DENVER–(BUSINESS WIRE)–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, 2020 and provided an update related to COVID-19.
Highlights for the second quarter ended June 30, 2020 compared to the same period last year are as follows:
- Total GAAP revenues decreased 29.4% to $16.7 million from $23.6 million;
- Consolidated comparable sales* decreased 66.7% but improved sequentially through the quarter
- Comparable sales decreased 40.1% in June, 70.2% in May, and 90.2% in April
- Comparable sales* for STK decreased 81.4% but improved sequentially through the quarter
- Comparable sales decreased 59.9% in June, 88.1% in May, and 95.6% in April
- Comparable sales* for Kona Grill decreased 52.8% but improved sequentially through the quarter
- Comparable sales decreased 21.9% in June, 52.5% in May, and 85.2% in April
- GAAP net loss attributable to The ONE Group was $2.9 million, or $0.10 net loss per share, compared to GAAP net loss of $0.3 million, or $0.01 net loss per share. GAAP net loss attributable to The ONE Group during the second quarter 2020 includes $0.7 million of incremental costs related to COVID-19;
- Adjusted EBITDA** decreased to ($0.8) million compared to $2.1 million.
For July 2020, consolidated comparable sales* decreased 25%. STK comparable sales* decreased 36% and for Kona Grill comparable sales* decreased 16%. Take-out and delivery sales were 13.7% of total company-owned revenues for the month.
*Comparable sales represent total U.S. food and beverage sales at owned and managed units opened for at least a full 18-month period. This measure includes total revenue from our owned and managed locations. Revenues from locations where we do not directly control the event sales force (The W Hotel Westwood, CA) are excluded from this measure.
** 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 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 Adjusted EBITDA to Net Income in this release.
“The health, safety and well-being of our employees and guests is critically important to us as we have welcomed guests back for in-person dining at 94% of our domestic STK and Kona Grill restaurants, providing them with the unique dining experiences they have been patiently waiting for. We are very pleased and most proud of having returned almost 3,000 teammates to the workforce in this very unique and challenging economic environment,” said Emanuel “Manny” Hilario, President and CEO of The ONE Group.
“We are encouraged by the continued sequential improvement in our comparable sales results, which includes our curbside and delivery business, as trends have strengthened month over month through July. Kona Grill has rebounded extremely well from the effects of COVID-19 shutdowns, driven by strong operations and marketing and aided by its suburban footprint; July comparable sales decreased 16% year over year and are tracking closer to normal levels as we quickly approach the holiday season. Excluding New York, Miami, and Las Vegas, our mainland domestic STK locations July’s comparable sales decreased 17%. Las Vegas, our STK brand flagship, July’s comparable sales decreased 34%, only limited by 50% occupancy leaving much unfulfilled customer demand. New York and Miami are our most challenged STK markets where July comparable sales decreased 54% because we currently do not have access to approximately 80% of our seating capacity in those markets. However, thanks to the relentless work and commitment of our team members, we were still able to achieve positive restaurant-level margins during the second quarter despite the challenges brought on by the pandemic,” continued Hilario.
“We continue to be encouraged by consumer interest in STK Meat Market, an e-commerce platform we launched in April that allows guests to purchase a wide array of signature Choice, Prime, and Waygu steak cuts for home delivery nationwide. It represents an additive layer to our business that we will leverage even after the pandemic subsides,” concluded Hilario.
Brinker International Provides First Quarter Of Fiscal 2021 Outlook And Reports Fourth Quarter Of Fiscal 2020 Results
August, 12 2020
Brinker International, Inc. (NYSE: EAT) today provided a business update related to the first quarter of fiscal 2021 and announced results for the fourth quarter and fiscal year 2020 ended June 24, 2020.
“Our continued strategic focus on value, off-premise, digital and scale is allowing us to successfully navigate through the pandemic,” said Wyman Roberts, Chief Executive Officer and President of Brinker International. “Leaning into these existing strategies with a clear focus and continually prioritizing the safety of our Team Members and Guests has allowed us to accelerate our performance and deliver industry leading results.”
Fiscal 2021 First Quarter-to-Date Highlights
During the first quarter of fiscal 2021 Chili’s and Maggiano’s continue to operate with reduced dining room capacities due to state and local mandates related to COVID-19. The following represents a business update from our first period of fiscal 2021 ended July 29, 2020, related to Company-owned restaurants:
- As of July 29, 2020, there were 885 Chili’s and 52 Maggiano’s Company-owned restaurants with dining rooms or patios open, representing 84.0% of total Company-owned restaurants. Capacities are limited in accordance with state and local mandates
- Comparable restaurant sales for the first period of fiscal 2021, ended July 29, 2020, compared to the prior year are as follows:
|Comparable Restaurant Sales|
- It’s Just Wings™, a virtual brand offering through our partnership with Doordash, launched nationally in 1,050 of our Company-owned restaurants on June 23, 2020. It’s Just Wings sales are included in comparable restaurant sales for restaurants operating the virtual brand
- Brinker had total liquidity of $576.2 million as of July 29, 2020
Fiscal 2021 Outlook
We are providing a financial outlook for the first quarter of fiscal 2021 quarter instead of our usual practice of providing an annual outlook. Forecasting longer term business performance is not reliable given the uncertainties created by the ongoing COVID-19 pandemic. We plan to update our financial outlook on a quarterly basis until such time we can reliably forecast on a longer term basis.
