Q1 2024 The ONE Group Hospitality Inc Earnings Call

Okay.

Greetings and welcome to the one group first quarter 2024 earnings Conference call. At this time all participants are in a listen only mode. A brief question and answer session will follow.

Operator: Greetings and welcome to the One Group first quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If at any time during this call you require immediate assistance, please press star zero for the operator. As a reminder, this conference is being recorded. I would now like to turn the conference call over to Tyler Loy. Please go ahead.

Tyler Loy: The formal presentation.

Tyler Loy: At any time during this call you require immediate assistance. Please press star zero for the operator as a reminder, this conference is being recorded I would now like to turn the conference call over to Tyler Roy. Please go ahead.

Tyler Loy: Thank you, Operator, and hello, everyone. Before we begin our formal remarks, let me remind you that part of our discussion today will include four viewing statements. These forward-looking statements are not guarantees of future performance, and you should not place undue reliance on them. These statements are also subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect. Please also note that these four forward-looking statements reflect our opinion only as of the date of this call.

Tyler Loy: Thank you operator, and Hello, everyone.

Tyler Loy: Before we begin our formal remarks, let me remind you that part of our discussion today will include forward looking statements.

Tyler Loy: These forward looking statements are not guarantees of future performance and you should not place undue reliance on them.

Tyler Loy: These statements are also subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect.

Tyler Loy: Please also note that these forward looking statements reflect our opinion only as of the date of this call.

Tyler Loy: We undertake no obligation to revise or publicly release any revisions to these forward-looking statements in light of new information or future events. We refer you to our recent SEC filings for a more detailed discussion of the risks that could impact our future operating results and financial conditions. During today's call, we will discuss certain non-GAAP financial measures that we believe can be useful in evaluating our performance. However, the presentation of these measures or other information should not be considered in isolation or as a substitute for results prepared in accordance with GAAP.

Tyler Loy: We undertake no obligation to revise or publicly release any revisions of these forward looking statements in light of new information or future events.

Tyler Loy: We refer you to our recent SEC filings for a more detailed discussion of the risks that could impact our future operating results.

Tyler Loy: Financial condition.

Tyler Loy: During today's call, we will discuss certain non-GAAP financial measures, which we believe can be useful in evaluating our performance.

Tyler Loy: However, the presentation of these measures or other information should not be considered in isolation or as a substitute for results prepared in accordance with GAAP.

Tyler Loy: Reconciliations of these measures, such as adjusted EBITDA, adjusted net income, restaurant operating profit, comparable sales, and total food and beverage sales that are owned and managed and licensed units to gap measures, along with the discussion of why we consider these measures useful, please see our earnings release issued today. With that, I'd like to turn the call over to Manny Hilario.

Tyler Loy: Reconciliations of these measures such as adjusted EBITDA adjusted net income restaurant operating profit comparable sales and total food and beverage sales at owned and managed and licensed units to GAAP measures along with a discussion of why we consider these measures useful please see our earnings release issued today.

Tyler Loy: With that I'd like to turn the call over to Manny Hilario.

Emanuel P. N. Hilario: Thank you Tyler and Hello, everyone. We sincerely appreciate you joining us today and for your interest in the one group.

Emanuel P. N. Hilario: Thank you, Tyler, and hello, everyone. We sincerely appreciate you joining us today and for your interest in the One Group. To begin, I would like to express my gratitude to each of our dedicated team members, including the nearly 6,500 new teammates who joined One Group last week with the closing of the acquisition of Safflower Holdings Corp., parent company of the Benihana and Raw Sushi restaurant brands. For the remainder of this call, we will be referring to Sapphire Holdings as Benihana.

Emanuel P. N. Hilario: To begin I would like to express my gratitude to each of our dedicated team members, including the nearly 6500, new teammates who joined the one group last week with the closing of the acquisition of Safflower Holdings Corp.

Emanuel P. N. Hilario: The parent company of the Benihana and raw Sushi restaurant brands.

Emanuel P. N. Hilario: For the remainder of this call, we will be referring to Sapphire holdings as benihana.

Emanuel P. N. Hilario: Thanks to a remarkable teams we have solidified our leadership position in high end polished casual vibe dining.

Emanuel P. N. Hilario: Thanks to our remarkable teams, we have solidified our leadership position in high-end and polished, casual-vibe dining. Let's discuss highlights from this first quarter, 2024, and provide an update on the strategic initiatives that shaped the quarter. First, despite a challenging sales environment, we grew sales 3% to $85 million, driven by the strength of our company-owned new restaurants, which contributed significant revenues at margins above the rest of the system. Second, with only moderate pricing and stickier than expected inflation, we kept restaurant-level margins intact at 16%.

Emanuel P. N. Hilario: Let's discuss highlights from this first quarter 2024, and provide an update on the strategic initiatives that shape of the quarter.

Emanuel P. N. Hilario: First despite a challenging sales environment, we grew sales, 3% to $85 million driven by the strength of our company owned new restaurants, which contributed significant revenues at margins above the rest of the system.

Emanuel P. N. Hilario: Second with only moderate pricing and stickier than expected inflation, we kept restaurant level margins intact at 16%.

Emanuel P. N. Hilario: This was enabled by the cost-saving initiatives that we enacted in the fourth quarter of last year, which generated approximately $3 million in restaurant operating profit throughout the quarter. Next, we manage G&A effectively, as G&A excluding stock-based compensation as a percentage of revenue improved by 20 basis points year over year. All of this resulted in $10.5 million in adjusted EBITDA, nearly in line with last year despite the tough consumer environment experienced throughout the industry. During the quarter, we celebrated the opening of our 28th SDK ShakeOut. The restaurant is located in Washington, D.C., across from the Walter E. Washington Convention Center and inside the Marriott Marquis Hotel.

Emanuel P. N. Hilario: This was enabled by the cost saving initiatives that we enacted in the fourth quarter of last year, which generated approximately $3 million in restaurant operating profit throughout the quarter.

Emanuel P. N. Hilario: Next we managed G&A effectively is G&A, excluding stock based compensation as a percentage of revenue improved by 20 basis points year over year.

Emanuel P. N. Hilario: All of this resulted in $10 $5 million and adjusted EBITDA nearly in line with last year, despite the tough consumer environment experienced throughout the industry.

Emanuel P. N. Hilario: During the quarter, we celebrated the opening of our 28 SDK Steakhouse.

Emanuel P. N. Hilario: The restaurant is located in the Washington D C across from the Walter Washington Convention Center and inside the Marriott Marquis looks out.

Emanuel P. N. Hilario: The opening of this new SDK marks an important step in the one group strategic expansion initiatives and long term growth strategy.

