Page 1

KURA REVOLVING SUSHI BAR Kura Sushi USA Announces Fiscal First Quarter 2021 Financial Results January 11 , 2021 IRVINE , Calif . , Jan. 11 , 2021 ( GLOBE NEWSWIRE ) -- Kura Sushi USA , Inc. ( " Kura Sushi " or the " Company " ) ( NASDAQ : KRUS ) , a technology enabled Japanese restaurant concept , today provided a COVID - 19 business update and reported fiscal first quarter 2021 financial results for the period ended November 30 , 2020 . COVID - 19 Business Update As of November 30 , 2020 , the Company had 27 restaurants open in some capacity : indoor dining , outdoor dining or takeout only . Due to changes in local guidelines for public activities , the Company reduced certain restaurants ' operating capacities in December , and as of today , the Company had all 29 restaurants open , with 16 of them in California and Washington DC only providing takeout , one restaurant in Illinois only providing outdoor dining and takeout , and the remaining 12 restaurants operating at reduced indoor capacities of 25 % to 75 % and providing takeout , depending on local requirements . In response to COVID - 19 , the Company continues to focus on cleaning and sanitizing protocols at its restaurants . The Company has implemented additional training and operating processes for all of its employees , including increased handwashing procedures , the use of face masks and gloves , and requirement to pass a health screening process , which includes a temperature check , before the start of each shift . On September 2 , 2020 , the Company increased its revolving line of credit to $ 35 million , and extended the payback period from one year to five years from each borrowing date . In November 2020 , the Company borrowed $ 3 million on the revolver and as of November 30 , 2020 , the Company had cash and cash equivalents of $ 2.7 million and $ 3 million in debt . Subsequent to November 30 , 2020 , the Company borrowed an additional $ 6 million . Fiscal First Quarter 2021 Highlights • Total sales were $ 9.4 million , a decrease of $ 8.0 million compared to the first quarter of 2020 ; • Operating loss was $ 6.3 million , compared to an operating loss of $ 1.4 million in the first quarter of 2020 ; • Net loss was $ 6.4 million , or ( $ 0.76 ) per diluted share , compared to net loss of $ 1.2 million , or ( $ 0.15 ) per diluted share , in the first quarter of 2020. Adjusted net loss * was $ 6.0 million , or ( $ 0.71 ) per diluted share , compared to adjusted net loss * of $ 1.2 million or ( $ 0.15 ) per diluted share , in the first quarter of 2020 ; • Restaurant - level operating loss * was $ 0.9 million , compared to restaurant - level operating profit * of $ 3.0 million in the first quarter of 2020 ; • Adjusted EBITDA * was ( $ 4.1 ) million , compared to ( $ 0.3 ) million in the first quarter of 2020 ; and • Three new restaurants opened during the first quarter of 2021 . * Adjusted net loss , Restaurant - level operating profit ( loss ) 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 . Hajime Uba , President and Chief Executive Officer of Kura Sushi , stated , “ I'm pleased with the progress on initiatives we've put in place at the onset of this pandemic . For fiscal first quarter of 2021 , we were able to operate 27 out of 28 of our restaurants , albeit at various capacity restrictions , improve our total sales by 70 % sequentially from fiscal fourth quarter of 2020 , and greatly enhance our off - premise offerings through our new partnership with Square , which enables a frictionless guest experience . While we remain optimistic about our business and its growth potential , we are still operating in an uncertain environment . As we progress through our fiscal second quarter , we see a new set of tougher state and local operational restrictions , particularly in California , where the state enacted a total ban on both indoor and outdoor dining effective December 6 , 2020. This contributed to a December comparable restaurant sales decline of approximately 64 % and sequential decline in sales of approximately 10 % from November . Nevertheless , we remain confident about our post - pandemic recovery and appreciate the financial security provided through our relationship with Kura Sushi Japan . " Review of Fiscal First Quarter 2021 Financial Results Total sales were $ 9.4 million compared to $ 17.4 million in the first quarter of 2020. Comparable restaurant sales decreased 51 % for the first quarter of 2021 . Food and beverage costs as a percentage of sales was 32.4 % compared to 32.6 % in the first quarter of 2020 . Labor and related costs as a percentage of sales increased to 46.3 % from 32.3 % in the first quarter of 2020. The increase was primarily due to the effect of lower sales and minimum staffing needed to operate our restaurants at reduced capacities . Occupancy and related expenses were $ 1.7 million , representing an increase of $ 0.3 million compared to the first quarter of 2020. This increase was primarily a result of additional lease expense incurred from new restaurants that were opened subsequent to November 30 , 2019 , as well as incremental pre - opening rent expense . Other costs as a percentage of sales increased to 22.1 % compared to 11.7 % in the first quarter of 2020. The increase was primarily due to fixed cost deleverage as a result of the decrease in sales , as well as an increase in smallware expense as a result of the three new restaurants that opened within the quarter and supplies for incremental takeout orders .