Quarterly Revenues Increased 14.6% to $81.1
million
Quarterly Consolidated Comparable Sales
Increased 12.8% Compared to 2021 and 53.5% Compared to 2019
The ONE Group Hospitality, Inc. (“The ONE Group” or the
“Company”) (Nasdaq: STKS) today reported its financial results for
the second quarter ended June 30, 2022.
Highlights for the second quarter compared to the same period
in 2021 are as follows:
- Total GAAP revenues increased 14.6% to $81.1 million
from $70.8 million;
- GAAP net income attributable to The ONE Group was $4.3
million, or $0.13 per share ($0.15 adjusted net income per share)
****, compared to GAAP net income of $13.8 million, or $0.41 per
share ($0.19 adjusted net income per share)****
- Restaurant Operating Profit*** decreased 16.7% to $12.8
million from $15.3 million; and
- Adjusted EBITDA** decreased 19.6% to $10.4 million from
$12.9 million.
Comparable sales* for the second quarter compared to the same
periods in 2021 and 2019:
- Compared to 2021:
- Consolidated comparable sales* increased 12.8%;
- Comparable sales* for STK increased 19.8%; and
- Comparable sales* for Kona Grill increased 3.7%.
- Compared to 2019:
- Consolidated comparable sales* increased 53.5%;
- Comparable sales* for STK increased 81.9%; and
- Comparable sales* for Kona Grill increased 27.6%.
“I am extremely pleased with our top-line performance, as the
strong momentum we experienced during the first quarter continued
into the second quarter. This was demonstrated by leading
comparable store sales growth of 12.8% when compared to 2021 and
53.5% when compared to pre-pandemic 2019. In addition, I am very
proud that we were able to deliver $4.3 million of net income
during a quarter in which our industry was facing tremendous
headwinds. We continue to be fully staffed in order to continue our
top-line momentum, deliver exceptional and unforgettable guest
experiences and create long-term shareholder value. Going forward,
we will continue to remain laser focused on driving sales and
managing our restaurant-level margins as we navigate this dynamic
environment,” said Emanuel “Manny” Hilario, President and CEO of
The ONE Group.
Hilario continued, “We believe we are early in our growth
strategy with significant whitespace ahead. Our 2022 pipeline is
the strongest in our history, with nine new venues expected to open
in the back half of the year. Looking ahead, we foresee a total
addressable market of at least 400 restaurants including 200 STK
restaurants globally and at least 200 Kona Grills domestically with
best in class returns. We are targeting between 40% and 50% ROIs
for new Company-Owned STKs and for Company-Owned Kona Grills.”
*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; the Company has presented comparable sales growth
from 2019 to illustrate how sales at its restaurant base before the
COVID-19 pandemic compare to sales as COVID-19 restrictions have
eased and the Company has reopened in-person dining.
** 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.
***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 to Restaurant Operating Profit
in this release.
****Adjusted Net Income. We define Adjusted Net Income as net
income before gains on CARES Act Loan forgiveness, COVID-19 costs,
lease termination expenses, one-time stock-based compensation,
other non-recurring costs, non-cash rent during the pre-opening
period 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 to Adjusted Net Income in this
release.
Second Quarter 2022 Financial Results
Total GAAP revenues increased $10.4 million, or 14.6%, to $81.1
million in the second quarter of 2022 from $70.8 million in the
second quarter of 2021.
Total owned restaurant net revenues increased $9.1 million, or
13.4%, to $76.9 million in the second quarter of 2022 from $67.8
million in the second quarter of 2021. The increase was primarily
attributable to strong execution of sales-driving initiatives.
Consolidated comparable sales* increased 12.8% from the second
quarter of 2021 and increased 53.5% from the second quarter of
2019.
Management, license and incentive fee revenues increased $1.3
million, or 44.1%, to $4.2 million in the second quarter of 2022
from $2.9 million in the second quarter of 2021. The increase was
primarily attributable to local governments lifting stay at home
orders and easing seating capacity restrictions in the markets in
which we operate as well as revenue generated from the opening of
two managed STKs, one licensed STK, and three managed F&B
venues during 2021.
