Market Overview

The ONE Group Hospitality, Inc. Reports Third Quarter 2018 Results

Share:

Domestic Comparable Sales for STK Restaurants Rose 6.9%

Updates 2018 Financial Targets, Introduces Preliminary 2019 Financial
Targets

The ONE Group Hospitality, Inc. ("The ONE Group" or the "Company")
(NASDAQ:STKS), today reported unaudited financial results for the third
quarter ended September 30, 2018.

Highlights for the Third Quarter ended September 30, 2018:

  • Total GAAP revenue increased 12.1% to $20.0 million compared to $17.8
    million in the same period last year;
  • Domestic comparable sales* at owned and managed STK restaurants rose
    6.9%, consisting of a 7.7% increase in domestic owned restaurants and
    a 5.4% in domestic managed restaurants;
  • GAAP income from continuing operations was $0.3 million compared to
    GAAP net loss of $0.5 million for the same period last year;
  • GAAP net loss attributable to The ONE Group Hospitality, Inc. was $0.3
    million compared to GAAP net loss of $1.2 million or for the same
    period last year;
  • Adjusted EBITDA** increased 41.1% to $2.0 million compared to $1.4
    million the same period last year;
  • Total owned restaurant expenses decreased 330 basis points to 90.3%
    from 93.6% as a percentage of owned net restaurant revenues; and
  • Opened one Company-owned STK and two international licensed STKs.

Emanuel "Manny" Hilario, President and Chief Executive Officer, said,
"We are making remarkable progress executing our four point strategy
during the third quarter, as demonstrated by our 6.9% comparable sales
growth, 12.1% increase in total revenue growth, and 41.1% increase in
adjusted EBITDA , while setting ourselves up for long-term success. We
have a very deep pipeline of development, management and licensed
opportunities, which is a reflection of the unique guest dining, and
hospitality experiences that we are able to create. We are back in
growth mode as we have identified significant global opportunities to
create unique vibe-dining experiences through company owned restaurants
as well as managed and licensed restaurants and venues."

Hilario added, "We are executing against our development pipeline as
demonstrated by the three new locations opened during the third quarter.
Openings included a second licensed location in Dubai, a company-owned
restaurant in San Diego, CA, and a licensed location in Mexico City. All
of these units are meeting or exceeding their preliminary targets which
is very encouraging. We now plan to open one domestic managed STK, one
international licensed STK, and one food and a beverage hospitality
venue before year-end."

*Comparable sales or same store sales ("SSS") represents total food
and beverage sales at owned and managed units opened for at least a full
18-month period. This metric includes total revenue from our owned and
managed STK locations. Revenues from locations where we do not directly
control the event sales force (Royalton Hotel, NY; The W Hotel,
Westwood, CA; and our locations in Europe) are excluded from this metric.

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 income
/ 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 Third Quarter 2018 Financial Results

Total GAAP Revenues increased 12.1% to $20.0 million in the third
quarter of 2018 compared to $17.8 million in the same period last year.
This increase was primarily driven by comparable sales growth. Domestic
comparable store sales at owned and managed STK restaurants increased
6.9%. This increase follows similarly strong mid to high single digit
comparable sales increases reported for the first half of 2018 and are
indicative of the continued strong performance of the STK brand. On an
adjusted basis, excluding the positive impact from lapping last year's
Hurricane Irma, domestic comparable store sales at owned and managed STK
restaurants increased 5.6%.

Management, license and incentive fee revenue increased 8.4% to $2.7
million in the third quarter of 2018 compared to $2.5 million in the
third quarter of 2017. The increase in management, license and incentive
fee revenue was due to the launch of the licensed STK in Dubai in
December 2017 coupled with STK Dubai Downtown in July 2018 and STK
Mexico City in August 2018.

GAAP net loss attributable to The ONE Group Hospitality, Inc. in the
third quarter of 2018 was $0.3 million compared to GAAP net loss of $1.2
million in the third quarter of 2017.

Adjusted EBITDA rose 41.1% to $2.0 million, an increase of $0.5 million,
from $1.4 million in the third quarter of 2017.

Development Update

 

Opened - 2018

 
Location     Type     Opening Date
STK- Dubai Downtown     International Licensed     July 2018
STK- San Diego     Domestic Company-Owned     July 2018
STK- Mexico City     International Licensed     August 2018
       

Projected Additions - 2018

             
Location     Type     Tentative Opening Date
STK- Doha     International Licensed     December 2018
F&B- London     Food and Beverage     December 2018
 

Key Strategic Initiatives

We continue executing our four key strategic initiatives which are
positioning The One Group sustained for long-term growth.

