Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2024 | Jul. 31, 2024 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2024 | |
Document Transition Report | false | |
Entity File Number | 001-37379 | |
Entity Registrant Name | ONE GROUP HOSPITALITY, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 14-1961545 | |
Entity Address, Address Line One | 1624 Market Street | |
Entity Address, Address Line Two | Suite 311 | |
Entity Address, City or Town | Denver | |
Entity Address, State or Province | CO | |
Entity Address, Postal Zip Code | 80202 | |
City Area Code | 646 | |
Local Phone Number | 624-2400 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | STKS | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 31,145,546 | |
Entity Central Index Key | 0001399520 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 32,247 | $ 21,047 |
Credit card receivable | 10,979 | 7,234 |
Restricted cash and cash equivalents | 552 | |
Accounts receivable | 9,287 | 10,030 |
Inventory | 9,164 | 6,184 |
Other current assets | 4,849 | 1,809 |
Due from related parties | 376 | 376 |
Total current assets | 67,454 | 46,680 |
Operating lease right-of-use assets | 271,160 | 95,075 |
Property and equipment, net | 260,385 | 139,908 |
Goodwill | 145,162 | |
Intangibles, net | 146,193 | 15,306 |
Deferred tax assets, net | 45,236 | 14,757 |
Other assets | 8,639 | 4,636 |
Security deposits | 1,635 | 883 |
Total assets | 945,864 | 317,245 |
Current liabilities: | ||
Accounts payable | 26,723 | 19,089 |
Accrued expenses | 52,474 | 28,333 |
Current portion of operating lease liabilities | 16,523 | 6,897 |
Deferred gift card revenue and other | 6,715 | 2,077 |
Current portion of long-term debt | 3,500 | 1,500 |
Other current liabilities | 559 | 266 |
Total current liabilities | 106,494 | 58,162 |
Long-term debt, net of current portion, unamortized discount and debt issuance costs | 330,861 | 70,410 |
Operating lease liabilities, net of current portion | 294,171 | 120,481 |
Other long-term liabilities | 5,116 | 832 |
Total liabilities | 736,642 | 249,885 |
Commitments and contingencies (Note 17) | ||
Mezzanine equity: | ||
Series A preferred stock, $0.0001 par value, 160,000 shares authorized; 160,000 issued and outstanding at June 30, 2024 and 0 issued and outstanding at December 31, 2023 | 143,481 | |
Stockholders' equity: | ||
Common stock, $0.0001 par value, 75,000,000 shares authorized; 33,765,978 issued and 31,297,200 outstanding at June 30, 2024 and 33,560,428 issued and 31,283,975 outstanding at December 31, 2023 | 3 | 3 |
Preferred stock, other than Series A preferred stock, $0.0001 par value, 9,840,000 shares authorized; no shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively | ||
Treasury stock, at cost, 2,468,778 shares at June 30, 2024 and 2,276,453 shares at December 31, 2023 | (15,939) | (15,051) |
Additional paid-in capital | 71,656 | 58,270 |
Retained earnings | 15,348 | 28,884 |
Accumulated other comprehensive loss | (2,987) | (2,930) |
Total stockholders' equity | 68,081 | 69,176 |
Noncontrolling interests | (2,340) | (1,816) |
Total stockholder's equity | 65,741 | 67,360 |
Total liabilities, Series A preferred stock and stockholders' equity | $ 945,864 | $ 317,245 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2024 | Dec. 31, 2023 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Temporary equity, par value per share | $ 0.0001 | $ 0.0001 |
Temporary equity, shares authorized | 160,000 | 160,000 |
Temporary equity, shares issued | 160,000 | 0 |
Temporary equity, shares outstanding | 160,000 | 0 |
Common stock, par value per share (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, shares issued | 33,765,978 | 33,560,428 |
Common stock, shares outstanding | 31,297,200 | 31,283,975 |
Preferred stock, par value per share (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 9,840,000 | 9,840,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Treasury stock, shares | 2,468,778 | 2,276,453 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Revenues: | ||||
Owned restaurant net revenue | $ 169,021 | $ 79,923 | $ 250,529 | $ 158,502 |
Management, license, franchise and incentive fee revenue | 3,473 | 3,470 | 6,960 | 7,447 |
Total revenues | 172,494 | 83,393 | 257,489 | 165,949 |
Owned operating expenses: | ||||
Owned restaurant cost of sales | 35,877 | 19,215 | 54,591 | 38,070 |
Owned restaurant operating expenses | 103,192 | 48,784 | 152,830 | 95,611 |
Total owned operating expenses | 139,069 | 67,999 | 207,421 | 133,681 |
General and administrative (including stock-based compensation of $1,495, $1,234, $2,853 and $2,554 for the three and six months ended June 30, 2024 and 2023, respectively) | 10,622 | 8,039 | 18,156 | 15,523 |
Depreciation and amortization | 8,025 | 3,506 | 13,285 | 7,162 |
Transaction and exit costs | 6,826 | 8,349 | ||
Transition and integration expenses | 3,794 | 3,794 | ||
Pre-opening expenses | 2,504 | 1,609 | 5,418 | 2,908 |
Other expenses | 195 | 32 | 352 | |
Total costs and expenses | 170,840 | 81,348 | 256,455 | 159,626 |
Operating income | 1,654 | 2,045 | 1,034 | 6,323 |
Other expenses, net: | ||||
Interest expense, net of interest income | 7,865 | 1,642 | 9,943 | 3,429 |
Loss on early debt extinguishment | 4,149 | 4,149 | ||
Total other expenses, net | 12,014 | 1,642 | 14,092 | 3,429 |
(Loss) income before provision for income taxes | (10,360) | 403 | (13,058) | 2,894 |
(Benefit) provision for income taxes | (3,268) | (13) | (3,536) | 148 |
Net (loss) income | (7,092) | 416 | (9,522) | 2,746 |
Less: comprehensive loss attributable to noncontrolling interest | (163) | (152) | (524) | (428) |
Net (loss) income attributable to The ONE Group Hospitality, Inc. | (6,929) | 568 | (8,998) | 3,174 |
Series A Preferred Stock paid-in-kind dividend and accretion | (4,538) | (4,538) | ||
Net (loss) income available to common stockholders | $ (11,467) | $ 568 | $ (13,536) | $ 3,174 |
Net (loss) income per common share: | ||||
Net (loss) income per common share Basic (in dollars per share) | $ (0.36) | $ 0.02 | $ (0.43) | $ 0.10 |
Net (loss) income per common share Diluted (in dollars per share) | $ (0.36) | $ 0.02 | $ (0.43) | $ 0.10 |
Weighted average common shares outstanding: Basic (in shares) | 31,424,938 | 31,782,783 | 31,376,951 | 31,730,299 |
Weighted average common shares outstanding: Diluted (in shares) | 31,424,938 | 32,673,457 | 31,376,951 | 32,779,821 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
Stock-based compensation | $ 1,495 | $ 1,234 | $ 2,853 | $ 2,554 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME | ||||
Net (loss) income | $ (7,092) | $ 416 | $ (9,522) | $ 2,746 |
Currency translation gain (loss), net of tax | 11 | 52 | (57) | (18) |
Comprehensive (loss) income | (7,081) | 468 | (9,579) | 2,728 |
Less: comprehensive loss attributable to noncontrolling interest | (163) | (152) | (524) | (428) |
Comprehensive (loss) income attributable to The ONE Group Hospitality, Inc. | (6,918) | 620 | (9,055) | 3,156 |
Series A Preferred Stock paid-in-kind dividend and accretion | (4,538) | (4,538) | ||
Comprehensive (loss) income attributable to common stockholders | $ (11,456) | $ 620 | $ (13,593) | $ 3,156 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY AND SERIES A PREFERRED STOCK - USD ($) $ in Thousands | Stockholders' equity | Common stock | Treasury stock | Additional paid-in capital | Retained Earnings | Accumulated other comprehensive loss | Noncontrolling interests | Series A Preferred Stock | Total |
Balance at Dec. 31, 2022 | $ 69,714 | $ 3 | $ (7,169) | $ 55,583 | $ 24,166 | $ (2,869) | $ (1,124) | $ 68,590 | |
Balance (in shares) at Dec. 31, 2022 | 31,735,423 | ||||||||
Stockholders' Equity | |||||||||
Stock-based compensation | 1,320 | 1,320 | 1,320 | ||||||
Stock-based compensation, (in shares) | 16,205 | ||||||||
Issuance of vested restricted shares, net of tax withholding | (1,432) | (1,432) | (1,432) | ||||||
Issuance of vested restricted shares, net of tax withholding (in shares) | 247,536 | ||||||||
Purchase of treasury stock | (735) | (735) | (735) | ||||||
Purchase of treasury stock (in shares) | (118,085) | ||||||||
Gain on foreign currency translation, net | (70) | (70) | (70) | ||||||
Net income (loss) | 2,606 | 2,606 | (276) | 2,330 | |||||
Balance at Mar. 31, 2023 | 71,403 | $ 3 | (7,904) | 55,471 | 26,772 | (2,939) | (1,400) | 70,003 | |
Balance (in shares) at Mar. 31, 2023 | 31,881,079 | ||||||||
Balance at Dec. 31, 2022 | 69,714 | $ 3 | (7,169) | 55,583 | 24,166 | (2,869) | (1,124) | 68,590 | |
Balance (in shares) at Dec. 31, 2022 | 31,735,423 | ||||||||
Stockholders' Equity | |||||||||
Gain on foreign currency translation, net | (18) | ||||||||
Net income (loss) | 2,746 | ||||||||
Balance at Jun. 30, 2023 | 69,695 | $ 3 | (11,322) | 56,561 | 27,340 | (2,887) | (1,552) | 68,143 | |
Balance (in shares) at Jun. 30, 2023 | 31,622,234 | ||||||||
Balance at Mar. 31, 2023 | 71,403 | $ 3 | (7,904) | 55,471 | 26,772 | (2,939) | (1,400) | 70,003 | |
Balance (in shares) at Mar. 31, 2023 | 31,881,079 | ||||||||
Stockholders' Equity | |||||||||
Stock-based compensation | 1,234 | 1,234 | 1,234 | ||||||
Stock-based compensation, (in shares) | 17,930 | ||||||||
Exercise of stock options | 226 | 226 | 226 | ||||||
Exercise of stock options (in shares) | 135,500 | ||||||||
Issuance of vested restricted shares, net of tax withholding | (370) | (370) | (370) | ||||||
Issuance of vested restricted shares, net of tax withholding (in shares) | 66,717 | ||||||||
Purchase of treasury stock | (3,418) | (3,418) | (3,418) | ||||||
Purchase of treasury stock (in shares) | (478,992) | ||||||||
Gain on foreign currency translation, net | 52 | 52 | 52 | ||||||
Net income (loss) | 568 | 568 | (152) | 416 | |||||
Balance at Jun. 30, 2023 | 69,695 | $ 3 | (11,322) | 56,561 | 27,340 | (2,887) | (1,552) | 68,143 | |
Balance (in shares) at Jun. 30, 2023 | 31,622,234 | ||||||||
Balance at Dec. 31, 2023 | 69,176 | $ 3 | (15,051) | 58,270 | 28,884 | (2,930) | (1,816) | 67,360 | |
Balance (in shares) at Dec. 31, 2023 | 31,283,975 | ||||||||
Stockholders' Equity | |||||||||
Stock-based compensation | 1,358 | 1,358 | 1,358 | ||||||
Issuance of vested restricted shares, net of tax withholding | (124) | (124) | (124) | ||||||
Issuance of vested restricted shares, net of tax withholding (in shares) | 24,521 | ||||||||
Gain on foreign currency translation, net | (68) | (68) | (68) | ||||||
Net income (loss) | (2,069) | (2,069) | (361) | (2,430) | |||||
Balance at Mar. 31, 2024 | 68,273 | $ 3 | (15,051) | 59,504 | 26,815 | (2,998) | (2,177) | $ 66,096 | |
Balance (in shares) at Mar. 31, 2024 | 31,308,496 | ||||||||
Series A preferred stock, beginning balance (Shares) at Dec. 31, 2023 | 0 | ||||||||
Balance at Dec. 31, 2023 | 69,176 | $ 3 | (15,051) | 58,270 | 28,884 | (2,930) | (1,816) | $ 67,360 | |
Balance (in shares) at Dec. 31, 2023 | 31,283,975 | ||||||||
Stockholders' Equity | |||||||||
Exercise of stock options (in shares) | 50,000 | ||||||||
Gain on foreign currency translation, net | $ (57) | ||||||||
Net income (loss) | (9,522) | ||||||||
Series A Preferred Stock paid-in-kind dividend and accretion | $ (4,500) | (4,538) | |||||||
Balance at Jun. 30, 2024 | 68,081 | $ 3 | (15,939) | 71,656 | 15,348 | (2,987) | (2,340) | $ 65,741 | |
Balance (in shares) at Jun. 30, 2024 | 31,297,200 | ||||||||
Series A preferred stock, beginning balance (Shares) at Dec. 31, 2023 | 0 | ||||||||
Series A preferred stock, ending balance (Amount) at Jun. 30, 2024 | $ 143,481 | $ 143,481 | |||||||
Series A preferred stock, ending balance (Shares) at Jun. 30, 2024 | 160,000 | 160,000 | |||||||
Balance at Mar. 31, 2024 | 68,273 | $ 3 | (15,051) | 59,504 | 26,815 | (2,998) | (2,177) | $ 66,096 | |
Balance (in shares) at Mar. 31, 2024 | 31,308,496 | ||||||||
Stockholders' Equity | |||||||||
Stock-based compensation | 1,495 | 1,495 | 1,495 | ||||||
Stock-based compensation, (in shares) | 22,905 | ||||||||
Exercise of stock options and warrants | 242 | 242 | 242 | ||||||
Exercise of stock options and warrants (in shares) | 50,000 | ||||||||
Issuance of vested restricted shares, net of tax withholding | (356) | (356) | (356) | ||||||
Issuance of vested restricted shares, net of tax withholding (in shares) | 108,124 | ||||||||
Issuance of warrants | 10,771 | 10,771 | 10,771 | ||||||
Purchase of treasury stock | (888) | (888) | (888) | ||||||
Purchase of treasury stock (in shares) | (192,325) | ||||||||
Gain on foreign currency translation, net | 11 | 11 | 11 | ||||||
Net income (loss) | (6,929) | (6,929) | (163) | (7,092) | |||||
Series A Preferred Stock paid-in-kind dividend and accretion | (4,538) | (4,538) | $ (4,500) | (4,538) | |||||
Balance at Jun. 30, 2024 | $ 68,081 | $ 3 | $ (15,939) | $ 71,656 | $ 15,348 | $ (2,987) | $ (2,340) | 65,741 | |
