The ONE Group Hospitality, Inc.

Thank you, operator, and good afternoon. Before we begin our formal remarks, we remind you that part of our discussion today will include forward-looking 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 forward-looking statements reflect our opinions only as of the date of this call. 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 condition. During our call, we will refer to certain non-GAAP financial measures, which we believe can be useful in evaluating our performance.

The presentation of these measures or other information should not be considered in isolation or the substitute for results prepared in accordance with GAAP and reconciliations to other GAAP measures. For reconciliations of these measures such as adjusted EBITDA 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 earlier today.

With that, I'd like to turn the call over to Manny Hilario. Manny?

Thank you, Tyler, and hello everyone. We appreciate your continued interest in The ONE Group.

During today's call, I plan to share a brief overview of the second quarter, update you on our current trends and ongoing recovery, and share our confidence in the future of our brands. Tyler will then walk you through the second quarter financials.

First and foremost, the health, safety and wellbeing of all of our employees and guests is our number one priority as judged by our actions within our restaurants. We are not only strictly following all guidelines from the CDC, federal and local authorities, but we have also created a very-detailed employee manual specific to each location and venue as we welcome guests back to our dining rooms.

This was critically important as we are now open for in-person dining at 34 of our 36 domestic STK and Kona Grill restaurants and are delighted to be providing guests with unique prior dining experience that they have been waiting for. We plan to resume in-person dining, STK Miami and reopen STK San Juan as soon as conditions permit.

Internationally, we also resumed in-person dining at six of eight STK restaurants. As you know, from our previous conference call, COVID-19 required us to take immediate actions, including very difficult decisions to reduce our workforce significantly.

However, because the overwhelming majority of our dining rooms have nearly opened, we are extremely proud to announce that we were able to bring almost 3,000 teammates back to work. This is an incredible turnaround for us, despite the very challenging environment.

And we thank our teammates for their dedication and eagerness to return to doing what they do best, serving our guests. We are encouraged by the continued sequential improvement in our comparable sales results, which includes our curbside and delivery business as trends have strengthened month over month during the second quarter and through July.

Building core competencies in curbside and delivery that did not previously exit, preserve the opportunity to continue reaching guests in markets throughout the country and it's contributing meaningfully to our comparable store sales. And thanks to a recent upgrade in our tech capabilities, our delivery model is now state-of-the-art with offerings available to nine separate delivery service providers.

Excluding Las Vegas, New York and Miami, comparable sales decreased 17% in July at our mainland domestic STK location. In terms of Las Vegas, our STK brand flagship, July’s comparable sales decreased 34%, despite being limited to 50% capacity, which left much of our customer demand and unfulfilled.

New York and Miami are still our most challenged STK markets because of local mandates, causing us not to have access to approximately 80% of our seating capacity. These markets together generated a 54% decrease in July’s comparable sales.

Excluding the impact of the capacity, we are particularly pleased and impressed as to how guests continue to embrace vibe dining and how we have achieved some of the highest guest satisfaction scores in social media in the last couple of months. The Kona Grill brand has rebounded extremely well, which we can attribute partly to the brand’s suburban footprints, coupled with all the initiatives that we have implemented.

New menus, aggressive and sustained marketing activities, including our summer fun promotion, and better overall restaurant-level execution. In July, Kona Grill’s comparable sales decreased 16% year-over-year and is tracking towards normalization, an important factor as we quickly approach the holiday season.

Notably, despite declining comparable sales, we were still able to achieve positive restaurant-level margins in this very-challenging operating environment. This would not have been possible without the relentless work and commitment of our teammates.

From a marketing standpoint, we are leveraging STK’s friends with benefits database of over 1.5 million subscribers to deploy multiple email marketing campaigns and have leverage our social media presence across key platforms with targeted social media advertising creators. We are also utilizing Kona Grill’s Konavore loyalty program of over 300,000 subscribers to deploy multiple email marketing campaign.