Emanuel P. N. Hilario: The opening of this new SDK marks an important step in the One Group's strategic expansion initiatives and long-term growth strategy. We are thrilled to be welcoming our guests to this exquisitely designed restaurant and providing them with a truly memorable dining experience. Looking ahead, we remain laser focused and continue to drive top-line growth while further enhancing operational efficiency. The strategic priorities for 2024 include, first, a focus on driving sales. Similar to others in the industry, during the first quarter, we experienced a decrease in comparable store sales due to a choppy and challenging consumer environment.

Emanuel P. N. Hilario: We are thrilled to be welcoming new guests to this exquisitely designed restaurants, and providing them with a truly memorable dining experience.

Emanuel P. N. Hilario: Looking ahead, we remain laser focused on continuing to drive top line growth, while further enhancing operational efficiencies.

Emanuel P. N. Hilario: Strategic priorities for 2024 include.

Emanuel P. N. Hilario: First our focus on driving sales.

Emanuel P. N. Hilario: Similar to others in the industry during the first quarter, we experienced a decrease in comparable store sales from a choppy and challenging consumer environment and as a result, we have focused on efforts on delivering value coupled with strong execution.

Emanuel P. N. Hilario: And as a result, we have focused on efforts to deliver value coupled with strong execution. We continue to promote our $3, $6, and $9 Happy Hour menu at both brands and our $69 and $39 Steak Night America offerings at SDK and Kona Grill, respectively. In addition, to cater to folks looking for higher-end experiences, we continue to innovate on our culinary program with premium product lines. To amplify these value-driven and experiential offerings, we are leveraging our robust digital marketing capabilities, supporting these strategies, coupled with a relentless focus on delivering fantastic guest experiences. We are confident that we can successfully navigate the current challenging sales environment and drive sustainable sales growth.

Emanuel P. N. Hilario: We continue to promote our $3 $6 $9 happy hour menu at both brands and are $69 and $39 stick that America offerings at SDK and Kona Grill, respectively.

Emanuel P. N. Hilario: In addition to cater to folks looking for higher and experiences we continue to innovate on our culinary program with premium product lines.

Emanuel P. N. Hilario: To amplify these value driven and experiential offerings, we are leveraging our robust digital marketing capabilities supporting these strategies, coupled with our relentless focus on delivering fantastic guest experiences.

Emanuel P. N. Hilario: We are confident that we can successfully navigate the current challenging sales environment and drive sustainable sales growth.

Emanuel P. N. Hilario: Our second key priority is to improve clinical margins at the end of 2023, we performed an in depth review of our clinical portfolio of restaurants, and the terms of that about a quarter of the 24 restaurants that we acquired are underperforming due to challenging real estate.

Emanuel P. N. Hilario: Our second key priority is to improve KonaGrow margins. At the end of 2023, we performed an in-depth review of our KonaGrow portfolio of restaurants and determined that about a quarter of the 24 restaurants we acquired are underperforming due to challenging real estate. The bifurcation of performance continued into the first quarter as our core base of operations saw significantly healthier margins than these other locations. As previously mentioned, we will address each of these locations on a case by case basis.

Emanuel P. N. Hilario: Bifurcation of performance continued into the first quarter as our core base of Russian saw significantly healthier margins in these other locations.

Emanuel P. N. Hilario: As previously mentioned, we will address each of these locations on a case by case basis.

Emanuel P. N. Hilario: As we look at our pipeline of new units, we expect the new Kona grilles to have a target AUV of $5 million and a 17% wrestling level margin. For both the SDK and Konego Brands, we have implemented several key initiatives to improve restaurant operating profit and overall profitability. Managing menu and product mix is one. Enhancing purchasing efficiencies for both in food and operating supplies. Maximizing productivity through Smart Scheduling Practices.

Emanuel P. N. Hilario: As we look at our pipeline of new units, we expect the new Kona grills have a target of $5 million and a 17% restaurant level margin.

Emanuel P. N. Hilario: For both the SDK and Carnival brands, we have implemented several key initiatives to improve restaurant operating profit and overall profitability.

Emanuel P. N. Hilario: Managing menu and product mixes one enhancing purchasing efficiencies for both.

Emanuel P. N. Hilario: Food and operating supplies.

Emanuel P. N. Hilario: Maximizing productivity through smart scheduling practices.

Emanuel P. N. Hilario: Evaluating All Third-Party Vendor Relationships and Reducing Travel Costs. We saw these initiatives take hold during the quarter as we were able to maintain margins. We are confident that this momentum will continue throughout 2024 as we further optimize operations. A third key priority is to rely on self-funded growth for company-owned operations.

Emanuel P. N. Hilario: Evaluating all third party vendor relationships and reduce travel costs.

Emanuel P. N. Hilario: We saw these initiatives take hold during the quarter as we were able to maintain margins.

Emanuel P. N. Hilario: We are confident that this momentum will continue throughout 2024 as we further optimize operations.

Emanuel P. N. Hilario: Third key priorities to rely on self funded growth for company owned operations as I. Previously mentioned this year. We have opened one company owned SDK in Washington, D C where there.

Emanuel P. N. Hilario: As I previously mentioned, this year we opened one SDK company in Washington, D.C. For the remainder of the year, we expect to open an additional 5 to 7 new SDK and Kona Grove venues, which includes 1 to 3 company-owned SDKs, two company-owned Kona Grills, and one to two managed or licensed units. We also plan to open one to two company-owned Benihanas and one company-owned Rocks. There are currently four company-owned restaurants under construction in the following city.

Emanuel P. N. Hilario: The remainder of the year, we expect to open an additional five to seven new SDK and clinical venues, which includes wanted three company owned Sdk's do copy on Kona grills and want to to manage or licensed units.

Emanuel P. N. Hilario: Also plan to open one to two company owned Benihana and one company owned rock.

Emanuel P. N. Hilario: There are currently four company owned restaurants and the construction in the following cities.

Emanuel P. N. Hilario: A Nasty Kid restaurant in Aventura, Florida, at the Aventura Mall; Saltwater Social, which is a high-end seafood vibe dining restaurant that will be located in Denver, Colorado, in the Cherry Creek neighborhood, a Kona Grill restaurant in Tigard, Oregon, at the Bridgeport Village, and a raw sushi restaurant in Plantation, Florida.

Emanuel P. N. Hilario: And Thats became restaurant in App and tariff, Florida at the Aventura mall.

Emanuel P. N. Hilario: Saltwater social which is a high end seafood fine dining restaurant that will be located in Denver, Colorado and the Cherry Creek neighborhood.

Emanuel P. N. Hilario: A kona grill restaurant and Tigard, Oregon at the Bridgeport village.

Emanuel P. N. Hilario: And Ah raw sushi restaurants in plantation, Florida.

