The ONE Group Reports Third Quarter 2021 Financial Results
The ONE Group Hospitality, Inc. (STKS) reported record quarterly revenues of $71.9 million for Q3 2021, an 81.6% year-over-year increase. Net income surged to $11.7 million, translating to $0.34 per share, compared to a net loss of $0.9 million in Q3 2020. Adjusted EBITDA rose to $10.0 million from $4.7 million. Consolidated comparable sales increased 44.7% from Q3 2019, with STK sales up 63.8% and Kona Grill up 26.9%. The company anticipates opening 13 new STK venues and 3-5 Kona Grill locations between 2021 and 2022 to further boost growth.
- GAAP revenues increased 81.6% to $71.9 million in Q3 2021 compared to Q3 2020.
- Net income of $11.7 million for Q3 2021, a significant turnaround from a $0.9 million loss in the same quarter last year.
- Adjusted EBITDA improved to $10.0 million, up from $4.7 million a year earlier.
- Consolidated comparable sales rose 44.7% compared to Q3 2019, indicating strong recovery.
- Plans to open 13 new venues including Kona Grill locations, reflecting growth strategy.
- Ongoing commodity cost and labor staffing headwinds could impact future profitability.
The Company Reports All-Time Record for Quarterly Revenues
Consolidated Comparable Sales Compared to 2019 Increased
Financial highlights for the third quarter compared to the same period last year are as follows:
-
Total GAAP revenues increased
81.6% to$71.9 million $39.6 million -
GAAP net income attributable to
The ONE Group was$11.7 million $0.34 $0.11 $0.9 million $0.03 $0.01 -
Adjusted EBITDA** increased to
$10.0 million $4.7 million
Sales highlights for the third quarter and
-
Consolidated comparable sales* increased
44.7% for the quarter and59.2% for the month of October. -
Comparable sales* for STK increased
63.8% for the quarter and73.7% for the month of October. -
Comparable sales* for
Kona Grill increased26.9% for the quarter and42.9% for the month of October.
“Achieving all-time high revenues for the second consecutive quarter during a pandemic is an incredible accomplishment and we could not be more pleased with our results. We generated significant comparable sales increases compared to both 2020 and 2019 as our guests demonstrated their eagerness for differentiated VIBE dining experiences. The strong comparable sales drove our average weekly volumes during the quarter to
*Comparable sales represent total
** 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 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.
Third Quarter 2021 Financial Results
Total GAAP revenues increased
Total owned restaurant net revenues increased
Management, license and incentive fee revenues increased
Restaurant Operating Profit*** increased to
GAAP net income attributable to
Adjusted Net Income**** attributable to
Adjusted EBITDA** increased to
As of
In
On
***Restaurant Operating Profit. 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 (Loss)to Restaurant Operating Profit in this release.
****Adjusted Net Income (Loss). We define Adjusted Net Income as net income before gains on CARES Act Loan forgiveness, COVID-19 costs, one-time stock-based compensation and the income tax effect of the adjustment. 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 (Loss) to Adjusted Net Income in this release.
