STKS - Earnings call transcript Q1 2021 | The ONE Group Hospitality, Inc.

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Operator

Greetings and welcome to The ONE Group First Quarter 2021 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to Tyler Loy. Tyler, you may begin.

Tyler Loy

Thank you, operator, and good afternoon.

formal discussion me statements. today our part you begin our of will we remarks, remind let that Before include forward-looking forward-looking reliance guarantees should not statements performance, These you and of not them. on future undue place are These uncertainties could statements materially what cause and differ that we to are expect. to results risks subject from also numerous actual also that these only date the of call. note forward-looking opinions Please of as statements reflect this our light obligation no these revise or new any events. release future to in to publicly forward-looking revisions statements We of or information undertake We refer a future the could you to SEC conditions. filings our our risks more for recent operating impact financial of detailed and results discussion that

we believe measures, will call, certain to which today’s can non-GAAP in we useful financial performance. During be refer our evaluating

other or total at sales information a Hilario. useful, along measures adjusted with Reconciliations adjusted measures these net I’d turn over should or and beverage be of as restaurant in accordance of of With comparable measures, the earnings presentation for issued these operating these the discussion substitute and consider Manny today. with the considered owned units; as licensed EBITDA, food income, prepared isolation results in GAAP. such not measures, However, sales to release we to that, why see a Manny? GAAP our please like and managed call profit, and

Manny Hilario

how sincerely times. Group. we and are ONE staying families teams that this And business. I’m I your way it everyone’s recovery healthy leading in before, and proud you this repeating. overcame through past they Thank of hope Tyler safe these We obstacles the know now you, our unprecedented but our continued everyone. hello continued I and said the have the are appreciate interest of of so year and bears the certainly

for call to And me our will some Tyler, turn provide the walk you I future. reiterate results recent and quarterly for on over financials our finally, today discuss development detail. plan detail plans. greater our through the the is optimism Afterwards, Our to will who in

reiterate at would we that I COVID-XX. aware of foremost, remains light and although that, the like see still and uncertainty end to First due much to tunnel, we cautious are the

available. capacity XX.X% same-store vaccinated, to April As improvement to an and restaurants, Same-store local of positions our quarter. increase vaccines outside all throughout XXXX X.X% STK sales and the more the including as ease vibe sales began and experienced greater compared in to acceleration XX.X% an they I a as of featuring then sequential in in quarter, deliver. indoor experienced time readily we for increased and dining, being compared for our continue XXXX. brands and looking become differentiated at fully continues we improvement XX.X% ever XXXX to compared positive social resulting increased fun more a restrictions homes capacity our Grill and April, in Momentum in Consumers became increase both increase even concepts to their than dining increase Kona at wall to

culinary strategies. and results of and couldn’t prouder Our marketing I The be all teams teams. truly on delivering effectively are are operational remarkable our

the four XX% extremely restaurant growth to company’s profit highest also revenue cost profit restaurant-level and robust fourth history. extremely in leading by of result able our restaurant-level within our management an almost We’re margins the achieve quarter, as interest a encouraged our effective we to level walls, for were

enhance and the events, STK, more restriction mandates. that return than considering We’re and indoor At corporate dining expect business performance this we incredibly impacted a in that still our private see which especially accomplishment, further was of momentum we pleased building traveler business unit events, to continue and has volumes. capacity our replaced social date quarterly by layer nights with

country. core a seeing high In for an in We $XXX,XXX. of fill in become to demand business Saturdays corporate XXXX the This events business private on as the speaks to we in return are midweek April, across brand York use New capture and our we sales weekly the the Additionally, these such and as the volume Grill, our domestic At numbers capacity Kona produced average XX brunch the volumes allows year-to-date XXXX, volume sales these XX our of sales have concepts all our instituted now the us an sustained an STKs the To traveler accelerate weekly locations during capacity quarter STKs produced average STK put Sundays. our Las weekly Wednesday to sales anticipate as initiatives capacity it addition has $XXX,XXX. be more sales numbers. had Monday quarter of key should volume of growth. further and in fourth and average strength markets, XX drive $XXX,XXX, several we of the that through will the busiest additive same domestic Vegas the on of record, XXXX volume of perspective

brand, marketing average we and launched that more including social media our active capabilities. activities adding new menus patio across will music programs, bar Specifically, revived have the and implemented