First Quarter of Fiscal 2021 Guidance
- Adjusted net loss per diluted share is expected to be in the range of $0.40 to $0.25
- Comparable restaurant sales are expected to be down low to mid-teens
- Operating cash flow is expected to be positive
- Weighted average diluted shares is expected to be 45.0 million to 46.0 million
Fiscal 2021 is a 53-week year, and includes an extra operating week in the fourth quarter.
We are unable to reliably forecast special items such as restaurant impairments, restaurant closures, reorganization charges and legal settlements without unreasonable effort. As such, we do not present a reconciliation of forecasted non-GAAP measures to the corresponding GAAP measures. If special items are reported during fiscal 2021, reconciliations to the appropriate GAAP measures will be provided.
August, 12 2020
Red Robin Gourmet Burgers, Inc. (NASDAQ: RRGB) yesterday reported financial results for the quarter ended July 12, 2020.
Second Quarter 2020 Financial Summary Compared to Second Quarter 2019
- Total revenues were $161.1 million, a decrease of 47.7%, primarily resulting from our operational shift in response to COVID-19, including limited occupant capacity as we reopen dining rooms, operating an off-premise only model at our restaurants with closed dining rooms, and closed restaurants;
- Comparable restaurant revenue decreased 41.4%;
- Comparable average Guest check decreased 2.9%, resulting from a 5.7% decrease from menu mix, partially offset by a 2.2% increase in pricing and a 0.6% increase from lower discounting;
- Comparable restaurant Guest counts decreased 38.5%;
- Off-premise sales increased 208.7% and comprised 63.8% of total food and beverage sales;
- GAAP loss per diluted share was $4.09 compared to GAAP earnings per diluted share of $0.08;
- Adjusted loss per diluted share was $3.31 compared to adjusted earnings per diluted share of $1.03 (see Schedule I);
- Net loss was $56.3 million compared to net income of $1.0 million; and
- Adjusted EBITDA was a loss of $15.3 million compared to adjusted EBITDA of $25.5 million (see Schedule III).
Paul J.B. Murphy III, Red Robin’s President and Chief Executive Officer, said, “We are accelerating the transformation of our business through exceptional hospitality and uncompromising health and safety standards, despite the challenges created by the recent surge in COVID-19 cases and localized, renewed mandates to re-close dining rooms. In addition to generating sequential improvement in average weekly net sales per restaurant over the last five weeks, our record-high dine-in and off-premise satisfaction scores validate our consistent, quality execution as we build trust and affinity within our communities.”
Murphy continued, “Having strengthened our liquidity through our recent equity raise of almost $30 million, we are managing our business prudently while continuing to progress the foundational pillars in our previously articulated strategic plan to create long-term value for our shareholders. This plan includes executing our TGX hospitality model, implementing Donatos® Pizza in our restaurants, and improving our digital experience to drive increased Guest engagement and frequency.”
August, 11 2020
Ark Restaurants Corp. (Nasdaq:ARKR) yesterday reported financial results for the third quarter ended June 27, 2020.
Third Quarter 2020 Financial Results
Total revenues for the 13 weeks ended June 27, 2020 were $7,199,000 versus $44,807,000 for the 13 weeks ended June 29, 2019.
Total revenues for the 39 weeks ended June 27, 2020 were $84,716,000 versus $120,667,000 for the 39 weeks ended June 29, 2019. The 39 weeks ended June 29, 2019 includes revenues of $1,040,000 related to Durgin-Park which was closed January 12, 2019.
Company-wide same store sales are not meaningful as a result of the temporary closure of all of our restaurants in March 2020.
The Company’s EBITDA for the 13 weeks ended June 27, 2020, adjusted for non-controlling interests and non-cash stock option expense was ($4,351,000) versus EBITDA adjusted for non-controlling interests, non-cash stock option expense and losses incurred on the closure of Durgin-Park (discussed below) of $5,838,000 during the same 13-week period of last year. Net loss for the 13 weeks ended June 27, 2020 was ($2,526,000) or ($0.72) per basic and diluted share, compared to a net income of $3,962,000 or $1.14 per basic and $1.12 per diluted share for the same 13-week period in the prior year.
The Company’s EBITDA for the 39 weeks ended June 27, 2020, adjusted for non-controlling interests, non-cash stock option expense and loss on lease termination was ($1,397,000) versus EBITDA adjusted for non-controlling interests, non-cash stock option expense and losses incurred on the closure of Durgin-Park (discussed below) of $9,705,000 during the same 39-week period of last year. Net loss for the 39 weeks ended June 27, 2020 was ($2,791,000) or ($0.80) per basic and diluted share, compared to net income of $3,231,000 or $0.93 per basic and $0.92 per diluted share, for the same 39-week period in the prior year.