2021-2022
The Company intends to open thirteen new STK and F&B venues in 2021 and 2022 and three to five
Location |
Type |
Opening Date |
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STK |
Domestic Managed STK |
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International Licensed STK |
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International Managed Venue |
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International Managed F&B Venue |
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STK London – |
International Managed STK |
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STK |
Domestic Company STK |
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Domestic Managed Venue |
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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 212-231-2094. A replay will be available after the call and can be accessed by dialing 1-412-317-6671; the passcode is 21998662. 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 23 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 24 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 13 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. 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 our key 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
Investors are referred to the most recent reports filed with the
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||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) |
||||||||||||||||
(in thousands, except earnings per share and related share information) |
||||||||||||||||
|
|
For the three months ended |
|
For the nine months ended |
||||||||||||
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Owned restaurant net revenue |
|
$ |
67,966 |
|
|
$ |
37,822 |
|
|
$ |
184,982 |
|
|
$ |
92,908 |
|
Management, license and incentive fee revenue |
|
|
3,903 |
|
|
|
1,745 |
|
|
|
8,129 |
|
|
|
4,042 |
|
Total revenues |
|
|
71,869 |
|
|
|
39,567 |
|
|
|
193,111 |
|
|
|
96,950 |
|
Cost and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Owned operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Owned restaurant cost of sales |
|
|
17,733 |
|
|
|
9,091 |
|
|
|
46,925 |
|
|
|
23,378 |
|
Owned restaurant operating expenses |
|
|
38,640 |
|
|
|
22,454 |
|
|
|
101,882 |
|
|
|
60,991 |
|
Total owned operating expenses |
|
|
56,373 |
|
|
|
31,545 |
|
|
|
148,807 |
|
|
|
84,369 |
|
General and administrative (including stock-based compensation of |
|
|
5,959 |
|
|
|
3,400 |
|
|
|
17,272 |
|
|
|
9,235 |
|
Depreciation and amortization |
|
|
2,572 |
|
|
|
2,655 |
|
|
|
7,766 |
|
|
|
7,605 |
|
COVID-19 related expenses |
|
|
1,131 |
|
|
|
1,716 |
|
|
|
3,776 |
|
|
|
3,759 |
|
Agreement restructuring expenses |
|
|
— |
|
|
|
— |
|
|
|
494 |
|
|
|
— |
|
Pre-opening expenses |
|
|
587 |
|
|
|
45 |
|
|
|
842 |
|
|
|
45 |
|
Lease termination expenses |
|
|
58 |
|
|
|
185 |
|
|
|
352 |
|
|
|
453 |
|
Transaction costs |
|
|
131 |
|
|
|
— |
|
|
|
131 |
|
|
|
1,109 |
|
Other income, net |
|
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
(11 |
) |
Total costs and expenses |
|
|
66,811 |
|
|
|
39,547 |
|
|
|
179,440 |
|
|
|
106,564 |
|
Operating income (loss) |
|
|
5,058 |
|
|
|
20 |
|
|
|
13,671 |
|
|
|
(9,614 |
) |
Other (income) expenses, net: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense, net of interest income |
|
|
781 |
|
|
|
1,280 |
|
|
|
3,262 |
|
|
|
3,650 |
|
Loss on early debt extinguishment |
|
|
600 |
|
|
|
— |
|
|
|
600 |
|
|
|
— |
|
Gain on CARES Act Loan forgiveness |
|
|
(9,968 |
) |
|
|
— |
|
|
|
(18,529 |
) |
|
|
— |
|
Total other (income) expenses, net |
|
|
(8,587 |
) |
|
|
1,280 |
|
|
|
(14,667 |
) |
|
|
3,650 |
|
