KURA SUSHI USA, INC. [KRUS] Filings

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10-Q 1 krus-20230228.htm 10-Q 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended February 28, 2023


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number: 001-39012

KURA SUSHI USA, INC.

(Exact Name of Registrant as Specified in its Charter)


Delaware	26-3808434
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
17461 Derian Avenue, Suite 200 Irvine, California	92614
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (657) 333-4100

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading
Symbol(s)

Name of each exchange on which registered

Class A Common Stock, $0.001 par value per share

KRUS

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of March 30, 2023, the registrant had 8,822,098 shares of Class A common stock, $0.001 par value per share, outstanding and 1,000,050 shares of Class B common stock, $0.001 par value per share, outstanding.

Table of Contents


		Page
PART I.	FINANCIAL INFORMATION	1
Item 1.	Financial Statements (Unaudited)	1
	Condensed Balance Sheets	1
	Condensed Statements of Operations	2
	Condensed Statements of Stockholders’ Equity	3
	Condensed Statements of Cash Flows	4
	Notes to Condensed Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24
Item 4.	Controls and Procedures	24
PART II.	OTHER INFORMATION	25
Item 1.	Legal Proceedings	25
Item 1A.	Risk Factors	25
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	25
Item 3.	Defaults Upon Senior Securities	25
Item 4.	Mine Safety Disclosures	25
Item 5.	Other Information	25
Item 6.	Exhibits	26
Signatures		27

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

Kura Sushi USA, Inc.

Condensed Balance Sheets

(amounts in thousands, except par value)

(Unaudited)


	February 28, 2023			August 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	22,294		$	35,782
Accounts and other receivables		3,644			2,486
Inventories		1,436			1,120
Due from affiliate		7			156
Prepaid expenses and other current assets		3,450			2,852
Total current assets		30,831			42,396
Non-current assets:
Property and equipment – net		87,791			75,590
Operating lease right-of-use assets		90,129			79,990
Deposits and other assets		3,966			3,380
Total assets	$	212,717		$	201,356

Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$	6,810		$	5,559
Accrued expenses and other current liabilities		2,356			3,731
Salaries and wages payable		5,800			5,955
Finance leases – current		179			507
Operating lease liabilities – current		8,538			7,992
Due to affiliate		439			285
Sales tax payable		1,341			1,240
Total current liabilities		25,463			25,269
Non-current liabilities:
Finance leases – non-current		16			30
Operating lease liabilities – non-current		94,329			82,280
Other liabilities		539			483
Total liabilities		120,347			108,062
Commitments and contingencies (Note 8)
Stockholders' equity:
Preferred stock, $0.001 par value; 1,000 shares authorized, no shares issued or outstanding		—			—
Class A common stock, $0.001 par value; 50,000 shares authorized, 8,819 and 8,788 shares issued and outstanding as of February 28, 2023 and August 31, 2022, respectively		9			9
Class B common stock, $0.001 par value; 10,000 shares authorized, 1,000 shares issued and outstanding as of February 28, 2023 and August 31, 2022		1			1
Additional paid-in capital		121,149			118,970
Accumulated deficit		(28,789	)		(25,686	)
Total stockholders' equity		92,370			93,294
Total liabilities and stockholders' equity	$	212,717		$	201,356

The accompanying notes are an integral part of these condensed financial statements.

Kura Sushi USA, Inc.

Condensed Statements of Operations

(amounts in thousands, except per share data)

(Unaudited)


	Three Months Ended February 28,						Six Months Ended February 28,
	2023			2022			2023			2022
Sales	$	43,944		$	31,290		$	83,262		$	61,122
Restaurant operating costs:
Food and beverage costs		13,240			9,376			25,670			18,333
Labor and related costs		13,854			10,342			26,389			20,052
Occupancy and related expenses		3,065			2,302			5,950			4,502
Depreciation and amortization expenses		1,758			1,267			3,334			2,438
Other costs		5,866			4,344			11,187			7,954
Total restaurant operating costs		37,783			27,631			72,530			53,279
General and administrative expenses		7,122			5,454			13,764			10,814
Depreciation and amortization expenses		88			83			173			171
Total operating expenses		44,993			33,168			86,467			64,264
Operating loss		(1,049	)		(1,878	)		(3,205	)		(3,142	)
Other expense (income):
Interest expense		14			22			30			47
Interest income		(63	)		(24	)		(157	)		(50	)
Loss before income taxes		(1,000	)		(1,876	)		(3,078	)		(3,139	)
Income tax expense		15			3			25			15
Net loss	$	(1,015	)	$	(1,879	)	$	(3,103	)	$	(3,154	)
Net loss per Class A and Class B shares
Basic	$	(0.10	)	$	(0.19	)	$	(0.32	)	$	(0.32	)
Diluted	$	(0.10	)	$	(0.19	)	$	(0.32	)	$	(0.32	)
Weighted average Class A and Class B shares outstanding
Basic		9,801			9,712			9,795			9,711
Diluted		9,801			9,712			9,795			9,711

The accompanying notes are an integral part of these condensed financial statements.

