Good morning. Thank you so much for joining us today. I have the pleasure to be here with Tyler Loy and Christine Hong from The ONE Group. Thank you so much for being here at the conference. We really appreciate you guys, you know, spending some time to teach us more about the company. Yeah. Thank you so much for having us. We really appreciate it. Before we get into more company-specific topics, I was hoping you could share some insights regarding the changes you're seeing in your clients' behavior and preferences over the last six months. And given that we keep hearing from some of your competitors that the consumer is engaging in value-seeking behavior and that the high menu pricing is impacting value perception at several of the restaurant concepts. Sure. Yeah. Great question. So I think, like many restaurant companies right now, you're really seeing a bifurcation. So I think that you've got your high-end consumer who has, you know, positive exposure to interest rates, who are, you know, have exposure to stock market, et cetera. Like, you know, those metrics I think are as favorable as they've been in quite some time. And so I think with that consumer, you see them holding in there very, very well. And then I think you see the lower-end consumer, frankly, is just struggling a little bit more. I think if, you know, they have exposure to interest rates, rent, inflation, that, you know, probably their purchasing power today is less than it was, you know, five years ago. So, I think the more mix that you have of that lower-end consumer, probably a little bit more of the challenges that you face. In terms of value, you do see that, right? Where you are seeing a lot of value out there, especially in, you know, casual dine, where you're all you can eat or unlimited or, you know, whatever the promotional activity is, you are seeing that quite a bit. And I think our philosophy is, you know, we do tend to have higher-end brands, and I think our philosophy is that, we wanna market the value, the everyday value that we've always had, whether that be $3, $6, $9 Happy Hour or whether that be, you know, some different activities that we do around the shoulder periods, et cetera. So market that brunch, which comes in a lower price point, and still provide that for folks, but we're not gonna do, you know, heavy discounting or heavy, kind of active. Do you guys expect your competitors will engage in this type of, you know, promotional dealing, by the end of the year? I think it depends on the competitor, right, in terms of kind of where they're at in the you know kind of casual to fine dining kind of spectrum. You know, you're certainly seeing it on the casual side. So how that percolates maybe up, I would just be speculating whether or not they'll do that or not. But I do think that everyone is trying to figure out if you do have some exposure to the lower-end consumer. I think everyone is trying to figure out well how do you reach them in a way that can you know where they can still utilize the brand? Perfect. I was hoping you could comment on what initiatives is the company implementing to drive higher business volume in this challenging environment? I mean, I think that the number one initiative is to just really focus on the guest experience. You know, we're in terms of, like, our customer satisfaction metrics, I think they're the highest they've ever been. So we're very, very focused on reputation. We're very, very focused on the operations within the four walls first and foremost. I think secondarily, you know, again, we are doing more. I wanna be careful. We're not doing a lot of promotional activity, but I think we're doing a lot of promoting through what we typically do around the value that we already have on the menu, and that we've always had on the menu. And so, we've always been focused on having a very broad-based demographic appeal. We've done that by trying to meet our customers kind of where they are. If they want to come in and have the full kind of fine dining experience, we certainly want to provide that. But if they want to have something that's more value-driven, but still want to participate in the brand, then meeting them there, and then just making sure that messaging is out there, you know, from digital, kind of all the various channels. So your marketing message is gonna be on loyalty and on, effectively highlighting the value that you're offering gives the consumer? Yeah, I think that's right. And then, I mean, we'll talk about the Benihana acquisition here momentarily, but I think, or I'm sure we'll talk, I'm sure we will at some point. And we do have kind of more initiatives within the Benihana and RA brands that are gonna be new to those restaurants. But it's kind of from the same playbook that we've found to be successful within STK and Kona Grill, which is around activating the bar, around creating occasions for folks where they can still participate in value, if that makes sense. You gave me the perfect segue, as on May first, the company acquired Benihana. I was hoping if you could remind us about the rationale of the transaction, and how is the company's capital structure post-transaction? Sure. So I think there's a lot of good, you know, public-facing elements to the transaction in the sense that, we're very. We like this area of the restaurant industry, which is kind of great food, great service, and for STK it's, you know, and a very vibrant dining experience. For Kona Grill, it's kind of and a very vibrant bar atmosphere. And with Benihana, it's and this entertainment experiential kind of piece, what they do. And so I think one of the things that the pandemic has taught, you know, a lot of us, is that getting a good meal, whether that be through takeout and delivery or getting a good meal through having it shipped to your house, I mean, those things were pretty readily available. So, you know, one of the things that, you know, I think you saw a lot in the industry, and certainly, our post-pandemic performance has shown that, is that folks really gravitated towards brands that gave them that something extra. And so, I think Benihana certainly does that. You know, it makes us a larger, publicly traded company, and it provides scale across a lot of different, you know, whether it be supply chain, G&A, et cetera. So I think those are some of the, you know, maybe the more obvious pieces. I think, you know, probably one that's maybe a little bit less obvious is just the stability of that business over a long period of time. It's probably one thing that folks may not know as well. And so, you know, that business has been. They just celebrated their sixtieth anniversary, so it's been around for a long time. It's been through a lot of cycles, and it has just been. It is very stable. It generates a lot of free cash flow. And so, I think that, you know, we've got this kind of growth with the STK brand and the Kona Grill brand, that's a little bit more capital intensive, and now we have this, like, very stable platform with Benihana and RA, that is, you know, kind of broadens out, you know, a little bit from a platform perspective, you know, our business. I think, you know, one of the things with that business that's, you know, pretty interesting is just, and I think one of the reasons it does so well, across, you know, the cyclical nature of the business, is really just the amount of, celebratory occasions that are in that brand. So I think, you know, as, as you think about the macro and you think about, okay, there's gonna be less, you know, potentially discretionary, dining occasions, you know, there's, like, discretionary occasions, and then there's discretionary occasions, right? Mm-hmm. I think people view birthdays, holidays, celebrations as being less discretionary than, like, just because type of occasions, which I think that is where you're seeing a lot less demand. Can you please remind us of the capital structure? Oh, yeah -of the transaction? Yeah, so we've got a Term B loan, about $350 million, and then we rounded out the financing with a preferred equity component that was $160 million at closing. Mm-hmm. Perfect. The company had mentioned that it expects to achieve annual synergies of $20 million over the next 24 months related to the Benihana acquisition. Can you please remind us where these synergies are coming from, and a little bit on the cadence on when we are going to see those? Yeah, so we talked about it on the last earnings call, so about nine of the twenty is done, and those are really, you know, I guess you'd call it the low-hanging fruit. You know, duplicate costs across the entire organization that were relatively easy to take out. I think there's a lot of, like, professional fees, those types of things. In my world, it's like, they had an auditor, we had an auditor, they had tax, so you know, those things are pretty easy to move quickly on, and then I think the things that you'll see more long-term, you know, as we go moving forward, is really around supply chain, and so the things that take a little bit longer are the ones that are contractual in nature. And so what you're doing is you're letting one contract roll off, you're then combining, whatever the best contract that you have across, you know, the entire system. So, as an example, like, we just finished the rice. We just finished consolidating rice. That was about $500,000 in savings across the entire. So I mean, you would think that there would be nothing more common, like a commodity, than rice. But as it turns out, when you have the leverage that we do now, you know, our ability to kind of, for lack of a better word, just leverage that, can really drive value there. Perfect. I was hoping you could give us a little bit more commentary on how the integrations of the new asset into the company portfolio is going, and what has surprised you the most, perhaps something that you didn't anticipate it? Integration is going great. We'll start there. I think we feel very good about where we are today relative to where we thought we would be. So, I think that, culturally, it's been. There's great alignment, I think. You know, folks are very excited to drive the business forward. Like I had said, it's, you know, it's a business that's been around for 60 years and, you know, I think even the process that it went through for the sale has just been. It went on an extended period of time. And so I think that there's just a little bit of. There are probably a lot of things that just weren't changing, that could have or should have, during that time, and that's not anybody's fault. But I think overall, I think we feel very, very positive about where that's at. I think maybe the surprise would just be the amount of opportunity within the brands. I think, you know, we didn't go through the process hypothesizing any one thing. I think we had ideas about maybe some. I f we overlaid some of the things that we currently do over that, you know, what would that look like? But I think as we dig more, as we dig deeper, and as we get a better understanding of what makes those brands work, I think we just feel very excited about the opportunity. I was hoping that you could, you know, comment on the opportunities Benihana's franchise and licensing business. You know, I, I think that franchising and licensing, it's a little bit of a mentality. You know, I've worked. Both Manny and I have worked for franchisors and franchisees, and you have to be very intentional about that business. It's, you have to choose great partners. You have to make sure that those folks are aligned with what you want to do, and you want to make sure that they're well capitalized. And you want to make sure they're gonna be great stewards of the brand. And so, you know, we have a pretty large asset- light business between, you know, managed license for STK. We do have, like, a hospitality component to what we do, and then we have now this franchising license business with Benihana and RA. And I think that the improvement is just gonna come from a dedicated focus on building that business. And I mean we do think it's a real business and something scalable long term. And so how do you create the structure that's gonna support that, and then how do you create you know kind of the organizational mindset to really drive that business and make it more robust? 'Cause I mean we do think that it can be a robust business. Perfect. I was hoping you could provide us some color on the company's long-term growth targets. Sure. So we've said kind of publicly that long term, we wanna grow kind of three to five of each brand. So that's STK, Benihana, and then kind of, I think, RA and Kona Grill combined. Those brands are pretty. And so, you know, y ou know, we had touched on a little bit that, you know, what we bought with Benihana, it's like it was a very consistent business, and that also includes this very consistent cash flow stream, right? And so when you think about, well, what is, you know, post synergy, kind of, when you combine the businesses and think about, you know, annualizing new stores, you know, we project somewhere between $130 and $140 of Adjusted EBITDA. You know, you walk that down with maintenance CapEx and with interest, it really leaves about somewhere between $80 million and $90 million of kind of free cash flow to figure out, you know, from a leverage profile and also then from an EBITDA profile, like, you know, there's a lot of different choices that we. So I think it gives us a lot of flexibility. I think, you know, when we talk about our new restaurant performance, our new restaurant performance is fantastic. So it's a really, really good, a really, really good use of capital. And I think, you know, kind of maybe touching back a little bit to the previous question is, we do feel like this asset-light business is a business that is very meaningful, right? So anytime where you can grow EBITDA and grow revenue without investing capital, like, we like that. And so, we'll continue to drive that as well. But I think, you know, when we look at free cash flow generation, we look at our pipeline, we feel like, you know, there's a lot of different, we have a lot of optionality there. Can you please remind us your new unit economics and, you know, what are your, and more specifically, you know, which return on cash can you obtain from these, you know, new units that you intend to grow? Yeah. So, you know, we're for STK, we're targeting about $8 million AUV, a little bit north of 20%, restaurant-level margins, cash-on-cash returns, you know, that would imply about 50% at $3 of net investment. With Kona Grill, about $5 million of revenue, 20% restaurant-level margin, that implies kind of 40%, cash-on-cash returns. And then with Benihana, six, you know, $6.5 million, roughly, of AUV, 20% restaurant-level margin, that kind of puts you in that kind of 40%-50% range. I think, in our—for our kind of pipeline up through 2023, or I'm sorry, up through kind of the beginning of this year, I think we had, the cash-on-cash returns had been around between 40% and 50% for the new restaurants. So, you know, we think that, you know, the best predictor of the future is kind of like the past performance and I think, you know, we've done a pretty good job showing, that those returns are real. Can you please remind us of your commodity basket and perhaps, you know, your early outlook on commodity price inflation and labor cost increases for next year? Yeah. We have more exposure to beef than anything else in our basket, but we certainly have, I mean, we're protein heavy, so