Fiscal First Quarter 2024 Highlights
- Total sales were
$51.5 million , compared to$39.3 million in the first quarter of 2023; - Comparable restaurant sales increased 3.8% for the first quarter of 2024 as compared to the first quarter of 2023;
- Operating loss was
$2.8 million , compared to operating loss of$2.2 million in the first quarter of 2023; - Net loss was
$2.0 million , or$(0.18) per diluted share, compared to net loss of$2.1 million , or$(0.21) per diluted share, in the first quarter of 2023; - Restaurant-level operating profit* was
$10.1 million , or 19.5% of sales; - Adjusted EBITDA* was
$1.8 million ; and - Four new restaurants opened during the fiscal first quarter of 2024.
* Restaurant-level operating profit and Adjusted EBITDA are non-GAAP measures and are defined below under “Key Financial Definitions.” Please see the reconciliation of non-GAAP measures accompanying this release. See also “Non-GAAP Financial Measures” below.
Review of Fiscal First Quarter 2024 Financial Results
Total sales were
Food and beverage costs as a percentage of sales were 29.8% compared to 31.6% in the first quarter of 2023. The decrease is primarily due to increases in menu prices, partially offset by food cost inflation.
Labor and related costs as a percentage of sales remained consistent at 31.6% in the first quarter of 2024 as compared to 31.9% in the first quarter of 2023.
Occupancy and related expenses were
Other costs as a percentage of sales increased to 14.7% compared to 13.5% in the first quarter of 2023. The increase was primarily driven by general inflationary pressures on advertising and promotion, repairs and maintenance, utilities and travel expenses associated with new restaurant openings.
General and administrative expenses were
Operating loss was
Income tax expense was
Net loss was
Restaurant-level operating profit* was
Adjusted EBITDA* was
During the fiscal first quarter of 2024, the Company opened four new restaurants in
Subsequent to
Fiscal Year 2024 Outlook
For the full fiscal year of 2024, the Company reiterates and updates the following annual guidance:
- Total sales between
$239 million and$244 million ; - General and administrative expenses as a percentage of sales to be approximately 14.5%; and
- 12 to 14 new restaurants, with average net capital expenditures per unit of approximately
$2.5 million .
Conference Call
A conference call and webcast to discuss Kura Sushi’s financial results is scheduled for
Interested parties may listen to the conference call via telephone by dialing 201-689-8471. A telephone replay will be available shortly after the call has concluded and can be accessed by dialing 412-317-6671; the passcode is 13742850. The webcast will be available at www.kurasushi.com under the investor relations section and will be archived on the site shortly after the call has concluded.
ICR Conference Participation
About
Key Financial Definitions
EBITDA, a non-GAAP measure, is defined as net income (loss) before interest, income taxes and depreciation and amortization expenses.
Adjusted EBITDA, a non-GAAP measure, is defined as EBITDA plus stock-based compensation expense, non-cash lease expense and asset disposals, closure costs and restaurant impairments, as well as certain items, such as litigation accrual that the Company believes are not indicative of its core operating results. Adjusted EBITDA margin is defined as adjusted EBITDA divided by sales.
Restaurant-level Operating Profit (Loss), a non-GAAP measure, is defined as operating income (loss) plus depreciation and amortization expenses; stock-based compensation expense; pre-opening costs and general and administrative expenses which are considered normal, recurring, cash operating expenses and are essential to supporting the development and operations of restaurants; non-cash lease expense; and asset disposals, closure costs and restaurant impairments; less corporate-level stock-based compensation expense recognized within general and administrative expenses. Restaurant-level operating profit (loss) margin is defined as restaurant-level operating profit (loss) divided by sales.
Comparable Restaurant Sales Performance refers to the change in year-over-year sales for the comparable restaurant base. The Company includes restaurants in the comparable restaurant base that have been in operation for at least 18 months prior to the start of the accounting period presented due to new restaurants experiencing a period of higher sales upon opening. For restaurants that were temporarily closed for consecutive days, which primarily occur during renovations, the comparative period was also adjusted. Performance in comparable restaurant sales represents the percent change in sales from the same period in the prior year for the comparable restaurant base.
