Kura Sushi USA, Inc.

Good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to the Kira Sushi USA Inc. Fiscal Third Quarter 2021 Earnings Conference Call. At this time, all participants have been placed in a listen-only mode, and the lines will be open for your questions following the presentation. Please note that this call is being recorded. On the call today, we have Hajime Jimmy Uba, President and Chief Executive Officer, Steve Benrubi, Chief Financial Officer, and Benjamin Porton, Investor Relations Director. And now, I would like to turn the call over to Mr. Porton.

Thank you, Operator. Good afternoon, everyone, and thank you all for joining. By now, everyone should have access to our fiscal third quarter 2021 earnings release. It can be found at www.kurasushi.com in the Investor Relations section. A copy of the earnings release has also been included in an AK we submitted to the SEC. Before we begin our formal remarks, I need to remind everyone that part of our discussion today will include forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. These forward-looking statements are not guarantees of future performance, and therefore you should not put 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. We refer all of you to our recent SEC filings for a more detailed discussion of the risks that could impact our future operating results and financial conditions. Also during today's call, we will discuss certain non-GAAP measures which we believe can be useful in evaluating our performance. The presentation of this additional information should not be considered in isolation, nor as a substitute for results prepared in accordance with GAAP, and the reconciliations to comparable GAAP measures are available in our earnings release. With that out of the way, I would like to turn the call over to Jimmy.

Thank you, Ben, and thank you, everyone, for joining us today. Let me begin by saying how pleased I am with the rate of recovery in our restaurants. following the COVID-related operational challenges we've experienced over the past 16 months. During our fiscal third quarter, we not only saw meaningful improvement in sales, but were also able to improve our operating efficiency and restaurant-level profitability as we steadily increased our dining room capacity in accordance with state and local regulations. Let me briefly expand on this. As we mentioned on our last call, March performance improvement was largely driven by the relaxation of dining room restrictions in mid to late March, including the resumption of conveyor belt operations and limited indoor dining in our California stores, as well as increased indoor dining capacity in non-California restaurants. During the third quarter, our average available seating capacity was approximately 60% against the second quarter's available seating capacity of approximately 25%. Our sales momentum continued through April and May, terminating in third quarter revenue of $18.5 million, more than doubling the revenue we saw in our fiscal second quarter. Looking at the current quarter, our sales recovery has continued with the lifting of operating restrictions in California in mid-June, resulting in full-month June revenue of $8 million. As of July 1st, all of our restaurants system-wide were back to operating at full capacity with no restrictions in place. Guest response to the return of the full-cry experience has been terrific, and with further restriction relaxations during the third quarter, Our stronger revenues delivered were restaurant-level operating profit for the first time since entering the pandemic. We believe we are on the path to return to pre-pandemic profitability as sales normalize. Texas, which had full seating capacities for the majority of the quarter, produced positive confidence of 5% as compared to pre-pandemic fiscal 2019 levelings. Following the mid-June reopening of California, our system-wide comps began to exceed those of fiscal 2019, and our California locations are making great strides towards returning to pre-pandemic productivity levels. July is off to an even stronger start, propelled by the success of our Sanrio-Vicolapon toy collaboration. Sanrio provided sushi-style redesigns of Hello Kitty and other iconic characters for our toys and interior decorations, and consumer reaction has been strong. I'm very excited for our promotional pipeline for the coming year, which includes cooperation with properties with cross-generational appeal, such as Tetris. Now I would like to touch on our offer misses offerings. Third quarter results continue to support our belief that off-premises can be a long-term and incremental part of our business. In spite of dining room reopenings and increases in our system-wide seating capacity, our third-quarter off-premises mix held strong at 10%. As a reminder, our pre-pandemic off-premises mix was minimal at around 1%, and we are very pleased with this improvement. It's also worth noting that we were able to grow our off-premises sales with minimal paid advertising. Our primary communication channel was our rewards program, which now has over 160,000 members, representing 60% growth over the previous quarter's membership count of 100,000. Despite the tangible improvement in off-premises as compared to before the pandemic, This part of our business is still nascent, and we remain very excited about its longer-term potential. Turning to our development, I'm pleased to say that fiscal 2021 has been our busiest and possibly our most productive development year ever. During our fiscal third quarter, we opened one new restaurant in Sherman, California, and subsequent to the end of the quarter, We opened another new restaurant in Bellevue, Washington, bringing our total count to 32 restaurants. With these openings, we have completed our development plan for fiscal 2021, consisting of seven new restaurants and five new markets, a truly impressive feat by our development team, given the challenging macro environment. We continue to be pleased with the class of fiscal 2021, including our recent openings. We believe there are units from this year's vintage that have the potential to become some of the top performers in our system. For example, in June, Fortale and Bellevue were respectively our second and third strongest performers in our restaurant base. The success of our openings across new markets is a clear demonstration of the broad appeal of Kura Sushi in the US and the confirmation of the enormous opportunity we have ahead of us as we continue to expand our footprint. As we look ahead, I'm excited about how our fiscal 2022 development plan is shaping up. We are benefiting from new real estate opportunities created by the pandemic, as well as a more rigorous site selection process through our new data platform, Formal Analytics, resulting in the most exciting pipeline we've had since entering the States. To date, we have already executed eight new leases, including three new markets, Arizona, Massachusetts, and Pennsylvania. And our Sons Town Galleria location, San Francisco, is currently under construction. Fiscal 21 was a record development year for Cooler, and we expect to maintain this growth momentum by opening even more units in fiscal 2022. On that note, I'm so excited to announce the hiring of our new Chief Operating Officer, Sean Arame. Sean has extensive experience in the restaurant industry, most recently as the COO of Luna Grill, and with Umami Burger, Daphne's Griff Carpet, Arby's, and Subaru. We are tremendously excited to have Sean join our team and believe that he will be instrumental in cloud growth. In summary, we are thrilled with the sales recovery we've experienced so far, and our team is ready to capitalize on our guest pent-up demand for the full cloud experience. Of course, none of these accomplishments would have been possible without the hard work and dedication of our team members. I would like to personally thank them for their resilience during these uncertain times. With that, let me turn the call over to Steve to briefly discuss our financial results on the liquidity. Steve?