The ONE Group Reports Fourth Quarter 2023 and Full Year 2023 Financial Results
Grows Revenue and Adjusted EBITDA in the Quarter
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
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
*Comparable sales represent total
**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
Total owned restaurant net revenues increased
Consolidated comparable sales* decreased 4.3% compared to the fourth quarter of 2022. STK same store sales decreased 4.6% while
Management, license and incentive fee revenues increased
Restaurant Operating Profit*** increased
General and administrative costs decreased
Pre-opening expenses were
GAAP net income attributable to
Adjusted Net Income**** attributable to
Adjusted EBITDA** increased
Full Year 2023 Financial Results
Total GAAP revenues increased
Total owned restaurant net revenues increased
Consolidated comparable sales* decreased 2.7% compared to 2022. STK same store sales decreased 3.0% while
Management, license and incentive fee revenues decreased
Restaurant Operating Profit*** decreased to
GAAP net income attributable to
Adjusted Net Income**** attributable to
Adjusted EBITDA** decreased
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 inColumbus, Ohio -
Owned Kona Grill restaurant inRiverton, Utah -
Owned Kona Grill restaurant inPhoenix, Arizona
The Company intends to add six to eight new restaurants in 2024, inclusive of one owned STK restaurant in
There are currently three restaurants under construction in the following cities:
-
Owned STK restaurant in
Aventura, Florida -
Owned Kona Grill restaurant inTigard, Oregon -
Owned Salt Water Social restaurant in
Denver, Colorado
Share Repurchase Program
On
2024 Targets
The Company is providing the following targets for 2024:
Financial Results and Other Select Data |
|
2024 Guidance |
Total GAAP revenues |
|
|
Managed, license and incentive fee revenues |
|
|
Total owned operating expenses as a percentage of owned restaurant net revenue |
|
Approximately 83.0% |
Total G&A excluding stock-based compensation |
|
Approximately |
Consolidated Adjusted EBITDA |
Approximately |
|
Restaurant pre-opening expenses |
|
|
Operating income |
|
|
Effective income tax rate |
|
5% to 10% |
Total capital expenditures, net of allowances received by landlords |
|
|
Number of new system-wide venues |
|
Six to Eight |
Conference Call and Webcast
Emanuel “Manny” Hilario, President and Chief Executive Officer, and
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
The webcast can be accessed from the Investor Relations tab of The ONE Group’s website at www.togrp.com under “News / Events”.
About
-
STK, a modern twist on the American steakhouse concept with 28 restaurants in major metropolitan cities in the
U.S. ,Europe and theMiddle 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 theU.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. andEurope .
Additional information about
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
Investors are referred to the most recent reports filed with the
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (in thousands, except earnings per share and related share information) |
||||||||||||||||
|
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For the three months ended |
|
For the year ended |
||||||||||||
|
|
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 |
|
|
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 |
|
$ |
4,643 |
|
|
$ |
5,078 |
|
|
$ |
4,718 |
|
|
$ |
13,534 |
|
Currency translation gain (loss) |
|
|
68 |
|
|
|
124 |
|
|
|
(61 |
) |
|
|
(224 |
) |
Comprehensive income attributable to |
|
$ |
4,711 |
|
|
$ |
5,202 |
|
|
$ |
4,657 |
|
|
$ |
13,310 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
For the year ended |
||||||||
|
|
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 |
|
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 |
|
5.2 |
% |
|
5.8 |
% |
|
1.4 |
% |
|
4.3 |
% |
_______________________ | |
(1) |
These expenses are being shown as a percentage of owned restaurant net revenue. |
CONSOLIDATED BALANCE SHEETS (in thousands, except share information) |
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|
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|
||||
|
|
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, |
|
|
3 |
|
|
|
3 |
|
Preferred stock, |
|
|
— |
|
|
|
— |
|
|
|
|
(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 |
|
For the year ended |
||||||||
|
|
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 |
||||||||||
|
|
57.1 |
% |
17.8 |
% |
4.0 |
% |
0.2 |
% |
15.7 |
% |
|
1.0 |
% |
(10.1 |
)% |
(7.8 |
)% |
(6.5 |
)% |
(6.0 |
)% |
|
|
103.6 |
% |
26.6 |
% |
2.1 |
% |
(0.8 |
)% |
21.9 |
% |
|
15.4 |
% |
2.5 |
% |
0.7 |
% |
0.7 |
% |
4.9 |
% |
|
|
66.7 |
% |
19.8 |
% |
3.5 |
% |
0.0 |
% |
17.1 |
% |
|
5.3 |
% |
(6.8 |
)% |
(5.5 |
)% |
(4.6 |
)% |
(3.0 |
)% |
|
|
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 |
|
For the year ended |
||||||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Net income attributable to |
|
$ |
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 |
|
$ |
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 |
|
For the year ended |
||||||||||||
|
|
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 |
|
For the year ended |
||||||||||||
|
|
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 |
% |
|
|
$ |
4,117 |
|
|
$ |
4,151 |
|
|
$ |
12,305 |
|
|
$ |
13,695 |
|
|
|
|
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 |
|
For the year ended |
|||||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|||||||
Net income attributable to |
|
$ |
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 |
|
$ |
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 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240314777746/en/
Investors:
ICR
(646) 277-1224
Michelle.Michalski@icrinc.com
Media:
ICR
(646) 277-1272
seth.grugle@icrinc.com
Source: