Revenue and Growth - Total revenue increased by $340.6 million, or 102.3%, to $673.3 million for 2024 compared to $332.8 million for 2023, primarily due to the addition of Benihana and RA Sushi restaurants [167]. - Owned restaurant net revenues increased to $658.9 million in 2024 from $317.4 million in 2023, representing a growth of 107.5% [203]. - Total revenues for 2024 reached $673.3 million, compared to $332.8 million in 2023, marking a 102.2% increase [203]. - Owned restaurant net revenue increased by $341.5 million, or 107.6%, to $658.9 million for 2024 from $317.4 million for 2023, primarily due to the acquisition of Benihana and RA Sushi restaurants [209]. Profitability and Expenses - Restaurant operating profit increased by $57.9 million, or 114.9%, to $108.3 million for 2024, with a profit margin of 16.4% compared to 15.9% in 2023 [170]. - Net loss attributable to The ONE Group Hospitality, Inc. was $15.8 million in 2024, compared to net income of $4.7 million in 2023, mainly due to transaction and integration costs [171]. - Owned restaurant cost of sales was $138.8 million in 2024, which is 21.1% of owned restaurant net revenues, down from 23.9% in 2023 [203][205]. - Owned restaurant operating expenses totaled $411.8 million in 2024, accounting for 62.5% of owned restaurant net revenues, compared to 60.3% in 2023 [203][205]. - General and administrative expenses rose to $44.2 million in 2024, representing 6.6% of total revenues, up from 9.2% in 2023 [203][205]. - Interest expense increased significantly to $31.1 million in 2024 from $7.0 million in 2023 [203]. - Depreciation and amortization expense increased by $18.4 million to $34.1 million for 2024, primarily due to the acquisition of Benihana and RA Sushi restaurants [214]. Sales Performance - Same store sales for STK decreased by 8.7%, Benihana by 1.8%, and Grill Concepts by 13.2% for 2024 compared to the prior year [179]. - Average check per person at STK was $127 for 2024, down from $130 in 2023 [182]. - Average transaction for comparable Benihana restaurants was $111, while Grill Concepts had an average transaction of $64 in 2024 [183]. - Average comparable STK restaurant revenues were $15.5 million for 2024, down from $17.3 million in 2023 [184]. - Comparable restaurant sales decreased by 6.2% in 2024 compared to 2023 [209]. Acquisitions and Expansion Plans - The company acquired Safflower Holdings Corp. for $365.0 million, which owns most Benihana and RA Sushi restaurants in the U.S. [162]. - The company plans to expand STK to 200 restaurants globally, with an expected opening of four to six new locations annually [172]. - The company expects to grow the Benihana brand to 400 restaurants, with plans to open one to three new locations annually [174]. - Transition and integration expenses related to the Benihana acquisition amounted to $13.7 million in 2024 [203]. Cash Flow and Financing - Net cash provided by operating activities increased to $44.19 million in 2024 from $30.78 million in 2023, primarily due to cash generated from acquired restaurants [238]. - Net cash used in investing activities for 2024 was $441.39 million, including $369.8 million for the Benihana acquisition and $71.6 million for new restaurant construction [240]. - Net cash provided by financing activities was $404.34 million in 2024, primarily from borrowings under the Credit Agreement [241]. - A credit agreement was established providing a $350.0 million senior secured term loan facility and a $40.0 million revolving credit facility [165]. Market and Operational Risks - The Company is exposed to market price fluctuations in beef, seafood, produce, and other food products, which can materially impact food and beverage costs [259]. - The Company does not enter into long-term agreements for the purchase of food supplies, leading to potential unforeseen supply and cost fluctuations [259]. - Inflation impacts labor, food, operating supplies, and occupancy costs, which could significantly affect operations [260]. - The Company has maintained food costs as a percentage of revenues through procurement efficiencies and menu price increases, although future stability is uncertain [260]. - The Company does not currently use financial instruments to hedge against market price fluctuations in food products [259]. - Foreign currency exchange risk exists for operations in the UK, Europe, Canada, Mexico, and the Middle East, but exposure is not material to consolidated financial statements [262]. - The Company’s strategy includes maintaining operating margins through menu price increases and cost controls to address inflation [260]. - The Company has qualified multiple suppliers to mitigate risks associated with food product price fluctuations [259].