Our STK Meat Market, an e-commerce platform that we launched in April, is also doing very well, representing an additive layer to our business that we will continue to leverage even after the pandemic subsides. STK Meat Market allows guests to purchase a wide array of signature Choice, Prime, and Waygu steak cuts for home delivery nationwide.

The average steak is in a $25 to $30 range and delivery costs are very reasonable for two and three-day delivery, so that the guests benefits from great value and great convenience. So, to conclude, our team has certainly proven how strong and resilient they are through these trying times and also how welcoming they are to our guests who have already returned to our restaurants for a great meal out.

Thank you all for standing by us and for the in-person, takeout, delivery and STK Meat Market orders. Now, I will turn the call back over to Tyler.

Thank you, Manny. I would like to begin by addressing our current cash and liquidity before reviewing the second quarter financials in greater detail.

First, as of June 30th, we had $23.5 million in cash and cash equivalents. And as of August 12th, our cash balance has not materially changed.

In addition, due to our improving sales performance in recent months, we're currently generating positive cash flow. Turning now to our quarterly financials.

For the second quarter ended June 30, 2020, total GAAP revenues were $16.7 million, representing a 29.4% decrease from $23.6 million for the comparable quarter last year. Included in our total revenues for the second quarter of 2020 is our owned restaurant net revenues of $16.5 million, which decreased approximately 21.1%, compared to $20.9 million in the second quarter of 2019.

The decrease was due to the temporary closures and limited operations of our restaurants due to COVID-19, partially offset by approximately $12.4 million in sales contributions from Kona Grill, which we acquired in October 2019. Domestic consolidated comparable sales decreased 66.7%.

At STK comparable sales decreased 81.4%. And at Kona Grill, comparable sales decreased 52.8%.

However, it is important to note, sales sequentially improved throughout the quarter at both STK and Kona Grill as we discussed in our press release. In July, consolidated comparable sales decreased 25%, while STK comparable sales decreased 36% and At Kona Grill comparable sales decreased 16%.

While there's obviously volatility in certain markets due to reclosing, our underlying trend points toward the building recovery. Management, license and incentive fees revenues decreased to $135,000 in the second quarter of 2020 from $2.7 million in the prior year’s second quarter.

This decrease is primarily result of temporary closures due to COVID-19 measures. We should see more normal performance in this line item in future quarters as our key properties that drive this line are now in operation.

STK Las Vegas, STK London, STK Toronto, Radio London, and Radio Milan. Owned restaurant cost of sales as a percentage of owned restaurant net revenue decreased 110 basis points to 25.3% in the second quarter of 2020 compared to 26.4% in comparable quarter last year.

The year-over-year decrease was primarily due to supply chain synergies and redeveloped menu. Owned restaurant operating expenses as a percentage of owned restaurant net revenues increased approximately 770 basis points to 72.8% in the second quarter of 2020 compared to 65.1% in the second quarter of 2019.

The increase was driven by comparable sales decreases due to COVID-19, coupled with less substantial decreases in fixed costs. We are actively managing operating costs and negotiating with landlords on rent concession due to the impact of COVID-19 on our restaurant sales.

Restaurant operating profit for the quarter was $317,000, an accomplishment we are proud of, considering the tremendous headwinds we were up against. On a total reported basis, general and administrative expenses, including stock-based compensation for the quarter of 2020 was $2.4 million compared to $2.7 million in the prior year.

To put that number in perspective, our G&A costs per venue were about half what they were last year. As a percentage of total revenues, general and administrative expenses increased 310 basis points to 14.6% of total revenues.

The increase is due to lower sales related to COVID-19, partially offset by measures we implemented to reduce our costs, including significant reductions in employees and reduction of third-party professional services. When adjusting for stock-based compensation, adjusted general and administrative expenses were $2 million in the second quarter.

As a percentage of revenues, adjusted general and administrative expenses decreased 220 basis points to 11.7% of total revenue. We incurred approximately $695,000 of direct costs related to COVID-19 during the second quarter.

Included in this line item are primarily payments to employees for paid time off during restaurant closures, inventory waste, and PPE costs associated with keeping our employees and guests safe. Interest expense net of interest income was $1.2 million in the second quarter of 2020 compared to $218,000 in the same quarter of the prior year.

Income tax benefit was $3.2 million for the second quarter of 2020 compared to $15,000 for the second quarter of 2019. Net loss attributable to The ONE Group Hospitality, Inc.

was $2.9 million or $0.10 net loss per share compared to $322,000 in the second quarter of 2019 or $0.01 net loss per share. Adjusted EBITDA attributable to The ONE Group Hospitality, Inc.

for the second quarter was negative $824,000 compared to the prior year adjusted EBITDA of $2.1 million. We have included as we have in the past, a reconciliation of adjusted EBITDA to GAAP net income from continuing operations and GAAP revenue to total food and beverage sales at owned and managed properties in the tables in the second quarter earnings release.

As a reminder, due to these unprecedented market conditions, we cannot reasonably estimate when our business will return fully to normal operations, and therefore suspended all financial guidance for 2020 back in March. We do however intend to provide further business updates as warranted by this evolving situation.

I will now turn the call back over to Manny.

Thank you, Tyler. Let me conclude by expressing again how appreciative we are to our team with our dedication and resourcefulness and reopening our restaurants while showcasing our takeout, delivery and e-commerce capabilities.

And to our valued guests, who have enjoyed STK and Kona Grill at our restaurants and in their homes during these past few weeks, we look forward to serving you in-person again. I think, we have made clear how we intend to get through these unusual and difficult times and will ultimately be stronger for it.

Above all, we are grateful to our teammates who bring our mission to life every day, to operate the best restaurant in every market that we operate in, by delivering exceptional and unforgettable guest experiences to every guest every time. Thank you all for joining us on the call today.

Tyler and I are happy to answer any questions that you may have. Operator?

Thank you. Good afternoon.

And thanks for the update. I want to ask first about comp for the July trend.

Is that open and closed units? And if it is, how do the open diners -- maybe they're not in there, but I just wanted to find what that July comp is?

And if there's any difference to understand?

So, the comps we reported include all restaurants. So, it doesn’t exclude any non-open operations.

And I think we only have two in the U.S. mainland anyhow, they will be now opening up.

So, there's not a big distinction. If you see any other underlying trend with those that have been open a little bit longer or anything of that nature?

Yes. I mean, I think, the restaurants that we have open and we are -- have availability of dining room and can actually be closer to full capacity, we're back to normalized levels in those Russians.

So, anywhere where we haven't been limited by local mandates, I think, we're doing very, very well. But, just in general, I don't want that to be confused with the general environment.

I think, the general environment is extremely complicated and challenging right now. But, I just think, the team has done an exceptional job of going out and, if you will, retooling our marketing, because the marketing in this environment is different.

There's no business, there's no real tourism business. So, we'd have to be re-shift or shift our marketing resources and our programs towards more social occasions, date night, birthdays, and such type of occasions.

So, it’s -- so the business in those markets where we've been open for a while now with the dining rooms and what we have capacity is, we’re seeing really good business, but that’s because marketing has shifted. And, I also believe that there's a lot less competitors who are competing in the market right now.

So, I think we are taking advantage of that. I think, we mentioned on our press release, for instance, our Las Vegas restaurant which is our flagship STK, the biggest challenge there is we can't get people in the door because we're limited to 50% of the peak there.

So, frankly, I'm a bit disappointed that sometimes we have to turn away as many as a 100 to 200 people a night, just because we don't have enough seats, even with 90 minutes turn. So, I think that really speaks well for the strengths of the brand.

I think, once we open the STK at the cosmopolitan, I think we are just drawing this proportion to pretty much everybody in the Vegas market. So, we're super excited about that.

And again, as we get more seats into some of these properties, I think that we will do very, very well. Not to mention Kona Grill, I think, as is really common on Kona Grill.