Emanuel P. N. Hilario: Over the long term, we plan on growing three to five new units of each of our growth brands, FTK, Sonogrow, and Benihana. Given that this is a proven and scalable international platform with compelling white space, we see an addressable market of over 800 venues, which includes 400 restaurants for Benihana in the U.S. alone, 200 SDKs, and 200 Kona Grows. We are clearly in the early innings of a robust growth strategy. Our fourth key priority is the successful integration of Benihana.

Emanuel P. N. Hilario: Over the long term with plant on growing 3% to five new units of each of our growth brands SDK Kona Grill and benihana.

Emanuel P. N. Hilario: We view this as a proven and scalable international platform with compelling white space, we see an addressable market of over 800 venues, which includes 400 restaurants for benihana in the U S alone 200, Sdk's and 200 Kona grills we.

Emanuel P. N. Hilario: We are clearly in the early innings of a robust growth strategy.

Emanuel P. N. Hilario: Our fourth theme.

Emanuel P. N. Hilario: Priority is the successful integration of benihana.

Emanuel P. N. Hilario: This acquisition not only aligns with our vision of being the undisputed global leader in vibe dining, but it will also generate tremendous synergies from our ability to manage commodity costs at scale, drive many mix through culinary innovation, leverage our combined digital databases and digital capabilities, and utilize our robust reservation management system. We have a tremendous opportunity to create value for our shareholders through this combination of top entertainment brands. Lastly, our fifth key priority is to continue to return value to our shareholders through share repurchase.

Emanuel P. N. Hilario: This acquisition not only aligns with our vision of being the undisputed global leader in vibe dining, but he will also generate tremendous synergies.

Emanuel P. N. Hilario: Our ability to manage commodity costs that scale.

Emanuel P. N. Hilario: Drive menu mix through culinary innovation leverage our combined digital databases and digital capabilities and utilize our robust reservation management system, we have a tremendous opportunity to create value for our shareholders to this combination.

Emanuel P. N. Hilario: Top entertainment brands.

Emanuel P. N. Hilario: Lastly, our fifth key priority is to continue to return value to our shareholders through share repurchases.

Emanuel P. N. Hilario: We generate tremendous cash flow, and we believe there's an opportunity to leverage our internally generated cash to create a balance between growth and shareholder accretion via share count reduction. To this end, earlier this year, the company's board of directors authorized a $5 million share repurchase program on top of the $15 million program that was already completed last year.

Emanuel P. N. Hilario: We generate tremendous cash flow and we believe there is an opportunity to leverage our internally generate cash to create balance between growth and shareholder accretion via share count reduction.

Emanuel P. N. Hilario: To this end earlier this year the company's board of directors authorized a $5 million share repurchase program on top of the $50 million program that was already completed last year.

Tyler Loy: To conclude, I am pleased with how we have kicked off the new year despite navigating a particularly challenging Russian environment. This is a testament to the fantastic job our team is doing. We believe that our strong leadership team, combined with our strategic initiatives, positions us as well to navigate the evolving market conditions and capitalize on growth opportunities. We are excited for the future, and we will remain focused on executing our strategy and enhancing shareholder value. I will now turn the call over to Tyler.

Emanuel P. N. Hilario: To conclude I am pleased with how we have kicked off the new year, despite navigating a particularly challenging restaurant environment.

Tyler Loy: This is a testament to the fantastic job our team is doing.

Tyler Loy: We believe that our strong leadership team.

Tyler Loy: With our strategic initiatives positions us well to navigate the evolving market conditions and capitalize on growth opportunities we.

Tyler Loy: We are excited for the future and we will remain focused on executing our strategy and enhancing shareholder value.

Tyler Loy: I will now turn the call over to Tyler.

Tyler Loy: Thank you Manny let me start by discussing our first quarter financials in greater detail.

Tyler Loy: Thank you, Manny. Let me start by discussing our first quarter financials in greater detail. Total GAAP revenues were $85 million, increasing 3% from $82.6 million for the same quarter last year. Included in our total revenues is our owned restaurant net revenues of $81.5 million, which increased 3.7% from $78.6 million for the same quarter last year. The increase is primarily attributable to the opening of six restaurants since July of 2020. However, this was partially offset by a 7.9% decrease in comparable sales consisting of a 6.8% decrease at SDK and a 9.7% decrease at Kona Grille.

Tyler Loy: Management license and identity revenues were $3.5 million, decreasing 12.3% from $4 million in the first quarter of 2023. The decrease was primarily attributed to decreased revenues at our SDK restaurants in North America and the exit out of SDK Westminster as we consolidated our London operations in the fourth quarter of 2023. Owned restaurant cost of sales as a percentage of owned restaurant net revenue improved 100 basis points to 23% in the fourth quarter of 2024 compared to 24% in the prior year, primarily due to operational cost reduction initiatives, product mix management, and pricing offset by cost inflation.

Tyler Loy: Total GAAP revenues were $85 million, increasing 3% from $82 6 million for the same quarter last year.

Tyler Loy: Owned restaurant operating expenses as a percentage of owned restaurant net revenue reached 130 basis points to 60.9% in the first quarter of 2024 from 59.6% in the first quarter of 2023 due to fixed cost deleveraging and operating cost inflation, partially offset by an operational cost reduction initiative. Restaurant operating profit was 16.1% for the first quarter of 2024 compared to 16.4% in the first quarter of 2023. On a total reported basis, general and administrative expenses were flat at $7.5 million for the first quarter of 2024 and 2023. However, when adjusting for stock-based compensation, adjusted general and administrative expenses were $6.2 million in the first quarter of 2024 and 2023. Reopening expenses were $2.9 million, compared to $1.3 million in the prior year.

Tyler Loy: Included in our total revenues is our owned restaurant net revenues of $81 5 million, which increased three 7% from $78 6 million for the same quarter last year.

Tyler Loy: The increase was primarily attributable to the opening of six restaurants since July of 2023.

Tyler Loy: This was partially offset by a seven 9% decrease in comparable sales.

Tyler Loy: <unk> have a six 8% decrease at SDK and a nine 7% decrease in Kona grill.

Tyler Loy: Management license and incentive fee revenues were $3 5 million decreasing 12, 3% from $4 million in the first quarter of 2023.

Tyler Loy: The decrease was primarily attributed to decreased revenues at our SDK restaurants in North America, and the exit out of SDK Westminster as we consolidated our London operations, the fourth quarter of 2023.

Tyler Loy: Owned restaurant cost of sales as a percentage of owned restaurant net revenue improved 100 basis points to 23% and the.

Tyler Loy: Fourth quarter of 2024 compared to 24% in the prior year.