Non-GAAP Financial Measures
To supplement the financial statements presented in accordance with
The Company believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing the Company’s financial measures with those of comparable companies, which may present similar non-GAAP financial measures to investors. However, you should be aware that restaurant-level operating profit (loss) and restaurant-level operating profit (loss) margin are financial measures which are not indicative of overall results for the Company, and restaurant-level operating profit (loss) and restaurant-level operating profit (loss) margin do not accrue directly to the benefit of stockholders because of corporate-level and certain other expenses excluded from such measures. In addition, you should be aware when evaluating these non-GAAP financial measures that in the future the Company may incur expenses similar to those excluded when calculating these measures. The Company’s presentation of these measures should not be construed as an inference that its future results will be unaffected by unusual or non-recurring items. The Company’s computation of these non-GAAP financial measures may not be comparable to other similarly titled measures computed by other companies, because all companies may not calculate these non-GAAP financial measures in the same fashion. Because of these limitations, these non-GAAP financial measures should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. The Company compensates for these limitations by relying primarily on its GAAP results and using these non-GAAP financial measures on a supplemental basis.
Forward-Looking Statements
Except for historical information contained herein, the statements in this press release or otherwise made by the Company’s management in connection with the subject matter of this press release are forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995) and involve risks and uncertainties and are subject to change based on various important factors. This press release includes forward-looking statements that are based on management’s current estimates or expectations of future events or future results. These statements are not historical in nature and can generally be identified by such words as “target,” “may,” “might,” “will,” “objective,” “intend,” “should,” “could,” “can,” “would,” “expect,” “believe,” “design,” “estimate,” “continue,” “predict,” “potential,” “plan,” “anticipate” or the negative of these terms, and similar expressions. Management’s expectations and assumptions regarding future results are subject to risks, uncertainties and other factors that could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements included in this press release. These risks and uncertainties include but are not limited to: the Company’s ability to successfully maintain increases in our comparable restaurant sales; the Company’s ability to successfully execute our growth strategy and open new restaurants that are profitable; the Company’s ability to expand in existing and new markets; the Company’s projected growth in the number of its restaurants; macroeconomic conditions and other economic factors, including rising interest rates, the possibility of a recession and instability in financial markets; the Company’s ability to compete with many other restaurants; the Company’s reliance on vendors, suppliers and distributors, including its majority stockholder
Investor Relations Contact:
(657) 333-4010
investor@kurausa.com
Statements of Operations and Comprehensive Loss (in thousands, except per share amounts; unaudited) | ||||||||
Three months ended | ||||||||
2023 | 2022 | |||||||
Sales | $ | 51,475 | $ | 39,318 | ||||
Restaurant operating costs: | ||||||||
Food and beverage costs | 15,365 | 12,430 | ||||||
Labor and related costs | 16,263 | 12,535 | ||||||
Occupancy and related expenses | 3,908 | 2,885 | ||||||
Depreciation and amortization expenses | 2,476 | 1,576 | ||||||
Other costs | 7,591 | 5,321 | ||||||
Total restaurant operating costs | 45,603 | 34,747 | ||||||