Back in September last year, I initiated coverage on The ONE Group Hospitality, Inc. (NASDAQ: STKS ), giving it a buy rating. My thesis revolved around the company's strong potential as it capitalized on its innovative capabilitiesI specialize in analyzing individual stocks. With a strong educational background in both finance and economics, I’ve developed a deep fascination with the stock market and the potential it offers to investors at all levels. I keep a close watch on market trends, particularly in t ...

Exhibit 99.1 The ONE Group Reports Preliminary Fourth Quarter and Full Year 2024 Sales Results Revenues Expected to Increase 145% to $221.0 Million for the Fourth Quarter Participating at the 27th Annual ICR Conference Beginning with a Fireside Chat at 11:00 AM ET Today · Total GAAP revenues are expected to be approximately $221.0 million, an approximate 145% increase from $89.9 million for the same quarter last year; and · Comparable sales* are expected to have decreased approximately 4.3% · Total GAAP rev ...

Company Overview - The ONE Group Hospitality, Inc. (STKS) is experiencing significant attention from investors due to high implied volatility in its options market, particularly the Mar 21, 2025 $07.50 Call option [1] - The company currently holds a Zacks Rank of 5 (Strong Sell) within the Retail-Restaurants industry, which is positioned in the bottom 37% of the Zacks Industry Rank [3] Analyst Sentiment - Over the past 60 days, no analysts have increased their earnings estimates for the current quarter, while one analyst has revised their estimate downward, leading to a decrease in the Zacks Consensus Estimate from 30 cents per share to 12 cents per share [3] Options Market Dynamics - The high implied volatility suggests that options traders are anticipating a significant price movement for The ONE Group Hospitality's shares, which could indicate an upcoming event that may lead to a substantial rally or sell-off [2][4] - Options traders often seek to capitalize on high implied volatility by selling premium, aiming for the underlying stock to not move as much as initially expected by expiration [4]

Group 1 - The article highlights the challenges faced by the fast food industry, indicating that it is not the only sector experiencing tight checks and declining traffic [1] - The author emphasizes the importance of advanced analytical models and specialized valuation techniques in providing insights into restaurant stocks [1] - The coverage of the analysis includes various segments of the restaurant industry such as QSR, fast casual, casual dining, fine dining, and family dining [1] Group 2 - The author has a strong background in Business Administration and Accounting, complemented by an MBA in Forensic Accounting and Controllership, which enhances the credibility of the analysis [1] - The company, Goulart's Restaurant Stocks, focuses on delivering detailed insights and actionable strategies to help investors make informed decisions in the restaurant sector [1] - The author has experience in accounting and business consulting across LATAM, indicating a broad understanding of the market dynamics in the region [1]

