Kura Sushi USA, Inc.

Good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to the Kurasushi USA Inc. Fiscal Second Quarter 2023 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 Jimmy Uva, President and Chief Executive Officer, Jeff Utes, Chief Financial Officer, and Benjamin Porton, Senior Vice President, Investor Relations and Business Development. And now I'd 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 second quarter 2023 earnings release. It can be found at www.cursus.com in the Investor Relations section. A copy of the earnings release has also been included in the 8K 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 SEC filings for a more detailed discussion of the risks that could impact our future operating results and financial condition. Also during today's call, we will discuss certain non-GAAP financial measures which we believe can be useful in evaluating our performance. Presentation of this additional information should not be considered in isolation, nor is 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'd like to turn the call over to Jimmy.

Thanks, Ben, and thank you to everyone for joining us today. It's been an exceptional quarter for Kurasushi. In the previous earnings call, I had mentioned our three goals for this fiscal year. Maintaining great operations and delivering unbeatable value to our guests. Continuing our rapid unit expansion and leveraging our G&A investment. It's my pleasure to be able to say that we are seeing excellent results on each of these goals. We continue to lead the industry with traffic growth of 7.4% in our second quarter and as demonstrated by our topic performance, consumer sentiment remains extremely strong. Our unit pipeline is the strongest it has ever been, with nine units under construction and another nine executed leases across existing and new markets. Our success in leveraging GMA, combined with improvement in restaurant level cost, has resulted in a 400 basis point adjusted EBITDA margin expansion over the previous year. Our second quarter sales of $43.9 million represent 40% revenue growth over the prior year. Our restaurants delivered comparable sales growth of 17.4%, which breaks down to 7.4% in traffic growth and 10% in price and mix. Despite our pricing, our value remains unparalleled and consumer sentiment and strength have never been stronger. Our strong sales performance continued into March with revenue of $16.4 million and comparable sales of 11.2%. Turning to operating results, we've seen material improvement in both labor and cost of goods sold. Our labor costs as a percentage of sales have improved by 160 basic points over the prior year, and our COGS as a percentage of sales are approaching the all-time best we saw in fiscal 22. Between the flattening of food cost inflation and our December pricing, we saw COGS as a percentage of sales improve by 150 basic points over the prior quarter. Restaurant efficiencies continue to be realized resulting in restaurant-level operating profit margin of 20.3%, a 250 basis point improvement over the prior year. In terms of corporate cost, we were able to improve G&A as a percentage of sales by 120 basis points over the prior year. Cumulatively, we were able to grow adjusted EBITDA margin by 400 basis points and net income margin by 370 basic points as compared to the prior year. It's been a pleasure to see our strategies for growing corporate profitability succeed, and we believe this is only an early indication of what we can expect as we continue to grow and achieve our true scale. During our second quarter, we opened three new restaurants, Philadelphia, Edison, New Jersey, and Oak Brook, Illinois. We are very pleased with the performance of these restaurants, with the Philadelphia and Edison locations in particular, underscoring the tremendous opportunity that East Coast Market represents. In our previous calls, we have mentioned unprecedented permitting delays that impacted the opening of Jersey City and Philadelphia. We haven't seen any such permitting concerns since and we believe those are one-off anomalies. Looking ahead, our unit pipeline is stronger than it has ever been, with nine restaurants under construction and nine more executed leases. We not only feel extremely comfortable about achieving our fiscal 2023 unit growth guidance, but also have an excellent head start on our fiscal 2024 development. As a note on the cadence of unit openings, we expect one opening during the third quarter, with the remainder in Q4. Finally, we have made meaningful progress on the implementation of our new waitlist app, which we believe has the potential to be the biggest comp driver of our fiscal 2023. As we mentioned in past calls, our current waitlist app algorithm provides highly conservative estimate of wait times, particularly close to the end of the evening. We expect the revised algorithm to have three major impacts, an improvement in customer satisfaction, reduced attrition, and the potential to drive additional traffic in off-peak hours. I'm extremely pleased with the progress that we've seen on our marketing initiatives as well. The targeted advertising and search engine optimization we began in December has been highly effective in drawing first-time guests. Our reward membership-based growth continues to be extremely rapid, with the current count of 700,000 members as compared to the 500,000 members we noted during our November earnings call. While the implementation of the new waitlist app is a more immediate priority. We are also working on rolling out our updated device program with Punch. Additionally, we just began our second demo 3D campaign in April, which I'm sure you remember from the prior summer as being our most successful brand collaboration yet. As the preview of things will come, I'm very happy to announce that we will be partnering with DC Comics this summer which is just another indication of the momentum the Kula brand has seen over recent years. It's an honor and a privilege to be able to report such strong results and progress on our initiatives, and I'm incredibly grateful for the consistently spectacular work by our restaurant team members and corporate support staff that make this possible. And with that, I'll turn it over to Jeff to discuss our financial results and liquidity. Jeff?