But, I think Kona Grill, particularly with the new menu that we have put in place and the emphasis on summer fun and really going after the patio as a great summer occasion and trying to provide customers a great get away from the pandemic, I think the promotions that worked very well in the Kona Grill. I think Tyler mentioned on his comments that we’re down 16% in July.

And we're not only just sequentially getting better by month, we're actually getting better by week. So, we continue to see even better and better weeks coming out of Kona Grill brand.

I was just trying to clarify with the comp question, there was something about two markets and a drag and comps down 50. So, if I'm headed in the wrong direction, we can just move away from it.

But, I just wanted to underscore -- it seems like this is clearly a phenomenal recovery and maybe the underlying trend without that drag is even better. So, I was just trying to head in that direction, if that makes sense.

Yes, absolutely. And I think to your point there, Nicole, I think the two markets that we called out primarily is Miami and New York, and in those markets, we haven't been able to open the dining room.

So, when using outdoor if you want even cafes [ph] on the street side, but yes, those markets, even though we don't have access to the dining rooms, we're still doing reasonably well relative to number of seats. So, I would say that we're very, very pleased with the progress that we've made and how our market is relative to recovery in sales.

And then, just talk about for a last question, who is coming back, the type of customer? Because traditionally, I would think you have like a local frequent user, you have an aspirational guest that comes to celebrate and then maybe a corporate user.

So, who is coming back first?

I think, just our observation is, we're seeing a lot of -- and I would say the -- without having specific age groups in mind, but kind of the 35ish demographic. And as I mentioned earlier, we've seen a lot of date nights, has become as a big occasion coming out, as well as birthdays.

There are a lot of birthday celebrations. So, many social occasions.

And in the suburban footprint in Kona Grill, we're just seeing a lot of people just coming out to have fun. It's become pretty apparent that there's a subgroup of the population who just feels like they've been locked in for a long time.

So, you're seeing just people wanting to get out to the patios and just having a good experience there. And as you may recall, we are reviving the Kona Grill bar program and patio program with more active music, lots of more emphasis on a great cocktail program.

So, you're seeing a lot of people who just want to go out and have fun who’ve been trapped in their house for quite a long time, so. In terms of the business side, we haven't seen -- I mean that business is not there.

Obviously, there's not a convention business anymore. So, you're just basically seeing the majority of the business being social occasion business.

And then, just last really quick one. Talk to us about food and beverage trends, as you execute this recovery and how that compares to prior food and/or beverage trend?

Is it [multiple speakers] together other?

Yes. So, that’s a great question.

So, the bars being closed now, we did shift our programs like Happy Hour to be in the dining room. So, we have not seen a change in the mix of alcohol to food.

So, that's held up very well in the dining room.

First one for me, can you give us a little more detail on how the takeout and delivery business is going? And then, maybe what percentage of revenue that was during the quarter?

Yes. So, as we talked about in the Q1 call, we were building sequentially that business, takeout and delivery.

I think, where we've ended up now after having the dining rooms open is we've got about 14% of revenue of our total revenue now being takeout and delivery. And I would say from a dollar perspective, from a fixed dollar perspective, if you talk about the end of Q1 and then beginning of Q2, we have consistently grown the fixed dollar amount of takeout and delivery.

And I think, just as added color on that is, I think, from where we were, I think we're -- around 5% of our total business was takeout-delivery, before we got into the COVID period. And I think coming out of it, as Tyler said that we’re around 14%.

So, we have increased that business substantially. And I think that team has done a very good job as we’ve reopened the dining room, that layer of business, we have continued to heavily market it and go after.

And I think in the long term, our goal is to continue growing that business significantly. So, we are actually really emphasizing currently the objective that we have to become very dominant on that.

And if you look at the programs we’ve done, they're working -- we’ve adapted some of our menus, particular at STK to have more transportable and items that work in the takeout environment. So, we do have resources allocated to it, and we plan to continue growing and elevating that business.

And then, can you give us a little bit more detail on how the weekly sales actually tracked over the quarter? Maybe kind of what they were in the first week of the quarter compared to the last, if you guys want to give any more detail on that?