Income (loss) before provision (benefit) for income taxes |
|
|
13,645 |
|
|
|
(1,260 |
) |
|
|
28,338 |
|
|
|
(13,264 |
) |
Provision (benefit) for income taxes |
|
|
1,544 |
|
|
|
(350 |
) |
|
|
2,188 |
|
|
|
(4,231 |
) |
Net income (loss) |
|
|
12,101 |
|
|
|
(910 |
) |
|
|
26,150 |
|
|
|
(9,033 |
) |
Less: net income (loss) attributable to noncontrolling interest |
|
|
430 |
|
|
|
(35 |
) |
|
|
573 |
|
|
|
(687 |
) |
Net income (loss) attributable to |
|
$ |
11,671 |
|
|
$ |
(875 |
) |
|
$ |
25,577 |
|
|
$ |
(8,346 |
) |
Currency translation gain (loss) |
|
|
(34 |
) |
|
|
19 |
|
|
|
(44 |
) |
|
|
(23 |
) |
Comprehensive income (loss) attributable to |
|
$ |
11,637 |
|
|
$ |
(856 |
) |
|
$ |
25,533 |
|
|
$ |
(8,369 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss) attributable to |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic net income (loss) per share |
|
$ |
0.36 |
|
|
$ |
(0.03 |
) |
|
$ |
0.83 |
|
|
$ |
(0.29 |
) |
Diluted net income (loss) per share |
|
$ |
0.34 |
|
|
$ |
(0.03 |
) |
|
$ |
0.75 |
|
|
$ |
(0.29 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Shares used in computing basic income (loss) per share |
|
|
31,993,557 |
|
|
|
29,010,348 |
|
|
|
30,830,521 |
|
|
|
28,857,990 |
|
Shares used in computing diluted income (loss) per share |
|
|
34,380,573 |
|
|
|
29,010,348 |
|
|
|
34,223,857 |
|
|
|
28,857,990 |
|
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 nine months ended |
||||
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Revenues: |
|
|
|
|
|
|
|
|
Owned restaurant net revenue |
|
94.6 % |
|
95.6 % |
|
95.8 % |
|
95.8 % |
Management, license and incentive fee revenue |
|
5.4 % |
|
4.4 % |
|
4.2 % |
|
4.2 % |
Total revenues |
|
100.0 % |
|
100.0 % |
|
100.0 % |
|
100.0 % |
Cost and expenses: |
|
|
|
|
|
|
|
|
Owned operating expenses: |
|
|
|
|
|
|
|
|
Owned restaurant cost of sales (1) |
|
26.1 % |
|
24.0 % |
|
25.4 % |
|
25.2 % |
Owned restaurant operating expenses (1) |
|
56.9 % |
|
59.4 % |
|
55.1 % |
|
65.6 % |
Total owned operating expenses (1) |
|
82.9 % |
|
83.4 % |
|
80.4 % |
|
90.8 % |
General and administrative (including stock-based compensation of |
|
8.3 % |
|
8.6 % |
|
8.9 % |
|
9.5 % |
Depreciation and amortization |
|
3.6 % |
|
6.7 % |
|
4.0 % |
|
7.8 % |
COVID-19 related expenses |
|
1.6 % |
|
4.3 % |
|
2.0 % |
|
3.9 % |
Agreement restructuring expenses |
|
—% |
|
—% |
|
0.3 % |
|
—% |
Pre-opening expenses |
|
0.8 % |
|
0.1 % |
|
0.4 % |
|
—% |
Lease termination expenses |
|
0.1 % |
|
0.5 % |
|
0.2 % |
|
0.5 % |
Transaction costs |
|
0.2 % |
|
—% |
|
0.1 % |
|
1.1 % |
Other income, net |
|
—% |
|
—% |
|
—% |
|
—% |
Total costs and expenses |
|
93.0 % |
|
99.9 % |
|
92.9 % |
|
109.9 % |
Operating income (loss) |
|
7.0 % |
|
0.1 % |
|
7.1 % |
|
(9.9)% |
Other (income) expenses, net: |
|
|
|
|
|
|
|
|
Interest expense, net of interest income |
|
1.1 % |
|
3.2 % |
|
1.7 % |
|
3.8 % |
Loss on early debt extinguishment |
|
0.8 % |
|
—% |
|
0.3 % |
|
—% |
Gain on CARES Act Loan forgiveness |
|
(13.9)% |
|
—% |
|
(9.6)% |
|
—% |
Total other (income) expenses, net |
|
(12.0)% |
|
3.2 % |
|
(7.6)% |
|
3.8 % |
Income (loss) before provision (benefit) for income taxes |
|
19.0 % |
|
(3.2)% |
|
14.7 % |
|
(13.7)% |
Provision (benefit) for income taxes |
|
2.1 % |
|
(0.9)% |
|
1.1 % |
|
(4.4)% |
Net income (loss) |
|
16.8 % |
|
(2.3)% |
|
13.5 % |
|
(9.3)% |
Less: net income (loss) attributable to noncontrolling interest |
|
0.6 % |
|
(0.1)% |
|
0.3 % |
|
(0.7)% |
Net income (loss) attributable to |
|
16.2 % |
|
(2.2)% |
|
13.2 % |
|
(8.6)% |
_____________________________________________________________________________
(1) These expenses are being shown as a percentage of owned restaurant net revenue.