Balance (in shares) at Jun. 30, 2024 | 31,297,200 | ||||||||
Temporary Equity | |||||||||
Series A Preferred Stock issuance | $ 138,943 | ||||||||
Series A Preferred Stock issuance ( in shares) | 160,000 | ||||||||
Series A Preferred Stock paid-in-kind dividend and accretion | $ 4,538 | ||||||||
Series A preferred stock, ending balance (Amount) at Jun. 30, 2024 | $ 143,481 | $ 143,481 | |||||||
Series A preferred stock, ending balance (Shares) at Jun. 30, 2024 | 160,000 | 160,000 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Operating activities: | ||
Net (loss) income | $ (9,522) | $ 2,746 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 13,285 | 7,162 |
Non-cash exit costs | 321 | |
Stock-based compensation | 2,853 | 2,554 |
Amortization of debt issuance costs and debt original issuance discounts | 806 | 372 |
Deferred taxes | (3,671) | 12 |
Non-cash loss on early debt extinguishment | 1,674 | |
Changes in operating assets and liabilities, net of acquisition: | ||
Accounts receivable | 2,623 | 5,722 |
Inventory | 1,425 | (37) |
Other current assets | 2,300 | (253) |
Security deposits | (35) | 3 |
Other assets | (2,397) | (257) |
Accounts payable | 891 | (922) |
Accrued expenses | (4,007) | (4,943) |
Operating lease liabilities and right-of-use assets | 466 | 1,735 |
Other liabilities | (458) | (758) |
Net cash provided by operating activities | 6,554 | 13,136 |
Investing activities: | ||
Purchase of property and equipment | (34,941) | (23,896) |
Acquisition related payments, net of cash acquired | (368,605) | |
Net cash used in investing activities | (403,546) | (23,896) |
Financing activities: | ||
Borrowings of long-term debt | 333,829 | |
Repayments of long-term debt and financing lease liabilities | (73,612) | (435) |
Issuance of Series A preferred stock net of discount | 138,943 | |
Issuance of warrants to Series A preferred stockholders | 10,771 | |
Exercise of stock options | 242 | 226 |
Tax-withholding obligation on stock-based compensation | (480) | (1,802) |
Purchase of treasury stock | (888) | (4,153) |
Net cash provided by (used in) financing activities | 408,805 | (6,164) |
Effect of exchange rate changes on cash | (61) | (19) |
Net change in cash and cash equivalents and restricted cash and cash equivalents | 11,752 | (16,943) |
Cash and cash equivalents and restricted cash and cash equivalents, beginning of period | 21,047 | 55,121 |
Cash and cash equivalents and restricted cash and cash equivalents, end of period | 32,799 | 38,178 |
Supplemental disclosure of cash flow data: | ||
Interest paid, net of capitalized interest | 4,572 | 4,055 |
Income taxes paid | 413 | 312 |
Accrued purchases of property and equipment | 10,768 | $ 5,602 |
Series A Preferred Stock paid-in-kind dividend and accretion | $ 4,538 |
CONDENSED CONSOLIDATED STATEM_6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) $ in Thousands | Jun. 30, 2024 USD ($) |
Reconciliation of cash and cash equivalents and restricted cash and cash equivalents | |
Cash and cash equivalents | $ 32,247 |
Restricted cash and cash equivalents | 552 |
Total cash and cash equivalents and restricted cash and cash equivalents as shown in the statement of cash flows | $ 32,799 |
Summary of Business and Signifi
Summary of Business and Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2024 | |
Summary of Business and Significant Accounting Policies | |
Summary of Business and Significant Accounting Policies | Note 1 – Summary of Business and Significant Accounting Policies Description of Business The ONE Group Hospitality, Inc. and its subsidiaries (collectively, the “Company”) is an international restaurant company that develops, owns and operates, manages and licenses upscale and polished casual, high-energy restaurants and lounges and provides turn-key food and beverage (“F&B”) services and consulting services for hospitality venues including hotels, casinos and other high-end locations. Turn-key F&B services are food and beverage services that can be scaled, customized and implemented by the Company at a particular hospitality venue and customized for the client. As of June 30, 2024, the Company’s primary restaurant brands are STK, a multi-unit steakhouse concept that combines a high-energy, social atmosphere with the quality and service of a traditional upscale steakhouse, Benihana, the nation’s leading operator of Japanese teppanyaki restaurants, Kona Grill, a polished casual bar-centric grill concept featuring American favorites, award-winning sushi, and specialty cocktails in a polished casual atmosphere, and RA Sushi, a Japanese cuisine concept that offers a fun-filled, bar-forward, upbeat, and vibrant dining atmosphere. On May 1, 2024, the Company acquired 100% of the issued and outstanding equity interests of Safflower Holdings Corp. from Safflower Holdings LLC (the “Benihana Acquisition”). Safflower Holdings Corp. beneficially owns most of the Benihana restaurants, as well as all of the RA Sushi restaurants, in the United States. It also franchises Benihana locations in the U.S., Latin America (excluding Mexico) and the Caribbean. Refer to Note 2 – Benihana Acquisition for additional information. As of June 30, 2024, the Company owned, operated, managed, or licensed 167 venues, including 28 STKs, 86 Benihanas, 26 Kona Grills and 19 RA Sushis in major metropolitan cities in North America, Europe, Latin America and the Middle East and 8 F&B venues in four hotels and casinos in the United States and Europe. For those restaurants and venues that are managed, licensed or franchised, the Company generates management fees and franchise fees based on top-line revenues and incentive fee revenue based on a percentage of the location’s revenues and profits. Basis of Presentation The accompanying condensed consolidated balance sheet as of December 31, 2023, which has been derived from audited financial statements, and the accompanying unaudited interim condensed consolidated financial statements (“condensed consolidated financial statements”) of the Company have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and in accordance with accounting principles generally accepted in the United States (“GAAP”). Certain information and footnote disclosures normally included in annual audited financial statements have been omitted pursuant to SEC rules and regulations. These unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. In the Company’s opinion, the accompanying unaudited interim financial statements reflect all adjustments (consisting only of normal recurring accruals and adjustments) necessary for a fair presentation of the results for the interim periods presented. The results of operations for any interim period are not necessarily indicative of the results expected for the full year. Additionally, the Company believes that the disclosures are sufficient for interim financial reporting purposes. Prior Period Reclassifications Certain reclassifications of the condensed consolidated balance sheet as of December 31, 2023 have been made to conform to current year presentation. The Company has reclassified credit card receivables of $7.2 million to be presented within credit card receivables from accounts receivable. Certain reclassifications were also made to conform the prior period segment reporting to the current year segment presentation. Refer to Note 15 – Segment Reporting for additional information regarding the Company’s reportable operating segments. Significant Accounting Policies Refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 for the Company’s significant accounting policies. The following represents changes in accounting policies during 2024, primarily attributable to the evaluation of accounting policies in conjunction with the Benihana acquisition discussed below: Restricted cash and cash equivalents. Goodwill. st Recent Accounting Pronouncements In November 2023, the FASB issued ASU No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosure.” The ASU updates reportable segment disclosure requirements, primarily through requiring enhanced disclosures about significant segment expenses and information used to assess segment performance. The ASU is effective for fiscal years beginning after December 15, 2023, with early adoption permitted. The Company is evaluating the impact of adopting this ASU on its disclosures. In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” The ASU includes amendments requiring enhanced income tax disclosures, primarily related to standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. The guidance is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is evaluating the impact of adopting this ASU on its disclosures. |
Benihana Acquisition
Benihana Acquisition | 6 Months Ended |
Jun. 30, 2024 | |
Benihana Acquisition | |
Benihana Acquisition | Note 2 – Benihana Acquisition On May 1, 2024, the Company acquired 100% of the issued and outstanding equity interests of Safflower Holdings Corp. and its affiliates comprising of 93 company owned restaurants and 12 franchised restaurants (the “Benihana Acquisition”). The Company purchased the equity for a contractual price of $365.0 million, subject to customary adjustments. The Company believes that Benihana is complementary to its existing brands and will enable the Company to capture market share in the Vibe Dining segment. The assets and liabilities of Benihana were recorded at their respective fair values as of the date of acquisition. The Company is in the process of finalizing the fair value of certain assets and liabilities acquired, including property and equipment, intangible assets, operating lease right-of-use assets, operating lease liabilities and income tax assets and liabilities. The fair values set forth below are based on preliminary estimates and are subject to change as additional information is obtained during the measurement period which is up to one year from acquisition date (amounts in thousands). Preliminary purchase consideration: Contractual purchase price $ 365,000 Cash and cash equivalents, restricted cash and cash equivalents and credit card receivable 25,224 Working capital adjustment (82) Cash consideration paid 390,142 Net assets acquired: Cash and cash equivalents $ 20,986 Restricted cash and cash equivalents 551 Credit card receivable 3,687 Inventory 4,405 Other current assets 7,315 Property and equipment 103,015 Operating lease right-of-use assets 181,144 Deferred tax assets, net 26,808 Intangible assets 130,900 Other assets 2,898 Accounts payable (9,851) Accrued expenses (29,228) Other current liabilities (5,337) Operating lease liabilities (187,909) Other long-term liabilities (4,404) Total net assets acquired 244,980 Goodwill $ 145,162 The excess of the purchase price over the aggregate fair value of net assets acquired was allocated to goodwill. The portion of the purchase price attributable to goodwill represents benefits expected because of the acquisition, including sales and unit growth opportunities in addition to supply-chain and support-cost synergies. The Benihana and RA Sushi tradenames have an indefinite life based on the expected use of the asset and the regulatory and economic environment within which it is being used. The tradenames represent highly respected brands with positive connotations, and the Company intends to cultivate and protect the use of the brands. Goodwill and indefinite-lived tradenames are not amortized but are reviewed annually for impairment or more frequently if indicators of impairment exist. As a result of the Benihana Acquisition, the Company incurred approximately $6.5 million and $7.8 million of transaction costs, respectively, during the three and six months ended June 30, 2024, which are included in transaction and exit costs in the consolidated statements of operations. The Company incurred $3.8 million for transition and related integration efforts in the three and six months ended June 30, 2024. The following pro forma results of operations for the three and six months ended June 30, 2024 and 2023 give effect to the Benihana Acquisition as if it had occurred on January 1, 2023 (in thousands): For the three months ended June 30, For the six months ended June 30, 2024 2023 2024 2023 Total Revenues (1) $ 212,794 $ 217,260 $ 431,026 $ 434,649 Net (loss) income as reported $ (10,535) $ 3,293 $ 39,880 $ 8,577 Adjustments: Transaction and exit costs 11,236 — 13,639 (13,639) Transition and integration costs 3,794 — 3,794 (3,794) Loss on early debt extinguishment 4,149 — 4,149 (4,149) Purchase price accounting adjustments (2) 67 171 9,744 463 Change in interest expense 387 463 891 1,170 Pro forma net income (loss) before income taxes 9,098 3,927 72,097 (11,372) Income tax effect of adjustments (1,473) (48) (2,416) 1,496 Change in valuation allowance — — (59,925) — Pro forma net income (loss) $ 7,625 $ 3,879 $ 9,756 $ (9,876) (1) $3.6 million of the year-over-year change in revenue occurred at Benihana and RA during April 2024, before the acquisition (2) Purchase price accounting adjustments include the elimination of Benihana's impairment charges and changes to depreciation The above pro forma information includes the below post-acquisition results of the Benihana Acquisition (in thousands): Revenue $ 89,137 Operating Income $ 14,875 Adjustments: General and administrative (1) (2,597) Transaction and exit costs (6,826) Transition and integration costs (3,794) Adjusted Operating Income 1,658 Interest expense (5,787) Loss on early debt extinguishment (4,149) Loss before provision for income taxes (8,278) Benefit for income taxes 2,243 Net loss $ (6,035) (1) Reflects only direct general and administrative costs The most significant adjustments included in the pro forma financial information are the elimination of the release of Benihana’s valuation allowance, elimination of Benihana’s impairment charges, movement of transaction, transition, integration and debt extinguishment costs, and increased interest expense associated with debt incurred to fund the Benihana Acquisition, all giving effect as if the acquisition had occurred on January 1, 2023. In the opinion of the Company’s management, the unaudited pro forma financial information includes all significant necessary adjustments that can be factually supported to reflect the effects of the Benihana Acquisition and related transactions. The unaudited pro forma financial information is provided for informational purposes only and are not necessarily indicative of what our actual results of operations would have been had the Benihana Acquisition and related transactions been completed as of January 1, 2023 or that may be achieved in the future. |