Tyler Loy: Primarily due to operational cost reduction initiatives product mix management and pricing offset by cost inflation.

Tyler Loy: Owned restaurant operating expenses as a percentage of owned restaurant net revenues reached 130 basis points to 69% in the first quarter of 2024 from 59, 6% in the first quarter of 2023.

Tyler Loy: Due to fixed cost deleveraging and operating cost inflation, partially offset by operational cost reduction initiatives.

Tyler Loy: Restaurant operating profit was 16, 1% for the first quarter of 2024 compared to 16, 4% in the first quarter of 2023.

Tyler Loy: On a total reported basis.

Tyler Loy: General and administrative expenses were flat at $7 5 million for the first quarter of 2024 and 2023.

Tyler Loy: When adjusting for stock based compensation adjusted General and administrative expenses were $6 2 million in the first quarter of 2024 and 2023.

Tyler Loy: Preopening expenses were $2 9 million compared to $1 3 million in the prior year.

Tyler Loy: The increase was related to payroll, training, and non-cash pre-open rent for SDK Washington, D.C., which opened in March 2024, and SDK and Conegro restaurants currently under development. Interest expense was $2.1 million in the first quarter of 2024, compared to $1.8 million in the first quarter of 2023. Income tax benefit was $0.3 million in the first quarter of 2024, compared to income tax expense of $0.2 million in the first quarter of 2023.

Tyler Loy: The increase was related to payroll training and non cash pre opening rent for SDK, Washington, DC, which opened in March 2024, and the SDK and Kona Grill restaurants currently under development.

Tyler Loy: Interest expense was $2 1 million in the first quarter of 2024 compared to $1 8 million in the first quarter of 2023.

Tyler Loy: Income tax benefit was <unk> 3 million in the first quarter of 2024 compared to income tax expense of <unk> 2 million in the first quarter of 2023.

Tyler Loy: Net loss attributable to the one group Hospitality, Inc was $2 1 million or <unk> <unk> net loss per share compared to a net income of $2 6 million at the first quarter of 2023 or <unk> net income per share.

Tyler Loy: Net loss attributable to One Group Hospitality Inc. was $2.1 million, or $0.07 net loss per share, compared to a net income of $2.6 million in the first quarter of 2023, or $0.08 net income per share. Adjusted net loss was $0.6 million, or $0.02 adjusted net loss per share, compared to an adjusted net income of $3.2 million in the first quarter of 2023, or $0.10 net income per share. Adjusted EBITDA for the first quarter attributable to One Group Hospitality Inc. was $10.5 million compared to $10.9 million in the first quarter of 2023.

Tyler Loy: Adjusted net loss was <unk> 6 million or <unk> <unk> adjusted net loss per share compared to an adjusted net income of $3 2 million in the first quarter of 2023 or 10 net income per share.

Tyler Loy: Adjusted EBITDA for the first quarter attributable to the one group Hospitality, Inc was $10 5 million compared to $10 9 million in the first quarter of 2023.

Tyler Loy: We have included a reconciliation of adjusted EBITDA and adjusted net income in the tables in our first quarter 2024 earnings release. During the first quarter, our Board of Directors authorized an additional $5 million share repurchase program. However, there were no stock repurchases in the first quarter of 2024.

Tyler Loy: We have included a reconciliation of adjusted EBITDA and adjusted net income in the tables in our first quarter 2024 earnings release.

Tyler Loy: During the first quarter, our board of directors authorized an additional $5 million share repurchase program. However, there was no stock repurchases in the first quarter of 'twenty going forward.

Tyler Loy: Now, I would like to provide some forward-looking commentary regarding our business. This commentary is subject to risks and uncertainties associated with forward-looking statements as discussed in our SEC filing. We always remind our investors that the actual number and timing of new restaurant openings for any given period are subject to a number of factors outside the company's control, including macroeconomic conditions, weather, and factors in the control of landlords, contractors, licensees, and regulatory and licensing authorities.

Speaker Change: Now I would like to provide some forward looking commentary regarding our business.

Tyler Loy: This commentary is subject to risks and uncertainties associated with forward looking statements as discussed in our SEC filings we.

Tyler Loy: We as always remind our investors the actual number and timing of new restaurant openings for any given period.

Tyler Loy: Subject to a number of factors outside the company's control, including macroeconomic conditions weather and factors under control of landlords contractors licensees and regulatory and licensing authorities.

Tyler Loy: Based on the information available now and the expectations as of today, we are updating our 2024 targets to include the addition of benihana.

Tyler Loy: Based on the information available now and the expectations as of today, we are updating our 2024 targets to include the addition of Benihana. The guidance includes projections for Benihana from May 1st, the date of the acquisition, until the end of the year.

Tyler Loy: The guidance includes projections for benihana from May one the date of the acquisition until the end of the year.

Emanuel P. N. Hilario: Beginning with revenues, we project total gap revenues of between $700 and $740 million, which consists of an additional $340 to $360 million for the addition of Benihana. Managed franchise and licensee revenue is expected to be between $17 and $19 million, which consists of an additional $2 to $3 million for the addition of any honors, total owned operating expenses as a percentage of owned restaurant net revenue of approximately 83% Total GNA excluding stock-based compensation of approximately $40 million.

Tyler Loy: Beginning with revenues, we project total GAAP revenues of between 700 $740 million, which consists of an additional $340 million to $360 million with the addition of benihana.

Emanuel P. N. Hilario: Managed franchise and license fee revenue are expected to be between 17 and $19 million, which consists of an additional $2 million to $3 million for the addition of benihana.

Emanuel P. N. Hilario: Total owned operating expenses as a percentage of owned restaurant net revenue of approximately 83%.

Emanuel P. N. Hilario: Total G&A, excluding stock based compensation of approximately $40 million.

Emanuel P. N. Hilario: Adjusted EBITDA of between $95 and $100 million, with restaurant pre-opening expenses between $7 and $9 million. An effective income tax rate of between 5% and 10%, total capital expenditures net of allowances received from landlords of between 50 and 60 million. And finally, we plan to add 8 to 11 new venues in 2024. Based on the guidance discussed, coming out of 2024, our annual run rate system-wide F&B revenues will be in excess of $1 billion. Our Run Rate Gap revenues will be approximately $950 million, and our Run Rate Adjusted EBITDA will be greater than $140 million. I will now turn the call back to Manny.

Emanuel P. N. Hilario: Adjusted EBITDA of between 95 and 100 million.

Emanuel P. N. Hilario: Restaurant Preopening expenses between $7 9 million.

Manny: An effective income tax rate of between 5% and 10%.

Emanuel P. N. Hilario: Capital expenditures net of allowances received from landlords of between 50 and $60 million.

Manny: And finally, we plan to add 811, new venues in 2024.