1. Improving Operational Efficiencies in our Restaurants

  • We have taken numerous steps to streamline operations and run our
    restaurants more efficiently, including menu simplification, better
    labor scheduling, reservation management, and most recently, hiring a
    Head of Operations and Global Training.
  • Total Owned Restaurant operating expenses decreased 330 basis points
    in the third quarter of 2018 to 90.3% of sales.
  • Total Owned Restaurant operating expenses decreased 370 basis points
    through the first three quarters of 2018 to 88.6% of sales.

2. Driving Comparable Sales

  • We have reported strong mid to high single digit increases in domestic
    comparable sales for the first three quarters of 2018:
    • Q1 2018: 7.3%
    • Q2 2018: 7.5%
    • Q3 2018: 6.9%

3. Reducing G&A at the Corporate Level

  • G&A declined 130 basis points to 11.4% of total sales in the third
    quarter of 2018. On an adjusted basis, G&A decreased 270 basis points
    to 8.9% of total sales.
  • G&A declined 130 basis points to 13.3% of total sales through the
    first three quarters of 2018. On an adjusted basis, G&A decreased to
    8.9% of total sales.
  • We expect G&A to be approximately $2 million per quarter on a go
    forward basis.

4. Focusing on Growth Through License and Management Deals

  • We have a strong pipeline of asset light management and hospitality
    deals.
  • We opened two international licensed STKs and one owned restaurant
    during the third quarter 2018.
  • We plan to open one international licensed STK, one domestic managed
    STK, and one food and beverage venue during the fourth quarter of 2018.
  • Over the long term we plan to open three to five licensed restaurant
    units and one to two food and beverage hospitality venues annually.

2018 Targets

We are updating the following targets for 2018:

  • Total GAAP revenues between $80 million and $85 million;
  • Total food and beverage sales at all our owned and managed units of
    between $170 million and $180 million;
  • Comparable store sales growth of about 7% up from 3% to 4%;
  • Total food and beverage costs of approximately 25% to 26%;
  • Adjusted EBITDA between $10 million and $10.5 million, representing
    approximately 40% growth compared to the prior year; and,
  • Total capital expenditures, net of $0.6 million in allowances received
    from landlords, of approximately $3 million, which is significantly
    less than prior years and reflective of our capital-light strategy.

Preliminary 2019 Targets

We are providing the following preliminary targets for 2019:

  • Comparable store sales growth of about 2% to 3%;
  • Adjusted EBITDA of $13 million, representing approximately 24% to 30%
    growth compared to our 2018 Adjusted EBITDA guidance;
  • Total G&A of approximately $8.0 million, or approximately $2 million
    per quarter;
  • Total capital expenditures, net of allowances received from landlords,
    of approximately $3 to $4 million; and,
  • Four to six licensed restaurant units, one company-owned STK, and one
    to two food and beverage hospitality venues.

Long-Term Growth Targets

We are reiterating the following long-term growth targets:

  • Three to five licensed restaurant units and one to two food and
    beverage hospitality venues annually;
  • Comparable store sales growth of 2% to 3%;
  • Consistent Adjusted EBITDA growth of at least 20%; and,
  • Continued focus on our asset light model and disciplined G&A
    management, while benefiting from economies of scale and operating
    efficiencies.

We have not reconciled guidance for Adjusted EBITDA to the corresponding
GAAP financial measure because we do not provide guidance for the
various reconciling items. We are unable to provide guidance for these
reconciling items because we cannot determine their probable
significance, as certain items are outside of our control and cannot be
reasonably predicted since these items could vary significantly from
period to period. Accordingly, reconciliations to the corresponding GAAP
financial measure are not available without unreasonable effort.

Conference Call and Webcast

Emanuel "Manny" Hilario, President and Chief Executive Officer, and
Linda Siluk, Interim Chief Financial Officer, will host a conference
call and webcast to discuss third quarter 2018 financial results, update
2018 financial targets, preliminary 2019 financial targets, and
long-term growth targets today at 5:00 PM Eastern Time.

The conference call can be accessed live over the phone by dialing
1-201-493-6780. The replay will be available after the call and can be
accessed by dialing 1-412-317-6671; the passcode is 13683752. The replay
will be available until November 26, 2018.

The webcast can also be accessed from the Investor Relations tab of the
Company's website at www.togrp.com
under "News / Events".