Restaurant Operating Profit*** decreased $2.6 million, or 16.7%,
to $12.8 million and represented 16.6% of Company-owned restaurant
net revenues in the second quarter of 2022 compared to $15.3
million and 22.6% of Company-owned restaurant net revenues in the
second quarter of 2021 primarily due to consolidated average wage
increases and higher product costs at Kona Grill.
General and administrative costs increased $1.1 million, or
18.3%, to $7.3 million for the three months ended June 30, 2022
from $6.1 million for the three months ended June 30, 2021. The
increase was attributable to increased activity required for
growth, increased outside professional services and increased
travel expenses due to rising hotel and airfare costs.
GAAP net income attributable to The ONE Group Hospitality, Inc.
in the second quarter of 2022 was $4.3 million, or $0.13 per share,
compared to GAAP net income of $13.8 million, or $0.41 per share,
in the second quarter of 2021.
Adjusted Net Income**** attributable to The ONE Group
Hospitality, Inc. in the second quarter of 2022 was $4.9 million,
or $0.15 per share, compared to adjusted net income of $6.5
million, or $0.19 per share, in the second quarter of 2021.
Adjusted EBITDA** decreased $2.5 million, or 19.6%, to $10.4
million in the second quarter of 2022 from $12.9 million in the
second quarter of 2021.
As of June 30, 2022, the Company had $24.4 million in cash and
cash equivalents, $24.5 million in term loan debt, and $10.6
million available on its revolving credit facility.
Restaurant Development
The Company intends to open at least nine new venues in 2022.
There are currently two Company-owned STK restaurants (San
Francisco, CA and Dallas, TX), three Company-owned Kona Grill
restaurants (Riverton, UT, Columbus, OH and Desert Ridge, Arizona)
and one managed STK restaurant (Stratford, UK) under development.
In addition, in conjunction with REEF Kitchens, the Company plans
to open three licensed units in Texas (of which one has already
opened) for takeout and delivery only. These units will feature
offerings from Kona Grill and Bao Yum concepts.
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 1-412-542-4186. A replay will be available after the call
and can be accessed by dialing 1-412-317-6671; the passcode is
10168394. The replay will be available until August 18, 2022.
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 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 22
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 13 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.
THE ONE GROUP HOSPITALITY,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited, in thousands,
except income per share and related share information)
For the three months ended
June 30,
For the six months ended June
30,
2022
2021
2022
2021
Revenues:
Owned restaurant net revenue
$
76,930
$
67,848
$
147,446
$
117,016
Management, license and incentive fee
revenue
4,195
2,912
7,860
4,226
Total revenues
81,125
70,760
155,306
121,242
Cost and expenses:
Owned operating expenses:
Owned restaurant cost of sales
19,851
17,191
37,950
29,192
Owned restaurant operating expenses
44,309
35,336
83,682
63,242
Total owned operating expenses
64,160
52,527
121,632
92,434
General and administrative (including
stock-based compensation of $911, $1,137, $1,790 and $2,159 for the
three and six months ended June 30, 2022 and 2021,
respectively)
7,261
6,139
14,140
11,313
Depreciation and amortization
2,926
2,495
5,641
5,194
COVID-19 related expenses
221
1,088
2,534
2,645
Agreement restructuring expenses
—
494
—
494
Pre-opening expenses
804
154
1,149
255
Lease termination expenses
—
107
255
294
Total costs and expenses
75,372
63,004
145,351
112,629
Operating income
5,753
7,756
9,955
8,613
Other expenses, net:
Interest expense, net
444
1,235
952
2,481
Gain on CARES Act Loan forgiveness
—
(8,561
)
—
(8,561
)
Total other expenses, net
444
(7,326
)
952
(6,080
)
Income before provision for income
taxes
5,309
15,082
9,003
14,693
Provision for income taxes
869
973
1,042
644
Net income
4,440
14,109
7,961
14,049
Less: net income (loss) attributable to
noncontrolling interest
137
273
(12
)
143
Net income attributable to The One Group
Hospitality, Inc.