Emanuel P. N. Hilario: Based on the guidance discussed coming out of 2020 for our annual run rate system wide F&B revenues will be in excess of $1 billion.

Emanuel P. N. Hilario: Our run rate GAAP revenues will be approximately $950 million in a run rate adjusted EBITDA will be greater than $140 million.

Emanuel P. N. Hilario: I will now turn the call back to Manny.

Emanuel P. N. Hilario: Thank you, Tyler, and thank you all for your time today and interest in the One Group. We are in the early stages of our long-term growth strategy as we continue to build a portfolio of high-volume brands with compelling returns for our shareholders. We've recently added Benihana and Raw Sushi, two Vibe and Entertainment dining brands that will diversify and strengthen our industry-leading portfolio of world-class, Experiential Rushman Concepts and blend perfectly with FCK and Conogro. This is an exciting time to be part of this company, and we appreciate your support. Tyler and I would be happy to answer any questions that you may have, operator.

Manny: Thank you Taylor and thank you all for your time today and interest in the one group.

Emanuel P. N. Hilario: We are in the early stages of our long term growth strategy as we continue to build a portfolio of high volume brands with compelling returns for our shareholders.

Emanuel P. N. Hilario: We've recently added benihana in raw sushi too.

Emanuel P. N. Hilario: <unk> vibe, an entertainment dining brands that will diversify and strengthen our industry leading portfolio of world class experiential restaurant concepts.

Speaker Change: And blended perfectly with SDK is going to grow.

Emanuel P. N. Hilario: This is an exciting time to be part of this company and we appreciate your support.

Emanuel P. N. Hilario: Alan and I will be happy to answer any questions that you may have operator.

Speaker Change: Thank you ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press star followed by one on your Touchtone phone.

Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by one on your touchtone phone. You will hear a three-tone prompt acknowledging your request, and your questions will be answered in the order they are received. Should you wish to decline from the polling process, please press star followed by 2. If you are using a speakerphone, please lift the handset before pressing any keys. One moment, please for your first question. Your first question comes from Jim Salera, Steven Zeng. Jim, please go ahead.

Operator: Here are three tone prompt acknowledging our request and your questions will be pulled in the order. They are received should you wish to decline from the polling process. Please press star followed by two.

James Ronald Salera: If you are using a speaker phone please lift the handset before pressing any keys one moment. Please for your first question.

James Ronald Salera: Your first question comes from Jim Solera Stephens, Inc. Jim. Please go ahead.

Emanuel P. N. Hilario: Hey guys, good afternoon. Thanks for taking our question. Manny, I was curious if you could maybe level set what you saw from the consumer during the quarter and just kind of run that versus the results versus your expectations. I don't know. We hear a lot about consumer engagement and value-seeking behavior, especially with restaurants. And so, if you can just maybe give us an idea of the appetite for some of the experiential dining that you talk about and how that jives with what the consumer is engaging in with kind of a value-oriented lens right now.

James Ronald Salera: Hey, guys. Good afternoon, Thanks for taking my question.

Emanuel P. N. Hilario: Manny I was curious if you could maybe level set what you saw from the consumer during the quarter and just kind of run that versus the results versus your expectations. I don't know, we hear a lot about consumer engaging and value seeking behavior, especially with restaurants.

Emanuel P. N. Hilario: And so if you can just maybe give us an idea for the appetite for some of the experiential dining that you talk about and how that jives with what the consumers engaging and what's kind of a value oriented lines right now.

Emanuel P. N. Hilario: Yes.

Emanuel P. N. Hilario: Yeah, so great question. I think, as we mentioned in our earlier, you know, last quarter's call, we certainly see choppiness in the sales environment, so it's a little bit more uneven environment in terms of predictability of sales week over week, so it's a little bit choppier. In terms of consumer behavior, we clearly see consumers gravitating towards the happy hour. Our $3.69 price points are holding up very well, so we do see trading to the happy hour.

Manny: So great question I think as we mentioned in our earlier.

Emanuel P. N. Hilario: Last quarter's call.

Emanuel P. N. Hilario: We certainly see choppiness in the sales environment, so, it's a little bit more uneven environment.

Emanuel P. N. Hilario: In terms of predictability on sales week over week, so it's a little bit chopped here in terms of the consumer behavior.

Emanuel P. N. Hilario: We clearly see a consumer.

Emanuel P. N. Hilario: Gravitating towards the happy hour there are $369 price points are holding up very well. So we do see trading to happy hour and then within the dinner Sats at Ash.

Emanuel P. N. Hilario: And then within the dinner sets at SDK, we also see, we actually see two things. We have a group of consumers that are actually trading and sharing more at the table, and then we have a group of consumers that still trade up to the premium items like Wagyu, so we do have a little bit of a bifurcated behavior within SDK, so I would say that's kind of what I've been noticing is a lot more attraction to the entry price points in the menu, but at the higher end, I still see a lot of consumers opting for the high-end product.

Emanuel P. N. Hilario: Teekay will also see.

Emanuel P. N. Hilario: Well actually we see two things we have a group of consumers that actually trading and sharing more at the table and then we have a group of consumers.

Emanuel P. N. Hilario: That's still trade up to the premium items like white goods. So we do have a little bit of a bifurcated.

Emanuel P. N. Hilario: Behavior within SDK, So I would say that's kind of what I've been noticing is a lot more attraction to the entry price points and the menu but.

Emanuel P. N. Hilario: At the higher end I still see a lot of consumers.

Emanuel P. N. Hilario: Opting for the high end product.

Speaker Change: Okay great.

Emanuel P. N. Hilario: Okay, great. And then maybe if I can just ask a question on the new unit side. Can you give us an update on your new unit environment? Permitting, many labor delays, anything I know, depends on where you're opening stores, obviously, but we've heard, you know, some other restaurant operators may have some delays in getting new unit openings, whether it's labor shortages or permitting delays, just anything you can talk about what you're seeing on your end.

Emanuel P. N. Hilario: And then maybe if I can just ask a question on the new unit side can you just give us an update on new unit environment.

Emanuel P. N. Hilario: Permitting.

Emanuel P. N. Hilario: Any labor delays anything I know it depends on where you're opening stores, obviously, but we've heard some other restaurant operators may have some delays in getting new unit openings, whether it's labor shortages or permitting delays just anything you can talk about what youre seeing on your end.

Emanuel P. N. Hilario: Yeah, another great question. Historically, we always planned three to six months for the permitting cycle. Now, we actually think it's nine months. We've actually added three extra months to the permitting cycle. It is longer. There seems to be a lot more back and forth, and the responses seem to be a little slower in terms of when we send in submissions. I would say that's still part of the environment.

