The ONE Group Plans to Open Eight New STK Restaurants

The ONE Group Hospitality, Inc. announced its financial results for the fourth quarter and full year ended December 31. 

Highlights were as follows: 

• The fourth quarter marked the seventh consecutive quarter of double-digit revenue growth.
• Owned unit net revenues increased 42.6 percent to $16.8 million.
• Total GAAP revenue increased 29.2 percent to $18.6 million.
• Total food and beverage sales at owned and managed units increased 16.3 percent to $41.7 million.
• Management and incentive fee revenues were $1.8 million for the quarter. 

Jonathan Segal, CEO of The ONE Group, says, “Looking back on 2015, we are pleased with the performance of our older STK’s as well as the initial success at our 2015 class of restaurants including STK Chicago, STK LA and the reopening of the STK Miami Beach. Although we show a drop in Adjusted EBITDA for the quarter, it’s important to note that in 2014 we received a one-time settlement on a trademark dispute of approximately $600,000 and in 2015 we had a decline in our European business which was further impacted by the strength of the U.S. dollar.” 

Segal continues, “As we look ahead to the next 12 months, we have an exciting pipeline of growth through both company owned restaurants and hospitality and licensing deals. We anticipate opening eight new STK restaurants, of which three will include rooftop restaurants. This will take the total number of STK units around the world to 18. Also, earlier today we were very excited to announce that Alejandro Munoz-Suarez, formerly of B&B Hospitality, has agreed to join us as our new Chief Operating Officer. We believe Alex’s deep level of experience in the hospitality industry is perfectly aligned with us and we are extremely excited to have him on board.” 

Fourth Quarter 2015 Financial Results

Total owned unit net revenues increased 42.6 percent to $16.8 million in the fourth quarter of 2015 compared to $11.8 million in the fourth quarter of 2014. The increase was primarily due to the opening of an STK in Chicago in the fourth quarter, as well as the revenues from the STK in Miami Beach and the STK at the W Hotel in West Beverly Hills that opened earlier in 2015. Comparable sales from owned STK units decreased 2.9 percent for the quarter. Comparable sales from owned and managed STK units decreased 0.8 percent for the quarter.

Management and incentive fee revenues were $1.8 million in the fourth quarter of 2015, a decrease of 30.8 percent compared to $2.6 million in the prior year’s quarter. The decrease was driven by the decline in revenue from the U.K. operations as well as a decline in the currency exchange rates versus the same period a year ago. This was partially offset by an increase in management and incentive fees from the STK in Las Vegas.

Total food and beverage sales at owned and managed units increased 16.3 percent to $41.7 million compared to $35.8 million in the fourth quarter of 2014.

Net income attributable to The ONE Group Hospitality, Inc. increased 3.5 percent to $1.6 million compared to a net income of $1.6 million in the fourth quarter of 2014. Included in net income for the fourth quarter of 2015 are transaction costs of $1.2 million related to the terminated acquisition of sbe’s Katsuya and Cleo brands as well as a one-time non-cash impairment charge of $3 million primarily relating to the STK unit in Washington, D.C.

Full Year 2015 Financial Results

Total owned unit net revenues increased 29.9 percent to $52.6 million in fiscal year 2015 compared to $40.5 million in fiscal year 2014. The increase was primarily due to the opening of STKs in Chicago and at the W Hotel in West Beverly Hills and the reopening of the STK in Miami Beach as well as a full year of the food and beverage services at the W Hotel in West Beverly Hills. Comparable sales from owned STK units decreased 0.7 percent for the year. Comparable sales from owned and managed STK units increased 0.5 percent for the year.

Management and incentive fee revenues were $7.9 million in fiscal year 2015 compared to $8.8 million in the prior fiscal year. The decrease was driven by the decline in revenue from U.K. operations as well as a decline in the currency exchange rates versus the prior year. This decrease was partially offset by an increase in management fees from the STK in Las Vegas. 

Total food and beverage sales at owned and managed units increased 9.5 percent to $144.6 million in fiscal year 2015 compared to $132.2 million in fiscal year 2014.

In fiscal year 2015, net income attributable to The ONE Group Hospitality, Inc. increased 49.7% to $6.9 million compared to a net income of $4.6 million for fiscal 2014.

Adjusted net income for fiscal year 2015 was $1.4 million, or $0.06 per share, compared to adjusted net income of $1.5 million, or $0.06 per share, in 2014.