$
4,303
$
13,836
$
7,973
$
13,906
Currency translation (loss) gain
(169
)
8
(261
)
(10
)
Comprehensive income attributable to The
ONE Group Hospitality, Inc.
$
4,134
$
13,844
$
7,712
$
13,896
Net income attributable to The ONE Group
Hospitality, Inc. per share:
Basic net income per share
$
0.13
$
0.44
$
0.25
$
0.46
Diluted net income per share
$
0.13
$
0.41
$
0.23
$
0.41
Shares used in computing basic income per
share
32,601,203
31,248,677
32,411,570
30,239,364
Shares used in computing diluted income
per share
33,959,991
34,028,735
34,123,142
33,683,652
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
June 30,
For the six months ended June
30,
2022
2021
2022
2021
Revenues:
Owned restaurant net revenue
94.8
%
95.9
%
94.9
%
96.5
%
Management, license and incentive fee
revenue
5.2
%
4.1
%
5.1
%
3.5
%
Total revenues
100.0
%
100.0
%
100.0
%
100.0
%
Cost and expenses:
Owned operating expenses:
Owned restaurant cost of sales (1)
25.8
%
25.3
%
25.7
%
24.9
%
Owned restaurant operating expenses
(1)
57.6
%
52.1
%
56.8
%
54.0
%
Total owned operating expenses (1)
83.4
%
77.4
%
82.5
%
79.0
%
General and administrative (including
stock-based compensation of 1.1%, 1.6%, 1.2% and 1.8% for the three
and six months ended June 30, 2022 and 2021, respectively)
9.0
%
8.7
%
9.1
%
9.3
%
Depreciation and amortization
3.6
%
3.5
%
3.6
%
4.3
%
COVID-19 related expenses
0.3
%
1.5
%
1.6
%
2.2
%
Agreement restructuring expenses
—
%
0.7
%
—
%
0.4
%
Pre-opening expenses
1.0
%
0.2
%
0.7
%
0.2
%
Lease termination expenses
—
%
0.2
%
0.2
%
0.2
%
Total costs and expenses
92.9
%
89.0
%
93.6
%
92.9
%
Operating income
7.1
%
11.0
%
6.4
%
7.1
%
Other expenses, net:
Interest expense, net
0.5
%
1.7
%
0.6
%
2.0
%
Gain on CARES Act Loan forgiveness
—
%
(12.1
)%
—
%
(7.1
)%
Total other expenses, net
0.5
%
(10.4
)%
0.6
%
(5.0
)%
Income before provision for income
taxes
6.5
%
21.3
%
5.8
%
12.1
%
Provision for income taxes
1.1
%
1.4
%
0.7
%
0.5
%
Net income
5.5
%
19.9
%
5.1
%
11.6
%
Less: net income (loss) attributable to
noncontrolling interest
0.2
%
0.4
%
—
%
0.1
%
Net income attributable to The One Group
Hospitality, Inc.
5.3
%
19.6
%
5.1
%
11.5
%
(1) These expenses are being shown as a percentage of owned
restaurant net revenue.