Financial Data and Key Metrics Changes - Total consolidated GAAP revenues increased by 152.3% to $194 million from $76.9 million in the same quarter last year [29] - Owned restaurant net revenue rose by 158.6% to $190.6 million from $73.7 million, primarily due to contributions from Benihana and RA Sushi [29] - Restaurant operating profit increased by 90 basis points to 13.2% compared to 12.3% in the same quarter last year [33] - Net loss available to common stockholders was $16 million or $0.52 per share, compared to a net loss of $3.1 million in the same quarter last year [38] - Adjusted EBITDA for the third quarter was $14.9 million, up from $3.1 million in the same quarter last year [39] Business Line Data and Key Metrics Changes - Comparable sales decreased by 8.8%, with Benihana down 4.2%, STK down 11.1%, and grill concepts down 70% [29] - Restaurant operating profit at Benihana was 70% [33] - Owned restaurant cost of sales as a percentage of net revenue increased by 380 basis points to 20.9% [31] - Owned restaurant operating expenses as a percentage of net revenue increased by 300 basis points to 65.9% [32] Market Data and Key Metrics Changes - The company experienced robust demand on Fridays and Saturdays across all brands, focusing on maximizing reservations and throughput during peak times [13] - The restaurant landscape is characterized by deep discounting and promotional activity, with competitors offering all-day happy hours and other promotions [51][52] Company Strategy and Development Direction - The company aims to become the global leader in Vibe Dining, focusing on driving sales through operations, marketing, and culinary strategies [7][12] - Plans to open six new venues by the end of 2024, including five company-owned restaurants and one managed STK [22] - The company is pursuing asset-light growth through franchising and management contracts, particularly for Benihana [24][76] Management's Comments on Operating Environment and Future Outlook - Management noted macroeconomic headwinds and consumer uncertainty but expressed confidence in the company's portfolio and long-term vision [49] - The company anticipates improving same-store sales trends for the third and fourth quarters, projecting total GAAP revenues of $660 million to $680 million for 2024 [45] - Management expects consolidated margins to improve, targeting around 17% for 2025, with potential upside due to synergies from acquisitions [80] Other Important Information - The company finished the quarter with over $70 million in liquid resources, including cash and undrawn credit facilities [25] - Approximately $2.3 million was returned to shareholders through share repurchases during the quarter [26] Q&A Session Summary Question: Update on industry trends and competition - Management noted competitors are engaging in heavy discounting and promotions, such as all-day happy hours, and the company is responding with its own promotions and loyalty programs [51][56] Question: Development delays and construction processes - Management indicated that development timing is controlled by a focus on asset-light growth and that they have opened three restaurants in the last 60 days [58][59] Question: Potential closures and lease evaluations - Management confirmed that they will evaluate leases as they come due and will not continue with locations that do not meet profitability criteria [62][64] Question: Monthly comp breakdown and exit rates - Management acknowledged a trend of softening in the first month of each quarter, with improvements in the following months, and provided guidance for the fourth quarter [66][68] Question: Four-wall margins and growth opportunities - Management targets consolidated margins around 17% for 2025, with expectations for improvement due to operational efficiencies and synergies from acquisitions [80]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended September 30, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-37379 | --- | --- | --- | |---------------------------------------------------------------------------|--- ...

Revenue Performance - Total GAAP revenues increased 152.3% to $194.0 million from $76.9 million[1] - Total revenues for the nine months ended September 30, 2024, reached $451,464, up from $242,833 in the prior year, indicating a growth of approximately 86%[6] - The company reported GAAP revenues of $193,975,000 for the three months ended September 30, 2024, compared to $76,884,000 for the same period in 2023[10] - Management, license, franchise, and incentive fee revenue for the three months ended September 30, 2024, was $3,388,000, compared to $3,184,000 for the same period in 2023[10] Profitability Metrics - Restaurant Operating Profit increased 175.6% to $25.1 million from $9.1 million[1] - Adjusted EBITDA for the three months ended September 30, 2024, was $14,803,000, compared to $3,023,000 for the same period in 2023, indicating a substantial improvement in financial performance[12] - Restaurant Operating Profit for the nine months ended September 30, 2024, was $68,181 million, up from $33,919 million in 2023, representing a significant increase[16] - STK restaurant operating profit for the three months ended September 30, 2024, was $6,547 million, with a profit margin of 14.6%[17] - Benihana restaurant operating profit for the three months ended September 30, 2024, was $17,708 million, with a profit margin of 17.0%[17] Costs and Expenses - Total costs and expenses for the three months ended September 30, 2024, were $196,995, compared to $78,839 in the same period last year, reflecting an increase of 150%[6] - General and administrative expenses for the three months ended September 30, 2024, were $12,785 million, compared to $7,280 million in 2023, showing an increase in operational costs[16] - General and administrative expenses as a percentage of total revenues decreased to 6.6% for the three months ended September 30, 2024, from 9.5% in the prior year[7] - Transaction and exit costs for the nine months ended September 30, 2024, totaled $9,199 million, indicating significant restructuring expenses[19] - Transition and integration expenses for the three months ended September 30, 2024, were $6,274 million, reflecting ongoing integration efforts[19] Financial Position - Cash and short-term credit card receivables at the end of the quarter totaled $36.2 million, with $34.1 million available under the revolving credit facility[2] - Total current assets increased to $63,472 as of September 30, 2024, from $46,680 at December 31, 2023, showing a growth of approximately 36%[8] - Total liabilities rose to $753,928 as of September 30, 2024, compared to $249,885 at December 31, 2023, indicating a significant increase of about 202%[8] - Cash and cash equivalents increased to $28,185 as of September 30, 2024, from $21,047 at December 31, 2023, representing a growth of approximately 34%[8] Guidance and Future Plans - 2024 total GAAP revenue guidance set at $660 to $680 million[3] - Consolidated Adjusted EBITDA guidance for 2024 is $71 to $76 million[4] - Company plans to open five to six Company-owned locations annually while focusing on asset-light development[1] - The integration of Benihana and RA Sushi is progressing well, with synergies expected to enhance margins[1] - Company closed four RA Sushi locations in October to optimize the restaurant portfolio[2] Losses and Adjustments - The net loss attributable to The ONE Group Hospitality, Inc. for the three months ended September 30, 2024, was $(8,890), compared to a net loss of $(3,098) for the same period in 2023[6] - The company reported an operating loss of $(3,020) for the three months ended September 30, 2024, compared to an operating income of $4,368 for the same period in 2023[6] - Adjusted net loss income available to common stockholders for the three months ended September 30, 2024, was $(9,383) million, compared to $(2,977) million in 2023[19] - Adjusted net income per share for the three months ended September 30, 2024, was $(0.30), compared to $(0.09) in 2023, indicating a decline in profitability per share[19] Sales Performance - Comparable sales decreased 8.8%[1] - Same Store Sales for US STK Owned Restaurants decreased by 11.4% in Q1 2024 compared to Q1 2023, while US STK Managed Restaurants saw a decrease of 8.6% in the same period[11] - Total food and beverage sales at owned and managed units reached $222,869,000 for the three months ended September 30, 2024, compared to $102,213,000 for the same period in 2023, representing a significant increase[10] - For the nine months ended September 30, 2024, total food and beverage sales at owned and managed units were $533,592,000, up from $321,421,000 for the same period in 2023[10]

