Grows Revenue 3.0% and Opens STK Washington DC
During the Quarter
Completed Acquisition of Safflower Holdings
Corp., the Owner of Benihana Inc. on May 1st
Updates 2024 Targets to Include Acquisition
The ONE Group Hospitality, Inc. (“The ONE Group” or the
“Company”) (Nasdaq: STKS) today reported its financial results for
the first quarter ended March 31, 2024.
Highlights for the first quarter compared to the same quarter
in 2023 are as follows:
- Total GAAP revenues increased 3.0% to $85.0 million from
$82.6 million;
- Comparable sales* decreased 7.9%;
- GAAP net loss attributable to The ONE Group was $2.1
million, or $0.07 net loss per share ($0.02 adjusted net loss per
share) ****, compared to GAAP net income of $2.5 million, or $0.08
per share ($0.10 adjusted net income per share) ****
- Restaurant Operating Profit*** increased 2.0% to $13.2
million from $12.9 million; and
- Adjusted EBITDA** decreased 3.6% to $10.5 million from
$10.9 million.
"We grew our top-line, held restaurant-level margins stable,
improved G&A as a percentage of revenue, and delivered adjusted
EBITDA nearly even with the prior year despite the choppy consumer
environment. We are pleased that the cost savings initiatives
implemented in 2023 are working effectively and they will be even
more evident upon the return to a more normalized sales
environment. Our priorities remain driving sales through
initiatives such as our elevated food program, national happy hour
offerings, and social media-driven marketing campaigns, while
maintaining disciplined control over restaurant-level operating
costs and general and administrative expenses,” said Emanuel
“Manny” Hilario, President and CEO of The ONE Group.
Hilario continued, “We are excited to be forging ahead with a
new chapter for The ONE Group through our acquisition of Safflower
Holdings Corp., the parent company of the iconic Benihana brand and
RA Sushi brand. This milestone transaction diversifies and
strengthens our industry-leading portfolio of world-class,
experiential restaurant concepts and aligns perfectly with our
strategic vision of being the undisputed leader in vibe dining.
Importantly, it creates a sizable and meaningful, publicly traded
company at scale, which we could not have achieved organically in
the near term.”
Hilario concluded, “On an annual basis, the Benihana and RA
Sushi brands are expected to add over $500 million in annualized
revenues and approximately $70 million in annual run-rate EBITDA
before synergies, which are estimated to be $20 million
annually.”
*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 and new restaurant openings.
**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
and certain transactional and exit 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
transaction and exit expenses, 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.
Acquisition of Benihana Inc. Owner
On May 1, 2024, the Company announced it had completed its
previously announced acquisition of Safflower Holdings Corp., the
owner of Benihana Inc. (“Benihana”), for $365 million in cash. The
transaction was financed with a portion of a new $390 million term
loan and revolving credit facility and $160 million in preferred
equity primarily issued to an affiliate of Hill Path Capital
LP.
First Quarter 2024 Financial Results
Total GAAP revenues increased $2.4 million, or 3.0%, to $85.0
million in the first quarter of 2024 from $82.6 million in the
first quarter of 2023.
Total owned restaurant net revenues increased $2.9 million, or
3.7%, to $81.5 million in the first quarter of 2024 from $78.6
million in the first quarter of 2023. The increase was primarily
attributable to the opening of six restaurants since July 2023
partially offset by a reduction in comparable restaurant sales.
Consolidated comparable sales* decreased 7.9% in the first
quarter of 2024 compared to the first quarter of 2023. STK same
store sales decreased 6.8% while Kona Grill same store sales
decreased 9.7%.
Management, license and incentive fee revenues decreased $0.5
million, or 12.3%, to $3.5 million in the first quarter of 2024
from $4.0 million in the first quarter of 2023. The decrease was
primarily attributed to decreased revenues at our STK restaurants
in North America and the early termination of the STK Westminster
management agreement in the fourth quarter of 2023.
Restaurant Operating Profit*** increased $0.3 million or 2.0% to
$13.2 million in the first quarter of 2024 from $12.9 million in
the first quarter of 2023. As a percentage of Company-owned
restaurant net revenues, operating profit margin decreased 30 basis
points to 16.1% in the first quarter of 2024 from 16.4% in the
first quarter of 2023. The decrease was due to higher average wage
and operating cost inflation.
General and administrative costs were flat at $7.5 million for
the three months ended March 31, 2024 and 2023. As a percentage of
revenues, general and administrative costs decreased 20 basis
points to 8.9% compared to 9.1%.
Pre-opening expenses were $2.9 million in the first quarter of
2024 compared to $1.3 million in the first quarter of 2023. The
increase was related to payroll, training, and non-cash pre-open
rent for STK Washington DC which opened in the first quarter, and
for STK and Kona Grill restaurants currently under development.