feedback XXXX, impressive Additionally, have our an rolled of positive. sales of $XX,XXX volume Grill of recovered guests growth having continued tremendously Kona extremely to we of the a AUVs sales our weekly with and well, $XX,XXX, Overall, at both been Grill we improve optimistic believe which continue a $X continue the that our will that April rest time XX% average their been average approximately brands Kona now In produced on about to and have objective feel brunch, of for out XXXX, received we track to expect AUV we than concept. more build to acquisition. year. for our XX the Grills that Kona million be or domestic weekly and an opportunities the Year-to-date produced volume has sales level all we locations has from

food. be in New of New XX% midnight Regarding will will curfew, able their they in capacity without example, York at forthcoming capacity, a will longer guests also be Guests and to wait set and be up longer is also They City to and quick have York their to order in dinner allowing peak the be the able lifting during ordering to couple bar for door will open will increasing restaurants bar beverages weeks City the their finished. when no table stay to for in our restaurant nights end times.

during from to a and and art We technology, in represents and the benefit sales early been high a our a full year. marketing strategy XXX% Takeout stages attribute last our enabled execution delivery first operations the channel. quarter, nine It’s at curbside and of seeing both actively delivery sales initiatives, pickup state from first delivery to also our delivery Kona or our quarter investments and success important to in takeout delivery business, XX% STK our comprised we partners. the guests of which which approximately compared toward the our increase of we Grill. separate this have note are marketing additive though, have margin We’re

to a make loyal with denying no us to are and to eager unique and result celebrate the customers huge are of over have these memorable. delivery goal new a customers with they that when experience we as to we guests opportunity There’s XX% these at truly to exciting As remember look converting in our customers. and of a birthday doing long-term delivery guests food special how occasion are nights at our a we our so transactions hope delicious because return or know We restaurants out a earnest.

complimented great not category Our an this we firmly to resulted an that a attractive only in by so great beyond are also vibe highly the was cocktail and is and that what it’s the vastly dining differentiated scape, and conventional to and We service bar experiences. unique casual particularly exceptional leader because higher great energy polished and it’s but dining experience unforgettable many in people superior experience. food more end to offered ambience believe include unmatched much steakhouse also it so program program

in over a focus restaurant Arizona. an start in managed Now STK to sales. to restaurant $XXX,XXX to turning January, early off we incredible development. continues and The In average opened weekly Scottsdale, our is

international we to week peak San of report location Lucas first being sales happy we an full first despite X, approximately were off in the season. May are STK at the opened airport, our Cabo on airport this location, Additionally, license $XXX,XXX,

our of Our are emphasis excited and natural the a elsewhere. in well for locations many as to traveling for Ultimately, brand billboard We first Dining centric those to believe that business incredibly bar brand. makes and will position already we're airport will from for experienced us. future Mexico the airport be it to STK STK that Vibe bring this the lead platform

Curio at the venue converted one In DoubleTree addition, week, to a Westminster we last soon to be managed F&B opened London UK hotel.

Five between are there STK year and additional Three three additional and three company-owned opened California. new three San managed Bellevue, venue, and construction. which including in London, and managed airport, One restaurants Scottsdale, locations, in two Westminster, Stratford, Stratford STK and May Mexico, January, Lucas opened May. F&B As STKs, XX in year, Francisco, UK, STKs San Dallas, managed venues STK And and UK Arizona, Cabo already opened eight four this which today, in London, open we Westminster. to includes UK. London Texas, of London, Washington, F&Bs, restaurants intend which next two under licensed

additional we major very and we longer welcoming execution To the strong Vibe our effective restaurants on a areas guests the experience. on the job, we're back a see certainly Over addressable future. Dining are continue metropolitan foreseeable restaurants our across could accelerate P&L, trying for our to in these translating currently during day-to-day we're that XX over proved the brand that will a in we our team to market Ultimately, the ahead. has focus grow proven fantastic doing into where months trajectory as our resiliency has hopeful STK And times. great term, to XXX globe, our conclude,

back to Now I'll Tyler. the call turn

Tyler Loy

Thank you, Manny.

