Good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to the Kura Sushi USA, Inc. Fiscal First 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 your presentation. Please note that this conference is being recorded today, January 11, 2021. On the call today, we have Hajime Jimmy Uba, President and Chief Executive Officer; Steven Benrubi, Chief Financial Officer; and Benjamin Porten, Investor Relation Director. I would now like to turn the conference over to Mr. Porten.

Thank you, operator. Good afternoon, everyone, and thank you all for joining. By now, everyone should have access to our fiscal first 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 8-K 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 condition. 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. I would like to begin by welcoming Steve Benrubi who recently joined us as our new CFO. Steve brings to us significant experience from well-established restaurant and retail companies, including Drybar, The Wet Seal, CKE Restaurants and Domino's Pizza. He is well qualified to provide financial leadership and strategic vision to Kura Sushi, and I know we will benefit tremendously from his experience as we execute our long-term growth plans. As you know, the environment surrounding this pandemic is very fluid, especially as COVID cases are on the rise again in certain parts of the country. Despite this uncertainty, I am pleased with the progress with initiatives we put in place at the onset of this pandemic, resulting in sequential sales improvements from the fiscal first quarter of 2020. Let me quickly go through our quarterly results on a high level. Operating conditions remained challenging due to restrictions on indoor dining in California, resulting in 7 out of our 28 restaurants being unable to use their dining rooms at all during the quarter. While restrictions in certain California counties became more relaxed over the course of the quarter in mid-November, new restrictions required us to close our dining rooms of all of our California restaurants. In spite of these operational challenges, we were able to achieve market revenue growth over the prior fiscal quarter due to the steps taken at the onset of COVID. Including retention of store managers and critical kitchen staff, we were able to ramp up operations quickly and efficiently as restrictions allowed. I have been extremely impressed with how nimble our restaurants operations team has been responding to the constant changes in local and state regulations. Turning to our top-line. Total sales for the fiscal first quarter improved sequentially to $9.4 million, an increase of over 70% from fiscal fourth quarter of 2020. Breaking it down by month. We achieved close to 30% month-over-month revenue growth in September, which continued into October with revenue growth of 20% over September. November saw revenue decline by 8% relative to October due to indoor dining restrictions in California enacted in mid-November. Comparable restaurant sales during the quarter also improved to negative 51%. Our costs for September were negative 54%, followed by negative 44% in October and negative 53% in November. When taking into account that we significantly outperformed the quarter weighted indoor seating capacity of 35%, we believe these results demonstrate the continued strength of the Kura experience and its appeal to our guests when we are able to utilize our dining rooms. The ability to offer indoor dining and the Kura experience remains a key factor for strong performance and is best demonstrated by our Texas market, which has weighted indoor seating capacity during Q1 of 63% and was able to offer the full Kura experience resulting in Q1 comps of negative 32% or almost 20% higher than what we saw system-wide. As a result, we remain very encouraged about our consumer appeal and post-pandemic sales recovery. Throughout the quarter, we continued to focus on the initiatives we hope to put in place since the onset of the pandemic. Starting with our online ordering and delivery options, after a brief relationship with Grubhub, we decided to focus our operating efforts with Square due to better integration and more attractive economics. Through our new partnership with Square, we are now able to offer online ordering through our homepage and mobile ordering through the waiting app. While our off-premise business is still young, we have seen tremendous growth in revenue, particularly since rolling out online ordering. During the fiscal first quarter, our total off-premise revenue was $1.3 million, representing continued growth over the previous quarter’s off-premises revenue of approximately $1 million. We continue to see robust growth month over month with off-premises sales of $400,000 in September, $430,000 in October and $470,000 in November, followed by $860,000 in December as we entered our fiscal second quarter. Our fiscal first quarter off-premises mix was 13.8%. And as a reminder, our pre-pandemic off-premise mix was only 1%. Notably, December was the first month where the majority of our off-premises orders were placed online as opposed to through in person or a telephone, confirming a positive impact that the frictionless guest experience can have encouraging guests to use Kura Sushi as an off-premises occasion. We believe Square can be a very exciting partnership for us, and we look forward to working together to further capitalize on this previously untapped off-premises sales potential. We continue to offer outdoor seating in many of our California restaurants as permitted through December and Kura service in all of our open restaurants. However, as you can imagine, it's almost impossible to replicate the Kura experience in true outside of our dining rooms. While these initiatives have helped to mitigate the loss of in-store sales, we are eager to bring back the whole Kura experience to our guests as soon as we can. With that in mind, the health and the safety of our guests and the team members remains our top priority because of our restaurant capacity. We continue to promote a safe indoor and outdoor environment through the use of personal protective equipment for each of our team members, enhanced clinical processes, social distancing sufficient between booths and team member’s health checks prior to the start of each shift. Ultimately, our goal is to give our guests peace of mind while they enjoy the whole Kura experience. In terms of development, as we mentioned on our last call, we opened 3 new restaurants during the fiscal first quarter located in Fort Lee, New Jersey, Koreatown in Los Angeles California and Washington, D.C. Overall, we are very happy with the performance of our new openings especially our Fort Lee location, where sales levels are close to 60% of our pre-pandemic system AUV in spite of New Jersey's 25% seating capacity limitation. While the Koreatown and D.C. locations have faced more immediate external challenges as a result of COVID, we see great potential from these 2 locations once the pandemic subsides. Subsequent to our fiscal first quarter, we have maintained our growth momentum by entering the new market with the opening of our Aventura Hotel location in January. All in all, we remain optimistic about the growth prospects of Kura Sushi. And while we continue to expect a 20% unit growth CAGR over a 5-year period which began in fiscal '19, the ongoing uncertainties of COVID will alter or delay our plans. In summary, while we remain optimistic about our business and its growth potential, we are still operating in an uncertain environment. As we progress through our fiscal second quarter, we expect our business will continue to be impacted by growing COVID cases and particularly by a new set of tough state and local operational restrictions in California that began in November and effectively closed the dining rooms for half of our system. These restrictions have since become even more severe, including a total ban on both indoor and outdoor dining for our California store effective December 6, 2020. While we remain hopeful for a relaxation of these restrictions, we realize that it will be difficult to maintain the sales momentum we saw in the past few quarters while these restrictions remain effective. This being said, we remain confident about our post-pandemic recovery and appreciate the financial security that is provided by our relationship with our parent company. Lastly, I would like to thank all of our team members for their resilience and dedication in serving and keeping guests and themselves safe and healthy during this challenging time. I believe that together we will navigate these near-term challenges and emerge a stronger company when the pandemic subsides. With that, let me turn the call over to Steve Benrubi to briefly discuss our liquidity and the cash balance situation. Steve?