GAAP net loss attributable to The ONE Group Hospitality, Inc. in
the first quarter of 2024 was $2.1 million, or $0.07 net loss per
share, compared to GAAP net income of $2.5 million, or $0.08 per
share, in the first quarter of 2023.
Adjusted Net Income**** attributable to The ONE Group
Hospitality, Inc. in the first quarter of 2024 was a loss of $0.6
million, or $0.02 per share, compared to Adjusted Net Income of
$3.2 million, or $0.10 per share, in the first quarter of 2023.
Adjusted EBITDA** decreased $0.4 million, or 3.6%, to $10.5
million in the first quarter of 2024 from $10.9 million in the
first quarter of 2023.
Restaurant Development
The Company intends to open eight to eleven new venues in 2024
consisting of three to four STKs, two to three Kona Grills, one to
two Benihanas, one Salt Water Social and one RA Sushi. In March
2024, The Company opened a Company owned STK restaurant in
Washington, DC.
There is currently one Company-owned STK restaurant, one
Company-owned Kona Grill restaurant, one Company-owned Salt Water
Social restaurant, and one Company-owned RA Sushi restaurant 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
- RA Sushi restaurant in Plantation, Florida
Share Repurchase Program
In March 2024, the Company’s Board of Directors authorized a $5
million share repurchase program, although no shares were purchased
during the first quarter of 2024.
2024 Targets
The Company is updating its 2024 targets, which are now
inclusive of the acquisition of Benihana.
Financial Results and Other
Select Data
US$s in millions
2024 Guidance
w/o Benihana
1/1/2024 –
12/31/2024
2024 Guidance
Addition of
Benihana
5/1/2024-12/31/2024
2024 Updated
Guidance
1/1/2024-12/31/2024
Total GAAP revenues
$360 to $380
$340 to $360
$700 to $740
Managed, franchise and license
revenues
$15 to $16
$2 to $3
$17 to $19
Total owned operating expenses as a
percentage of owned restaurant net revenue
-
-
Approx. 83.0%
Consolidated Total G&A excluding
stock-based compensation
-
-
Approx. $40
Consolidated Adjusted EBITDA
$45
$50 to $55
$95 to $100
Consolidated Restaurant pre-opening
expenses
-
-
$7 to $9
Consolidated Effective income tax rate
-
-
5% to 10%
Consolidated Total capital expenditures,
net of allowances received by landlords
-
-
$50 to $60
Consolidated Number of new system-wide
venues
-
-
Eight to Eleven
The Company’s annual run-rate Total GAAP Revenues at 12/31/2024
is projected to be approximately $950 million and annual run-rate
Consolidated Adjusted EBITDA is projected to be greater than $140
million.
Projected Capitalization After
Acquisition of Benihana
US$ in millions
Before
After
Change
Cash
$15.4
$50.4
$40.0
Term Note
$73.5
$350.0
$350.0
Preferred Stock
-
$150.0
$150.0
Revolver Availability
$10.6
$40.0
$30.4
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 416-764-8658. A replay will be available after the call and
can be accessed by dialing 4123176671; the passcode is 03783315.
The replay will be available until Tuesday, May 21, 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
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.
- Benihana, a leading operator of highly differentiated
experiential brands that owns the only national teppanyaki brand in
the US. The Company also franchises Benihanas in the U.S.,
Caribbean, Central America, and South America.
- Kona Grill, a polished casual, bar-centric grill concept with
restaurants in the U.S., featuring American favorites,
award-winning sushi, and specialty cocktails in an upscale casual
atmosphere.
- RA Sushi, a Japanese cuisine concept that offers a fun-filled,
bar-forward, upbeat, and vibrant dining atmosphere with restaurants
in the U.S. anchored by creative sushi, inventive drinks, and
outstanding service.