|
||||||||
CONSOLIDATED BALANCE SHEETS |
||||||||
(in thousands, except share information) |
||||||||
|
|
|
|
|
||||
|
|
2021 |
|
2020 |
||||
ASSETS |
|
(Unaudited) |
|
|
|
|||
Current assets: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
19,078 |
|
|
$ |
24,385 |
|
Accounts receivable |
|
|
8,348 |
|
|
|
5,777 |
|
Inventory |
|
|
3,006 |
|
|
|
2,490 |
|
Other current assets |
|
|
2,287 |
|
|
|
1,348 |
|
Due from related parties |
|
|
376 |
|
|
|
376 |
|
Total current assets |
|
|
33,095 |
|
|
|
34,376 |
|
|
|
|
|
|
|
|
||
Property and equipment, net |
|
|
68,530 |
|
|
|
67,344 |
|
Operating lease right-of-use assets |
|
|
83,957 |
|
|
|
80,960 |
|
Deferred tax assets, net |
|
|
11,722 |
|
|
|
13,226 |
|
Intangibles, net |
|
|
15,724 |
|
|
|
16,313 |
|
Other assets |
|
|
3,189 |
|
|
|
2,446 |
|
Security deposits |
|
|
898 |
|
|
|
904 |
|
Total assets |
|
$ |
217,115 |
|
|
$ |
215,569 |
|
|
|
|
|
|
|
|
||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
|
||
Accounts payable |
|
$ |
9,849 |
|
|
$ |
7,404 |
|
Accrued expenses |
|
|
20,911 |
|
|
|
15,684 |
|
Deferred license revenue |
|
|
100 |
|
|
|
207 |
|
Deferred gift card revenue and other |
|
|
975 |
|
|
|
1,990 |
|
Current portion of operating lease liabilities |
|
|
5,116 |
|
|
|
4,817 |
|
Current portion of CARES Act Loans |
|
|
— |
|
|
|
10,057 |
|
Current portion of long-term debt |
|
|
500 |
|
|
|
588 |
|
Total current liabilities |
|
|
37,451 |
|
|
|
40,747 |
|
|
|
|
|
|
|
|
||
Deferred license revenue, long-term |
|
|
318 |
|
|
|
953 |
|
Operating lease liabilities, net of current portion |
|
|
102,312 |
|
|
|
98,569 |
|
CARES Act Loans, net of current portion |
|
|
— |
|
|
|
8,257 |
|
Long-term debt, net of current portion |
|
|
23,196 |
|
|
|
45,064 |
|
Total liabilities |
|
|
163,277 |
|
|
|
193,590 |
|
|
|
|
|
|
|
|
||
Commitments and contingencies |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Stockholders’ equity: |
|
|
|
|
|
|
||
Common stock, |
|
|
3 |
|
|
|
3 |
|
Preferred stock, |
|
|
— |
|
|
|
— |
|
|
|
|
(37 |
) |
|
|
— |
|
Additional paid-in capital |
|
|
52,519 |
|
|
|
46,538 |
|
Retained earnings (accumulated deficit) |
|
|
4,861 |
|
|
|
(20,716 |
) |
Accumulated other comprehensive loss |
|
|
(2,690 |
) |
|
|
(2,646 |
) |
Total stockholders’ equity |
|
|
54,656 |
|
|
|
23,179 |
|
Noncontrolling interests |
|
|
(818 |
) |
|
|
(1,200 |
) |
Total equity |
|
|
53,838 |
|
|
|
21,979 |
|
Total liabilities and equity |
|
$ |
217,115 |
|
|
$ |
215,569 |
|
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 nine months ended |
|||||||||
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|||||
Owned restaurant net revenue (1) |
|
$ |
67,966 |
|
$ |
37,822 |
|
$ |
184,982 |
|
$ |
92,908 |
Management, license and incentive fee revenue |
|
3,903 |
|
1,745 |
|
8,129 |
|
4,042 |
||||
GAAP revenues |
|
$ |
71,869 |
|
$ |
39,567 |
|
$ |
193,111 |
|
$ |
96,950 |
Food and beverage sales from managed units (1) |
|
|
32,178 |
|
|
12,904 |
|
|
64,719 |
|
|
35,996 |
|
|
|
|
|||||||||
Total food and beverage sales at owned and managed units |
|
$ |
100,144 |
|
$ |
50,726 |
|
$ |
249,701 |
|
$ |
128,904 |
_____________________________________________________________________________
(1) Components of total food and beverage sales at owned and managed units.