About The ONE Group

The ONE Group (NASDAQ:STKS) is a global hospitality company that
develops and operates upscale, high-energy restaurants and lounges and
provides hospitality management services for hotels, casinos and other
high-end venues both nationally and internationally. The ONE Group's
primary restaurant brand is STK, a modern twist on the American
steakhouse concept with locations in major metropolitan cities
throughout the U.S., Europe, Mexico, and the Middle East. ONE
Hospitality, The ONE Group's food and beverage hospitality services
business, provides the development, management and operations for
premier restaurants and turn-key food and beverage services within
high-end hotels and casinos. 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. For example, the statements
related to the exploration of strategic alternatives and the potential
results therefrom and the statements related to our strategic review of
our operations targeting sources for 2018 and beyond are
forward-looking. Forward-looking statements may be identified by the use
of words such as "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) 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; (2) 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;
(3) in
the case of our strategic review of operations, 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; (4) changes in applicable
laws or regulations; (5) the possibility that the Company may be
adversely affected by other economic, business, and/or competitive
factors; and (6) 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, 2017.

Investors are referred to the most recent reports filed with the SEC
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 following table sets forth certain statements of operations and
comprehensive (loss) income from the periods indicated:

       
The One Group Hospitality, Inc.
Consolidated Statements of Operations and Comprehensive (Loss)
Income
(Unaudited, in thousands, except earnings per share and related
share information)
 
Three Months Ended September 30, Nine Months Ended September 30,
2018 2017 2018 2017
Revenues:
Owned restaurant net revenues $ 15,312 $ 13,189 $ 45,908 $ 42,100
Owned food, beverage and other net revenues   1,960     2,144     6,048     8,460  
Total owned revenues 17,272 15,333 51,956 50,560
Management, license and incentive fee revenue   2,688     2,479     7,832     7,577  
Total revenues   19,960     17,812     59,788     58,137  
 
Cost and expenses:
Owned operating expenses:
Owned restaurants:
Owned restaurant cost of sales 4,050 3,436 12,121 11,150
Owned restaurant operating expenses   9,779     8,911     28,556     27,688  
Total owned operating expenses 13,829 12,347 40,677 38,838
Owned food, beverage and other expenses   2,068     2,044     5,782     7,296  
Total owned operating expenses 15,897 14,391 46,459 46,134
General and administrative (including stock-based compensation of
$337, $200, $1,005 and $744, respectively)
2,266 2,267 7,937 8,479
Settlements - 500 - 1,295
Depreciation and amortization 896 950 2,575 2,621
Lease termination expense and asset write-offs 78 402 168 883
Pre-opening expenses 449 94 1,330 1,286
Transaction costs - - - 254
Equity in income of investee companies - (264 ) (111 ) (156 )
Other expense (income), net   38     (19 )   (139 )   (137 )
Total costs and expenses   19,624     18,321     58,219     60,659  
 
Income (loss) from operations 336 (509 ) 1,569 (2,522 )
 
Interest expense, net of interest income   294     325     902     804  
 
Income (loss) from continuing operations before provision for income
taxes
42 (834 ) 667 (3,326 )
 
Provision for income taxes   251     179     445     365  
 
(Loss) income from continuing operations   (209 )   (1,013 )   222     (3,691 )
 
Loss from discontinued operations, net of taxes   -     -     -     (106 )
 
Net (loss) income (209 ) (1,013 ) 222 (3,797 )
Less: net income attributable to noncontrolling interest   96     153     116     71  
Net (loss) income attributable to The ONE Group Hospitality, Inc. $ (305 ) $ (1,166 ) $ 106   $ (3,868 )
 
Currency translation adjustment   (170 )   107   (104 )   190  
Comprehensive (loss) income $ (475 ) $ (1,059 ) $ 2   $ (3,678 )
 
Basic and diluted (loss) income per share
Continuing operations $ (0.01 ) $ (0.05 ) $ 0.00   $ (0.15 )
Discontinued operations $ -   $ -   $ -   $ -  
Attributed to The One Group Hospitality, Inc. $ (0.01 ) $ (0.05 ) $ 0.00   $ (0.15 )
Weighted average number of common shares outstanding
Basic   27,751,632     25,228,288     27,437,269     25,141,933  
Diluted   27,751,632     25,228,288     27,499,645     25,141,933  
 

The following table sets forth certain statements of operations data as
a percentage of total revenues for the periods indicated:

   
Three Months Ended Nine Months Ended
September 30, September 30,
2018   2017 2018   2017
Revenues:        
Owned restaurant net revenues 76.7 % 74.0 % 76.8 % 72.4 %
Owned food, beverage and other net revenues   9.8 %   12.0 %   10.1 %   14.6 %
Total owned revenues 86.5 % 86.1 % 86.9 % 87.0 %
Management, license and incentive fee revenue   13.5 %   13.9 %   13.1 %   13.0 %
Total revenues   100.0 %   100.0 %   100.0 %   100.0 %
 