Yes. I think, I kind on my one answer to Nicole’s questions that the sequence is better.

So, as we get later into the month of July, the trends continued to improve. And again, I believe that’s because of our just relentless approach to digital marketing.

I think, that's one of the areas that we've really gone heavy on, and we just keep going heavy on that. And so, we’re very pleased with just the quality and the magnitude of what we've been able to do with our marketing program.

And that's one of the reasons we highlighted some of the stuff during our prepared comments.

That’s helpful. And then, last one for me, did you guys have any sort of difficulties getting your employees to come back?

I think, just like everyone else has reported in industry, yes, I mean, the initial push was challenging just because we were competing with $600 unemployment bonus. So, there was a lot of employees getting compensated for that and not as interested in coming back.

So, we did go through a time period where we had to deal with that. But, I think as we’ve gotten further out with being open, I think we recall, everyone that needed to be recalled back to the restaurant and we're now hiring again.

So, I think, yes, it was challenging initially. But, as we've gone out now and we can hire and we’re also figuring out that there's a pretty large -- very qualified labor pool now.

So, as we continue growing and expanding the business, I think we're starting to see very high quality candidates that are now looking for companies that come out of this stable and interested in joining their team. So, as a matter of fact, I would say that we've seen a little bit of a improvement now on hiring, and we're seeing some incredibly high quality candidates just because of there is still a lot of restaurants concepts that have now reopened.

Hi, Manny. Congratulations, incredible job, controlling the things that you have control over, very impressed.

So first question is on royalties. We were negative EBITDA by less than a $1 million, which is impressive, but we didn’t have any royalty income for the quarter or very little.

Can you tell me if that’s -- now that restaurants are reopening, when you expect that to start coming back and sort of an expectation of how it will ramp, between now and the end of the year?

Yes. Thanks for that question.

Obviously, that's a very big insight from our income statement, which is the management business and license business was the latest part of the business coming on line. So, you will see those numbers dramatically increase going forward.

Obviously with Vegas being up, that's going to make an immediate difference on the line item. And, London has now reopened.

So, we're starting to see in the properties in Milan, et cetera. So, you will see a dramatic increase in that line item in the third quarter.

So, the fact that it was a small amount in the quarter or in second quarter, it was just a factor that the majority of those businesses did not come on line until either the tail end of June or the beginning of July, but they're now on. And as we have it on the press releases, a lot of our big license, managing properties are back on line for us now.

So, if I -- so, is it safe for me to model, I don't know, let's say 30%, 40% of where we were a year ago in terms of royalties sort of...

I mean, we didn't provide guidance on the quarter. But, if you go back to the comments we gave on Vegas, that should be indicative of some of the things that how you should think about evaluating that part of the business going forward.

So, exiting the quarter and then going into July STK comp was down, could you just reiterate that number? I think, it was, I read 30 something percent, and then Kona was what, like negative 18, is that correct?

And then, can you tell me what kind of trends you're seeing into August?

Yes. So, just reiterating the number, so in June, STK was 59.9% and Kona Grill was 21.9%.

And then, in July…

Yes. July was minus 35 for STK and then minus 16 for Kona Grill.

And as I mentioned on my comments, the trend is that by week, as we've gotten out into the quarter, the later weeks have gotten better. So, we've seen a sequential improvement in the weeks.

August, still little early to really comment on that. But, the trend from July was very encouraging towards the last couple of weeks of the month.

Yes. That’s definitely impressive.

And you said that some of the Kona stores are operating in markets where you have 100% capacity. Is that correct?

We have a couple of restaurants that have large footprints, like Georgia is one of the places where we have -- we're able to upgrade at a little bit bigger clip than other places. Texas and everywhere else was pretty limited.

I mean, we were pretty much limited to 50%, if I put kind of an average number across the system, I would say 50% across everywhere except New York and Miami, were only allowed to do outside dining, outdoor dining and also New Jersey were only allowed to do outside outdoor dining. Although, we're now able to use our patio in New Jersey, that's covered.