Thank you, Jimmy. Let me start by saying how excited I am to join the Kura team. While the pandemic has created a lot of uncertainties, we have the right team in place to weather these near-term challenges. Let me briefly go through our liquidity and cash flow. As of the end of the quarter, we had $2.7 million in cash on hand and $3 million in debt as we began drawing on our revolver to meet our planned capital expenditures for fiscal year 2021. As a reminder, we have expanded this revolving line of credit to $35 million from Kura Sushi Japan and have also extended the payback period from 1 year to 5 years from each borrowing date. For the fiscal first quarter, our weekly expenditures were within our expectations at approximately $825,000 per week. Please note that our Q1 burn rate is higher than our burn rate expectations for subsequent quarters during this fiscal year, primarily due to capital spending from our front-loaded store opening schedule and certain annual insurance payments that fell in the first quarter. To illustrate, our weekly expenditure expectations for the remaining 3 quarters in our fiscal year excluding restaurant level expenditures are expected to range from $120,000 to $160,000 for CapEx and $250,000 to $270,000 for G&A. Lastly, as a reminder, due to the ongoing uncertainty driven by COVID-19, we will not issue additional financial guidance for fiscal year 2021 at this time. Now, I'll turn the call back to Jimmy.

This concludes our prepared remarks. We are now happy to answer any questions you have. Operator, please open the line for questions. As a reminder, during the Q&A session, I may answer in Japanese before my response is translated into English. Please bear with us.

Our first question comes from James Rutherford with Stephens Inc.

And Steve, welcome to the team. It's good to speak with you here on your first earnings call. It looks like your off-premise mix declined a little bit sequentially just in terms of percentage, 17% last quarter, down to 14% this quarter. While on a dollar basis, it actually grew sequentially, which is certainly great to see. I'm just curious, Jimmy, where you see the off-premises mix landing when you've kind of fully recovered to pre-pandemic unit volumes? And sort of additional clarification here is, are you offering delivery today since you've canceled that agreement with Grubhub? Or are you still offering it in some other way?