financials Let me detail. by first current cash and greater start the discussing reviewing quarter in positions, liquidity before our

we Notably, amount And has cash generated cash we cash quarter. million throughout As through balance of have not March our in $XX.X on flow first and positive the today. XX, materially sheet. changed equivalents this

availability at Finally, credit million. as stood approximately the on end facility, of $XX.X our quarter, of the revolving

Included ease sales in compared consolidated increased to sales the we capacity our X.X% revenue financials, for our revenues net for quarterly of were GAAP quarter increasing from million, XX.X% total $XX.X the our revenues $XX.X XXXX. last quarter Domestic increase operate. to last same increased markets attributable The of same strong total to million quarter state continue and year. revenues which $XX.X restaurant XX% seating which owned restrictions is from quarter for million comparable in $XX.X the as year. governments local primarily million, approximately is the the for in terms In momentum

comparable STK, increased For for Grill. X.X% and sales X.X% Kona

As sales for accelerated both SDK sequential throughout Kona Manny and the quarter commented, Grill.

dining to operating to began cities for first including sales STK As expenses to of This increase $X.X XXXX. XXXX restaurant points sale an Grill. strong driven and first increased of of XXXX. XX.X% as XX.X% in Kona and capacity costs, as a more synergies the beginning restaurant the record locations. by improve And basis, pandemic On since quarter XXXX million percentage managed expenses, first stock-based million in of was in were XX.X% to the menu Owned despite operating million to net prior of reopen savings compensation, to our first and across operations high and April million quarter quarter reported of year particularly for adjusting XX.X% Again, of quarter to decrease quarter and and was a restaurant compensation a basis to the invested approximately $X.X the to consolidated improved increase fee basis closers Owned a of measures. seating for $X.X company. plan XX.X% labor administrative managing $X.X primarily Management based quarter is incentive was license XX.X% XXXX model in throughout operating approximately total quarter to of compensation, current the includes profit efficient COVID-XX a in including in-person for quarter winning future. of for at and million increase and in made of have $X.X company of XXXX limited XX.X% in in administrative the compared XXXX. of stock-based to revenue attraction the of the due the consider a price and nature. continue XX.X% of we the execute general from revenues percentage quarter. progress due and the temporary net comparable expenses quarter, first tremendous first at the Restaurant in of The was first management. foreseeable in by a $X this to million number compared the operating XXXX, purchasing actively COVID-XX driven as cost result owned points limited implementing indoor We change of $X.X one-time managing the certain quarter. primarily cost restaurant the restaurant and during compared be $X.X revenue XXXX quarter million X,XXX adjusted XXXX, grants a stock first XXX When in the in general were stock and substantial due first and operating

the EBITDA Group income $X.XX one-time for XXXX net and per COVID-XX for marks Group share quarter compared EBITDA revenue and adjusted of $X.X to net quarter direct was was of attributable XXXX, Adjusted income quarter XXXX. compared quarter, ONE of of adjusted GAAP the We've second or costs sanitation in release. XXXX, ONE benefit prevent revenues, composed in protective income the compared of current expense, per incurred items share respectively. approximately in $X.X or compares benefit quarter quarter or was The total regular to personal net per of general supplies net a quarter first $X.X administrative was the million attributable quarter EBITDA year. percentage adjusted driven highest of stock-based expenses quarter of the XXXX quarter to million in XXXX tax $X.X first of was the last included $XX,XXX net of share. first history. We to of first to first net of and first during XXXX. primarily of of million net a for income in of million net income interest for $X.XX $X.X net spread the expenses, of electrostatic the was related net year COVID-XX adjusted the our Inc. first is the first $X.XX million loss income company the net loss The first compensation, quarter adjusted equipment Inc. XXXX. compensation, XXXX benefit compared in Hospitality, income dispute to revenue COVID-XX. quarter tax cleaning million in first XXXX costs of loss As income This the were to of $X.XX to costs of income or adjusted million $X.X to venues, the tax $X.X related $X.X in to share. to our X.X% $X.X This by reconciliation adjusting million of X.X% total loss the in to Hospitality, of and first compared earnings loss per of of of stock-based the the million tables The Income in $X.X first first million quarter loss Interest quarter similar of of and When

warranted As unprecedented updates back however, turn a the the effects by provide guidance Manny. our suspended business estimate surrounding business pandemic, these will when do, further will of the and We conditions return evolving reminder, as fully March. normal cannot we to financial intend in I market situation. due operations certainty last in now all therefore to to call and reasonably the