Property and Equipment, Net
Property and Equipment, Net | 6 Months Ended |
Jun. 30, 2024 | |
Property and Equipment, Net | |
Property and Equipment, Net | Note 3 – Property and Equipment, Net Property and equipment, net consist of the following (in thousands): June 30, December 31, 2024 2023 Furniture, fixtures and equipment $ 82,908 $ 49,753 Leasehold improvements 202,609 130,136 Less: accumulated depreciation (69,898) (60,128) Subtotal 215,619 119,761 Construction in progress 40,222 17,044 Restaurant smallwares 4,544 3,103 Total $ 260,385 $ 139,908 Depreciation related to property and equipment was $7.7 million and $3.4 million for the three months ended June 30, 2024 and 2023, respectively, and $13.0 million and $7.0 million for the six months ended June 30, 2024 and 2023, respectively. The Company depreciates construction in progress upon such assets being placed into service. |
Intangibles, Net
Intangibles, Net | 6 Months Ended |
Jun. 30, 2024 | |
Intangibles, Net | |
Intangibles, Net | Note 4 – Intangibles, Net Intangibles, net consists of the following (in thousands): June 30, December 31, 2024 2023 Indefinite-lived intangible assets Tradenames $ 147,400 $ 17,400 Finite-lived intangible assets Franchise agreements 900 — Other finite-lived intangible assets 101 101 Total finite-lived intangible assets 1,001 101 Less: accumulated amortization (2,208) (2,195) Total intangibles, net $ 146,193 $ 15,306 Finite-lived intangible assets are amortized using the straight-line method over their estimated useful life of 10-15 years. Amortization expense was nominal for the three and six months ended June 30, 2024 and 2023. The Company’s estimated aggregate amortization expense for each of the five succeeding fiscal years is less than $0.1 million annually. |
Accrued Expenses
Accrued Expenses | 6 Months Ended |
Jun. 30, 2024 | |
Accrued Expenses | |
Accrued Expenses | Note 5 – Accrued Expenses Accrued expenses consist of the following (in thousands): June 30, December 31, 2024 2023 Payroll and related $ 12,924 $ 5,655 Interest 7,179 2,396 VAT and sales taxes 5,480 4,238 New restaurant construction 4,965 6,318 Amounts due to landlords 4,782 2,753 Legal, professional and other services 3,830 1,364 Insurance 1,412 545 Income taxes and related — 30 Other (1) 11,902 5,034 Total $ 52,474 $ 28,333 (1) Amount primarily relates to recurring restaurant operating expenses. |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Jun. 30, 2024 | |
Long-Term Debt | |
Long-Term Debt | Note 6 – Long-Term Debt Long-term debt consists of the following (in thousands): June 30, December 31, 2024 2023 Term loan agreements $ 350,000 $ 23,750 Revolving credit facility — — Delayed draw term facility — 49,750 Total long-term debt 350,000 73,500 Less: current portion of long-term debt (3,500) (1,500) Less: debt issuance costs (595) (1,590) Less: debt original issuance discount (15,044) — Total long-term debt, net of current portion $ 330,861 $ 70,410 Interest expense, net for the Company’s debt arrangements, excluding the amortization of debt issuance costs, debt original issuance discount and fees, was $7.3 million and $1.8 million for the three months ended June 30, 2024 and 2023, respectively, and $9.3 million and $3.8 million for the six months ended June 30, 2024 and 2023, respectively. Capitalized interest was $0.6 million and $0.9 million for the three and six months ended June 30, 2024, respectively. Capitalized interest was $0.4 and $0.6 million for the three and six months ended June 30, 2023, respectively. As of June 30, 2024, the Company had $6.2 million in standby letters of credit outstanding for certain restaurants and $33.8 million available in its revolving credit facility, subject to certain conditions. Credit and Guarantee Agreement In connection with the Benihana Acquisition, on May 1, 2024, the Company entered into a credit agreement (the “Credit Agreement”) with Deutsche Bank AG New York Branch, Deutsche Bank Securities Inc., HPS Investment Partners, LLC and HG Vora Capital Management, LLC (collectively, the “Lenders”). The Credit Agreement provides a $350.0 million senior secured term loan facility (the “Term Loan Facility”) and a $40.0 million senior secured revolving credit facility (the “Revolving Facility”, and together with the Term Loan Facility, the “Facilities”), up to $10.0 million of which will be available in the form of letters of credit. On May 1, 2024, the Company borrowed $350.0 million under the Term Loan Facility and the Revolving Facility was and remains undrawn. The Term Loan Facility is not subject to a financial covenant and the Revolving Facility’s financial covenant will apply only after 35% of the Revolving Facility’s capacity has been drawn. The Term Loan Facility will bear interest at a margin over a reference rate selected at the option of the borrower. The margin for the Term Loan Facility will be 6.5% per annum for SOFR borrowings and 5.5% per annum for base rate borrowings. The Term Loan Facility will mature on the fifth anniversary of the date of the related loan agreement. The Term Loan Facility is payable in quarterly installments commencing with fiscal quarter ending September 30, 2024, and are 1% per annum for the first year (through June 30, 2025), then 2.5% per annum for the next two years (through June 2027), then 5% per annum thereafter through maturity on April 30, 2029. The Revolving Facility will bear interest at a margin over a reference rate selected at the option of the borrower. The margin for the Revolving Facility will be set quarterly based on the Company’s Consolidated Net Leverage Ratio for the preceding four fiscal quarter period and will range from 5.5% to 6.0% per annum for SOFR borrowings and 4.5% to 5.0% for base rate borrowings. The Revolving Facility will mature on November 1, 2028. The Company’s weighted average interest rate on the borrowings under the Credit and Guarantee Agreement as of June 30, 2024 was 11.82%. As of June 30, 2024, the Company had $0.5 million of debt issuance costs and $16.8 million of debt original issuance discount related to the Credit Agreement, which were capitalized and are recorded as a direct deduction to long-term debt and less than $0.1 million in debt issuance costs and $1.7 million of debit original issuance discount recorded in Other Assets on the condensed consolidated balance sheets. Debt Extinguishment On October 4, 2019, the Company entered into the credit agreement with Goldman Sachs, which was replaced with the Credit Agreement described above on May 1, 2024. The Goldman Sachs credit agreement provided for a secured revolving credit facility of $12.0 million, a $25.0 million term loan and a $50.0 million delayed draw term loan. On May 1, 2024, the outstanding loan balance was repaid and the unamortized debt issuance costs of $1.7 million and fees incurred of $2.4 million were recognized as a loss on early debt extinguishment on the condensed consolidated statements of operations. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 6 Months Ended |
Jun. 30, 2024 | |
Fair Value of Financial Instruments | |
Fair Value of Financial Instruments | Note 7 – Fair Value of Financial Instruments Cash and cash equivalents, accounts receivable, inventory, accounts payable and accrued expenses are carried at cost, which approximates fair value. Long-lived assets are measured and disclosed at fair value on a nonrecurring basis if an impairment is identified. There were no long-lived assets measured at fair value as of June 30, 2024. The Company’s long-term debt, including the current portion, is carried at cost on the condensed consolidated balance sheets. Fair value of long-term debt, including the current portion, is valued using Level 2 inputs including current applicable rates for similar instruments and approximates the carrying value of such obligations. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2024 | |
Income Taxes | |
Income Taxes | Note 8 – Income Taxes For the six months ended June 30, 2024, the Company has elected to compute its interim tax provision using the actual year-to-date effective tax rate method rather than the estimated annual effective tax rate method as small changes in projected income may produce large variations in the Company’s estimated annual effective tax rate. The Company recorded a benefit for income taxes of $3.5 million for the six months ended June 30, 2024 compared to income tax expense of $0.1 million for the six months ended June 30, 2023. The Company’s actual year-to-date effective income tax rate was 27.1% for the six months ended June 30, 2024 compared to 5.1% for the six months ended June 30, 2023 under the estimated annual effective tax rate method. The Company’s effective tax rate differs from the statutory U.S. tax rate of 21% primarily due to the following: (i) tax credits for FICA taxes on certain employees’ tips (ii) taxes owed in foreign jurisdictions with tax rates that differ from the U.S. statutory rate; (iii) taxes owed in state and local jurisdictions; (iv) transaction costs associated with the Benihana Acquisition; and (v) the tax effect of non-deductible compensation. The income tax (benefit) provision recorded for the six months ended June 30, 2024 and 2023 included the discrete period tax benefits resulting from the vesting of restricted stock units. The Company is subject to U.S. federal, state, local and various foreign income taxes for the jurisdictions in which it operates. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. In the normal course of business, the Company is subject to examination by the federal, state, local and foreign taxing authorities. There are no ongoing federal, state, local, or foreign tax examinations as of June 30, 2024. |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Jun. 30, 2024 | |
Revenue from Contracts with Customers | |
Revenue Recognition | Note 9 – Revenue Recognition The following table provides information about contract liabilities, which include deferred license revenue, deferred gift card revenue, advanced party deposits and the Konavore rewards program (in thousands): June 30, December 31, 2024 2023 Deferred license revenue (1) $ 195 $ 218 Deferred gift card and gift certificate revenue (2) $ 6,076 $ 1,716 Advanced party deposits (2) $ 639 $ 361 Konavore rewards program (3) $ 187 $ 177 (1) Includes the current and long-term portion of deferred license revenue which are included in other current liabilities and other long-term liabilities on the condensed consolidated balance sheets. (2) Deferred gift card revenue and advance party deposits on goods and services yet to be provided are included in deferred gift card revenue and other on the condensed consolidated balance sheets. (3) Konavore rewards program is included in accrued expenses on the condensed consolidated balance sheets. Revenue recognized during the period from contract liabilities as of the preceding fiscal year end date is as follows (in thousands): June 30, June 30, 2024 2023 Revenue recognized from deferred license revenue $ 23 $ 40 Revenue recognized from deferred gift card revenue $ 895 $ 917 Revenue recognized from advanced party deposits $ 361 $ 278 The estimated deferred license revenue to be recognized in the future related to performance obligations that are unsatisfied as of June 30, 2024 were as follows for each year ending (in thousands): 2024, six months remaining $ 21 2025 44 2026 37 2027 34 2028 34 Thereafter 25 Total future estimated deferred license revenue $ 195 |