The following table presents the elements of the quarterly Same Store Sales measure for 2020 and 2021:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2021 vs. 2019 |
||||||||||||||||||||||||||
|
|
|
Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
|
|
|
Q1 |
|
Q2 |
|
Q3 |
|
|
|
Q1 |
|
Q2 |
|
Q3 |
||||||||||||
|
|
|
- |
- |
- |
- |
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
|
|
- |
- |
- |
- |
- |
|
|
|
|
- |
|
|
|||||||||||||||||||||||
|
|
|
- |
- |
- |
- |
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
|
|
- |
- |
- |
- |
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Combined Same Store Sales |
|
|
- |
- |
- |
- |
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
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 nine months ended |
||||||||||||
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
2020 |
||||||
Net income (loss) attributable to |
|
$ |
11,671 |
|
|
$ |
(875 |
) |
|
$ |
25,577 |
|
|
$ |
(8,346 |
) |
Net income (loss) attributable to noncontrolling interest |
|
|
430 |
|
|
|
(35 |
) |
|
|
573 |
|
|
|
(687 |
) |
Net income (loss) |
|
|
12,101 |
|
|
|
(910 |
) |
|
|
26,150 |
|
|
|
(9,033 |
) |
Interest expense, net of interest income |
|
|
781 |
|
|
|
1,280 |
|
|
|
3,262 |
|
|
|
3,650 |
|
Provision (benefit) for income taxes |
|
|
1,544 |
|
|
|
(350 |
) |
|
|
2,188 |
|
|
|
(4,231 |
) |
Depreciation and amortization |
|
|
2,572 |
|
|
|
2,655 |
|
|
|
7,766 |
|
|
|
7,605 |
|
EBITDA |
|
|
16,998 |
|
|
|
2,675 |
|
|
|
39,366 |
|
|
|
(2,009 |
) |
COVID-19 related expenses |
|
|
1,131 |
|
|
|
1,716 |
|
|
|
3,776 |
|
|
|
3,759 |
|
Agreement restructuring expenses |
|
|
— |
|
|
|
— |
|
|
|
494 |
|
|
|
— |
|
Transaction costs (1) |
|
|
131 |
|
|
|
— |
|
|
|
131 |
|
|
|
1,109 |
|
Stock-based compensation |
|
|
653 |
|
|
|
496 |
|
|
|
2,812 |
|
|
|
1,316 |
|
Lease termination expense (2) |
|
|
58 |
|
|
|
185 |
|
|
|
352 |
|
|
|
453 |
|
Non-cash rent expense (3) |
|
|
(16 |
) |
|
|
58 |
|
|
|
(19 |
) |
|
|
268 |
|
Pre-opening expenses |
|
|
587 |
|
|
|
45 |
|
|
|
842 |
|
|
|
45 |
|
Gain on CARES Act Loan forgiveness |
|
|
(9,968 |
) |
|
|
— |
|
|
|
(18,529 |
) |
|
|
— |
|
Loss on early debt extinguishment |
|
|
600 |
|
|
|
— |
|
|
|
600 |
|
|
|
— |
|
Adjusted EBITDA |
|
|
10,174 |
|
|
|
5,191 |
|
|
|
29,825 |
|
|
|
4,883 |
|
Adjusted EBITDA attributable to noncontrolling interest |
|
|
126 |
|
|
|
511 |
|
|
|
407 |
|
|
|
(475 |
) |
Adjusted EBITDA attributable to |
|
$ |
10,048 |
|
|
$ |
4,664 |
|
|
$ |
29,418 |
|
|
$ |
5,416 |
|
_____________________________________________________________________________
(1) |
Primarily transaction and integration costs incurred with the |
|
(2) |
Lease termination expense are costs associated with closed, abandoned and disputed locations or leases. |
|
(3) |
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 (loss). |
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 (loss) to Restaurant Operating Profit for the period indicated (in thousands):
|
|
For the three months ended |
|
For the nine months ended |
||||||||||||
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
Operating income (loss) as reported |
|
$ |
5,058 |
|
|
$ |
20 |
|
|
$ |
13,671 |
|
|
$ |
(9,614 |
) |
Management, license and incentive fee revenue |
|
|
(3,903 |
) |
|
|
(1,745 |
) |
|
|
(8,129 |
) |
|
|
(4,042 |
) |
General and administrative |
|
|
5,958 |
|
|
|
3,400 |
|
|
|
17,271 |
|
|
|
9,235 |
|
Depreciation and amortization |
|
|
2,572 |
|
|
|
2,655 |
|
|
|
7,766 |
|
|
|
7,605 |
|
COVID-19 related expenses |
|
|
1,132 |
|
|
|
1,716 |