Manny Hilario

Tyler, your and today. you thank for Thanks, time all

who while, appreciate us for beyond. have want have. this also and grateful me experience am they on our this bring are our saying Tyler to for teammates all, the very Above guests, all year restaurants call. I'm Dine encouraged to enjoying answer We date results questions the I market time. a been any to every and may Let exceptional by our everyone guest to past coming operate. us this and happy where with do conclude that I prospects Vibe in first they and craving. our Operator? we to best to restaurants unforgettable thank and the every life and long have be guest back you I are the in delivering experiences over time They today every by with joining our day every to our mission for stuck year

Operator

Joshua Instructions] the question Our of with with Piper you. proceed Thank [Operator first line Long from Sandler. comes Please question. your

Joshua Long

and in Great. Exciting period Thank when you then my also sales in the thank April the taking questions for for about the in you acceleration and margin today. hear management paired XQ. to against strong update here

and you'd got able margins layered levels, be just need wanted to back basis, to start bit XX, be about just some you've X are margin, noting see first in into there of delivered maybe on going how a back of And go-forward carry quarter something forward pulling strong but expect you'd the things thinking that those that's jurisdictions if so a that that these you. talk going you're started costs as to restaurant revenue level and XQ if restrictions some about to curious if normal to back Thank really you in, more you did that forward. that that

Manny Hilario

in question, Tyler Yes. earlier I the Thanks the in This for But XX to April said there domestic and call, year-to-date it. then that STKs. has And Manny. the also mentioned additional we'll add as for $XXX,XXX. start $XXX,XXX I averaged about is for color some will comments are the our I Joshua. were about volumes

range revenues from continue extremely forward perspective. is expectation in level going keep to that do well as margin we So a my that will higher

a to relative But and aware no that have those. and in did of during I of here, SDKs XX. commodities And to have there XXXX. of the pressures margins have statements, we're want actually there's that layers make end only into we'll back we have my to P&L. XX Obviously, environment domestic correction costs say no that will the particular put in just go expectations some at back. I I to So had We is labor,

sure want just that. knew to So make everybody

that margin this Tyler, was anyhow, to our not for the for I good. add? believe XX. the XX, looks you do want company very So do of But $XXX,XXX very, year overall the for rest

Tyler Loy

No.

Joshua Long

extent, touch seeing seeing seeing we've side? been have has well, curious the there I'm you're as line are in you to of both been Could Obviously, any Great. Kona programs inflation fairing with the some on in heard how and if items what other beef that of pressure. cost in sort and basket of that have other locks some costs. to those across you you SDK then mitigate the either just or what place

Manny Hilario

Yes.

beef, pricing to are Obviously, our gets now work in. we but do for locked partners, like do extremely, So we locked the in. beef right pressure we have if to with

And where up don't some so material did anticipate throughout – did Obviously, seafood down crab the We quarter. of particularly we we seafood, anything the pricing there. have buy do crab. in see we some and some

help So over we time. that did some buys out to make

fluctuation saw lobster. some also We in

any that there's So opportunities. there we and have been that feel fluctuations times

do make sure we some in you buys that sure buys, get to to just that future pricing do will make to term. We but we the we longer say don't into protection locked ask

lot the ups think commodity I So seen us. lines. and that have been we downs for which material again, has of in None of there's obviously a

of we're the we one that relative up most lot although markets going the of the labor down the is labor. the the on labor. things quarter. very quarter, Obviously, monitoring is to could in in COGS, had our were and COGS line, You availability There good see noise a throughout

don't over been a managed Overall, job all the it pressure buys, yes, I labor. we've things but we and relative manage get retaining all we terms that doing surprised think prices we've in very so. to that there's the some think I and P&L good of And by have sure done generally, doing around talents, locking making managing that. proactive wage, in right we're managing think very of I so teams also the

Joshua Long

much for that. for locked pricing – have long have How – beef Great. how you in? beef there? Thank visibility How that you those do you

Manny Hilario

end the Until the end year. this of of the year. Until

Joshua Long

the check we to basis level that. the do your driving you shifting on back at more one you it. going team an and and back efficiency with the back table periods, my you do last with something with maybe a longer, going of Got sales during of managing can where And to or building how forward some Thank turns forward? guests efficient square really for balance little bit normalized returning balance linger you kind level activities can extra that just and in comes How the things being foot downturn also shifted that was as the drink, you maybe some store restaurant start to dessert efficiency store a at on in. normal focus level,