Leases
Leases | 6 Months Ended |
Jun. 30, 2024 | |
Leases | |
Leases | Note 10 – Leases The components of lease expense for the six months ended June 30, 2024 and 2023 are as follows (in thousands): June 30, June 30, 2024 2023 Lease cost Operating lease cost $ 13,135 $ 7,943 Finance lease cost Amortization of ROU assets 108 102 Interest on lease liabilities 36 41 Total finance lease cost 144 143 Variable lease cost (1) 7,561 5,781 Short-term lease cost 922 488 Total lease cost $ 21,762 $ 14,355 Weighted average remaining lease term Operating leases 13 years 13 years Finance leases 3 years 4.3 years Weighted average discount rate Operating leases 10.30 % 8.53 % Finance leases 9.17 % 9.00 % (1) Variable lease cost is comprised of percentage rent and common area maintenance. Supplemental cash flow information related to leases for the period was as follows (in thousands): June 30, December 31, 2024 2023 Finance lease right-of-use assets (1) $ 713 $ 850 Current portion of finance lease liabilities (1) 263 222 Long-term portion of finance lease liabilities (1) 559 658 (1) Finance lease assets and liabilities are included in other assets, other current liabilities, and other long-term liabilities on the condensed consolidated balance sheet. June 30, June 30, 2024 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 12,738 $ 7,090 Operating cash flows from finance leases $ 108 $ 102 Financing cash flows from finance leases $ 112 $ 185 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 3,081 $ 8,034 Finance leases $ — $ 43 The Company has entered into five operating leases for future restaurants that have not commenced as of June 30, 2024. The present value of the aggregate future commitment related to these leases, net of tenant improvement allowances received from the landlord, is estimated to be $7.2 million. The Company expects these leases, which have initial lease terms of 10 to 15 years and two or three 5-year As of June 30, 2024, maturities of the Company’s operating lease liabilities are as follows (in thousands): 2024, six months remaining $ 14,736 2025 44,545 2026 45,429 2027 46,089 2028 45,484 Thereafter 418,991 Total lease payments 615,274 Less: imputed interest (304,580) Present value of operating lease liabilities $ 310,694 As of June 30, 2024, maturities of the Company’s finance lease liabilities are as follows (in thousands): 2024, six months remaining $ 215 2025 257 2026 257 2027 214 Total lease payments 943 Less: imputed interest (121) Present value of finance lease liabilities $ 822 |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2024 | |
Earnings Per Share | |
Earnings Per Share | Note 11 – Earnings Per Share Basic earnings per share is computed using the weighted average number of common shares outstanding during the period and income available to common stockholders. Diluted earnings per share is computed using the weighted average number of common shares outstanding during the period plus the dilutive effect of potential shares of common stock including common stock issuable pursuant to stock options, warrants, and restricted stock units. The two-class method for ocmputing earnings per share will be utilized when applicable. For the three and six months ended June 30, 2024 and 2023, net (loss) income per share was calculated as follows (in thousands, except net income per share and related share data): Three months ended June 30, Six months ended June 30, 2024 2023 2024 2023 Net (loss) income attributable to The ONE Group Hospitality, Inc. $ (6,929) $ 568 $ (8,998) $ 3,174 Series A Preferred Stock paid-in-kind dividend and accretion (4,538) — (4,538) — Net (loss) income available to common stockholders (11,467) 568 (13,536) 3,174 Basic weighted average shares outstanding 31,424,938 31,782,783 31,376,951 31,730,299 Dilutive effect of stock options, warrants and restricted share units — 890,674 — 1,049,522 Diluted weighted average shares outstanding 31,424,938 32,673,457 31,376,951 32,779,821 Basic net (loss) income per common share $ (0.36) $ 0.02 $ (0.43) $ 0.10 Diluted net (loss) income per common share $ (0.36) $ 0.02 $ (0.43) $ 0.10 For the three months ended June 30, 2024 and 2023, 2.6 million and a nominal amount, respectively, of stock options, warrants and restricted share units were determined to be anti-dilutive and were therefore excluded from the calculation of diluted earnings per share. For the six months ended June 30, 2024 and 2023, 1.9 million and a nominal amount of stock options, warrants and restricted share units were anti-dilutive. |
Series A Preferred Stock
Series A Preferred Stock | 6 Months Ended |
Jun. 30, 2024 | |
Series A Preferred Stock | |
Series A Preferred Stock | Note 12 – Series A Preferred Stock On May 1, 2024, the Company issued 160,000 shares of Series A Preferred Stock for $160.0 million, subject to a 5% original issuance discount. Additionally, the Company recorded an additional discount of $2.3 million for expenses paid to the holders of the Series A Preferred Stock in connection with the issuance of the Series A Preferred Stock. The Series A Preferred Stock is non-voting and non-convertible; has compounding dividends that begin at a rate of 13.0% per annum and increase over time at specified intervals; is subject to optional redemption by the Company and mandatory redemption following specified events and in certain circumstances upon the exercise by the holders of a majority of the outstanding shares of Series A Preferred Stock of an option to deliver written notice to the Company to require redemption, in each case, for specified prices; and gives certain consent rights for the holders of a majority of the outstanding shares of Series A Preferred Stock for specified matters. The Company records the paid-in-kind dividend and accretion of the Series A Preferred Stock using the effective interest method based on a future redemption value of $247.4 million payable in 2027, the earliest date at which the Company can redeem the Series A Preferred Stock. During the three and six months ended June 30, 2024, the Company recorded paid-in-kind dividends and accretion of the Series A Preferred Stock of $4.5 million. Redemption Rights On and after May 1, 2029, holders of the Series A Preferred Stock have the right to require redemption of all or any part of the Series A Preferred Stock for an amount equal to the liquidation preference after the fifth anniversary, upon an acceleration of material indebtedness or upon a change-of-control. However, at any time between the third and fourth anniversary of the issuance date, the Company may repurchase all or some of the preferred stock for 102.5% of the liquidation preference. At any time after the fourth anniversary, the Company may repurchase all of some of the preferred stock for 100% of the liquidation preference. Since the redemption of the Series A Preferred Stock is contingently redeemable and therefore not certain to occur, the Series A Preferred Stock is not required to be classified as a liability under ASC 480, Distinguishing Liabilities from Equity. As the Series A Preferred Stock is redeemable in certain circumstances at the option of the holder and is redeemable in certain circumstances upon the occurrence of an event that is not solely within the Company’s control, the Series A Preferred Stock is classified separately from stockholders’ equity in the condensed consolidated balance sheets. |
Stockholder's Equity
Stockholder's Equity | 6 Months Ended |
Jun. 30, 2024 | |
Stockholder's Equity | |
Stockholder's Equity | Note 13 – Stockholder’s Equity Preferred Stock The Company is authorized to issue 9,840,000 shares of preferred stock with a par value of $0.0001. There were no shares of preferred stock that were issued or outstanding at June 30, 2024 or December 31, 2023. Common Stock The issuance of a dividend is dependent on a variety of factors, including but not limited to, available cash and the overall financial condition of the Company. The issuance of a dividend is also subject to legal restrictions and the terms of the Company’s credit agreement. The Company did not issue dividends related to its common stock in the years ended June 30, 2024 and 2023, respectively. Stock Purchase Program The Company’s Board of Directors authorized a repurchase program of up to |
Stock-Based Compensation and Wa
Stock-Based Compensation and Warrants | 6 Months Ended |
Jun. 30, 2024 | |
Stock-Based Compensation and Warrants | |
Stock-Based Compensation and Warrants | Note 14 – Stock-Based Compensation and Warrants Stock-Based Compensation As of June 30, 2024, the Company had 3,093,237 shares available for issuance under the Equity Incentive Plan. Stock-based compensation cost was $1.5 million and $1.2 million for the three months ended June 30, 2024 and 2023, respectively, and $2.9 million and $2.6 million for the six months ended June 30, 2024 and 2023, respectively. Stock-based compensation is included in general and administrative expenses in the condensed consolidated statements of operations and comprehensive income. Included in stock-based compensation cost was $0.2 million and $0.3 million of stock granted to directors for the three and six months ended June 30, 2024 compared to $0.1 million and $0.3 million for the three and six months ended June 30, 2023, respectively. Such grants were awarded consistent with the Board of Director’s compensation practices. Stock-based compensation for the three and six months ended June 30, 2024 included $0.2 million and $0.4 million, respectively, of compensation costs for performance stock units that contain both a market condition and time element (“PSUs”) compared to $0.2 million and $0.4 million for the three and six months ended June 30, 2023. Stock Option Activity Stock options in the table below include both time-based and market condition-based awards. Changes in stock options during the six months ended June 30, 2024 were as follows: Weighted Weighted average Intrinsic average exercise remaining value Shares price contractual life (thousands) Outstanding and Exercisable at December 31, 2023 673,942 $ 2.35 3.24 years $ 2,540 Granted 260,420 5.73 Exercised (50,000) 4.85 Cancelled, expired or forfeited (5,000) 4.85 Outstanding at June 30, 2024 879,362 $ 3.20 5.00 years $ 1,342 Stock options granted during the six months ended June 30, 2024 were valued using the Black-Scholes method and included the following assumptions: a) expected term of 5.5 years, b) risk-free rate of 4.4% and c) volatility of 71.3%. The Company recognized $0.2 million in compensation costs for stock options during the three and six months ended June 30, 2024. As of June 30, 2024, the Company had $0.7 million of unrecognized compensation costs related to 260,420 unvested stock options, which will be recognized over a weighted average period of 0.8 years. There were no unvested stock options as of December 31, 2023. Restricted Stock Unit Activity The Company issues restricted stock units (“RSUs”) under the 2019 Equity Plan. RSUs in the table below include both time-based and market condition-based awards. The fair value of time-based RSUs is determined based upon the closing market value of the Company’s common stock on the grant date. A summary of the status of RSUs and changes during the six months ended June 30, 2024 is presented below: Weighted average Shares grant date fair value Non-vested RSUs at December 31, 2023 1,020,556 $ 8.08 Granted 238,368 5.75 Vested (260,470) 7.21 Cancelled, expired or forfeited (30,024) 7.66 Non-vested RSUs at June 30, 2024 968,430 $ 7.75 As of June 30, 2024, the Company had approximately $5.6 million of unrecognized compensation costs related to RSUs, which will be recognized over a weighted average period of 1.9 years. Performance Stock Unit Activity The Company issues performance stock units (“PSUs”) under the 2019 Equity Plan. PSUs in the table below includes both time based and market condition-based awards and are valued using the Monte Carlo Simulation. A summary of the status of PSUs and changes during the six months ended June 30, 2024 is presented below: Weighted average Shares grant date fair value Non-vested PSUs at December 31, 2023 375,000 $ 5.89 Granted 98,166 4.65 Vested — — Cancelled, expired or forfeited — — Non-vested PSUs at June 30, 2024 473,166 $ 5.63 As of June 30, 2024, the Company has approximately $1.6 million of unrecognized compensation costs related to PSUs, which will be recognized over a weighted average period of 2.2 years. Warrants In connection with the Benihana Acquisition, on May 1, 2024, the Company issued both market and penny warrants to the following holders of the Series A Preferred Stock. The holders of the penny warrants are entitled to receive any dividends issued to common stockholders. The Company has the following warrants to purchase shares of common stock outstanding as of June 30, 2024 and 2023. Warrants Exercise Shares available for purchase as of June 30, Issuance date Holder of warrants Expiration date Issued Price 2024 2023 May 1, 2024 HPC III Kaizen LP May 1, 2029 1,000,000 $ 10.00 1,000,000 — May 1, 2024 HPS and affiliates May 1, 2029 66,667 $ 10.00 66,667 — May 1, 2024 HPC III Kaizen LP May 1, 2034 1,786,582 $ 0.01 1,786,582 — May 1, 2024 HPS and affiliates May 1, 2034 119,105 $ 0.01 119,105 — During the three months ended June 30, 2023, warrants to purchase 125,000 shares of common stock at an exercise price of $1.63 per share were exercised. There were no warrants outstanding as of June 30, 2023. |