Cost and expenses:
Owned operating expenses:
Owned restaurants:
Owned restaurant cost of sales (1) 26.4 % 26.1 % 26.4 % 26.5 %
Owned restaurant operating expenses (1)   63.9 %   67.6 %   62.2 %   65.8 %
Total owned operating expenses (1) 90.3 % 93.6 % 88.6 % 92.3 %
Owned food, beverage and other expenses (2)   105.5 %   95.3 %   95.6 %   86.2 %
Total owned operating expenses (3) 92.0 % 93.9 % 89.4 % 91.2 %
General and administrative (including stock-based compensation of
1.7%, 1.1%, 1.7% and 1.3%, respectively)
11.4 % 12.7 % 13.3 % 14.6 %
Settlements 0.0 % 2.8 % 0.0 % 2.2 %
Depreciation and amortization 4.5 % 5.3 % 4.3 % 4.5 %
Lease termination expense and asset write-offs 0.4 % 2.3 % 0.3 % 1.5 %
Pre-opening expenses 2.2 % 0.5 % 2.2 % 2.2 %
Transaction costs 0.0 % 0.0 % 0.0 % 0.4 %
Equity in income of investee companies 0.0 % (1.5 )% (0.2 )% (0.3 )%
Other expense (income), net   0.2 %   (0.1 )%   (0.2 )%   (0.2 )%
Total costs and expenses   98.3 %   102.9 %   97.4 %   104.3 %
 
Income (loss) from operations 1.7 % (2.9 )% 2.6 % (4.3 )%
 
Interest expense, net of interest income   1.5 %   1.8 %   1.5 %   1.4 %
 
Income (loss) from continuing operations before provision for income
taxes
0.2 % (4.7 )% 1.1 % (5.7 )%
 
Income tax provision   1.3 %   1.0 %   0.7 %   0.6 %
 
(Loss) income from continuing operations   (1.0 )%   (5.7 )%   0.4 %   (6.3 )%
 
(Loss) from discontinued operations, net of taxes   0.0 %   0.0 %   0.0 %   (0.2 )%
 
Net (loss) income (1.0 )% (5.7 )% 0.4 % (6.5 )%
Less: net loss attributable to noncontrolling interest   0.5 %   0.9 %   0.2 %   0.1 %
Net (loss) income attributable to The ONE Group Hospitality, Inc.   (1.5 )%   (6.5 )%   0.2 %   (6.7 )%
 
  (1)   These expenses are being shown as a percentage of owned restaurant
net revenues.
(2) These expenses are being shown as a percentage of owned food,
beverage and other net revenues.
(3) These expenses are being shown as a percentage of total owned
revenue.
 
   
THE ONE GROUP HOSPITALITY, INC.
CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS, EXCEPT SHARE INFORMATION)
 
(unaudited)
  9/30/2018     12/31/2017  
Assets
Current assets:
Cash and cash equivalents $ 968 $ 1,548
Accounts receivable 6,129 5,514
Inventory 1,194 1,402
Other current assets 1,600 1,299
Due from related parties, net   27      
Total current assets 9,918 9,763
Property & equipment, net 38,476 37,811
Investments 2,612 2,957
Deferred tax assets 72 69
Other assets 598 384
Security deposits   2,091     2,031  
Total assets $ 53,767   $ 53,015  
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 5,855 $ 5,329
Accrued expenses 6,625 6,987
Deferred license revenue 241 115
Deferred gift card revenue and other 1,196 999
Due to related parties, net 256
Current portion of long-term debt   3,196     3,241  
Total current liabilities 17,113 16,927
 
Deferred license revenue, long-term 1,663 1,222
Due to related parties, long-term 1,197 1,197
Deferred rent and tenant improvement allowances 17,072 17,001
Long-term debt, net of current portion   7,877     10,115  
Total liabilities 44,922 46,462
 
Commitments and contingencies
 
Stockholders' equity:
Common stock, $0.0001 par value, 75,000,000 shares authorized;
28,293,902 and 27,152,101 shares issued and outstanding at September
30, 2018 and December 31, 2017, respectively
3 3
Preferred stock, $0.0001 par value, 10,000,000 shares authorized; 0
shares issued and outstanding at September 30, 2018 and December 31,
2017, respectively
Additional paid-in capital 43,235 41,007
Accumulated deficit (31,927 ) (31,979 )
Accumulated other comprehensive loss   (1,660 )   (1,556 )
Total The One Group Hospitality, Inc. stockholders' equity   9,651     7,475  
Noncontrolling interests   (806 )   (922 )
Total stockholders' equity   8,845     6,553  
Total Liabilities and Stockholders' Equity $ 53,767   $ 53,015  

 

 

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 and adjusted EBITDA.