Manny Hilario

we've on I mean, the that still far, what is so outpaces capacity. demand the supply seen

right tables making so is that question And day capacity we It times. more experience no truly tables, think is the available, part. more work the our number of will I one still the that only just but probably wasn't of it's becomes turnover on as do end not it's of over sure nights’ turning that strategy, and amount stellar. the

bit liquor mix. time dining So working think the on probably o'clock of take XX on little we'll where more plus of a

there. to So frankly, pass seating, extended I midnights, work to be on going we've a of the success amount our which restaurants logical probably of next the late tremendous be to and that lot think that's a step we've nights will seen

the that of be probably will So layer working on check. next

has been check Our tremendously healthy.

which number erosion of opportunity. still four really that's is on our haven't very a it, Friday, is which days. about now seen objective tables still we to Saturday, of honest us, for block Sunday and a turning But is the because be So the over weekends, Thursday, now right an one any particularly day but liquor,

Joshua Long

Thank you. Great.

Operator

proceed the with Street Our Markets. next Smith Capital question. your Mark of Please comes from line question Lake with

Mark Smith

Thanks for taking questions.

you did XX% First say confirm I and off, quarter? just mix takeout in Manny, the can delivery

Manny Hilario

right. that's about, Just

Mark Smith

is that that everything been looked looked XX mover? last of percent helping a is sales, in at we kind brunch, a to If the of Just that about, as added if restaurants at that the you've okay. And over we needle months?

Manny Hilario

think it's go I that think try Yes, particularly and I the I you The food of – invite Saturdays as I particularly, and work I comments, I as is a my mean, all, first in programs. saw to at outstanding. mean, Sundays, earlier everybody lever,

think the creating there remember. great has done my because I menus craveable, And stand then is opinion, culinary brunch most one to team of job a – brunch. there's of really the what's in really out, Instagramable will that people

So we've working later that been on category.

So start building of think may I the really recall, as up, And I a April, entered marketing I think been is it about holidays brunch we've that we our that critical of that elements impact part. as strategy. seeing the is you we liked day thing

is within holiday strategy. the natural So lever a brunch

we've that So And in Mother's of the saw year Easter. that power seen Day. in again we this

So we of forward. were very excited about that the parts potential going day

still build that which things continue that to big we And get And of part out experience business. as think early on day this. people obviously, repeat more we'll expect as So very I more it, coming it.

Sunday. happened So layer historically the business attractive I AM a in very o'clock XX:XX our new on Saturday because and that between see of nothing X:XX as SDKs really and

into a So capacity of amount we turn now revenues. huge that's can that captured

about seen in brunch of by in part. that Vibe And way, very the stay been that of terms us So done doing digital tuned, mind. you've around with impression that has our see day lot creating marketing we've team probably our aggressive marketing, a the you'll in

DJs and in brunch see food, getting coming just you not our it's locations. in So the but will

and food that see believe You'll more lot really we killer compliments what a lot brunch. more an a I offering making to emphasis drink have be sure in energy program amazing a for that

Mark Smith

Day. about that Mother's talk May of in almost up where system-wide brought capacity – you that you to? and kind moved And Okay. Can is

Manny Hilario

I improving. Well, think, is capacity

big think ones was I Vegas. the

I think New We're XX% York now to up XX%. with to capacity. going coming up to Finally, see

that am up and Mother's markets then the tell are I I So about we thing for can those very And Day. ran – that's you I'm and brunch we that. markets is, very tremendous will mean those for exciting a have New out very bullish on some what there's of that part these markets Vegas, demand York amount that of for like found day in coming

again, we dining layer from will starting think frankly, that So the into and of believe and for corporate see platform business, that we're there. business group a be I I events. group to demand think coming And layer

next working on events So of is Thursday. business, business appetite the of a Saturday, those Sunday, Monday And frankly, much not on. ala team that Friday, us. layer priority here now that that will got and the business is momentum for to is carte be our the we kind maybe Wednesday, so for

good So we that. really frankly, the are around say I to the assets behind limiting that starting to business travel, brought And our resources back. team phones some and guess that's ask up bulk the Wednesday, starting now sales a we of our development back, have problem to We events can was coming business. ring. that managers to And business we'll we're Monday I think and which

and go almost of correlation vaccines as think as we see eye, group public get events vaccination levels I a into connection out kind up. the direct for

where stand right we and I starting the feel in see a Grill to And about good think I to we'll pretty what XXX us building as think into on, pick capacity about Kona week keeps I think in we are guess, is and XXX I coming very now. STK continue is impressive So AUVs, up.