Segment Reporting
Segment Reporting | 6 Months Ended |
Jun. 30, 2024 | |
Segment Reporting | |
Segment Reporting | Note 15 – Segment Reporting The Company’s Chief Executive Officer, who is the Company’s Chief Operating Decision Maker (“CODM”), manages the business and allocates resources via a combination of restaurant sales reports and operating segment profit information, defined as revenues less operating expenses. As a result of the Benihana Acquisition, the CODM evaluated the Company’s business and determined that there are five operating segments. The Company has reclassified prior year disclosures to conform with the current year presentation. The Company has identified its reportable operating segments as follows: ● STK . The STK segment consists of the results of operations from STK restaurants and ONE Hospitality restaurant locations, which include Bao Yum and Hideout, as well as management, license and incentive fee revenue generated from the STK brand and ONE Hospitality restaurants which include, Heliot, Rado, Rivershore Bar & Grill and F&B hospitality management agreements, and pre-opening expenses associated with new restaurants under development. ● Benihana. The Benihana segment consists of the results of operations from Benihana restaurant locations, as well as franchise revenue from the Benihana brand and pre-opening expenses associated with new restaurants under development. ● Kona Grill . The Kona Grill segment consists of the results of operations of Kona Grill restaurant locations and pre-opening expenses associated with new restaurants under development. ● RA Sushi. The RA Sushi segment consists of the results of operations from RA Sushi restaurant locations and pre-opening expenses associated with new restaurants under development. ● Corporate . The Corporate segment consists of the following: general and administrative costs, stock-based compensation, lease termination expenses, transaction costs, COVID-19 related expenses and other income and expenses. This segment also includes STK Meat Market, an e-commerce platform that offers signature steak cuts nationwide, the Company’s major off-site events group, which supports all brands and venue concepts, and revenue generated from gift card programs. The Corporate segment’s total assets primarily include cash and cash equivalents, tradenames, goodwill and deferred tax assets. Certain financial information relating to the three and six months ended June 30, 2024 and 2023 for each segment is provided below (in thousands). STK Benihana Kona Grill RA Sushi Corporate Total For the three months ended June 30, 2024 Total revenues $ 52,651 78,444 30,609 10,693 97 172,494 Operating income (loss) $ 7,071 14,718 763 157 (21,055) 1,654 Capital asset additions (1) $ 12,398 2,407 3,172 991 188 19,156 For the six months ended June 30, 2024 Total revenues $ 107,402 78,444 60,758 10,693 192 257,489 Operating income (loss) $ 15,786 14,718 260 157 (29,887) 1,034 Capital asset additions (1) $ 25,423 2,407 5,759 991 361 34,941 As of June 30, 2024 Total assets $ 155,210 239,673 92,637 44,855 413,489 945,864 STK Benihana Kona Grill RA Sushi Corporate Total For the three months ended June 30, 2023 Total revenues $ 49,015 — 34,277 — 101 83,393 Operating income (loss) $ 8,861 — 1,379 — (8,195) 2,045 Capital asset additions (1) $ 6,686 — 4,937 — 422 12,045 For the six months ended June 30, 2023 Total revenues $ 100,554 — 65,186 — 209 165,949 Operating income (loss) $ 20,911 — 1,354 — (15,942) 6,323 Capital asset additions $ 10,981 — 11,415 — 1,500 23,896 As of December 31, 2023 Total assets $ 142,777 — 81,026 — 93,442 317,245 (1) Capital asset additions for the Corporate segment include furniture, fixtures, and equipment for restaurants that the Company plans to open in the future. |
Geographic Information
Geographic Information | 6 Months Ended |
Jun. 30, 2024 | |
Geographic Information | |
Geographic Information | Note 16 – Geographic Information Certain financial information by geographic location is provided below (in thousands). For the three months ended June 30, For the six months ended June 30, 2024 2023 2024 2023 Domestic revenues $ 171,430 $ 82,214 $ 255,395 $ 163,673 International revenues 1,064 1,179 2,094 2,276 Total revenues $ 172,494 $ 83,393 $ 257,489 $ 165,949 June 30, December 31, 2024 2023 Domestic long-lived assets $ 877,346 $ 269,052 International long-lived assets 1,064 1,513 Total long-lived assets $ 878,410 $ 270,565 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2024 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 17 – Commitments and Contingencies The Company is party to claims in lawsuits incidental to its business, including lease disputes and employee-related matters. The Company has recorded accruals, when necessary, in its consolidated financial statements in accordance with ASC 450. While the resolution of a lawsuit, proceeding or claim may have an impact on the Company’s financial results for the period in which it is resolved, in the opinion of management, the ultimate outcome of such matters and judgements in which the Company is currently involved, either individually or in the aggregate, will not have a material adverse effect on the Company’s consolidated financial position or results of operations. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Pay vs Performance Disclosure | ||||
Net Income (Loss) | $ (6,929) | $ 568 | $ (8,998) | $ 3,174 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Jun. 30, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Rule 10b5-1 Arrangement Modified | false |
Non-Rule 10b5-1 Arrangement Modified | false |
Summary of Business and Signi_2
Summary of Business and Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2024 | |
Summary of Business and Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated balance sheet as of December 31, 2023, which has been derived from audited financial statements, and the accompanying unaudited interim condensed consolidated financial statements (“condensed consolidated financial statements”) of the Company have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and in accordance with accounting principles generally accepted in the United States (“GAAP”). Certain information and footnote disclosures normally included in annual audited financial statements have been omitted pursuant to SEC rules and regulations. These unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. In the Company’s opinion, the accompanying unaudited interim financial statements reflect all adjustments (consisting only of normal recurring accruals and adjustments) necessary for a fair presentation of the results for the interim periods presented. The results of operations for any interim period are not necessarily indicative of the results expected for the full year. Additionally, the Company believes that the disclosures are sufficient for interim financial reporting purposes. |
Prior Period Reclassifications | Prior Period Reclassifications Certain reclassifications of the condensed consolidated balance sheet as of December 31, 2023 have been made to conform to current year presentation. The Company has reclassified credit card receivables of $7.2 million to be presented within credit card receivables from accounts receivable. Certain reclassifications were also made to conform the prior period segment reporting to the current year segment presentation. Refer to Note 15 – Segment Reporting for additional information regarding the Company’s reportable operating segments. |
Restricted cash and cash equivalents | Restricted cash and cash equivalents. |
Goodwill | Goodwill. st |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In November 2023, the FASB issued ASU No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosure.” The ASU updates reportable segment disclosure requirements, primarily through requiring enhanced disclosures about significant segment expenses and information used to assess segment performance. The ASU is effective for fiscal years beginning after December 15, 2023, with early adoption permitted. The Company is evaluating the impact of adopting this ASU on its disclosures. In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” The ASU includes amendments requiring enhanced income tax disclosures, primarily related to standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. The guidance is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is evaluating the impact of adopting this ASU on its disclosures. |
Benihana Acquisition (Tables)
Benihana Acquisition (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Benihana Acquisition | |
Schedule of assets and liabilities | The fair values set forth below are based on preliminary estimates and are subject to change as additional information is obtained during the measurement period which is up to one year from acquisition date (amounts in thousands). Preliminary purchase consideration: Contractual purchase price $ 365,000 Cash and cash equivalents, restricted cash and cash equivalents and credit card receivable 25,224 Working capital adjustment (82) Cash consideration paid 390,142 Net assets acquired: Cash and cash equivalents $ 20,986 Restricted cash and cash equivalents 551 Credit card receivable 3,687 Inventory 4,405 Other current assets 7,315 Property and equipment 103,015 Operating lease right-of-use assets 181,144 Deferred tax assets, net 26,808 Intangible assets 130,900 Other assets 2,898 Accounts payable (9,851) Accrued expenses (29,228) Other current liabilities (5,337) Operating lease liabilities (187,909) Other long-term liabilities (4,404) Total net assets acquired 244,980 Goodwill $ 145,162 |
Schedule of information showing pro forma results of operations | The following pro forma results of operations for the three and six months ended June 30, 2024 and 2023 give effect to the Benihana Acquisition as if it had occurred on January 1, 2023 (in thousands): For the three months ended June 30, For the six months ended June 30, 2024 2023 2024 2023 Total Revenues (1) $ 212,794 $ 217,260 $ 431,026 $ 434,649 Net (loss) income as reported $ (10,535) $ 3,293 $ 39,880 $ 8,577 Adjustments: Transaction and exit costs 11,236 — 13,639 (13,639) Transition and integration costs 3,794 — 3,794 (3,794) Loss on early debt extinguishment 4,149 — 4,149 (4,149) Purchase price accounting adjustments (2) 67 171 9,744 463 Change in interest expense 387 463 891 1,170 Pro forma net income (loss) before income taxes 9,098 3,927 72,097 (11,372) Income tax effect of adjustments (1,473) (48) (2,416) 1,496 Change in valuation allowance — — (59,925) — Pro forma net income (loss) $ 7,625 $ 3,879 $ 9,756 $ (9,876) (1) $3.6 million of the year-over-year change in revenue occurred at Benihana and RA during April 2024, before the acquisition (2) Purchase price accounting adjustments include the elimination of Benihana's impairment charges and changes to depreciation The above pro forma information includes the below post-acquisition results of the Benihana Acquisition (in thousands): Revenue $ 89,137 Operating Income $ 14,875 Adjustments: General and administrative (1) (2,597) Transaction and exit costs (6,826) Transition and integration costs (3,794) Adjusted Operating Income 1,658 Interest expense (5,787) Loss on early debt extinguishment (4,149) Loss before provision for income taxes (8,278) Benefit for income taxes 2,243 Net loss $ (6,035) (1) Reflects only direct general and administrative costs |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Property and Equipment, Net | |
