The ONE Group Announces Increase to Credit Facility Up to $87 Million

Rhea-AI Summary

The ONE Group Hospitality, Inc. (Nasdaq: STKS) announced an amendment to its credit facility, securing an additional $50 million delayed draw senior secured term loan, adding to its existing $25 million term loan and $12 million revolving credit facility. This amendment enhances the Company's financial flexibility, allowing for accelerated development and stock repurchases. The new term facility is subject to a 1.75x Net Leverage Ratio test, enabling permitted acquisitions and capital expenditures.

Positive

• Secured an additional $50 million in funding through a delayed draw senior secured term loan.
• Enhances financial flexibility for development, acquisitions, and stock repurchases.

Negative

• None.

DENVER--(BUSINESS WIRE)-- The ONE Group Hospitality, Inc. (“The ONE Group” or the “Company”) (Nasdaq: STKS) today announced that it has successfully amended the Company’s existing credit facility to provide an additional $50 million delayed draw senior secured term loan to its existing $25 million term loan and $12 million revolving credit facility.

Emanuel “Manny” Hilario, President and CEO of The ONE Group, stated, "The amendment to our credit facility greatly enhances our financial flexibility and, at our option, will allow us to accelerate our incredibly robust development pipeline. We thank our lenders for their partnership and confidence in our outlook for delivering long-term sustainable growth and value for our shareholders.”

Key updates to the credit agreement include:

• Allows for a new $50 million delayed draw term facility, available to draw for up to 12 months and subject to a 1.75x Net Leverage Ratio incurrence test (as defined in the credit agreement) for permitted acquisitions, stock repurchases and new restaurant capital expenditures; and
• Allows the Company to redeem, repurchase or otherwise acquire its own capital stock in an aggregate amount of up to $50 million subject to a 1.75x Net Leverage Ratio incurrence test.

Goldman Sachs Specialty Lending Group, L.P. served as administrative agent for the lenders.

About The ONE Group

The ONE Group Hospitality, Inc. (Nasdaq: STKS) is a global hospitality 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 25 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 24 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 14 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. Forward-looking statements may be identified by the use of words such as “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) the effects of the COVID-19 pandemic on our business, including government restrictions on our ability to operate our restaurants and changes in customer behavior, and our ability to hire employees; (2) 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; (3) 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; (4) 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; (5) changes in applicable laws or regulations; (6) the possibility that The ONE Group may be adversely affected by other economic, business, and/or competitive factors; and (7) other risks and uncertainties indicated from time to time in our filings with the SEC, including our Annual Report on Form 10-K filed for the year ended December 31, 2021 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20221214005382/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

Source: The ONE Group Hospitality, Inc.

FAQ

What recent financial update did The ONE Group (STKS) announce?

The ONE Group announced a $50 million amendment to its credit facility, enhancing financial flexibility.

How will the new funding impact The ONE Group (STKS)?

The funding will allow The ONE Group to accelerate its development pipeline and conduct stock repurchases.

What are the conditions for the new loan for The ONE Group (STKS)?

The new $50 million term facility is subject to a 1.75x Net Leverage Ratio test for acquisitions and capital expenditures.