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. We believe that this measure also represents a useful internal
measure of performance. 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):

  Three Months Ended     Nine Months Ended
September 30, September 30,
2018   2017 2018   2017
 
Owned restaurant net revenue (a) $ 15,312 $ 13,189 $ 45,908 $ 42,100
Owned food, beverage and other revenue (a)   1,960   2,144   6,048   8,460
Total owned revenue 17,272 15,333 51,956 50,560
Managed, licensed and incentive revenue   2,688   2,479   7,832   7,577
Total revenues (GAAP) $ 19,960 $ 17,812 $ 59,788 $ 58,137
 
Food and Beverage Sales from Managed Units $ 26,220 $ 25,641 $ 75,039 $ 75,171
 
Total Food and Beverage Sales at Owned and Managed Units $ 43,492 $ 40,974 $ 126,995 $ 125,731
 

(a) Components of Total Food & Beverage Sales at Owned and Managed
Units.

 

The following table presents the elements of the domestic comparable
sales measure for Fiscal 2017 and Fiscal 2018 through September 2018 on
a quarterly basis. Note that comparable sales is calculated only for
locations opened for at least a full 18 month period and excludes
revenues from locations where we do not directly control the event sales
force.

  2017     2018
Q1   Q2   Q3*   Q4 Q1   Q2   Q3
 
US Owned STK Restaurants -1.8% 1.2% -0.9% 5.8% 8.7% 6.2% 7.7%
US Managed STK Restaurants 8.3% 2.5% 6.5% 6.6% 4.9% 10.1% 5.4%
US Total STK Restaurants 2.6% 1.7% 1.9% 6.0% 7.3% 7.5% 6.9%
 

* Reflects 2.1% adjustment for Hurricane Irma impact

 

Adjusted EBITDA. We define adjusted EBITDA as 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. 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.

We believe that adjusted EBITDA is an appropriate measure of operating
performance, as it provides a clear picture of our operating results by
eliminating certain non-cash expenses that are not reflective of the
underlying business performance. We use this metric to facilitate a
comparison of our operating performance on a consistent basis from
period to period and to analyze the factors and trends affecting our
business as well as evaluate the performance of our units. Adjusted
EBITDA 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. Adjusted EBITDA is included in
this press release because it is a key metric used by management.
Additionally, adjusted EBITDA is frequently used by analysts, investors
and other interested parties to evaluate companies in our industry. We
use adjusted EBITDA, alongside other GAAP measures such as net income
(loss), to measure profitability, as a key profitability target in our
annual and other budgets, and to compare our performance against that of
peer companies. We believe that adjusted EBITDA provides useful
information facilitating operating performance comparisons from period
to period.

The following table presents a reconciliation of net income to Adjusted
EBITDA for the periods indicated (unaudited, in thousands):

   
Three Months Ended Nine Months Ended
September 30, September 30,
2018   2017 2018   2017
 
Net (loss) income attributable to The ONE Group Hospitality, Inc. $ (305 ) $ (1,166 ) $ 106 $ (3,868 )
Net income attributable to noncontrolling interest   96     153     116     71  
Net (loss) income (209 ) (1,013 ) 222 (3,797 )
Interest expense, net of interest income 294 325 902 804
Income tax provision 251 179 445 365
Depreciation and amortization   896     950     2,575     2,621  
 
EBITDA 1,232 441 4,144 (7 )
 
Deferred rent (1) (52 ) 14 (141 ) (39 )
Pre-opening expenses 449 94 1,330 1,286
Lease termination expense and asset write-offs (2) 78 402 168 883
Loss from discontinued operations, net of taxes - - - 106
Transaction costs (3) - - - 254
Stock-based compensation 337 200 1,005 744
Settlements - 500 - 1,295
Equity share of settlement costs - - - 270
Other   145     -     145     -  
 
Adjusted EBITDA 2,189 1,651 6,651 4,792
Adjusted EBITDA attributable to noncontrolling interest   153     208     317     269  
Adjusted EBITDA attributable to The ONE Group Hospitality, Inc. $ 2,036   $ 1,443   $ 6,334   $ 4,523  
 
  (1)   Deferred rent is included in owned restaurant operating expenses and
general and administrative expense on the statement of operations
and comprehensive (loss) income.
(2) Lease termination and related asset write-offs is related to the
costs associated with closed or abandoned locations.
 

View Comments and Join the Discussion!