of I level to historically first the our quarter, in that the seasonality good so got seasonal if level. one Keep feel are the business, translating that margin And in see be place. So even saw to And did in is put units quarter quarter. the are very store it's about high the a quarter the the that with first very how store that very all executing a delighted margins. we we we of I our always in programs the that these margins good mind best not performance framed margins of in I further level

Mark Smith

Grills in patio, did in a And right weather makes have negative Texas. trending similarly sense. looking capacity, impact? thinking Kona And there and patios is big events added that space looking – business how any was how much at then I'm you at year-over-year maybe about That now? that had QX primarily

Manny Hilario

I'm a horrible and the weather good guy guy. restaurant

do did have in think some that Texas. the we So, but I have did we challenges quarter times within where

think a is week weather that As Grill is lots fact, where real our had But I a matter everything running. patios, in was Kona fish have focus Obviously, whole Texas weather. We fishing rooftops, impact is by the of of its. of else. did we

overall, action from enough our we I out not what of but markets say, once operating of So were weather whether that we markets it about did Troy, these XX we also us of and of like to days, But internally, was were tents mean, for got item let of analytical big weather. the degree, to again did overall, we all markets did some and call there days but But We significant days talk net perspective. Woodbridge some the days kind the happy is, and and because did had I'm anymore. the have that. become like to does clearly tends wouldn't that wet a track sure weather it see to which I somebody real some events. dry the not a really impact below of be cold were the warm have intense in have time Michigan, we in in

Mark Smith

to able of any patio you've on patio on increase been business, year-over-year commentary in business? And kind what the

Manny Hilario

Yes, I'm excited.

be if unfortunately, were limited year to of our weren't social – on patios. to and that you Sundays, we were will – So patios and patio, we into. first Frankly capacity majority Saturdays year both get and because going the maximize really going because distancing the difficult to didn't last of to Fridays, are able we very COVID, was that, do our really in

matter fact, get big of your get a it. guests patio As of of in the can one Grill. I complaints to get is into want never afraid and I I from Kona

patio demands probably way for exceed would I of say Kona Grill, that So we on that have now. right supply

internally is earliest set challenge that Our turns.

a the little is have table. define at people people again, sit food and bit our execute difficult out down But turns turn table the on really seats patio. patio work and at difficult a problem we turns do to great and It’s we those more have, the once have to on we drinks to have So of patio always patio. table because in to the class always get high that’s will

So what be happens I’m excited to this limitation. hopefully super year, less because this see year there’ll

the So of there’ll be the to see us opportunity power what an here should for patios be. really

opportunity to at at May, make in AUV of out patio and that of would for $XXX,XX Looking revenues lots into have Kona August I a season the patios. Grill July, really say June, we September, April, tremendous going our in

Mark Smith

any me is, build restaurants, or look And as as new we guys Okay. estate insight for last to open and beginning commentary develop and what at construction one at that, seeing to real as opportunities, you you’re that issues second opportunities. real starting delays continuing you’re or And estate lighten to around with permitting any some we was issues reopening. up into look or those have,

Manny Hilario

looking We that XX way remember thing think didn’t employees I development, development, on year. say the in last stop although would April I challenged mean, probably us. down challenged well were the to back for – all went we worked because very we I Yes. of

challenged open. Although one very reasons keep our we we’re got we’re And we the were of incredible deals some frankly, now geographies. doing in we these wide incredible that doing deals restaurant that activities development is back did then,

real of there window And there where time open. was estate a wide was so market the

would up, bit, the deals during say I stacking were five were very or I days same a the of weeks. market. up think things in quality last say see there lot I of four I a that coming would the of uncertain COVID, don’t the

bit, wait see say things little landlords and lot mindset. a are think I more So I that would out cleared as

different that available So is stuff to used the frankly, as construction you now little And a because bit happen. I’ve seen need not easily some be. build is to of that it

your So lot are lots things construction more of which deal require to market. petroleum it byproducts, does not management on with project like, in of a precision products,

construction. But construction. that I the we’re on say in pleased all, calendars our our would very all think adjust of I to with had the pace we’ve So

restaurant be is that pretty one one that after and that next is will STK very, looks I that It shape. And good. is in that up think we’ll my Bellevue next then on frankly, And I did opening much the very, very also good Our Westminster be today. walkthrough London. restaurant based very

obviously, little say people some in is a permitting live because would don’t the have moved So different that of have I offices things it.

