SEC Filing | Kura Sushi USA

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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 May 31, 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 June 30, 2023, the registrant had 10,106,852 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 and Comprehensive Income (Loss)	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)


	May 31, 2023			August 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	70,474		$	35,782
Short-term investments		8,742			—
Accounts and other receivables		3,536			2,486
Inventories		1,387			1,120
Due from affiliate		—			156
Prepaid expenses and other current assets		5,123			2,852
Total current assets		89,262			42,396
Non-current assets:
Property and equipment – net		96,654			75,590
Operating lease right-of-use assets		96,126			79,990
Deposits and other assets		4,206			3,380
Total assets	$	286,248		$	201,356

Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$	5,521		$	5,559
Accrued expenses and other current liabilities		2,084			3,731
Salaries and wages payable		6,932			5,955
Finance leases – current		75			507
Operating lease liabilities – current		8,593			7,992
Due to affiliate		466			285
Sales tax payable		1,445			1,240
Total current liabilities		25,116			25,269
Non-current liabilities:
Finance leases – non-current		16			30
Operating lease liabilities – non-current		100,794			82,280
Other liabilities		582			483
Total liabilities		126,508			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, 10,101 and 8,788 shares issued and outstanding as of May 31, 2023 and August 31, 2022, respectively		10			9
Class B common stock, $0.001 par value; 10,000 shares authorized, 1,000 shares issued and outstanding as of May 31, 2023 and August 31, 2022		1			1
Additional paid-in capital		186,845			118,970
Accumulated deficit		(27,109	)		(25,686	)
Accumulated other comprehensive loss		(7	)		—
Total stockholders' equity		159,740			93,294
Total liabilities and stockholders' equity	$	286,248		$	201,356

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

Kura Sushi USA, Inc.

Condensed Statements of Operations and Comprehensive Income (Loss)

(amounts in thousands, except per share data)

(Unaudited)


	Three Months Ended May 31,						Nine Months Ended May 31,
	2023			2022			2023			2022
Sales	$	49,238		$	37,969		$	132,500		$	99,091
Restaurant operating costs:
Food and beverage costs		14,770			11,282			40,440			29,615
Labor and related costs		14,362			11,788			40,751			31,840
Occupancy and related expenses		3,554			2,693			9,504			7,195
Depreciation and amortization expenses		1,975			1,376			5,309			3,814
Other costs		6,165			4,372			17,352			12,326
Total restaurant operating costs		40,826			31,511			113,356			84,790
General and administrative expenses		7,012			5,900			20,776			16,714
Depreciation and amortization expenses		92			85			265			256
Total operating expenses		47,930			37,496			134,397			101,760
Operating income (loss)		1,308			473			(1,897	)		(2,669	)
Other expense (income):
Interest expense		23			23			53			70
Interest income		(436	)		(25	)		(593	)		(75	)
Income (loss) before income taxes		1,721			475			(1,357	)		(2,664	)
Income tax expense (benefit)		41			(2	)		66			13
Net income (loss)	$	1,680		$	477		$	(1,423	)	$	(2,677	)
Net income (loss) per Class A and Class B shares
Basic	$	0.16		$	0.05		$	(0.14	)	$	(0.28	)
Diluted	$	0.16		$	0.05		$	(0.14	)	$	(0.28	)
Weighted average Class A and Class B shares outstanding
Basic		10,485			9,722			10,028			9,714
Diluted		10,807			10,069			10,028			9,714

Other comprehensive income (loss):
Unrealized loss on short-term investments	$	(7	)		—		$	(7	)		—
Comprehensive income (loss)	$	1,673		$	477		$	(1,430	)	$	(2,677	)

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					Accumulated			Total
	Class A					Class B				Paid-in		Accumulated			Other Comprehensive			Stockholders'
	Shares			Amount		Shares		Amount		Capital		Deficit			Loss			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
Stock-based compensation		—			—		—		—		975		—			—			975
Employee stock plan		17			—		—		—		423		—			—			423
Issuance of common stock in connection with follow-on public offering, net of underwriter discounts and issuance costs		1,265			1		—		—		64,298		—			—			64,299
Net income		—			—		—		—		—		1,680			—			1,680
Other comprehensive loss		—			—		—		—		—		—			(7	)		(7	)
Balances as of May 31, 2023		10,101		$	10		1,000	$	1	$	186,845	$	(27,109	)	$	(7	)	$	159,740


	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	)		—