General and administrative expenses | 8,609 | 6,642 | ||||||
Depreciation and amortization expenses | 104 | 85 | ||||||
Total operating expenses | 54,316 | 41,474 | ||||||
Operating loss | (2,841 | ) | (2,156 | ) | ||||
Other expense (income): | ||||||||
Interest expense | 8 | 16 | ||||||
Interest income | (840 | ) | (94 | ) | ||||
Loss before income taxes | (2,009 | ) | (2,078 | ) | ||||
Income tax expense | 38 | 10 | ||||||
Net loss | $ | (2,047 | ) | $ | (2,088 | ) | ||
Net loss per Class A and Class B shares | ||||||||
Basic | $ | (0.18 | ) | $ | (0.21 | ) | ||
Diluted | $ | (0.18 | ) | $ | (0.21 | ) | ||
Weighted average Class A and Class B shares outstanding | ||||||||
Basic | 11,150 | 9,789 | ||||||
Diluted | 11,150 | 9,789 | ||||||
Other comprehensive income (loss): | ||||||||
Unrealized gain on short-term investments | $ | 3 | — | |||||
Comprehensive loss | $ | (2,044 | ) | $ | (2,088 | ) |
Selected Balance Sheet Data and Selected Operating Data (in thousands, except restaurants and percentages; unaudited) | ||||||||
Selected Balance Sheet Data: | ||||||||
Cash and cash equivalents | $ | 64,161 | $ | 69,697 | ||||
Total assets | $ | 309,297 | $ | 304,659 | ||||
Total liabilities | $ | 145,556 | $ | 140,018 | ||||
Total stockholders’ equity | $ | 163,741 | $ | 164,641 |
Three months ended | ||||||||
2023 | 2022 | |||||||
Selected Operating Data: | ||||||||
Restaurants at the end of period | 54 | 42 | ||||||
Comparable restaurant sales performance | 3.8 | % | 6.9 | % | ||||
EBITDA | $ | (261 | ) | $ | (495 | ) | ||
Adjusted EBITDA | $ | 1,767 | $ | 637 | ||||
Adjusted EBITDA margin | 3.4 | % | 1.6 | % | ||||
Operating loss | $ | (2,841 | ) | $ | (2,156 | ) | ||
Operating loss margin | (5.5 | )% | (5.5 | )% | ||||
Restaurant-level operating profit | $ | 10,061 | $ | 7,160 | ||||
Restaurant-level operating profit margin | 19.5 | % | 18.2 | % |
Reconciliation of Net Loss to EBITDA and Adjusted EBITDA (in thousands; unaudited) | ||||||||
Three months ended | ||||||||
2023 | 2022 | |||||||
Net loss | $ | (2,047 | ) | $ | (2,088 | ) | ||
Interest income, net | (832 | ) | (78 | ) | ||||
Income tax expense | 38 | 10 | ||||||
Depreciation and amortization expenses | 2,580 | 1,661 | ||||||
EBITDA | (261 | ) | (495 | ) | ||||
Stock-based compensation expense(1) | 1,006 | 650 | ||||||
Non-cash lease expense(2) | 817 | 482 | ||||||
Litigation accrual(3) | 205 | — | ||||||
Adjusted EBITDA | $ | 1,767 | $ | 637 |
Reconciliation of Operating Loss to Restaurant-level Operating Profit (in thousands; unaudited) | ||||||||
Three months ended | ||||||||
2023 | 2022 | |||||||
Operating loss | $ | (2,841 | ) | $ | (2,156 | ) | ||
Depreciation and amortization expenses | 2,580 | 1,661 | ||||||
Stock-based compensation expense(1) | 1,006 | 650 | ||||||
Pre-opening costs(4) | 749 | 437 | ||||||
Non-cash lease expense(2) | 817 | 482 | ||||||
General and administrative expenses | 8,609 | 6,642 | ||||||
Corporate-level stock-based compensation included in general and administrative expenses | (859 | ) | (556 | ) | ||||
Restaurant-level operating profit | $ | 10,061 | $ | 7,160 |
__________________
(1) | Stock-based compensation expense includes non-cash stock-based compensation, which is comprised of restaurant-level stock-based compensation included in other costs and corporate-level stock-based compensation included in general and administrative expenses in the statements of operations and comprehensive income (loss). | |
(2) | Non-cash lease expense includes lease expense from the date of possession of restaurants that did not require cash outlay in the respective periods. | |
(3) | Litigation accrual includes an accrual related to a litigation claim. | |
(4) | Pre-opening costs consist of labor costs and travel expenses for new employees and trainers during the training period, recruitment fees, legal fees, cash-based lease expenses incurred between the date of possession and opening day of restaurants, and other related pre-opening costs. |
Source:
2024 GlobeNewswire, Inc., source