THE ONE GROUP HOSPITALITY,
INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(in thousands, except share
information)
June 30,
December 31,
2022
2021
ASSETS
(Unaudited)
Current assets:
Cash and cash equivalents
$
24,417
$
23,614
Accounts receivable
7,979
11,356
Inventory
4,732
3,915
Other current assets
2,281
3,666
Due from related parties
376
376
Total current assets
39,785
42,927
Property and equipment, net
77,213
69,638
Operating lease right-of-use assets
86,297
85,395
Deferred tax assets, net
11,727
12,313
Intangibles, net
15,284
15,505
Other assets
4,124
3,199
Security deposits
797
858
Total assets
$
235,227
$
229,835
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
12,278
$
11,094
Accrued expenses
18,698
23,155
Deferred license revenue
79
90
Deferred gift card revenue and other
1,545
2,029
Current portion of operating lease
liabilities
5,914
5,396
Current portion of long-term debt
500
500
Total current liabilities
39,014
42,264
Deferred license revenue, long-term
258
298
Operating lease liabilities, net of
current portion
104,464
103,616
Long-term debt, net of current portion
23,004
23,132
Total liabilities
166,740
169,310
Commitments and contingencies (Note
14)
Stockholders’ equity:
Common stock, $0.0001 par value,
75,000,000 shares authorized; 32,662,035 issued and 32,649,401
outstanding at June 30, 2022 and 32,138,396 issued and 32,125,762
outstanding at December 31, 2021
3
3
Preferred stock, $0.0001 par value,
10,000,000 shares authorized; no shares issued and outstanding at
June 30, 2022 and December 31, 2021, respectively
—
—
Treasury stock
(37
)
(37
)
Additional paid-in capital
53,743
53,481
Retained earnings
18,605
10,632
Accumulated other comprehensive loss
(2,906
)
(2,645
)
Total stockholders’ equity
69,408
61,434
Noncontrolling interests
(921
)
(909
)
Total equity
68,487
60,525
Total liabilities and equity
$
235,227
$
229,835
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.
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
June 30,
For the six months ended June
30,
2022
2021
2022
2021
(unaudited)
(unaudited)
(unaudited)
(unaudited)
Owned restaurant net revenue (1)
$
76,930
$
67,848
$
147,446
$
117,016
Management, license and incentive fee
revenue
4,195
2,912
7,860
4,226
GAAP revenues
$
81,125
$
70,760
$
155,306
$
121,242
Food and beverage sales from managed units
(1)
32,197
21,504
60,469
32,541
Total food and beverage sales at owned and
managed units
$
109,127
$
89,352
$
207,915
$
149,557
(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 2021 and 2022:
2021
2022
2021 vs. 2019
2022 vs. 2019
Q1
Q2
Q3
Q4
Q1
Q2
Q1
Q2
Q3
Q4
Q1
Q2
US STK Owned Restaurants
38.6
%
715.0
%
136.0
%
107.8
%
57.1
%
17.8
%
17.9
%
66.5
%
72.0
%
60.7
%
73.5
%
91.4
%
US STK Managed Restaurants
-19.5
%
764.6
%
116.5
%
133.3
%
103.6
%
26.6
%
-30.7
%
26.8
%
47.4
%
58.2
%
41.1
%
60.5
%
US STK Total Restaurants
20.8
%
725.7
%
130.6
%
113.5
%
66.5
%
19.8
%
1.9
%
54.3
%
63.8
%
60.0
%
62.9
%
81.9
%
Kona Grill Total Restaurants
26.6
%
160.6
%
36.8
%
50.2
%
21.9
%
3.7
%
4.6
%
23.0
%
26.9
%
38.2
%
27.5
%
27.6
%
Combined Same Store Sales
23.5
%
324.1
%
78.9
%
82.7
%
45.1
%
12.8
%
3.3
%
38.0
%
44.7
%
49.8
%
45.3
%
53.5
%
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
June 30,
For the six months ended June
30,
2022
2021
2022
2021
Net income attributable to The One Group
Hospitality, Inc.
$
4,303
$
13,836
$
7,973
$
13,906
Net income (loss) attributable to
noncontrolling interest
137
273
(12
)
143
Net income
4,440
14,109
7,961
14,049
Interest expense, net
444
1,235
952
2,481
Provision for income taxes
869
973
1,042
644
Depreciation and amortization
2,926
2,495
5,641
5,194
EBITDA
8,679
18,812
15,596
22,368
COVID-19 related expenses
221
1,088
2,534
2,645
Agreement restructuring expenses
—
494
—
494
Stock-based compensation
911
1,137
1,790
2,159
Lease termination expense (1)
—
107
255
294
Non-cash rent expense (2)
(54
)
(26
)
(85
)
(3
)
Pre-opening expenses
804
154
1,149
255
Gain on CARES Act Loan forgiveness
—
(8,561
)
—
(8,561
)
Adjusted EBITDA
10,561
13,205
21,239
19,651
Adjusted EBITDA attributable to
noncontrolling interest
211
333
133
281
Adjusted EBITDA attributable to The ONE
Group Hospitality, Inc.
