The ONE Group Hospitality, Inc. announced its financial results for the first quarter ended March 31.
Highlights for the first quarter ended March 31, 2017 were as follows:
The first quarter marked the 12 consecutive quarter of revenue growth.
Total GAAP revenue increased 24.6 percent to $20.4 million.
Comparable sales for owned and managed STK units increased 2.7 percent during the quarter and after adjusting for the impact of leap day in 2016, same-store sales increased 3.6 percent.
Total food and beverage sales at owned and managed units increased 18 percent to $41.6 million.
GAAP net loss attributable to The ONE Group Hospitality, Inc. for the quarter was $402,000 ($0.02 loss per share) as compared to a GAAP net loss of $457,000 ($0.02 loss per share) for the same period last year; and
Adjusted EBITDA increased 50.9 percent during the quarter to $1.6 million from $1.1 million from prior year.
Jonathan Segal, CEO of The ONE Group says, “We are delighted to report a 50 percent increase in our first quarter 2017 Adjusted EBITDA despite a very difficult time for the restaurant industry. We are equally pleased with a 2.7 percent increase in our same store sales for owned and managed units. Our marketing efforts are paying off along with the savings we are making across the company. Throughout 2017, we will continue our focus on improving sales as well as managing costs in line with our new strategy.”
Segal says, “As our growth strategy continues around an asset-light business model focused on management and licensing opportunities, we continue to take a strategic review of our company and make the necessary changes within our business to target success for 2017 and beyond. These efforts could yield potential annual cost savings in excess of $2 million. That said, our development pipeline remains strong with four new international licensed deals scheduled to open this year. We believe we are on the right track to drive our brand forward and create long term value for all shareholders. ”
First Quarter 2017 Financial Results
Total owned unit net revenues increased 26 percent to $18.1 million in the first quarter of 2017 compared to $14.4 million in the first quarter of 2016. The increase was primarily due to the opening of the STK in Orlando (May 2016) and Denver (January 2017), partially offset by a decline in comparable sales from owned units. Comparable sales from owned STK units decreased 1.8 percent for the quarter.
Comparable sales from owned and managed STK units increased 2.7 percent for the quarter.
Management and incentive fee revenues increased 14.9 percent to $2.3 million in the first quarter of 2017 compared to $2.0 million in the first quarter of 2016. The increase was driven by an increase in management and incentive fees at the STK in Las Vegas and the ME Hotel in Milan as well as management fees at the STK in Toronto, which opened at the end of September 2016.
Total food and beverage sales at owned and managed units increased 18 percent to $41.6 million compared to $35.2 million in the first quarter of 2016.
Adjusted EBITDA increased 50.9 percent during the first quarter of 2017 to $1.6 million from $1.1 million in the first quarter 2016.
GAAP net loss attributable to The ONE Group Hospitality, Inc. for the quarter was $402,000 ($0.02 loss per share) compared to GAAP net loss of $457,000 ($0.02 loss per share) for the same period last year
Adjusted net loss for the quarter was $114,000 ($0.00 loss per share) compared to adjusted net loss of $415,000 ($0.02 loss per share) in the first quarter of 2016.
Adjusted net loss, a non-GAAP measure, represents net loss before loss from discontinued operations, non-recurring gains and losses, non-cash impairment losses and stock based compensation. For a reconciliation of adjusted net loss to the most directly comparable financial measure presented in accordance with GAAP and a discussion of why we consider it useful, see the financial information accompanying this release.
OWNED STK UNITS
STK San Diego
STK Puerto Rico
STK Beach Puerto Rico
STK Beach Dubai
The company has appointed Linda Siluk to act as its interim CFO effective May 16, 2017. Ms. Siluk recently served as Chief Accounting Officer at Fairway Group Holdings Corp. and has been a senior financial executive in other retail companies as well.