|
|
|
3,777 |
|
|
|
3,759 |
|
Agreement restructuring expenses |
|
|
— |
|
|
|
— |
|
|
|
494 |
|
|
|
— |
|
Pre-opening expenses |
|
|
587 |
|
|
|
45 |
|
|
|
842 |
|
|
|
45 |
|
Lease termination expense |
|
|
58 |
|
|
|
185 |
|
|
|
352 |
|
|
|
453 |
|
Transaction costs |
|
|
131 |
|
|
|
— |
|
|
|
131 |
|
|
|
1,109 |
|
Other income, net |
|
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
(11 |
) |
Restaurant operating profit |
|
$ |
11,593 |
|
|
$ |
6,277 |
|
|
$ |
36,175 |
|
|
$ |
8,539 |
|
Restaurant operating profit as a percentage of owned restaurant net revenue |
|
|
17.1 |
% |
|
|
16.6 |
% |
|
|
19.6 |
% |
|
|
9.2 |
% |
Restaurant operating profit by brand is as follows (in thousands):
|
|
For the three months ended |
|
For the nine months ended |
||||||||
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||
STK restaurant operating profit (Company owned) |
|
|
8,309 |
|
|
2,767 |
|
|
23,458 |
|
|
3,682 |
STK restaurant operating profit (Company owned) as a percentage of STK revenue (Company owned) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,422 |
|
|
3,546 |
|
|
12,693 |
|
|
5,469 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Income (Loss). We define Adjusted Net Income as net income before gains on CARES Act Loan forgiveness, COVID-19 costs, one-time stock-based compensation and acceleration and the income tax effect of the adjustment.
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 nine months ended |
|||||||||||||
2021 |
|
2020 |
|
2021 |
|
2020 |
|||||||||
Net income (loss) attributable to |
$ |
11,671 |
|
|
$ |
(875 |
) |
|
$ |
25,577 |
|
|
$ |
(8,369 |
) |
Adjustments: |
|||||||||||||||
Gain on CARES Act Loan forgiveness |
|
(9,968 |
) |
|
|
— |
|
|
|
(18,529 |
) |
|
|
— |
|
COVID-19 related expenses |
1,131 |
|
1,716 |
|
3,776 |
|
3,759 |
|
|||||||
Accelerated stock compensation |
|
— |
|
|
|
— |
|
|
|
485 |
|
|
|
— |
|
Loss on early debt extinguishment |
|
600 |
|
|
— |
|
|
600 |
|
|
— |
|
|||
Adjusted net income before income taxes |
|
3,434 |
|
|
|
841 |
|
|
|
11,909 |
|
|
|
(4,610 |
) |
Income tax effect on adjustments(1) |
21 |
|
(487 |
) |
643 |
|
(1,068 |
) |
|||||||
Impact of excluding certain discrete income tax items |
|
285 |
|
|
|
0 |
|
|
|
(792 |
) |
|
|
40 |
|
Adjusted net income (loss) attributable to |
$ |
3,740 |
|
$ |
354 |
|
$ |
11,760 |
|
$ |
(5,638 |
) |
|||
|
|
|
|
|
|
|
|
|
|
|
|
||||
Adjusted net income (loss) per share: Basic |
$ |
0.12 |
|
$ |
0.01 |
|
$ |
0.38 |
|
$ |
(0.20 |
) |
|||
Adjusted net income (loss) per share: Diluted |
$ |
0.11 |
|
|
$ |
0.01 |
|
|
$ |
0.34 |
|
|
$ |
(0.20 |
) |
Shares used in computing basic income (loss) per share |
|
31,993,557 |
|
|
|
29,010,348 |
|
|
|
30,830,521 |
|
|
|
28,857,990 |
|
Shares used in computing diluted income (loss) per share |
34,380,573 |
|
|
29,010,348 |
|
34,223,857 |
|
|
28,857,990 |
|
|||||
_____________________________________________________________________________
(1) Reflects the tax expense associated with the adjustments for the three and nine months ended
View source version on businesswire.com: https://www.businesswire.com/news/home/20211104006297/en/
Investors:
ICR
(646) 277-1224
Michelle.Michalski@icrinc.com
Media:
ICR
(646) 277-1272
seth.grugle@icrinc.com
Source:
FAQ
What were The ONE Group's Q3 2021 earnings results?
How did The ONE Group's comparable sales perform in Q3 2021?
What is The ONE Group's future growth outlook?
What is the significance of The ONE Group's adjusted EBITDA for Q3 2021?
What challenges did The ONE Group mention in their Q3 2021 report?