Speaker Change: Yeah. Another great question I mean, historically, we always plan three to six months for the permitting cycle now we actually think it's nine months, we've actually added three extra months to the permitting cycle they are longer.

Emanuel P. N. Hilario: Seems to be a lot more back and forth and the responses seem to be a little slower in terms of one we send and submission. So I would say that's still.

Emanuel P. N. Hilario: Part of the environment, but generally new units and unit development and the one thing I will tell you is that when we open new stores, there's a lot of excitement with new stores. So thats the upside on developing right now is when we open great.

Emanuel P. N. Hilario: But generally, new units and unit development, the one thing I will tell you is that when we open new stores, there's a lot of excitement for new stores. So that's the upside on development right now; when we open great locations like we just did in Washington, D.C., we see an incredible amount of business coming to us because I think the consumer right now, in addition to, you know, they're looking for something different and experiential. So I think that anytime we open one of our restaurants, we do get rewarded with some very strong upfront revenues.

Emanuel P. N. Hilario: Great locations like we just did in Washington D. C. We see an incredible amount of business coming to us because I think the consumer right now in addition to.

Emanuel P. N. Hilario: They're looking for something different and experiential. So I think that anytime we opened one of our restaurants, we do get rewarded with some very strong upfront revenues.

Speaker Change: Perfect. Thanks, guys I appreciate the color I'll hop back in the queue.

Emanuel P. N. Hilario: Perfect. Thanks, guys. Appreciate the color. I'll hop back in.

Emanuel P. N. Hilario: Thank you. Your next question comes from Mark Smith, from Lake Street. Mark, please go ahead.

Speaker Change: Thank you.

Speaker Change: Thank you. Your next question comes from Mark Smith Lake Street Mark. Please go ahead.

Mark Eric Smith: Hi, guys.

Emanuel P. N. Hilario: Hi Guys, similar to the last question, just on consumers, you know, just curious as you look at, actually, first, can you talk any more about Kona grill consumers, maybe more so than STK, and any changes in behavior during the quarter?

Mark Eric Smith: The last question just on consumers.

Mark Eric Smith: Curious as you look at actually first can you just stuck anymore about Kona grill consumers, maybe more so than SDK and any changes in behavior during the quarter.

Mark Eric Smith: I mean.

Emanuel P. N. Hilario: I mean, actually, for the quarter, you know, Tyler and I were talking about this earlier, we actually, you know, I would expect that they would have traded down on the PMIX and actually our PMIX trade is only, you know, down three points, so we don't see a lot of trade down at Kona Grills. So, I would say that consumer, you know, actually has, you know, not traded down as much as I would have expected, but, you know, but the reality of it is they still are gravitating towards, as I mentioned earlier, the 369 price points on the happy hour and then we also now feature a $39 steak night America at Kona Grills, so I do think that right now value is king and that the consumer will gravitate towards that, except, as I mentioned earlier, higher end consumer still is going for the Wagyu and still ordering the premium product, but the other consumers are definitely trading to the value proposition.

Mark Eric Smith: Actually for the quarter.

Emanuel P. N. Hilario: Now we're talking about this earlier, we actually.

Emanuel P. N. Hilario: I would expect that they would have traded down on the Pemex and actually are our P mix Troy, it's only down three points. So we don't see a lot of trade.

Emanuel P. N. Hilario: Trade down at Kona Grill, So I would say that consumer.

Emanuel P. N. Hilario: Actually has not traded down as much as I would have expected but.

Emanuel P. N. Hilario: But.

Emanuel P. N. Hilario: The reality of it is they still are gravitating towards as I mentioned earlier, the 369 price points.

Emanuel P. N. Hilario: On the happy hour and then we also now feature 39 dollar Steak Night America at Kona Grill. So I do think that right now value is king and that the consumer will gravitate towards that except as I mentioned earlier higher end consumer still is going for the why do and still ordering the premium.

Emanuel P. N. Hilario: Product.

Emanuel P. N. Hilario: The consumers are definitely trading to the value propositions.

Emanuel P. N. Hilario: Okay, and then as we think about the spending on our consumer.

Emanuel P. N. Hilario: Okay, and as we think about, you know, this Benihana consumer, any initial thoughts that you have on, you know, potential behavior if maybe they lean more towards, you know, more or will behave more like that higher end STK consumer or, or maybe more like the Kona consumer. Any broad thoughts you have would be great.

Emanuel P. N. Hilario: Any initial thoughts that you have on potential behavior if may.

Emanuel P. N. Hilario: Maybe they lean more towards you know more or will behave more like that higher end, SDK consumer or or maybe more like call. It consumer and any broad thoughts you have there would be great.

Emanuel P. N. Hilario: Yeah, I mean, my early observations are that lots of celebrations happen, so they're still willing to go after the premium or the top items on the menu. So my view so far with the brand is that people, the behavior of Benihana has not really changed, if you will.

Speaker Change: Yes, I mean, so my.

Emanuel P. N. Hilario: Early observation as well.

Emanuel P. N. Hilario: It's a celebration so theres still willing to.

Emanuel P. N. Hilario: To go after the premium or the top items on the menu so.

Emanuel P. N. Hilario: My my view, so far with the Brian is that people the behavior at Benihana has not really changed if you will I do think that the.

Emanuel P. N. Hilario: I do think that the upside at Benihana, though, is premium products. I think that there's a lot of room for us to introduce some of the premium products that we have access to through our SDK program, particularly YGOO. So I think you'll see us introducing seasonal products that are a little bit higher in price point, and I think there is a group of consumers in that brand that will opt for them. As a matter of fact, we know that because the demographic studies that we've done do show that they do have some higher-end consumers in the brand. But it's a pretty broad-based usage brand because it's a celebration.

Emanuel P. N. Hilario: Upside at Benihana, though is is on premium products I think that there is a lot of room for us to introduce some of the premium products that we have access to through our SDK program, particularly why goes I think youll see us introducing seasonal products that are a little bit higher price point and I think there is a group of <unk>.

Emanuel P. N. Hilario: Consumers in that Brian that will opt to it as a matter of fact, and we know that because the demographic studies that we've done to show that they do have some higher end consumers into the brand. It's a pretty broad based use blanket celebration. So we think there's actually a pretty large upside for us as we go forward on that and then.

Emanuel P. N. Hilario: So we think there's actually a pretty large upside for us as we go forward on that. And then also on beverage, we also think there's a nice upside on beverage at Benihana, and not just only because of the offerings, but also because of the service style. And drinks don't really play a big role in that now, but I think over the next couple of months, we'll be putting more emphasis on beverages and on the bar. And I think that's actually going to be helping the average check, as well as profitability for Benihana over the next year or two years.

