
5,273
$
6,452
$
7,790
$
18,739
Adjusted net income per share: Basic
$
0.17
$
0.20
$
0.25
$
0.58
Adjusted net income per share: Diluted
$
0.17
$
0.19
$
0.24
$
0.55
Shares used in computing basic income per
share
31,249,833
32,114,857
31,556,437
32,400,515
Shares used in computing diluted income
per share
31,689,332
33,195,525
32,287,864
33,871,797
_______________________
(1)
Non-recurring and Non-cash Pre-opening
Expenses relate to non-recurring travel expenses for our training
teams and new venue employees training at other locations and
non-cash rent expensed during the pre-opening period.
(2)
Reflects the tax expense associated with
the adjustments for the three and twelve months ended December 31,
2023, and December 31, 2022. The Company uses its statutory tax
rate for the current year and for the previous year.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240314777746/en/
Investors: ICR Michelle Michalski or Raphael Gross (646)
277-1224 Michelle.Michalski@icrinc.com
Media: ICR Seth Grugle (646) 277-1272 seth.grugle@icrinc.com
Grafico Azioni ONE Group Hospitality (NASDAQ:STKS)
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Da Nov 2024 a Dic 2024
Grafico Azioni ONE Group Hospitality (NASDAQ:STKS)
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Da Dic 2023 a Dic 2024