Schedule of property and equipment, net | Property and equipment, net consist of the following (in thousands): June 30, December 31, 2024 2023 Furniture, fixtures and equipment $ 82,908 $ 49,753 Leasehold improvements 202,609 130,136 Less: accumulated depreciation (69,898) (60,128) Subtotal 215,619 119,761 Construction in progress 40,222 17,044 Restaurant smallwares 4,544 3,103 Total $ 260,385 $ 139,908 |
Intangibles, Net (Tables)
Intangibles, Net (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Intangibles, Net | |
Schedule of intangibles, net | Intangibles, net consists of the following (in thousands): June 30, December 31, 2024 2023 Indefinite-lived intangible assets Tradenames $ 147,400 $ 17,400 Finite-lived intangible assets Franchise agreements 900 — Other finite-lived intangible assets 101 101 Total finite-lived intangible assets 1,001 101 Less: accumulated amortization (2,208) (2,195) Total intangibles, net $ 146,193 $ 15,306 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Accrued Expenses | |
Schedule of accrued expenses | Accrued expenses consist of the following (in thousands): June 30, December 31, 2024 2023 Payroll and related $ 12,924 $ 5,655 Interest 7,179 2,396 VAT and sales taxes 5,480 4,238 New restaurant construction 4,965 6,318 Amounts due to landlords 4,782 2,753 Legal, professional and other services 3,830 1,364 Insurance 1,412 545 Income taxes and related — 30 Other (1) 11,902 5,034 Total $ 52,474 $ 28,333 (1) Amount primarily relates to recurring restaurant operating expenses. |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Long-Term Debt | |
Schedule of long-term debt | Long-term debt consists of the following (in thousands): June 30, December 31, 2024 2023 Term loan agreements $ 350,000 $ 23,750 Revolving credit facility — — Delayed draw term facility — 49,750 Total long-term debt 350,000 73,500 Less: current portion of long-term debt (3,500) (1,500) Less: debt issuance costs (595) (1,590) Less: debt original issuance discount (15,044) — Total long-term debt, net of current portion $ 330,861 $ 70,410 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Revenue from Contracts with Customers | |
Schedule of contract liabilities | The following table provides information about contract liabilities, which include deferred license revenue, deferred gift card revenue, advanced party deposits and the Konavore rewards program (in thousands): June 30, December 31, 2024 2023 Deferred license revenue (1) $ 195 $ 218 Deferred gift card and gift certificate revenue (2) $ 6,076 $ 1,716 Advanced party deposits (2) $ 639 $ 361 Konavore rewards program (3) $ 187 $ 177 (1) Includes the current and long-term portion of deferred license revenue which are included in other current liabilities and other long-term liabilities on the condensed consolidated balance sheets. (2) Deferred gift card revenue and advance party deposits on goods and services yet to be provided are included in deferred gift card revenue and other on the condensed consolidated balance sheets. (3) Konavore rewards program is included in accrued expenses on the condensed consolidated balance sheets. |
Revenue recognized during the period from contract liabilities | Revenue recognized during the period from contract liabilities as of the preceding fiscal year end date is as follows (in thousands): June 30, June 30, 2024 2023 Revenue recognized from deferred license revenue $ 23 $ 40 Revenue recognized from deferred gift card revenue $ 895 $ 917 Revenue recognized from advanced party deposits $ 361 $ 278 |
Schedule of estimated deferred license revenue to be recognized in the future related to performance obligations | The estimated deferred license revenue to be recognized in the future related to performance obligations that are unsatisfied as of June 30, 2024 were as follows for each year ending (in thousands): 2024, six months remaining $ 21 2025 44 2026 37 2027 34 2028 34 Thereafter 25 Total future estimated deferred license revenue $ 195 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Leases | |
Schedule of components of lease expense | The components of lease expense for the six months ended June 30, 2024 and 2023 are as follows (in thousands): June 30, June 30, 2024 2023 Lease cost Operating lease cost $ 13,135 $ 7,943 Finance lease cost Amortization of ROU assets 108 102 Interest on lease liabilities 36 41 Total finance lease cost 144 143 Variable lease cost (1) 7,561 5,781 Short-term lease cost 922 488 Total lease cost $ 21,762 $ 14,355 Weighted average remaining lease term Operating leases 13 years 13 years Finance leases 3 years 4.3 years Weighted average discount rate Operating leases 10.30 % 8.53 % Finance leases 9.17 % 9.00 % (1) Variable lease cost is comprised of percentage rent and common area maintenance. |
Summary of components of finance lease assets and liabilities on the consolidated balance sheet | Supplemental cash flow information related to leases for the period was as follows (in thousands): June 30, December 31, 2024 2023 Finance lease right-of-use assets (1) $ 713 $ 850 Current portion of finance lease liabilities (1) 263 222 Long-term portion of finance lease liabilities (1) 559 658 (1) Finance lease assets and liabilities are included in other assets, other current liabilities, and other long-term liabilities on the condensed consolidated balance sheet. |
Schedule of supplemental cash flow information related to leases | June 30, June 30, 2024 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 12,738 $ 7,090 Operating cash flows from finance leases $ 108 $ 102 Financing cash flows from finance leases $ 112 $ 185 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 3,081 $ 8,034 Finance leases $ — $ 43 |
Schedule of maturities of operating lease liabilities | As of June 30, 2024, maturities of the Company’s operating lease liabilities are as follows (in thousands): 2024, six months remaining $ 14,736 2025 44,545 2026 45,429 2027 46,089 2028 45,484 Thereafter 418,991 Total lease payments 615,274 Less: imputed interest (304,580) Present value of operating lease liabilities $ 310,694 |
Schedule of maturities of finance lease liabilities | As of June 30, 2024, maturities of the Company’s finance lease liabilities are as follows (in thousands): 2024, six months remaining $ 215 2025 257 2026 257 2027 214 Total lease payments 943 Less: imputed interest (121) Present value of finance lease liabilities $ 822 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Earnings Per Share | |
Schedule of net (loss) income per share | For the three and six months ended June 30, 2024 and 2023, net (loss) income per share was calculated as follows (in thousands, except net income per share and related share data): Three months ended June 30, Six months ended June 30, 2024 2023 2024 2023 Net (loss) income attributable to The ONE Group Hospitality, Inc. $ (6,929) $ 568 $ (8,998) $ 3,174 Series A Preferred Stock paid-in-kind dividend and accretion (4,538) — (4,538) — Net (loss) income available to common stockholders (11,467) 568 (13,536) 3,174 Basic weighted average shares outstanding 31,424,938 31,782,783 31,376,951 31,730,299 Dilutive effect of stock options, warrants and restricted share units — 890,674 — 1,049,522 Diluted weighted average shares outstanding 31,424,938 32,673,457 31,376,951 32,779,821 Basic net (loss) income per common share $ (0.36) $ 0.02 $ (0.43) $ 0.10 Diluted net (loss) income per common share $ (0.36) $ 0.02 $ (0.43) $ 0.10 |
Stock-Based Compensation and _2
Stock-Based Compensation and Warrants (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Stock-Based Compensation and Warrants | |
Schedule of stock option activity | Weighted Weighted average Intrinsic average exercise remaining value Shares price contractual life (thousands) Outstanding and Exercisable at December 31, 2023 673,942 $ 2.35 3.24 years $ 2,540 Granted 260,420 5.73 Exercised (50,000) 4.85 Cancelled, expired or forfeited (5,000) 4.85 Outstanding at June 30, 2024 879,362 $ 3.20 5.00 years $ 1,342 |
Schedule of RSUs and changes | Weighted average Shares grant date fair value Non-vested RSUs at December 31, 2023 1,020,556 $ 8.08 Granted 238,368 5.75 Vested (260,470) 7.21 Cancelled, expired or forfeited (30,024) 7.66 Non-vested RSUs at June 30, 2024 968,430 $ 7.75 |
Schedule of PSUs and changes | Weighted average Shares grant date fair value Non-vested PSUs at December 31, 2023 375,000 $ 5.89 Granted 98,166 4.65 Vested — — Cancelled, expired or forfeited — — Non-vested PSUs at June 30, 2024 473,166 $ 5.63 |
Schedule of warrants to purchase shares of common stock outstanding | Warrants Exercise Shares available for purchase as of June 30, Issuance date Holder of warrants Expiration date Issued Price 2024 2023 May 1, 2024 HPC III Kaizen LP May 1, 2029 1,000,000 $ 10.00 1,000,000 — May 1, 2024 HPS and affiliates May 1, 2029 66,667 $ 10.00 66,667 — May 1, 2024 HPC III Kaizen LP May 1, 2034 1,786,582 $ 0.01 1,786,582 — May 1, 2024 HPS and affiliates May 1, 2034 119,105 $ 0.01 119,105 — |
Segment Reporting (Tables)
Segment Reporting (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Segment Reporting | |
Schedule of segment information | Certain financial information relating to the three and six months ended June 30, 2024 and 2023 for each segment is provided below (in thousands). STK Benihana Kona Grill RA Sushi Corporate Total For the three months ended June 30, 2024 Total revenues $ 52,651 78,444 30,609 10,693 97 172,494 Operating income (loss) $ 7,071 14,718 763 157 (21,055) 1,654 Capital asset additions (1) $ 12,398 2,407 3,172 991 188 19,156 For the six months ended June 30, 2024 Total revenues $ 107,402 78,444 60,758 10,693 192 257,489 Operating income (loss) $ 15,786 14,718 260 157 (29,887) 1,034 Capital asset additions (1) $ 25,423 2,407 5,759 991 361 34,941 As of June 30, 2024 Total assets $ 155,210 239,673 92,637 44,855 413,489 945,864 STK Benihana Kona Grill RA Sushi Corporate Total For the three months ended June 30, 2023 Total revenues $ 49,015 — 34,277 — 101 83,393 Operating income (loss) $ 8,861 — 1,379 — (8,195) 2,045 Capital asset additions (1) $ 6,686 — 4,937 — 422 12,045 For the six months ended June 30, 2023 Total revenues $ 100,554 — 65,186 — 209 165,949 Operating income (loss) $ 20,911 — 1,354 — (15,942) 6,323 Capital asset additions $ 10,981 — 11,415 — 1,500 23,896 As of December 31, 2023 Total assets $ 142,777 — 81,026 — 93,442 317,245 (1) Capital asset additions for the Corporate segment include furniture, fixtures, and equipment for restaurants that the Company plans to open in the future. |
Geographic Information (Tables)
Geographic Information (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Geographic Information | |
Schedule of revenues by geographic location | Certain financial information by geographic location is provided below (in thousands). For the three months ended June 30, For the six months ended June 30, 2024 2023 2024 2023 Domestic revenues $ 171,430 $ 82,214 $ 255,395 $ 163,673 International revenues 1,064 1,179 2,094 2,276 Total revenues $ 172,494 $ 83,393 $ 257,489 $ 165,949 |
Schedule of long-lived assets by geographic location | June 30, December 31, 2024 2023 Domestic long-lived assets $ 877,346 $ 269,052 International long-lived assets 1,064 1,513 Total long-lived assets $ 878,410 $ 270,565 |
Summary of Business and Signi_3
Summary of Business and Significant Accounting Policies (Details) $ in Thousands | May 01, 2024 USD ($) | Jun. 30, 2024 USD ($) restaurant item | Dec. 31, 2023 USD ($) |
Number of venues | 167 | ||
Number of hotels provided F&B services | item | 4 | ||
Credit card receivable | $ | $ 10,979 | $ 7,234 | |
Error Correction | |||
Credit card receivable | $ | $ 7,200 | ||
STK | |||
Number of venues | 28 | ||
Kona Grill | |||
Number of venues | 26 | ||
F&B Venues | |||
Number of venues | 8 | ||
Benihana | |||
Number of venues | 86 | ||
RA Sushi | |||
Number of venues | 19 | ||
Safflower Holdings Corp | |||
Equity interest acquired | 100% | ||
Cash consideration paid | $ | $ 390,142 |
Benihana Acquisition (Details)
Benihana Acquisition (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
May 01, 2024 USD ($) restaurant | Jun. 30, 2024 USD ($) | Jun. 30, 2024 USD ($) | Jun. 30, 2023 USD ($) | |
Business Acquisition [Line Items] | ||||
Goodwill | $ 145,162 | $ 145,162 | ||
Pro forma information includes actual revenues | $ 89,137 | |||
Pro forma information includes actual net income | $ (6,035) | |||
Safflower Holdings Corp | ||||
Business Acquisition [Line Items] | ||||
Equity interest acquired | 100% | |||
Purchase price | $ 390,142 | |||
Goodwill | $ 145,162 | |||
Transaction cost of acquisition | 6,500 | |||
Transition and integration expenses | $ 3,800 | 3,800 | ||