Core Viewpoint - One Group Hospitality Inc. is undergoing a significant transformation following its acquisition of Benihana, which is expected to enhance its market position in the high-energy dining sector and has not yet been fully reflected in its stock price [1][16]. Company Overview - One Group Hospitality is an international restaurant company focused on premium dining experiences, emphasizing unique and high-energy offerings beyond traditional food and beverage services [2]. Acquisition Details - The acquisition of Safflower Holdings Inc., the parent company of Benihana, was announced earlier this year, positioning One Group to leverage Benihana's iconic brand and experiential dining model [4][5]. - The total consideration for the acquisition was $365 million, with a transaction multiple of 5.2x Benihana's 2023 run rate adjusted EBITDA of approximately $70 million [5][6]. Financial Metrics Post-Acquisition - Following the acquisition, One Group's financial metrics have shown substantial growth, including a 138% increase in TTM system-wide revenue from $436 million to $1,039 million and a 163% increase in TTM adjusted EBITDA from $40 million to $105 million [7][8]. - The company's gross profit margin improved from 18.46% to 19.38%, and operating income surged over 500% year-over-year, from $2 million to $12.3 million [9][10]. Market Reaction and Valuation - Despite the positive financial performance, One Group's stock price has decreased by over 40% year-to-date, indicating a significant undervaluation relative to its growth and the goodwill from the acquisition, which is reported at $145 million [11][12]. - The company's market cap has fallen to below $120 million, despite substantial increases in revenue and earnings, suggesting a disconnect between market perception and actual performance [11][16]. Future Growth Potential - One Group has plans for further expansion, with new venue openings already in progress, which could enhance its total addressable market (TAM) significantly, expanding beyond 800 locations post-acquisition [5][6]. - The anticipated annual synergies from the acquisition are forecasted at $20 million for at least three years, which could further improve financial performance [5][6].

The ONE Group Hospitality, Inc. (STKS) came out with quarterly earnings of $0.08 per share, beating the Zacks Consensus Estimate of $0.06 per share. This compares to earnings of $0.06 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 33.33%. A quarter ago, it was expected that this company would post earnings of $0.02 per share when it actually produced a loss of $0.02, delivering a surprise of -200%. Over the last four quarter ...