But, those are pretty limited on what we can use. And then, California, San Diego can also only use outdoor dining right now.

So, I would say that we're 50% or more limited on capacity right now based on the overall portfolio.

Okay. So, July, we were a negative 35 at the STK brand and then negative 16 for Kona.

So, what is the breakeven on a cash flow basis in terms of comp, how should we look at that?

The way I think about that is for the quarter, we were only -- we were below a $1 million in EBITDA negative and we're significantly above that level in revenues now. So, I think that without providing guidance on the number, I think we -- to assume that just looking at the same store sales number were significantly above breakeven.

And I think Tyler mentioned on his comments that we're generating positive cash flow right now.

Two questions, please. First on the -- can you kind of characterize the nature of your vendor and landlord relief packages?

Are they still going on? Do they roll off at a certain point?

And any other color you can provide there? And then, secondly, in terms of the STK portfolio, specific to tourist market, is this an opportunity to -- are you giving any thought to restructuring that portfolio at all?

And third, new openings, if any?

Tyler, do you want to comment on the first question?

Yes. I would say, from a vendor perspective, we are -- we've worked with all of our vendors.

We have maintained very, very good relationship. And frankly, just judging by our AP balance, we're pretty much current with everybody there.

So, and then from a landlord perspective, we continue to work with our landlord, take each one of them on a case by case basis, have a very, very good relationship with them. And I think, we will continue to work with them.

As we see our capacity restrictions, going forward, we'll continue to work with them on what would be available.

Yes. I think, the third part of the question was the tourism related and our thoughts on that for STK.

I mean, we're delighted with Vegas. So, I mean, we expect that to continue to progress, particularly, I think there's a lot of people coming to Vegas, albeit they're driving versus flying.

So, it's a little bit of a different mix of customers you're seeing there. But, I think that will continue to really grow up.

Orlando has been open up for a while. Obviously, the park has been open and we’re -- again that property is doing very well right now.

So, we don't have any real interest there. And then, obviously New York, is really the only big question we have.

It’s just because we haven't been able to be reopen the dining room. But, I can tell you that we sold out our -- what you call, outdoor dining now that we got there, which is, I call it a tent city outside of the restaurant, but we sold that out pretty much every Friday, Saturday, and sometimes even Sunday.

So, the demand has been really high for the New York properties. Although I'm not really sure what's going to happen once the dining rooms come back there.

So, we'll have to play that out. But the other side is an indication, is that I think we'll still be okay in all those cities.

Miami, we did open up the dining room for a couple of weeks, and frankly we were blown away, and we're very pleased with the performance that we were getting out of there for the weeks that we were open. Unfortunately, because of the incidents of COVID in the market, we have to shut down the dining room again.

And, I think the market permits only for outdoor dining, which is not exactly a plus in 110 degree weather. But, other than that, I think that's our view on those locations is that we don't have any reason to believe that there's anything -- to operate once the dining rooms to come back.

So that's kind of our position right now. Obviously, once we have more information, we'll take a look at it again.

Okay. I noticed a reference in the Q2 to a new restaurant in the state of Washington, or is that…

So, we have two restaurants. One of them is very close to opening at Scottsdale Arizona.

I think, we're finally in final stages of getting that property on line right. I think the decision with that market has been that we're going to let the market get a little cooler, still kind of very hot month right now.

So, we’re going to let that get a little cooler in terms of the weather in the market. And then, Bellevue, Washington is the only other restaurant that we’re contemplating from an STK.

And we're thinking probably the end of the year, unless something dramatically changes in the Washington market. But, it's a fantastic piece of real estate; it’s in Bellevue.

And we're super excited about the long-term potential of that property. And then, in terms of F&B, we have a bunch of partners who want to open.

All we’re trying to do is keep them at bay, because we don't want them to be over bullish about what's going on there. But there will be additional F&B opportunities that we will be bringing on line.

