Q3 2020 One Group Hospitality Inc Earnings Call
After delivery from nine separate delivery partners.
We have also adapt to our menus particulate SDK to have more transportable items that work in the takeout environment.
This is going a long way towards elevating this channel.
In the fourth quarter, we plan to drive event business, albeit we expect lower year over year sales because of the pandemic and less pass restrictions as a supplement we are working and other types of programs and promotions to drive holiday sales.
We have been testing brunch at select SDK Kona Grill locations and now expect to launch this program company wide in the U.S.
In addition, we are looking forward to executing premium menus at all our locations during the holiday season.
Our SDK meet market and ecommerce platform that we launched last spring is also doing well and is enabling us to reach cash in a manner that was previously not possible.
The average stake is in that 25 to $30 range and delivery costs are very reasonable for two and treated livery. So that gets benefit from both the great value and great convenience of getting a steak house probably stake at home.
To conclude our team has certainly proven our resiliency. During these trying times and we are doing a fantastic job welcoming guests back into our restaurants for a great five dining experience ultimately our focus on day to day execution has to effective in translating to a strong.
Now.
Now I will turn the call back to Tyler.
Thank you Manny.
Let me start by discussing our current cash and liquidity positions before reviewing the third quarter financials in greater detail.
As of September Thirtyth, we had $26.6 million in cash and cash equivalents on our balance sheet. In this amount has not changed materially through today.
Notably due to our improving sales performance in recent months, we generated positive cash flow throughout the third quarter and into October.
Finally, our credit facility balance as of the end of the quarter stood at approximately 47.5 million.
In terms of our quarterly financial total GAAP revenues were 39.6 million, increasing 79% from $22.1 million in the same quarter last year.
Included in our total revenues for the quarter as our own restaurant net revenue of $37.8 million, which increased approximately 97% from $19.2 million for the same quarter last year.
The increase was primarily driven by $22.8 million in additional sales from Kona Grill, which we acquired in October 2019.
Partly offset by lower revenues due to temporary closures and limited operation of several restaurants due to cope in 19.
Domestic consolidated comparable sales decreased 15.6% for the quarter for SDK comparable sales decreased 24.2% and for Kona grill comparable sales decreased 7.3%.
As Manny commented build sequentially improved throughout the quarter for both SDK and Kona Grill with Kona Grill, turning positive in September and both SDK and Kona Grill turning positive in October.
Solid comparable sales for October increased 4.2% and 8.6% increase the Kona grill, and a 0.3% increase SDK.
We certainly appreciate that there is likely to be volatility for the foreseeable future as locations might be subject to new guidelines.
Management license and incentive fee revenue decreased to $1.7 million in the third quarter of 2020 from $2.9 million in the third quarter of 2019. This.
This decrease is primarily the result of temporary closures due due to COVID-19 unlimited in person bidding advantage locations.
Owned restaurant cost of sales as a percentage of owned restaurant net revenue decreased 170 basis points to 24% in the third quarter of 2020 from 25.7% in the third quarter of 2019, primarily due to strong menu management supply chain synergies achieved by the addition of restaurant and favorable.
Food commodity costs.
Owned restaurant operating expenses as a percentage of owned restaurant net revenue decreased approximately 470 basis points to 59.4% in the third quarter of 2020 from 64.1% in the third quarter of 2019.
The decrease was driven by our attraction and actively managing operating costs, particularly in managing restaurant labor and implementing operating cost savings measures.
Again, we have made tremendous progress in running more efficient operation since the beginning of the Cove 19 pandemic and plan to continue to execute the current operating model into the foreseeable future.
In total our restaurant level margin increased by 640 basis points compared to the same quarter in the prior year.
On a total reported basis general and administrative expenses, including stock based compensation for the third quarter of 2020 or $3.4 million compared to $2.4 million in the prior year.
As a percentage of total revenue general and administrative expenses decreased 200 basis points to 8.6% of total revenue.
The decrease was due to measures we implemented to reduce our cost structure to offset the impact of code at 19, and the synergies created due to the integration of the Kona Grill brand.
When adjusting for stock based compensation adjusted General and administrative expenses were $2.9 million in the third quarter of 2020 and $2 million in the third quarter of 2019.
As a percentage of revenue adjusted general and administrative administrative expenses decreased 180 basis points to 7.3% of total revenue in the third quarter 21.
From 9.1% of total revenue in the third quarter of 2019.