- 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 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 the impact of the Safflower Holdings acquisition,
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 integrate the new or acquired restaurants into our
operations without disruptions to operations; (2) our ability to
capture anticipated synergies; (3) 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; (4)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; (5) 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; (6) changes in
applicable laws or regulations; (7) the possibility that The ONE
Group may be adversely affected by other economic, business, and/or
competitive factors; and (8) 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
March 31,
2024
2023
Revenues:
Owned restaurant net revenue
$
81,508
$
78,579
Management, license and incentive fee
revenue
3,487
3,977
Total revenues
84,995
82,556
Cost and expenses:
Owned operating expenses:
Owned restaurant cost of sales
18,714
18,855
Owned restaurant operating expenses
49,638
46,827
Total owned operating expenses
68,352
65,682
General and administrative (including
stock-based compensation of $1,358 and $1,320 for the three months
ended March 31, 2024 and 2023, respectively)
7,534
7,484
Depreciation and amortization
5,260
3,656
Pre-opening expenses
2,914
1,299
Transaction and exit costs
1,523
—
Other expenses
32
157
Total costs and expenses
85,615
78,278
Operating (loss) income
(620
)
4,278
Other expenses, net:
Interest expense, net of interest
income
2,078
1,787
Total other expenses, net
2,078
1,787
(Loss) income before provision for income
taxes
(2,698
)
2,491
(Benefit) provision for income taxes
(268
)
161
Net (loss) income
(2,430
)
2,330
Less: net loss attributable to
noncontrolling interest
(361
)
(276
)
Net (loss) income attributable to The ONE
Group Hospitality, Inc.
$
(2,069
)
$
2,606
Currency translation loss
(68
)
(70
)
Comprehensive (loss) income attributable
to The ONE Group Hospitality, Inc.
$
(2,137
)
$
2,536
Net (loss) income attributable to The ONE
Group Hospitality, Inc. per share:
Basic net (loss) income per share
$
(0.07
)
$
0.08
Diluted net (loss) income per share
$
(0.07
)
$
0.08
Shares used in computing basic (loss)
income per share
31,306,417
31,677,232
Shares used in computing diluted (loss)
income per share
31,306,417
32,997,751
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
March 31,
2024
2023
Revenues:
Owned restaurant net revenue
95.9
%
95.2
%
Management, license and incentive fee
revenue
4.1
%
4.8
%
Total revenues
100.0
%
100.0
%
Cost and expenses:
Owned operating expenses:
Owned restaurant cost of sales (1)
23.0
%
24.0
%
Owned restaurant operating expenses
(1)
60.9
%
59.6
%
Total owned operating expenses (1)
83.9
%
83.6
%
General and administrative (including
stock-based compensation of 1.6% for the three months ended March
31, 2024 and 2023)
8.9
%
9.1
%
Depreciation and amortization
6.2
%
4.4
%
Pre-opening expenses
3.4
%
1.6
%
Transaction and exit costs
1.8
%
—
%
Other expenses
—
%
0.2
%
Total costs and expenses
100.7
%
94.8
%
Operating (loss) income
(0.7
)%
5.2
%
Other expenses, net:
Interest expense, net of interest
income
2.4
%
2.2
%
Total other expenses, net
2.4
%
2.2
%
(Loss) income before provision for income
taxes
(3.2
)%
3.0
%
(Benefit) provision for income taxes
(0.3
)%
0.2
%
Net (loss) income
(2.9
)%
2.8
%
Less: net loss attributable to
noncontrolling interest
(0.4
)%
(0.3
)%
Net (loss) income attributable to The ONE
Group Hospitality, Inc.
(2.4
)%
3.2
%
_________________________
(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)
March 31,
December 31,
2024
2023
ASSETS
(Unaudited)
Current assets:
Cash and cash equivalents
$
15,374
$
21,047
Accounts receivable
12,172
17,264
Inventory
5,395
6,184
Other current assets
4,646
1,809
Due from related parties
376
376
Total current assets
37,963
46,680
Property and equipment, net
147,304
139,908
Operating lease right-of-use assets
87,900
95,075
Deferred tax assets, net
15,141
14,757
Intangibles, net
15,305
15,306
Other assets
4,819
4,636
Security deposits
883
883
Total assets
$
309,315
$
317,245
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
15,819
$
19,089
Accrued expenses
31,525
28,333
Deferred gift card revenue and other
2,006
2,077
Current portion of operating lease
liabilities
7,534
6,897
Current portion of long-term debt
1,856
1,500
Other current liabilities
310
266
Total current liabilities
59,050
58,162
Operating lease liabilities, net of
current portion
113,191
120,481
Long-term debt, net of current portion
70,207
70,410
Other long-term liabilities
771
832
Total liabilities
243,219
249,885
Commitments and contingencies (Note
14)
Stockholders’ equity:
Common stock, $0.0001 par value,