Kura Sushi USA, Inc.

Condensed Statements of Stockholders’ Equity

(amounts in thousands)

(Unaudited)


	Common Stock									Additional						Total
	Class A					Class B				Paid-in			Accumulated			Stockholders'
	Shares			Amount		Shares		Amount		Capital			Deficit			Equity
Balances as of August 31, 2022		8,788		$	9		1,000	$	1	$	118,970		$	(25,686	)	$	93,294
Stock-based compensation		—			—		—		—		650			—			650
Employee stock plan		3			—		—		—		51			—			51
Net loss		—			—		—		—		—			(2,088	)		(2,088	)
Balances as of November 30, 2022		8,791		$	9		1,000	$	1	$	119,671		$	(27,774	)	$	91,907
Stock-based compensation		—			—		—		—		945			—			945
Employee stock plan		28			—		—		—		533			—			533
Net loss		—			—		—		—		—			(1,015	)		(1,015	)
Balances as of February 28, 2023		8,819		$	9		1,000	$	1	$	121,149		$	(28,789	)	$	92,370

	Common Stock									Additional						Total
	Class A					Class B				Paid-in			Accumulated			Stockholders'
	Shares			Amount		Shares		Amount		Capital			Deficit			Equity
Balances as of August 31, 2021		8,700		$	9		1,000	$	1	$	115,756		$	(24,922	)	$	90,844
Stock-based compensation		—			—		—		—		443			—			443
Employee stock plan		13			—		—		—		19			—			19
Net loss		—			—		—		—		—			(1,275	)		(1,275	)
Balances as of November 30, 2021		8,713		$	9		1,000	$	1	$	116,218		$	(26,197	)	$	90,031
Stock-based compensation		—			—		—		—		596			—			596
Employee stock plan		5			—		—		—		29			—			29
Taxes paid on vested restricted stock awards		(2	)		—		—		—		(154	)		0			(154	)
Net loss		—			—		—		—		—			(1,879	)		(1,879	)
Balances as of February 28, 2022		8,716		$	9		1,000	$	1	$	116,689		$	(28,076	)	$	88,623

The accompanying notes are an integral part of these condensed financial statements.

Kura Sushi USA, Inc.

Condensed Statements of Cash Flows

(amounts in thousands)

(Unaudited)


	Six Months Ended February 28,
	2023			2022
Cash flows from operating activities
Net loss	$	(3,103	)	$	(3,154	)
Adjustments to reconcile net loss to net cash provided by operating activities
Depreciation and amortization		3,507			2,609
Stock-based compensation		1,595			1,039
Loss on disposal of property and equipment		50			—
Non-cash lease expense		1,825			1,420
Changes in operating assets and liabilities:
Accounts and other receivables		(11	)		(224	)
Inventories		(316	)		(147	)
Due from affiliate		149			318
Prepaid expenses and other current assets		(177	)		7,679
Deposits and other assets		245			(81	)
Accounts payable		(797	)		201
Accrued expenses and other current liabilities		(598	)		(123	)
Salaries and wages payable		(155	)		361
Operating lease liabilities		(242	)		(221	)
Due to affiliate		(278	)		(3	)
Sales tax payable		(17	)		48
Net cash provided by operating activities		1,677			9,722
Cash flows from investing activities
Payments for property and equipment		(14,302	)		(12,298	)
Payments for initial direct costs		(275	)		(315	)
Payments for purchases of liquor licenses		(831	)		(559	)
Net cash used in investing activities		(15,408	)		(13,172	)
Cash flows from financing activities
Repayment of principal on finance leases		(341	)		(524	)
Taxes paid on vested restricted stock awards		—			(154	)
Proceeds from exercise of stock options		584			48
Net cash provided by (used in) financing activities		243			(630	)
Decrease in cash and cash equivalents		(13,488	)		(4,080	)
Cash and cash equivalents, beginning of period		35,782			40,430
Cash and cash equivalents, end of period	$	22,294		$	36,350
Supplemental disclosures of cash flow information
Cash paid for income taxes	$	117		$	88
Noncash investing activities

KURA SUSHI USA, INC. [KRUS] Filings
10-Q	[2023-04-04]
10-Q	[2023-01-05]
10-K	[2022-11-10]
10-Q	[2022-07-07]
10-Q	[2022-04-07]
10-Q	[2022-01-06]
10-K	[2021-11-12]
10-Q	[2021-07-13]
10-Q	[2021-04-13]
10-Q	[2021-01-11]
10-K	[2020-11-18]
10-Q	[2020-07-14]
10-Q	[2020-04-14]
10-Q	[2020-01-13]
10-K	[2019-11-26]
S-1	[2019-07-03]