Emanuel P. N. Hilario: Also on beverage. We also think there is a nice upside on beverage at benihana.

Emanuel P. N. Hilario: And not just only because of the offerings, but also because of.

Emanuel P. N. Hilario: The as a service style.

Emanuel P. N. Hilario: And drinks don't really play a big rolling that now, but I think over the next couple of months.

Emanuel P. N. Hilario: We will be putting more emphasis on beverage and onto bar.

Emanuel P. N. Hilario: I think that's actually going to be helping the average check as well as profitability for benihana over the next year or two years.

Emanuel P. N. Hilario: Perfect.

Tyler Loy: And I think the last one for me, and I apologize that I missed some of this, of the 8 to 11 new restaurants expected this year, can you just go through kind of the breakdown of those again, and then, you know, any expectations on kind of near-term Q2, when those openings maybe happen over the next couple of months?

Emanuel P. N. Hilario: I think the last one for me and I apologize that I missed some of this.

Tyler Loy: I think it's eight to 11 new restaurants.

Tyler Loy: <unk>. This year can you just go through kind of the breakdown of those again and then.

Tyler Loy: Any expectations on kind of near term Q2, which of those openings maybe happened.

Tyler Loy: Over the next couple of months.

Tyler Loy: Sure Mark this is Tyler so.

Tyler Loy: Sure, Mark. This is Tyler.

Tyler Loy: Is going to be one company owned Ross. It is one to two company owned.

Tyler Loy: Lending auto locations.

Tyler Loy: So it's going to be one company-owned Roths. It is one to two company-owned Benihana locations. One Saltwater Social in Denver, one to two Kona grills, and then three to four SDKs.

Tyler Loy: One saltwater social and Denver are.

Tyler Loy: One to two Kona grills and.

Tyler Loy: Three to four <unk>.

Tyler Loy: And the next one coming out of the shoot is going to be STK in Aventura, Florida. So that'll be the next opening that we have. And then thereafter, we have Saltwater Social, and we have ARAH, and we have a Kuna Grill all bunching in around the middle of the third quarter in terms of opening, and then the rest is towards the end of the third quarter and early fourth quarter.

Tyler Loy: And the next one coming out of the chute, there's going to be.

Tyler Loy: T K and Hasnt SURA.

Tyler Loy: Florida, So that'll be the next opening that we have and then thereafter, we have saltwater social and we have a.

Tyler Loy: Ron we have a clinical well all bunching in around the middle of the third quarter.

Tyler Loy: In terms of opening and then the rest is towards the end of third quarter early fourth quarter.

Speaker Change: Im sorry, Mark those.

Tyler Loy: And sorry, Mark, that was two to three Kona grills. Yeah, two to three Kona grills. Two to three.

Tyler Loy: So the three Kona grills two to three Kona grills.

Tyler Loy: 2-3, not 1-2, okay?

Tyler Loy: Two to three 1% okay.

Speaker Change: Thank you.

Tyler Loy: Thank you. Your next question comes from Michael Symington, We Bush Michael Please go ahead.

Operator: Thank you. Your next question comes from Michael Simington, from WeBush. Michael, please go ahead.

Operator: Hi, this is actually Michael. I'm on behalf of Nick at Wedbush.

Operator: Hi, This is actually Michael on for Nick <unk> Wedbush.

Michael: For Us I guess, maybe just a modeling question to start could you guys provide the comp breakdown in Q1 for both SDK and Kona.

Operator: To us, I guess, maybe just a modeling question to start. Can you guys provide the comp breakdown in Q1 for both SDK and...

Speaker Change: Yes give me one second.

Tyler Loy: Yep, give me one second. Um, it was... (inaudible) minus 6.8 for STK Michael and minus 9.7 for Kona Girl.

Tyler Loy: It was.

Tyler Loy: Minus six eight for SDK, Michael and minus nine seven for Kona Grill.

Tyler Loy: Sorry, in terms of traffic and pricing, embedded in the

Tyler Loy: And then traffic there sorry, yes, sorry in terms of traffic and pricing embedded in that.

Tyler Loy: Oh yeah, I've got it. So, checks down at SDK minus 4. And then average check was minus two and a half, and pricing and that average check was four. And then for Kona Grille, Traffic 14. And pricing, our average check was plus four and a half with pricing up seven.

Speaker Change: Oh, yes, I've got it so.

Tyler Loy: Checks down an SDK minus four.

Tyler Loy: Average check was.

Tyler Loy: Minus two and a half.

Tyler Loy: And pricing in that average check was four.

Tyler Loy: And then for Kona Grill.

Tyler Loy: Traffic.

Tyler Loy: <unk>.

Tyler Loy: 2014.

Tyler Loy: Pricing, our average check was plus four and a half with pricing up seven.

Tyler Loy: Yes.

Emanuel P. N. Hilario: And then you guys have talked about targeting 17% margins at Kona. Just wondering if you could provide an update on the margin profile you're seeing on the new units and how that really compares to some of the older legacy units that you talked about needing to potentially look at a little bit of work on.

Speaker Change: Great. Thanks, and then you guys have talked about targeting a 17% margins that Kona just wondering if you could provide an update on the on the margin profile, you're seeing that the new units and how that really compares to some of the older legacy units that you've talked about needing to.

Emanuel P. N. Hilario: Potentially look at a little bit of work on.

Emanuel P. N. Hilario: I mean, the prototypes are ones that have done really well the new one so and the reason is I think labor has been better.

Emanuel P. N. Hilario: I mean, the prototype ones have done really well, the new ones, and the reason is I think labor has been better. I'll just preface that by saying that they're still early on their life cycle, so their profitability will be improving there as well, but I would say the new store has been doing as we expect it on the margin. I would say in general, the Kona Grill brand. We do have core restaurants, which we kind of refer to from the acquisition. Approximately 18 of the restaurants have an average margin of about 13% plus, and then we have about six Konas in there that, frankly, the real estate is not what we would do today, so I think really the margin fix with Kona Grill is to continue opening those new restaurants.

Emanuel P. N. Hilario: Ill, just pre phase II by saying Thats still early on their lifecycle. So their profitability will be improving there as well, but I would say the new stores.

Emanuel P. N. Hilario: Hi.

Emanuel P. N. Hilario: How do we expect that on the margin I would say in general the Kona Grill.

Emanuel P. N. Hilario: Brand, we do have our core restaurants, which we kind of refer to from the acquisition around 18 of the restaurants have an average margin of about 13% plus.

Emanuel P. N. Hilario: And then we have about six cognizant of there that frankly, the real estate is not what we would do today. So I think it's really the the margin fix with Kona Grill is to continue opening those new restaurants, I think the core ones are still.