kind of it goes beef and then seafood, and then chicken and obviously produce is a large component, so we do have exposure. I mean, more than anything, we have exposure to beef prices. You know, what we're seeing from a cost of beef perspective is it's pretty stable, more stable than it's been over the last three or four years, which is good. I think it's more predictable. You know, probably, you know, potentially a little bit of favorability in the back half of the year compared to the front half or compared to last year. So we feel that's good. We also think that with the Benihana acquisition and that scale that it provides, that we've got some probably supply chain juice, for lack of, for lack of better words, within the Benihana brand. And then, you know, we think inflation is probably gonna be in the low- single- digits on a go-forward basis. I don't know if there's any wood to knock on up here, but you know, that would be a good outcome for us, I think, and something that's very predictable. And then, I think with labor inflation, we've seen it moderate a lot. So we're seeing labor kind of back in the historical levels of low single digits. And so, you know, it finally feels a little bit more predictable. So that's good. Perfect. I was hoping if you could give us some insight on your pricing strategy for 2025? Yeah. I think our pricing strategy has always been like very very moderate in the amount of price that you take. I think we're a sales-driven organization, and we're very focused on transactions, and we're very focused on average check through you know culinary innovation and through managing the product mix, et cetera. And so you know pricing is not the first place that we want to go to drive same-store sales. I think our pricing philosophy is really around what we think inflation is gonna be. Let's take enough price once a year in order to cover that, and then let's figure out from a marketing operation perspective you know how do we want to drive same store growth. Perfect. Can you please remind us of the company's medium and long-term leverage targets? I think we want. I don't think that we have necessarily a number in mind. I think less, you know, is always better in some regards. So I think, you know, kind of what we had talked about previously is that, with the amount of free cash flow generation, we can really deploy that in a number of different ways, right? So we can grow EBITDA and really use capital to grow EBITDA and deleverage that way. We can just decrease the overall debt, and create a different leverage profile that way, or, a combination of. And so I think, having that level of flexibility, you know, we have a big, large pipeline of development, but we're also very, I think pretty conservative in terms of how many restaurants are under construction at any point in time, how many leases are signed at any one point in time. And so, you know, and our goal with that is to just create maximum flexibility in terms of what's going on in the environment, what are the opportunities that are out there? And so then we can kind of modulate between growth and debt as we see. Last one for me. I was hoping if you could give us some insight into the company's capital allocation priorities, given that you mentioned that you anticipate to generate very strong free cash flow. Is it debt paydown, investing in new stores, returning capital to shareholders, potential M&A? So how you guys are thinking about capital allocation? Good, good question. I think that we think about it in terms of we have a lot of different folks that are stakeholders in the business. We have common equity holders, we have debt. And so the capital allocation strategy is really around, I think, being as thoughtful as possible for what is the right blend that is going to make that group of shareholders the happiest. You know, because you can't make it. You know, I think you know, our debt holders would say one thing, I think our equity holders would say another thing. And so those things could change just based on the day, frankly. And so I think management's job is really to try to balance those things as thoughtfully as possible, and to just make sure that at the end of the day that everyone generating the value that kind of went into it, thinking about it. So it's really just protecting shareholders. So I don't mean to not answer the question, but I think it's a little bit nuanced in terms of different folks want different things. So I think it's about making sure that we're just good stewards of the free cash flow, and whether that be building new restaurants, which we think, you know, listen, we think that building restaurants right now a really good environment for that. There's great real estate that's available, and we're generating great returns. You know, and I think, you know, I think that's kind of what was underwritten in, you know, everyone knew what our pipeline looked like, but you know, again, it's really just kind of balancing that between all the different folks that are stakeholders. Perfect. This was a great conversation. Thank you so much. Thanks. For joining us. We hope to see you next year. Yeah. Thanks, Luis. We really appreciate it.