And for those, we're just looking for some of the [Technical Difficulty] just come up with that. But there will be development and for sure for the rest of this year.

And then, we'll see how the F&B business starts shaping up.

Any fresh thinking on expanding at the Kona level, given how well you guys are operating the brand?

That’s a great question. We don't have an internal plan for that.

But very wisely already stepped into the fact that there's been interest. So, there's been people who have asked, there's a lot of -- as you can imagine, vaccines in some malls.

Again, we’ll be very thoughtful about it. And right now, our number one goal is to get Kona Grill to flat same-store sales year-over-year.

And then again, we'll navigate through the third, fourth quarter. And as I said on the prepared comments, we’ll look forward to seeing how the holiday season shapes up.

So, that's going to be kind of our next big milestone is to really have a very strong holiday season with all brands. And then, we'll figure out what the growth comes after that.

But, there's a lot of demand. I mean, there's -- believe it or not, there's now places that -- real estate that landlords are starting to get concerned about, if they're going to be empty, and they're asking.

And our answer to them is, give us a little time to see what happens and we'll get back to you.

Do you envision that brand to always be owned and operated?

That's a very good strategic question. At this point, yes.

But, again, I've had requests - because we're already on the management business and on the license business, I've had some of our partners asking about potentially for smaller hotels, smaller venues. So, again, we'll consider that and we'll put that into our future growth plans.

But again, right now, as I mentioned earlier, we want to be thoughtful about this. Priority one is get our restaurants back at the positive same-store sales, which I believe was a theme that we have, is an achievable goal in the future.

And then once we get those pieces all back together, we can then talk about how to resolve strategy and grow.

Hey, guys. Great job navigating the tough environment.

My question has to do with competition in the marketplace. Can you just kind of talk about what you're seeing from competitors in terms of closures and do you see opportunity there, or is it more neutral for you?

I think, first of all, I want to set going record by saying that, our historical philosophy on compensation has been that strong restaurant industry is good for all parties. And frankly, I'm a true believer that having great co-tenants businesses in restaurants is very good for the overall industry.

So, I want to stop with that view. Unfortunately right now we are seeing that in some areas, not everybody's coming up.

I mean, we can walk down by some of our restaurants and we can point out two or three people who are just not going to come back in the near future. So, the competitive environment has definitely changed that there's less players right now who are competing.

And I do think that I've also noticed a trend where a lot of the people who have reopened are still trying to place some of the previous playbook relative to what they used to do. They're trying to do the same thing again after reopening.

But unfortunately, as I mentioned on my answer to Nicole, you have just to be very nimble right now. We have to think about where the next occasion is coming from.

So, competition is there. Some of them have not adapted as fast as we probably have to a certain degree.

And I think there's still some competitors who are just watching and waiting for better base to come. And they're kind of not getting into the game, which is okay I’m sure as well, but it's an opportunity for us because we believe that by having a healthy core of restaurants right now gives us a long-term advantage of capturing market share.

And as I said on my comments as well as is our social media scores have just jumped dramatically, meaning that guests now who are going out really the appreciate the experience. And so, we're seeing -- I think I'm very pleased with our progress of both marketing and as well as executing at the restaurant level.

So, I think that’s frankly separating us a little bit from the fact, being able to deliver great experiences every time guests come to our restaurant. So, I think that's -- it's an experience game.

I know people always ask about the future of vibe dining. And I think frankly, the people who come out now really want to have fun as one different experience.

If you just want to eat, everybody learned in March and April, they can just get pretty much anything at your house through the delivery services. So, I think differentiation and execution now are really the key players in the restaurant space.

Yes, it’s different competitors around right now, different.

Thank you. As always, we appreciate everyone's interest in The ONE Group.

And I look forward to running into all of you in our restaurants. And above all, I just want to thank all our ONE Group teammates who frankly have blown away every expectation that you possibly could have.

So, it's an incredible team performing at a very high level. And I appreciate the contributions of every single one of them.

So, until next time, thank you, everyone. Take care.