Pro forma information includes actual net income | $ 7,800 | |||
Safflower Holdings Corp | Owned | ||||
Business Acquisition [Line Items] | ||||
Number of restaurants | restaurant | 93 | |||
Safflower Holdings Corp | Franchised | ||||
Business Acquisition [Line Items] | ||||
Number of restaurants | restaurant | 12 |
Benihana Acquisition - Assets a
Benihana Acquisition - Assets and Liabilities (Details) - USD ($) $ in Thousands | May 01, 2024 | Jun. 30, 2024 |
Net assets acquired: | ||
Goodwill | $ 145,162 | |
Safflower Holdings Corp | ||
Preliminary purchase consideration: | ||
Contractual purchase price | $ 365,000 | |
Cash and cash equivalents, restricted cash and cash equivalents and credit card receivable | 25,224 | |
Working capital liabilities | (82) | |
Cash consideration paid | 390,142 | |
Net assets acquired: | ||
Cash and cash equivalents | 20,986 | |
Restricted cash and cash equivalents | 551 | |
Credit card receivable | 3,687 | |
Inventory | 4,405 | |
Other current assets | 7,315 | |
Property and equipment | 103,015 | |
Operating lease right-of-use assets | 181,144 | |
Deferred tax assets, net | 26,808 | |
Intangible assets | 130,900 | |
Other assets | 2,898 | |
Accounts payable | (9,851) | |
Accrued expenses | (29,228) | |
Other current liabilities | (5,337) | |
Operating lease liabilities | (187,909) | |
Other long-term liabilities | (4,404) | |
Total net assets acquired | 244,980 | |
Goodwill | $ 145,162 |
Benihana Acquisition - Pro form
Benihana Acquisition - Pro forma Financial Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Benihana Acquisition | ||||
Total revenues | $ 212,794 | $ 217,260 | $ 431,026 | $ 434,649 |
Net (loss) income as reported | (10,535) | 3,293 | 39,880 | 8,577 |
Transaction and exit costs | 11,236 | 13,639 | (13,639) | |
Transition and integration costs | 3,794 | 3,794 | (3,794) | |
Loss on early debt extinguishment | 4,149 | 4,149 | (4,149) | |
Purchase price accounting adjustments | 67 | 171 | 9,744 | 463 |
Change in interest expense | 387 | 463 | 891 | 1,170 |
Pro forma net income (loss) before income taxes | 9,098 | 3,927 | 72,097 | (11,372) |
Income tax effect of adjustments | (1,473) | (48) | (2,416) | 1,496 |
Change in valuation allowance | (59,925) | |||
Pro forma net income (loss) | $ 7,625 | $ 3,879 | 9,756 | $ (9,876) |
Total revenue (year-over-year change) | $ 3,600 |
Benihana Acquisition - Pro fo_2
Benihana Acquisition - Pro forma Financial Information - Actual Revenue and Net Loss (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Benihana Acquisition | |
Pro forma information includes actual revenues | $ 89,137 |
Operating Income | 14,875 |
General and administrative (1) | (2,597) |
Transaction and exit costs | (6,826) |
Transition and integration costs | (3,794) |
Adjusted Operating Income | 1,658 |
Interest expense | (5,787) |
Loss on early debt extinguishment | (4,149) |
Loss before provision for income taxes | (8,278) |
Benefit for income taxes | 2,243 |
Net loss | $ (6,035) |
Property and Equipment, Net - T
Property and Equipment, Net - Total PPE (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Property, Plant and Equipment [Line Items] | ||
Less: accumulated depreciation | $ (69,898) | $ (60,128) |
Total | 260,385 | 139,908 |
Furniture, fixtures and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 82,908 | 49,753 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 202,609 | 130,136 |
Subtotal | ||
Property, Plant and Equipment [Line Items] | ||
Total | 215,619 | 119,761 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Total | 40,222 | 17,044 |
Restaurant smallwares | ||
Property, Plant and Equipment [Line Items] | ||
Total | $ 4,544 | $ 3,103 |
Property and Equipment, Net - N
Property and Equipment, Net - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Property and Equipment, Net | ||||
Depreciation | $ 7.7 | $ 3.4 | $ 13 | $ 7 |
Intangibles, Net (Details)
Intangibles, Net (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Indefinite-lived intangible assets | ||
Tradenames | $ 147,400 | $ 17,400 |
Total finite-lived intangible assets | 1,001 | 101 |
Less: accumulated amortization | (2,208) | (2,195) |
Total intangibles, net | 146,193 | 15,306 |
Franchise agreements | ||
Indefinite-lived intangible assets | ||
Total finite-lived intangible assets | 900 | |
Other finite-lived intangible assets | ||
Indefinite-lived intangible assets | ||
Total finite-lived intangible assets | $ 101 | $ 101 |
Intangibles, Net - Narrative (D
Intangibles, Net - Narrative (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Finite-Lived Intangible Assets [Line Items] | ||
Useful life | 15 years | 15 years |
Aggregate amortization expense for succeeding years | $ 0.1 | |
Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful life | 10 years | 10 years |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Accrued Expenses | ||
Payroll and related | $ 12,924 | $ 5,655 |
Interest | 7,179 | 2,396 |
VAT and sales taxes | 5,480 | 4,238 |
New restaurant construction | 4,965 | 6,318 |
Amounts due to landlords | 4,782 | 2,753 |
Legal, professional and other services | 3,830 | 1,364 |
Insurance | 1,412 | 545 |
Income taxes and related | 30 | |
Other | 11,902 | 5,034 |
Total | $ 52,474 | $ 28,333 |
Long-Term Debt - Debt (Details)
Long-Term Debt - Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Debt Instrument [Line Items] | ||
Long-term debt | $ 350,000 | $ 73,500 |
Less: current portion of long-term debt | (3,500) | (1,500) |
Less: debt issuance costs | (595) | (1,590) |
Less: debt original issuance discount | (15,044) | |
Total long-term debt, net of current portion | 330,861 | 70,410 |
Delayed draw term facility | ||
Debt Instrument [Line Items] | ||
Long-term debt | 49,750 | |
Medium-term Notes | Term loan agreements | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 350,000 | $ 23,750 |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
May 01, 2024 | Oct. 04, 2019 | Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Debt Instrument [Line Items] | |||||||
Interest expense | $ 7,300 | $ 1,800 | $ 9,300 | $ 3,800 | |||
Standby letters of credit outstanding | 6,200 | 6,200 | |||||
Shares authorized under repurchase program | $ 15,000 | ||||||
Debt issuance costs | 595 | 595 | $ 1,590 | ||||
Non-cash loss on early debt extinguishment | $ 4,149 | $ 4,149 | |||||
Weighted average interest rate | 11.82% | 11.82% | |||||
Capitalized interest | $ 600 | $ 400 | $ 900 | $ 600 | |||
Unamortized discount | 15,044 | 15,044 | |||||
Senior secured term loan facility | |||||||
Debt Instrument [Line Items] | |||||||
Loan received | $ 350,000 | ||||||
Senior secured term loan facility | Payment installment for first year through June 30, 2025 | |||||||
Debt Instrument [Line Items] | |||||||
Percentage of term loan payable in quarterly installments | 1% | ||||||
Senior secured term loan facility | Payment installment for next two year through June 2027 | |||||||
Debt Instrument [Line Items] | |||||||
Percentage of term loan payable in quarterly installments | 2.50% | ||||||
Senior secured term loan facility | Payment installment thereafter through maturity on April 30, 029 | |||||||
Debt Instrument [Line Items] | |||||||
Percentage of term loan payable in quarterly installments | 5% | ||||||
Senior secured term loan facility | Credit and Guarantee Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Secured revolving credit facility | $ 350,000 | ||||||
Revolving credit facility | |||||||
Debt Instrument [Line Items] | |||||||
Secured revolving credit facility | $ 40,000 | ||||||
Minimum threshold percentage for financial covenant applicability | 35% | ||||||
Other Assets | |||||||
Debt Instrument [Line Items] | |||||||
Unamortized discount | 1,700 | 1,700 | |||||
Maximum | Other Assets | |||||||
Debt Instrument [Line Items] | |||||||
Debt issuance costs | 100 | 100 | |||||
Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Senior secured term loan facility | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 6.50% | ||||||
Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Minimum | Revolving credit facility | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 5.50% | ||||||
Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Maximum | Revolving credit facility | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 6% | ||||||
Base Rate | Senior secured term loan facility | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 5.50% | ||||||
Base Rate | Minimum | Revolving credit facility | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 4.50% | ||||||
Base Rate | Maximum | Revolving credit facility | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 5% | ||||||
Goldman Sachs Credit Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Secured revolving credit facility | $ 12,000 | ||||||
Face value of debt | 25,000 | ||||||
Loan received | $ 50,000 | ||||||
Debt issuance costs | $ 1,700 | 500 | 500 | ||||
Non-cash loss on early debt extinguishment | 2,400 | ||||||
Unamortized discount | 16,800 | 16,800 | |||||
Revolving credit facility | |||||||
Debt Instrument [Line Items] | |||||||
Available amount | $ 33,800 | $ 33,800 | |||||
Letter of credit | |||||||
Debt Instrument [Line Items] | |||||||
Secured revolving credit facility | $ 10,000 |
Long-Term Debt - Debt Extinguis
Long-Term Debt - Debt Extinguishment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
May 01, 2024 | Oct. 04, 2019 | Jun. 30, 2024 | Jun. 30, 2024 | Dec. 31, 2023 | |
Debt Instrument [Line Items] | |||||
Debt issuance costs | $ 595 | $ 595 | $ 1,590 | ||
Loss on early debt extinguishment | (4,149) | (4,149) | |||
Goldman Sachs Credit Agreement | |||||
Debt Instrument [Line Items] | |||||
Secured revolving credit facility | $ 12,000 | ||||
Term loan | 25,000 | ||||
Amount borrowed under credit facility | $ 50,000 | ||||
Debt issuance costs | $ 1,700 | $ 500 | $ 500 | ||
Loss on early debt extinguishment | $ (2,400) |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Details) | Jun. 30, 2024 USD ($) |
Fair Value of Financial Instruments | |
Long-lived assets measured at fair value | $ 0 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Income Taxes | ||||
Income tax expense (benefit) | $ (3,268) | $ (13) | $ (3,536) | $ 148 |
Effective income tax rate | 27.10% | 5.10% | ||
Foreign rate differential | 21% |
Revenue Recognition - Contract
Revenue Recognition - Contract Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Deferred license revenue | ||
Deferred revenue | $ 195 | $ 218 |
Deferred gift card and gift certificate revenue | ||
Deferred revenue | 6,076 | 1,716 |
Advanced party deposits | ||
Deferred revenue | 639 | 361 |
Konavore rewards program | ||
Deferred revenue | $ 187 | $ 177 |
Revenue Recognition - Changes i
Revenue Recognition - Changes in Deferred Gift Card and Gift Certificate Revenue (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Deferred license revenue | ||
Revenue recognized | $ 23 | $ 40 |
Deferred gift card revenue | ||
Revenue recognized | 895 | 917 |
Advanced party deposits | ||
Revenue recognized | $ 361 | $ 278 |
Revenue Recognition - Future Es
Revenue Recognition - Future Estimated Deferred License Revenue (Details) - Deferred license revenue $ in Thousands | Jun. 30, 2024 USD ($) |
2024, six months remaining | $ 21 |
2025 | 44 |
2026 | 37 |
2027 | 34 |
2028 | 34 |
Thereafter | 25 |
Total future estimated deferred license revenue | $ 195 |
Leases - Lease Expense (Details
Leases - Lease Expense (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Lease cost | ||
Operating lease cost | $ 13,135 | $ 7,943 |
Amortization of ROU assets | 108 | 102 |
Interest on lease liabilities | 36 | 41 |
Total finance lease cost | 144 | 143 |
Variable lease cost | 7,561 | 5,781 |
Short-term lease cost | 922 | 488 |
Total lease cost | $ 21,762 | $ 14,355 |
Weighted average remaining lease term - operating leases | 13 years | 13 years |
Weighted average remaining lease term - finance leases | 3 years | 4 years 3 months 18 days |
Weighted average discount rate - operating leases | 10.30% | 8.53% |
Weighted average discount rate - finance leases | 9.17% | 9% |
Leases - Finance Lease Assets a
Leases - Finance Lease Assets and Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Leases | ||
Finance lease right-of-use assets | $ 713 | $ 850 |
Current portion of finance lease liabilities | 263 | 222 |
Long-term portion of finance lease liabilities | $ 559 | $ 658 |
Leases - Operating Lease - Narr
Leases - Operating Lease - Narrative (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2024 USD ($) lease Option | |
Lessee, Lease, Description [Line Items] | |
Number of operating leases | lease | 5 |
Options term | 5 years |
The amount of lessee's operating lease not yet commenced | $ | $ 7.2 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Number of options | 2 |