Emanuel P. N. Hilario: I think the core ones are still in solid margins for the casual sector, and then we've got to work out the plan for the other six restaurants and get them to a better place, so that's really how we're targeting that, but I'm pretty pleased with the progress on the new restaurants on the margin side.

Emanuel P. N. Hilario: And solid margins for the.

Emanuel P. N. Hilario: The casual sector and then we've got to work out the plan for this other six freshmen.

Emanuel P. N. Hilario: And get them to a better place. So that's really how we're targeting that but I'm pretty pleased with the progress on our new restaurants on the margin side.

Speaker Change: Great. Thank you very much I'll hop back in the queue.

Operator: Great. Thanks very much. I'll hop back in the queue.

Operator: Thank you. Your next question comes from Roger Lipton Lipton financial Roger. Please go ahead, yes, Hi, Manny Hi, Tyler congratulations on getting the deal completed so quickly it seemed like about five weeks from announcement to closing.

Operator: Thank you. Your next question comes from Roger Lipton, of Lipton Financial. Roger, please go ahead. Yes, hi, man.

Emanuel P. N. Hilario: Yes, hi Mandy, hi Tyler, congratulations on getting the deal completed so quickly. It seems like about five weeks from announcement to closing. So the lawyers must have been busy. A couple of questions.

Roger Lipton: So the lawyers must have been busy a couple.

Roger Lipton: Couple of questions.

Emanuel P. N. Hilario: Sounds like the synergies from combining the companies are going to be in place pretty quickly. Can you give us some idea of where that's coming from? That run rate, it sounds like by the end of this year, it'll be pretty much in place. So that's the first question. The second question is, what does the current balance sheet look like post-closing in terms of cash and long-term debt?

Roger Lipton: It sounds like the synergies from combining.

Emanuel P. N. Hilario: Combining the companies is going to be in place pretty quickly.

Emanuel P. N. Hilario: Can you give us some idea of where that's coming from.

Emanuel P. N. Hilario: That run rate.

Emanuel P. N. Hilario: Sounded like like by the end of this year it'll be pretty much in place.

Emanuel P. N. Hilario:

Emanuel P. N. Hilario: So that's the first question second question is what is the current balance sheet looks like post the closing in terms of cash.

Emanuel P. N. Hilario: And long term debt.

Speaker Change: Yeah. So I think the synergies a lot of the initial ones, which we are already working on our supply chain. So I think that's going to be.

Emanuel P. N. Hilario: Yeah, I mean, a lot of the initial ones that we are already working on in our supply chain, so I think that's going to be a really good area of synergies for us. We've already started looking at beef and integrating our supply chain because we have a lot of purchasing power on that side, and I think that's going to be significant for us. I think there's also some other efficiencies with rebates and some other stuff in the supply chain.

Emanuel P. N. Hilario: Really good area of synergies for us, but we've already started looking at beef and the.

Emanuel P. N. Hilario: Integrating our supply chain, because we have a lot of purchasing power on that side and I think that's going to be significant for us and I think theres also.

Emanuel P. N. Hilario: Some other efficiencies with rebates and some other stuff and supply chain. So there'll be level, one there'll be relatively inactive quickly.

Emanuel P. N. Hilario: So they'll be at level one. They'll be relatively inactive quickly. I think the outlook on... On just the operations, I think there are a lot of things that we can do in terms of, for instance, we have a call center. I also think that we can improve labor efficiency at the restaurants when we bring in our services to the call center, so that's looking pretty good.

Emanuel P. N. Hilario: I think the.

Emanuel P. N. Hilario: <unk>.

Emanuel P. N. Hilario: The.

Emanuel P. N. Hilario: The outlook on.

Emanuel P. N. Hilario: On just the operations I think theres a lot of.

Emanuel P. N. Hilario: Things that we can do in terms of if for instance, we have a call center house. So think that we can have.

Emanuel P. N. Hilario: Our labor efficiency at the restaurants, when we bring in our.

Emanuel P. N. Hilario: Our services to the call center, so that's looking pretty good.

Emanuel P. N. Hilario: And then Roger in terms of the balance sheet.

Tyler Loy: And then Roger, in terms of the balance sheet, you know, in the previous IR presentation, we had said, you know, a little north of 50 on the balance sheet. And then debt after the transaction is going to be about 350 million. So net debt, you know, we anticipate to be around

Tyler Loy: And the previous IR presentation, we had said low north of 50, they are on the balance sheet.

Tyler Loy: And.

Tyler Loy: That.

Tyler Loy: After the transaction is going to be about $350 million. So net debt, we anticipate to be around $300 million or so okay.

Tyler Loy: Okay.

Tyler Loy: All right, thank you very much. Yeah, the only thing I would add to that is we also have a $40 million revolver that we brought in with this new debt deal and no covenants. So we have the loan, the term loan is a no-covenant term loan, and then we only have financial covenants if we draw over a certain amount on our revolver, which we have no plans to do at any time in the near future.

Speaker Change: Right right and it's very much also go ahead.

Tyler Loy: Yes, the only thing I would add to that is we also have a $40 million revolver.

Tyler Loy: Then we brought in with the new debt.

Tyler Loy: Deal.

Tyler Loy: And no covenants so we have.

Tyler Loy: The credit for the long term loan is.

Tyler Loy: No.

Tyler Loy: Covenants term loan and then we only have.

Tyler Loy: Our financial covenants, if we drive over a certain amount on our revolver, which we have no plans to do it anytime in the near future. Okay. Thanks very much good work. Thank you.

Tyler Loy: Thanks very much. Good work.

Speaker Change: Thank you Sir.

Operator: Thank you, sir. Thank you. There are no further questions at this time.

Speaker Change: There are no further questions at this time. Please proceed.

Speaker Change: Thank you everyone for joining today again, thanks to our over 10000 teammates who work hard very hard to everyday to tooling.

Emanuel P. N. Hilario: Thank you, everyone, for joining us today. Again, thanks to our over 10,000 teammates who work hard, very hard every day to live our mission of creating great memories and doing that through delivering great experiences, memorable experiences, and exceptional experiences at the restaurants to every guest, every time. So thank you for that. And then I look forward to seeing you all out in our restaurants. Everyone have a great day.

Emanuel P. N. Hilario: To live our mission of creating great memories and doing that to executing.

Emanuel P. N. Hilario: Great experiences minimal experiences and exceptional experiences at the restaurants.

Emanuel P. N. Hilario: To every guest every time so thank you for that and then I look forward to seeing you all are in our restaurants, everyone have a great day.

Speaker Change: Thank you ladies and gentlemen. This concludes your conference call for today, we thank you for participating and ask that you. Please disconnect your lines.

Operator: Thank you. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.

Operator: Yes.

Operator: Okay.

Operator: Yeah.