August, 10 2020
FAT (Fresh. Authentic. Tasty.) Brands Inc. (NASDAQ:FAT) last week reported fiscal second quarter 2020 financial results for the 13-week period ending June 28, 2020.
Andy Wiederhorn, President and CEO of FAT Brands, commented, “Thank you to our employees and franchisees, who have shown dedication and resolve to persevere through the challenges presented by the pandemic, and to return to a consistent growth mode as soon as possible.”
“In the second quarter, even while navigating the rapidly evolving state by state regulatory landscape, and while supporting and empowering our franchisees, the FAT Brands team executed on our strategic goals. This included anticipating and capitalizing on the rapid shift to delivery and to go, with the successful implementation of third-party delivery through enterprise partnerships with the big four delivery platforms. We also made progress on our cross-selling and co-branding programs, with four new co-branded Fatburger / Buffalo’s locations during the quarter and one multi-concept virtual restaurant, and we have a strong development pipeline for the second half of the year. Lastly, in July, we completed the public offering of our Series B Preferred Stock, which, on the heels of our whole business securitization in March, simplified our capital structure and lowered our cost of capital.”
Wiederhorn continued, “Toward the end of the second quarter and through July, local restrictions eased and dining rooms began to re-open. Same-store sales steadily improved, increasing 44% from $3.3 million the week ending May 17th to $4.7 million the week ending July 26th. We are optimizing operations wherever possible, and continuing the expansion of the FAT Brands asset light model. Through the end of July, there have been 15 new store openings, and we have plans to open 18 additional stores by the end of the year.”
Fiscal Second Quarter 2020 Highlights
- Total revenues of $3.1 million compared to $5.9 million in the second quarter of 2019. Excluding advertising revenues, revenues were $2.5 million, down from $4.8 million in the second quarter of 2019.
- System-wide sales were down 51.1% y/y and 31.1% YTD
- System-wide sales (excluding Ponderosa & Bonanza) declined 29.1% y/y and 15.4% YTD
- United States sales decline of 49.7% y/y and 32.0% YTD
- Canada sales decline of 17.7% y/y and 8.8% YTD
- Other International(1) sales were down 79.0% y/y and 40.8% YTD
- System-wide same-store sales decline of 23.1% y/y and 19.3% YTD
- System-wide same-store sales decline (excluding Ponderosa & Bonanza) of 22.0% y/y and 18.2% YTD
- United States same-store sales decline of 24.6% y/y and 19.5% YTD
- Canada same-store sales decline of 16.6% y/y and 19.3% YTD
- Other International(1) sales decline of 18.5% y/y and 18.0% YTD
- Five new franchised store openings during the second quarter 2020
- Store count as of June 28, 2020: 366 stores system-wide
- System-wide sales were down 51.1% y/y and 31.1% YTD
- Net loss of $4.25 million or $0.36 per share on a basic and fully diluted basis inclusive of a non-cash asset impairment charge of $3.2 million, as compared to net loss of $508,000 or $0.04 per share on a basic and fully diluted basis in the second quarter of 2019
- EBITDA(2) of ($4.3 million) inclusive of a non-cash asset impairment charge of $3.2 million as compared to $2.2 million in the second quarter of 2019
- Adjusted EBITDA(2) of ($361,000) as compared to $2.0 million in the second quarter of 2019. The reconciliation of EBITDA to Adjusted EBITDA can be found in the accompanying financial tables.
Summary of Second Quarter 2020 Financial Results
Total revenues were $3.1 million in the second quarter of 2020 and as compared to $5.9 million in the second quarter of 2019. The revenue performance overwhelmingly reflects a decline in royalty revenue related to the impact of COVID-19, as well as lower franchise fees in 2020 compared to the prior year period and decreases in store opening fees related to the preferred application of ASC 606, which the Company adopted in the fourth quarter of 2019.
Costs and expenses increased to $8.9 million in the second quarter of 2020 compared to $3.7 million in the second quarter of 2019. This increase reflects a $3.2 million goodwill and tradename impairment charge related to Ponderosa and Bonanza, as well as refranchising losses of $1.0 million and increased G&A primarily reflecting a $907,000 increase in provisions for bad debts related to the effects of COVID-19 and a full quarter of depreciation and amortization expense related to the acquisition of Elevation in June 2019.
Other income was $450,000 in the second quarter of 2020, compared to other expense of $1.4 million in the prior year, and consisted primarily of income of $1,264,000 from the change in fair value of the derivative liability relating to the conversion feature of the Series A Preferred Stock, which was partially offset by net interest expense of $765,000. In the second quarter of 2019, other expense of $1.4 million consisted primarily of net interest expense of $1.3 million.
The combination of the aforementioned revenue and expenses resulted in a net loss of $4.2 million in the second quarter of 2020, compared to a net loss of $508,000 in the second quarter of 2019.