Initial lease term | 10 years |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Number of options | 3 |
Initial lease term | 15 years |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Leases | ||
Operating cash flows from operating leases | $ 12,738 | $ 7,090 |
Operating cash flows from finance leases | 108 | 102 |
Financing cash flows from finance leases | 112 | 185 |
Operating leases | $ 3,081 | 8,034 |
Finance leases | $ 43 |
Leases - Operating Lease Liabil
Leases - Operating Lease Liabilities (Details) $ in Thousands | Jun. 30, 2024 USD ($) |
Operating Lease Liabilities, Payments Due [Abstract] | |
2024, six months remaining | $ 14,736 |
2025 | 44,545 |
2026 | 45,429 |
2027 | 46,089 |
2028 | 45,484 |
Thereafter | 418,991 |
Total lease payments | 615,274 |
Less: imputed interest | (304,580) |
Present value of operating lease liabilities | $ 310,694 |
Leases - Finance Lease Liabilit
Leases - Finance Lease Liabilities (Details) $ in Thousands | Jun. 30, 2024 USD ($) |
Finance Lease, Liability, Payment, Due [Abstract] | |
2024, six months remaining | $ 215 |
2025 | 257 |
2026 | 257 |
2027 | 214 |
Total lease payments | 943 |
Less: imputed interest | (121) |
Present value of finance lease liabilities | $ 822 |
Earnings Per Share - Summary of
Earnings Per Share - Summary of Net (Loss) Income Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Earnings Per Share | ||||
Net (loss) income attributable to The ONE Group Hospitality, Inc. | $ (6,929) | $ 568 | $ (8,998) | $ 3,174 |
Series A Preferred Stock paid-in-kind dividend and accretion | (4,538) | (4,538) | ||
Net (loss) income available to common stockholders | $ (11,467) | $ 568 | $ (13,536) | $ 3,174 |
Basic weighted average shares outstanding | 31,424,938 | 31,782,783 | 31,376,951 | 31,730,299 |
Dilutive effect of stock options, warrants and restricted share units | 890,674 | 1,049,522 | ||
Diluted weighted average shares outstanding | 31,424,938 | 32,673,457 | 31,376,951 | 32,779,821 |
Basic net (loss) income per common share | $ (0.36) | $ 0.02 | $ (0.43) | $ 0.10 |
Diluted net (loss) income per common share | $ (0.36) | $ 0.02 | $ (0.43) | $ 0.10 |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) - shares shares in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2024 | Jun. 30, 2024 | |
Stock options, warrants and restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities excluded from the calculation of diluted earnings per share | 2.6 | 1.9 |
Series A Preferred Stock (Detai
Series A Preferred Stock (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
May 01, 2024 | Jun. 30, 2024 | Jun. 30, 2024 | |
Class of Stock [Line Items] | |||
Series A Preferred Stock paid-in-kind dividend and accretion | $ (4,538) | $ (4,538) | |
Series A Preferred Stock | |||
Class of Stock [Line Items] | |||
Preferred stock issued | 160,000 | ||
Cash value of preferred stock issued | $ 160,000 | ||
Original issuance discount | 5% | ||
Additional discount for expenses | $ 2,300 | ||
Dividend rate | 13% | ||
Future redemption value | $ 247,400 | ||
Series A Preferred Stock paid-in-kind dividend and accretion | $ (4,500) | $ (4,500) | |
Series A Preferred Stock | Between 3rd and 4th Anniversary | |||
Class of Stock [Line Items] | |||
Percentage of liquidation preference that can be repurchase | 102.50% | ||
Series A Preferred Stock | After 4th Anniversary | |||
Class of Stock [Line Items] | |||
Percentage of liquidation preference that can be repurchase | 100% |
Stockholder's Equity - Preferre
Stockholder's Equity - Preferred Stock (Details) - $ / shares | Jun. 30, 2024 | Dec. 31, 2023 |
Stockholder's Equity | ||
Preferred Stock, Shares Authorized | 9,840,000 | 9,840,000 |
Preferred stock, par value per share (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Stockholder's Equity - Common S
Stockholder's Equity - Common Stock (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 7 Months Ended | ||||
Mar. 31, 2024 | Jun. 30, 2024 | Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Dec. 31, 2023 | |
Stockholder's Equity | ||||||||
Common stock, dividend issued | $ 0 | $ 0 | ||||||
Shares authorized under repurchase program | $ 15,000,000 | |||||||
Stock Repurchase Program, additional authorized amount | $ 5,000,000 | |||||||
Value of shares repurchased | $ 900,000 | $ 3,400,000 | $ 900,000 | $ 4,100,000 | ||||
Number of shares repurchased | 200,000 | 500,000 | 200,000 | 600,000 | 2,456,144 | |||
Aggregate value of shares repurchased | $ 888,000 | $ 3,418,000 | $ 735,000 | $ 15,900,000 |
Stock-Based Compensation and _3
Stock-Based Compensation and Warrants - Summary of Status of Company's Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 | Dec. 31, 2023 | |
Shares | ||
Outstanding at the beginning (in shares) | 673,942 | |
Exercisable at the beginning (in shares) | 673,942 | |
Granted (in shares) | 260,420 | |
Exercised (in shares) | (50,000) | |
Cancelled, expired or forfeited (in shares) | (5,000) | |
Exercisable at the ending (in shares) | 879,362 | 673,942 |
Outstanding at the ending (in shares) | 879,362 | 673,942 |
Weighted average exercise price | ||
Outstanding at the beginning (in dollars per share) | $ 2.35 | |
Exercisable at the beginning (in dollars per share) | 2.35 | |
Granted (in dollars per share) | 5.73 | |
Exercised (in dollars per share) | 4.85 | |
Cancelled, expired or forfeited (in dollars per share) | 4.85 | |
Exercisable at the ending (in dollars per share) | 3.20 | $ 2.35 |
Outstanding at the ending (in dollars per share) | $ 3.20 | $ 2.35 |
Weighted average remaining contractual life (Years) | ||
Weighted average remaining contractual life | 5 years | 3 years 2 months 26 days |
Exercisable weighted average remaining contractual life | 5 years | 3 years 2 months 26 days |
Intrinsic value | ||
Intrinsic value, Outstanding | $ 1,342 | $ 2,540 |
Intrinsic value, Exercisable | $ 1,342 | $ 2,540 |
Stock-Based Compensation and _4
Stock-Based Compensation and Warrants - Summary of Status of Company's Restricted Stock Option Activity (Details) | 6 Months Ended |
Jun. 30, 2024 $ / shares shares | |
Shares | |
Non-vested RSUs at beginning of period (in shares) | shares | 1,020,556 |
Granted (in shares) | shares | 238,368 |
Vested (in shares) | shares | (260,470) |
Cancelled, expired or forfeited (in shares) | shares | (30,024) |
Non-vested RSUs at ending of period (in shares) | shares | 968,430 |
Weighted Average Grant Date Fair Value | |
Non-vested RSUs at beginning of period (in dollars per share) | $ / shares | $ 8.08 |
Granted (in dollars per share) | $ / shares | 5.75 |
Vested (in dollars per share) | $ / shares | 7.21 |
Cancelled, expired or forfeited (in dollars per share) | $ / shares | 7.66 |
Non-vested RSUs at ending of period (in dollars per share) | $ / shares | $ 7.75 |
Performance Stock Units | |
Shares | |
Non-vested RSUs at beginning of period (in shares) | shares | 375,000 |
Granted (in shares) | shares | 98,166 |
Non-vested RSUs at ending of period (in shares) | shares | 473,166 |
Weighted Average Grant Date Fair Value | |
Non-vested RSUs at beginning of period (in dollars per share) | $ / shares | $ 5.89 |
Granted (in dollars per share) | $ / shares | 4.65 |
Non-vested RSUs at ending of period (in dollars per share) | $ / shares | $ 5.63 |
Stock-Based Compensation and _5
Stock-Based Compensation and Warrants - Warrants (Details) - USD ($) | Jun. 30, 2024 | Jun. 30, 2023 |
Class of Warrant or Right [Line Items] | ||
Exercise price of warrants (in dollars per share) | $ 1.63 | |
Shares available for purchase | 125,000 | |
HPC III Kaizen LP | Common Stock Warrants Maturing On May 1, 2029 | ||
Class of Warrant or Right [Line Items] | ||
Warrants Issued | $ 1,000,000 | |
Exercise price of warrants (in dollars per share) | $ 10 | |
Shares available for purchase | 1,000,000 | |
HPC III Kaizen LP | Common Stock Warrants Maturing On May 1, 2034 | ||
Class of Warrant or Right [Line Items] | ||
Warrants Issued | $ 1,786,582 | |
Exercise price of warrants (in dollars per share) | $ 0.01 | |
Shares available for purchase | 1,786,582 | |
HPS And affiliates | Common Stock Warrants Maturing On May 1, 2029 | ||
Class of Warrant or Right [Line Items] | ||
Warrants Issued | $ 66,667 | |
Exercise price of warrants (in dollars per share) | $ 10 | |
Shares available for purchase | 66,667 | |
HPS And affiliates | Common Stock Warrants Maturing On May 1, 2034 | ||
Class of Warrant or Right [Line Items] | ||
Warrants Issued | $ 119,105 | |
Exercise price of warrants (in dollars per share) | $ 0.01 | |
Shares available for purchase | 119,105 |
Stock-Based Compensation and _6
Stock-Based Compensation and Warrants - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation | $ 2,853 | $ 2,554 | |||
Stock options, granted | 260,420 | ||||
Unrecognized compensation cost, recognition period | 9 months 18 days | ||||
Proceeds from Issuance of Warrants | $ 10,771 | ||||
Shares available for purchase | 125,000 | 125,000 | |||
Strike price | $ 1.63 | $ 1.63 | |||
Warrants available | 0 | 0 | |||
Unrecognized compensation cost related to milestone based options | $ 700 | $ 700 | |||
Granted (in shares) | 238,368 | ||||
Expected life (in years) | 5 years 6 months | ||||
Risk-free interest rate | 4.40% | ||||
Volatility | 71.30% | ||||
Stock-based compensation | $ 1,495 | $ 1,234 | $ 2,853 | $ 2,554 | |
Weighted average remaining contractual life | 5 years | 3 years 2 months 26 days | |||
Non-vested stock options (in shares) | 260,420 | 260,420 | 0 | ||
General and Administrative Expense. | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation | $ 1,500 | 1,200 | $ 2,900 | 2,600 | |
Employee Stock Option [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation | 200 | ||||
Restricted Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized compensation cost related to non-vested awards | 5,600 | $ 5,600 | |||
Unrecognized compensation cost, recognition period | 1 year 10 months 24 days | ||||
Milestone-Based Options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation | 200 | 200 | $ 400 | 400 | |
Performance Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized compensation cost related to non-vested awards | $ 1,600 | $ 1,600 | |||
Unrecognized compensation cost, recognition period | 2 years 2 months 12 days | ||||
Granted (in shares) | 98,166 | ||||
Equity Incentive Plan 2019 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares available for issuance | 3,093,237 | 3,093,237 | |||
Director | Restricted Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation | $ 200 | $ 100 | $ 300 | $ 300 |
Segment Reporting (Details)
Segment Reporting (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2024 USD ($) segment | Jun. 30, 2023 USD ($) | Dec. 31, 2023 USD ($) | |
Segment Reporting Information [Line Items] | |||||
Number of operating segments | segment | 5 | ||||
Total revenues | $ 172,494 | $ 83,393 | $ 257,489 | $ 165,949 | |
Operating income (loss) | 1,654 | 2,045 | 1,034 | 6,323 | |
Capital asset additions | 19,156 | 12,045 | 34,941 | 23,896 | |
Total assets | 945,864 | 945,864 | $ 317,245 | ||
STK | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 52,651 | 49,015 | 107,402 | 100,554 | |
Operating income (loss) | 7,071 | 8,861 | 15,786 | 20,911 | |
Capital asset additions | 12,398 | 6,686 | 25,423 | 10,981 | |
Total assets | 155,210 | 155,210 | 142,777 | ||
Benihana | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 78,444 | 78,444 | |||
Operating income (loss) | 14,718 | 14,718 | |||
Capital asset additions | 2,407 | 2,407 | |||
Total assets | 239,673 | 239,673 | |||
Kona Grill | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 30,609 | 34,277 | 60,758 | 65,186 | |
Operating income (loss) | 763 | 1,379 | 260 | 1,354 | |
Capital asset additions | 3,172 | 4,937 | 5,759 | 11,415 | |
Total assets | 92,637 | 92,637 | 81,026 | ||
RA Sushi | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 10,693 | 10,693 | |||
Operating income (loss) | 157 | 157 | |||
Capital asset additions | 991 | 991 | |||
Total assets | 44,855 | 44,855 | |||
Corporate | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 97 | 101 | 192 | 209 | |
Operating income (loss) | (21,055) | (8,195) | (29,887) | (15,942) | |
Capital asset additions | 188 | $ 422 | 361 | $ 1,500 | |
Total assets | $ 413,489 | $ 413,489 | $ 93,442 |
Geographic Information (Details
Geographic Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenues | $ 172,494 | $ 83,393 | $ 257,489 | $ 165,949 | |
Long-lived assets | 878,410 | 878,410 | $ 270,565 | ||
Domestic | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenues | 171,430 | 82,214 | 255,395 | 163,673 | |
Long-lived assets | 877,346 | 877,346 | 269,052 | ||
International | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenues | 1,064 | $ 1,179 | 2,094 | $ 2,276 | |
Long-lived assets | $ 1,064 | $ 1,064 | $ 1,513 |