$
10,350
$
12,872
$
21,106
$
19,370
(1) Amount relates to lease exit costs for 2016 leases for
restaurants never built. All amounts have been paid as of June 30,
2022. (2) Non-cash rent expense is included in owned restaurant
operating expenses and general and administrative expense on the
condensed consolidated statements of operations and comprehensive
income.
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 periods indicated (in
thousands):
For the three months ended
June 30,
For the six months ended June
30,
2022
2021
2022
2021
Operating income as reported
$
5,753
$
7,756
$
9,955
$
8,613
Management, license and incentive fee
revenue
(4,195
)
(2,912
)
(7,860
)
(4,226
)
General and administrative
7,261
6,139
14,140
11,313
Depreciation and amortization
2,926
2,495
5,641
5,194
COVID-19 related expenses
221
1,088
2,534
2,645
Agreement restructuring expenses
—
494
—
494
Pre-opening expenses
804
154
1,149
255
Lease termination expense
—
107
255
294
Restaurant Operating Profit
$
12,770
$
15,321
$
25,814
$
24,582
Restaurant Operating Profit as a
percentage of owned restaurant net revenue
16.6
%
22.6
%
17.5
%
21.0
%
Restaurant operating profit by brand is as follows (in
thousands):
For the three months ended
June 30,
For the six months ended June
30,
2022
2021
2022
2021
STK restaurant operating profit (Company
owned)
9,469
9,672
18,282
15,149
STK restaurant operating profit (Company
owned) as a percentage of STK revenue (Company owned)
21.9
%
27.4
%
22.2
%
25.8
%
Kona Grill restaurant operating profit
3,353
5,534
7,629
9,271
Kona Grill restaurant operating profit as
a percentage of Kona Grill revenue
10.0
%
17.2
%
11.8
%
16.0
%
Adjusted Net Income (Loss). We define Adjusted Net Income as net
income before gains on CARES Act Loan forgiveness, COVID-19 costs,
lease termination expenses, one-time stock-based compensation,
other non-recurring costs, non-cash rent during the pre-opening
period 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
June 30,
For the six months ended June
30,
2022
2021
2022
2021
Net income attributable to The One Group
Hospitality, Inc. as reported
$
4,303
$
13,836
$
7,973
$
13,906
Adjustments:
COVID-19 related expenses
221
1,088
2,534
2,645
Accelerated Stock Compensation
-
-
-
485
Non-cash Rent During the Pre-open
Period
224
-
224
-
Non-recurring Legal and Professional
Fees
479
-
479
-
Gain on CARES Act Loan Forgiveness
-
(8,561
)
-
(8,561
)
Adjusted net income before income
taxes
5,227
6,363
11,210
8,475
Income tax effect on adjustments(1)
(165
)
892
(615
)
622
Impact of excluding certain discrete
income tax items
(125
)
(800
)
(665
)
(1,077
)
Adjusted net income attributable to The
One Group Hospitality, Inc.
$
4,937
$
6,455
$
9,930
$
8,020
Adjusted net income per share: Basic
$
0.15
$
0.21
$
0.31
$
0.27
Adjusted net income per share: Diluted
$
0.15
$
0.19
$
0.29
$
0.24
Shares used in computing basic income per
share
32,601,203
31,248,677
32,411,570
30,239,364
Shares used in computing diluted income
per share
33,959,991
34,028,375
34,123,142
33,683,652
(1) Reflects the tax expense associated with the adjustments for
the three and six months ended June 30, 2022, and June 30, 2021.
The Company uses its statutory tax rate for the current year and
for the previous year.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220804005575/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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