75,000,000 shares authorized; 33,584,949 issued and 31,308,496
outstanding at March 31, 2024 and 33,560,428 issued and 31,283,975
outstanding at December 31, 2023
3
3
Preferred stock, $0.0001 par value,
10,000,000 shares authorized; no shares issued and outstanding at
March 31, 2024 and December 31, 2023, respectively
—
—
Treasury stock, 2,276,453 shares at cost
at March 31, 2024 and December 31, 2023
(15,051
)
(15,051
)
Additional paid-in capital
59,504
58,270
Retained earnings
26,815
28,884
Accumulated other comprehensive loss
(2,998
)
(2,930
)
Total stockholders’ equity
68,273
69,176
Noncontrolling interests
(2,177
)
(1,816
)
Total equity
66,096
67,360
Total liabilities and equity
$
309,315
$
317,245
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
March 31,
2024
2023
(unaudited)
(unaudited)
Owned restaurant net revenue (1)
$
81,508
$
78,579
Management, license and incentive fee
revenue
3,487
3,977
GAAP revenues
$
84,995
$
82,556
Food and beverage sales from managed units
(1)
28,104
30,702
Total food and beverage sales at owned and
managed units
$
109,612
$
109,281
_________________________
(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 2023 and 2024:
2023 vs. 2022
2024 vs. 2023
Q1
Q2
Q3
Q4
YTD
Q1
US STK Owned Restaurants
1.0
%
(10.1
)%
(7.8
)%
(6.5
)%
(6.0
)%
(6.0
)%
US STK Managed Restaurants
15.4
%
2.5
%
0.7
%
0.7
%
4.9
%
(8.6
)%
US STK Total Restaurants
5.3
%
(6.8
)%
(5.5
)%
(4.6
)%
(3.0
)%
(6.8
)%
Kona Grill Total Restaurants
(4.3
)%
(1.5
)%
1.1
%
(3.9
)%
(2.2
)%
(9.7
)%
Combined Same Store Sales
1.6
%
(4.7
)%
(3.0
)%
(4.3
)%
(2.7
)%
(7.9
)%
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 and certain transactional and exit 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
March 31,
2024
2023
Net (loss) income attributable to The ONE
Group Hospitality, Inc.
$
(2,069
)
$
2,606
Net (loss) attributable to noncontrolling
interest
(361
)
(276
)
Net (loss) income
(2,430
)
2,330
Interest expense, net
2,078
1,787
(Benefit) provision for income taxes
(268
)
161
Depreciation and amortization
5,260
3,656
EBITDA
4,640
7,934
Pre-opening expenses
2,914
1,299
Stock-based compensation
1,358
1,320
Transaction and exit costs
1,523
—
Non-cash rent expense (1)
(248
)
(31
)
Other expenses
32
157
Adjusted EBITDA
10,219
10,679
Adjusted EBITDA attributable to
noncontrolling interest
(262
)
(189
)
Adjusted EBITDA attributable to The ONE
Group Hospitality, Inc.
$
10,481
$
10,868
_________________________
(1) 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
March 31,
2024
2023
Operating (loss) income as reported
$
(620
)
$
4,278
Management, license and incentive fee
revenue
(3,487
)
(3,977
)
General and administrative
7,534
7,484
Depreciation and amortization
5,260
3,656
Pre-opening expenses
2,914
1,299
Transaction and exit costs
1,523
—
Other expenses
32
157
Restaurant Operating Profit
$
13,156
$
12,897
Restaurant Operating Profit as a
percentage of owned restaurant net revenue
16.1
%
16.4
%
Restaurant Operating Profit by brand is as follows (in
thousands):
For the three months ended
March 31,
2024
2023
STK restaurant operating profit (Company
owned)
$
11,122
$
10,462
STK restaurant operating profit (Company
owned) as a percentage of STK revenue (Company owned)
21.7%
22.1%
Kona Grill restaurant operating profit
$
2,061
$
2,501
Kona Grill restaurant operating profit as
a percentage of Kona Grill revenue
6.8%
8.1%
Adjusted Net Income. We define Adjusted Net Income as net income
before transaction and exit 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
March 31,
2024
2023
Net (loss) income attributable to The One
Group Hospitality, Inc. as reported
$
(2,069
)
$
2,606
Adjustments
Transaction and exit costs
1,523
—
Non-cash pre-opening expenses(1)
341
426
Other expenses
32
157
Adjusted net income before income
taxes
(173
)
3,189
Income tax effect on adjustments(2)
(398
)
(38
)
Adjusted net (loss) income attributable to
The One Group Hospitality, Inc.
$
(571
)
$
3,151
Adjusted net (loss) income per share:
Basic
$
(0.02
)
$
0.10
Adjusted net (loss) income per share:
Diluted
$
(0.02
)
$
0.10
Shares used in computing basic (loss)
income per share
31,306,417
31,677,232
Shares used in computing diluted (loss)
income per share
31,306,417
32,997,751
_________________________
(1) Non-cash pre-opening expenses
relate to non-cash rent expensed during the pre-opening period.
(2) Reflects the tax expense
associated with the adjustments for the three months ended March
31, 2024, and March 31, 2023. The Company uses its estimated annual
tax rate for the current year and for the previous year.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240507116980/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
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