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The ONE Group Reports First Quarter 2018 Results
Comparable sales for owned and managed US STK restaurants increased 7.3%
New York, NY – May 15, 2018– The ONE Group Hospitality, Inc. (“The ONE Group” or the “Company”) (NASDAQ: STKS), today reported financial results for the first quarter ended March 31, 2018.
Highlights for the first quarter ended March 31, 2018 were as follows:
|·||Total GAAP revenue was $19.5 million compared to $20.4 million in the same period last year;|
|·||Comparable sales* globally increased 6.6% compared to the same period last year. Domestic comparable sales for STK restaurants rose 7.3% and international comparable sales rose 4.5%;|
|·||GAAP net income from continuing operations before income taxes was $143,000 compared to a loss of $511,000 for the same period last year;|
|·||GAAP net income attributable to The ONE Group Hospitality, Inc. was $231,000 or $0.01 per share compared to GAAP net loss of $402,000 or $0.02 loss per share for the same period last year;|
|·||Adjusted EBITDA** increased 11.6% to $1.8 million compared to $1.6 million the same period last year; and,|
|·||Total restaurant expenses decreased 410 basis points to 89.0% from 93.1% as a percentage of revenues.|
Emanuel “Manny” Hilario, Chief Executive Officer, said “The ONE Group is off to a strong start this year with a notable 6.6% gain in comparable sales coupled with an 11.6% increase in Adjusted EBITDA despite a non-recurring Super Bowl event from 2017 that negatively impacted year over year revenues by $1.7 million and Adjusted EBITDA by $0.7 million. We are particularly pleased with the 7.3% increase in comparable sales for the domestic STK restaurants and the 410 basis points increase in margin for our domestic STK restaurants. Our results demonstrate that we are making headway executing our four-point strategy of driving comparable sales; focusing growth on license and management deals; improving operational efficiency in the restaurants; and reducing corporate G&A expenses, excluding stock-based compensation. We believe that the momentum we have achieved should continue and that there is still room for further sales improvements and greater profitability. We believe that 2018 is poised to be a highly productive year for our business.”
*Comparable sales or same store sales (“SSS”), represents total food and beverage sales at owned and managed units opened for a full 18-month period. This metric includes total revenue from our US owned and managed STK locations as well as the revenue reported to us with respect to comparable sales at our international locations (measured in constant currency), and excludes revenues where we do not directly control the event sales force (Royalton Hotel in NY and The W Hotel in Westwood, CA).
Total food and beverage sales at owned and managed units, a non-GAAP measure, 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. For a reconciliation of our GAAP revenue to total food and beverage sales at our owned and managed units and a discussion of why we consider it useful, see the financial information accompanying this release.
** Adjusted EBITDA, a non-GAAP measure, represents net loss before interest expense, provision for income taxes, depreciation and amortization, non-cash impairment loss, deferred rent, pre-opening expenses, non-recurring gains and losses, stock based compensation, losses from discontinued operations and certain transactional costs. Not all of 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. For a reconciliation of Adjusted EBITDA to the most directly comparable financial measure presented in accordance with GAAP and a discussion of why we consider it useful, see the financial information accompanying this release.
Unaudited First Quarter 2018 Financial Results
Total GAAP Revenues were $19.5 million in the first quarter of 2018 compared to $20.4 million in the same period last year. This decrease was primarily driven by a Super Bowl event hosted in Houston, TX in the prior year that generated $1.7 million in revenues. We did not host a Super Bowl event in 2018. This was partially offset by the increase in comparable sales and increased revenues from management, license and incentive fee revenues.
The following information was filed by One Group Hospitality, Inc. (STKS) on Tuesday, May 15, 2018 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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