have manage your to you with So very deal adjust project that to in well. all, moved just I this all But annoyances. would we’ve say

Mark Smith

Okay, excellent. Thank guys. you,

Manny Hilario

Mark. you, Thank

Operator

Thank you.

Please Wealth question line Management. question. the Our of with with proceed comes from Kanen your Kanen next David

David Kanen

to your job Good you and Congratulations. afternoon, team. Great gentlemen.

Manny Hilario

sir. Thank you,

David Kanen

You’re welcome.

questions. a So few

Could just that you the total in During for locations gave remarks a think get can timeframe? the number and that to future. the you what you then reiterate prepared number is you

Manny Hilario

way, I it’s just that’s of the so kind is STK. mean, and by our $XXX,XXX addressable

other we about frankly, really out really number a – opportunities, talking for we laid don’t so because Kona the not Grill. never haven’t all And we’re

now really also airport. breaking the into now and opportunity that San work at just come call, a out to right turn smaller matter think $XXX,XXX in and frankly is Lucas have probably that fact, think whole turn a shoot, evaluate the we on us the But the I really dialogue as that off to believe heading probably Cabo number be after STKs, in week tables because with turns that AUVs team new get of there’s this about restaurant one as to can I ready I’ll that a $XXX,XXX and with a the AUV we’re that. for the the big. we airports we mean, of a revenues start is airports, on

you Boston, huge, I’m markets now tremendous Minneapolis, So that if opportunities the I streets there at start looking of think Washington amount at right are and letting D.C. airport the then

to opportunities up be in space hotel So that we’re with the now the two mention building not of domestic, large coming international now. there’s a have restaurants amount in X,XXX tremendous operators that aggregate white done Westminster right because right hotels. over that will Even and significantly Stratford

able to them So more of their property. in restaurants hopefully with earn the trust build to to we these be plan operators do

more world. just think good restaurants relationships real have Asia, So we’ve open hotel not amount that’s in I These up the the recent domestic to the of that white entered hotel partners side, really estate. space, a North but South in going tremendous airport very And San Cabo the Lucas’ job Africa, our which in partner higher that the areas, largest not Europe, of America operating to restaurants. of mention end is a they America, do operators one in just

Cabo that based So of of restaurant locations. relationship alone going on early to I the eat lots is San Lucas think results

have but accelerating. three will It Russian tell tell you got you five a and from our get see be are of opportunity the I a can when pipeline it not do I AUVs, do like now, you, to feel years. can be that. years, to So probably right huge we’ll there’s you of $XXX,XXX, that out STK can a we one will that $XXX,XXX-plus that that there can is lot we brand that that concepts there’s things

a As of think do fact, say average the of that I really one on matter can that can’t that.

do world the $XXX,XXX just of that in think can a kind then that the corner massive mall from for location product a asset through development a And significant. the any So U.S. that we a or is blow having week be demand will mall for of operation,

STK. is cool. developing And done that think the Grill. is also Not for to the Westminster, future location mention SMB for future that Kona is things I think for a there I in instance, we’ve very here the opened So other bright we

I growth things in meaningful will the in the that have other also we think more side. cool So hotel even make pipeline

stuff So going lots development of good on. really

David Kanen

look throughout know April increase at know were versus still don’t like same-store have XXX% I XX%. I XXX% quarter, Okay. think in-person even if was in-person one that dining potentially difference dining capacity And you was April – this sales markets that and were hamstrung, you call capacity? in to at that up market in in but limited the a you in the capacity was data, capacity. that April, out could What Could I the the comp you

Manny Hilario

that where I relative relaxed anywhere on the mean, example, is an else XXX% in restrictions the one instance, Atlantis XXXX country. I can markets And is you for of for same-store more restaurant to the give sales plus. relative we’re to

and do can other where stuff. lifting, well. proxy think what barrel if the for of good through social of that can full have restaurant because once you I a do So distancing one limitations it probably a But get want go we we look we still type when for there’s I aggregate, we think capacity those that’s market we to capacity-ish, very in to some

more incredible in which very also South Miami – comps then the done Grills has the Texas it’s relaxed have one Beach, the I done markets, XXX%-plus no we’ve in obviously guess, of Kona have think And I very, well. range.

what very available, of take are. So That’s we’re well advantage of think becomes I I they the as to capacity numbers reasons think I it. why think one positioned our are

the know, we you we’re to in optimistic. objective where very As can and one is do read We it. number what’s happening our revenues restaurants maximize

stay So tuned.

David Kanen

Okay.

And incremental I the Beach, there. market I though some that would yielded relaxed or was Is you’d was in yet sales South bar. changed? at last bar, that there there, if future? still at in be no could still factored probably Has noticed think time the So sit when catch the that’s the the I seating people like that to

Manny Hilario

way because, in liquor like I’m see business would I business, as beneficial to bar margin not brands. and is a I in magic XX. so before and food so other our and be not food. trading it’s Obviously, That’s fan – bar after that food there’s XX usually exactly in you determined bar a think as o’clock, that probably business see per I’m big still a a better sure else the much in people the yet we But costs the not run se, everything than our

year bars to revenues. open we’ll maximize up, again, utilize them that play to how by we’ll we’ll test the So, as and see

David Kanen

one… just then And Okay.

Manny Hilario

really table think keeping turns sure on where that capacity the the turns, Yes, focused I make the relax to turns really important is stay are. and table on is table available strategy now they right as becomes more you not

David Kanen

to getting normal lot Okay. things a license percent fees up to returns relicensed And you do When royalties a I like EBITDA as revenues, QX? those or start here of you EBITDA is do timeframe there’s year-over-year. XX% and as and leverage that you you because then incrementality, it? to of think But you in exceeds impressive. I an ultimately that In where fees think – in down to were what management that. that the normalize? do and which kind Can with fees was revenue then expect management improvement on start And future, see of of margins noticed recoup

Manny Hilario

Great.

that see opens So we’re because license do guidance, you up. we’ll improvement fees providing it. directionally Europe an not give major can I as didn’t we in

do we’ve see it. week London we to and opening actually next up that started know So is

the starting big be management to lever So that open the align. to also relax and Italy’s up. license will help next

see London Rico levels. Italy probably very historical and to we as open been now have or has So us. up up, we M&L dramatically Puerto fees remember Also will STK, closer license and a good management which going restaurant that for

Lucas, which And us. have have site a which a we is very also not that amount. for also Cabo also Scottsdale, We good will licensed a restaurant drive San substantial now is

you fees. at just license If that’s on X% the a XXX week $X,XXX in week, math do

when starting a or back and so start up. in about So here reopening week M&L they is for outlook the good very

David Kanen

That’s I have. Okay. all

Manny Hilario

dramatic the lift know, adjusted a see that. good, the on as the flows so on you because Very line, all EBITDA line. that margin outlook should XX% down What’s to bottom we

David Kanen

Yes.

great Well, job Okay. guys.

yet happy come. almost best in for, I’m shareholder to like it Sounds I four is now. years the think been very a

I work. great the to up keep look So quarter. next

Manny Hilario

Thank you.

Operator

Thank further to Hilario turn gentlemen, and are Ladies time, floor there back you. I Manny to comments. like for his at closing questions. no this would the

Manny Hilario

our everywhere I restaurants, and I all, And been in work in the phenomenal. globally. offices first thank done incredible right. who’s the the All teams Group of to the ONE Well, by team appreciate want

all not in our into restaurants. last So on I but forward your appreciate you interests least, obviously And we I of us. Group. appreciate to everybody’s ONE running of And all commitment to the look

in well, be restaurants. and be So see Thank you. safe of you our one

Operator

gentlemen, and concludes Ladies today’s you. Thank this teleconference.

You may at your Thank you disconnect this your time. for participation. lines

The ONE Group Hospitality, Inc. (STKS) 12 May 212021 Q1 Earnings call transcript