Sure, James, thank you for your question. We expect our off-premises business to continue to grow following the pandemic, with some gains remaining incremental. A good example is Texas, where in Q1, seating capacity was limited to about 50% to 75%, allowing us to use our full conveyor belts and provide the complete Kura experience. This was our least restrictive operating environment during that time. Historically, our off-premises mix has been 1%, but in Q1 specifically for Texas, it was in the mid-single digits, reflecting the more permissive conditions. Given the off-premises growth in Texas, we anticipate that our off-premises business will remain strong after the pandemic. After switching from Grubhub to Square, we still offer delivery through Square's partnerships with DoorDash and Postmates. The delivery option has been available continuously since we implemented Grubhub in August. There is a delivery fee associated with orders from DoorDash or Postmates, but that cost is borne by the guests. To illustrate the difference, our off-premises mix with Grubhub was about 80% pickup and 20% delivery, while with Square, it's 96% pickup, showing a clear preference for pickup among guests currently.

Perfect. And just one follow-up on Texas specifically. If I recall last quarter, you talked about Texas, I think, running a negative 25% comp, and I think it was negative 35% here in December. Was that just consumers hunkering down a little bit more as cases rose toward the end of your quarter? Or is something else in play that caused that little bit of deceleration in your Texas market specifically?

The main factor influencing our performance in Texas was the change in restrictions. In the fourth quarter, we were generally able to hold 75% seating capacities throughout Texas, while in the first quarter, some parts of our Texas system were restricted to only 50% seating capacity. This was a significant factor. With the rise in COVID cases in Texas, it may also influence consumer choices. In Texas specifically, our weighted seating capacity for the quarter stood at 63%, but the Texas-specific comparisons significantly outperformed the weighted seating capacities, clearly showing the strong demand from our customers. We are encouraged by their strong response and ongoing support. We are well-positioned to meet demand once the restrictions are lifted.

Okay. Perfect. And again, Steven, welcome to the team.

Thank you, James.

Our next question comes from Peter Saleh with BTIG.

I just wanted to ask, it seems like the pandemic is dragging on longer than most people had anticipated, and I think a lot of you guys had expected, I guess, at least initially. So how is it that you're thinking about the unit growth now going forward? What are the expectations for the units for this year? And when you start to think about looking out another year or so, are you being a little bit more cautious? Are you looking at different sites than you otherwise would have taken? Just some thoughts around the unit growth and maybe how that will look in 12 to 18 months from now?

Hey, Peter, I want to touch on the numbers briefly before handing it over to Jimmy for more details on our growth plan moving forward. As we mentioned in our prepared remarks, we've made significant investments in our capital plan and store openings in fiscal '21. Currently, we have four stores open and three more under construction, with at least two, possibly all three, expected to open this year. Given the investments we've made in these locations, we believe it’s important to complete their construction rather than scale back. Our spending plan for fiscal '22 includes investments for new store openings, which will begin in the late third quarter and extend into the fourth quarter. This is included in the $120,000 to $160,000 weekly CapEx run rate we provided for the past three quarters. We have some flexibility in the coming months to decide whether to proceed with these plans or not. Our goal is to maintain a 20% compounded annual growth rate in our store count. However, like everyone else, we are keeping an eye on the progress of the COVID vaccine and the timing of any lifting of restrictions, which may lead us to adjust our spending plan later this year. With that, I’ll turn it over to Jimmy.

In addition to everything Steve said, just like to explain some of the decision-making that's been driving this. We run a variety of different financial models that assume different pandemic lengths, different unit counts for whichever period. And while it's certainly true that we'd be able to make some CapEx savings if we were to slow construction right now, considering the fact that we have a 300 unit white space potential, which is absolutely massive, and this was before the pandemic, before there were lots of closures by independent restaurants. And so we expect that white space potential to persist. And there's just tremendous real estate opportunity. And so we want to be ready to capture all the revenue once we return to normalcy. And looking back at this 3, 4 years from now, we think that we will be very much vindicated in the decisions that we've made to continue with our unit growth now. Some additional color. If you look at the most recent IBIS report, it notes just how fragmented the sushi industry is. They say the top 2 players control less than 1% of the industry, which is a level of fragmentation that is unimaginable in any other restaurant space. And so what this means is that there's an overwhelming majority of individually operated sushi restaurants. Unfortunately, the pandemic has had a disproportionate financial impact on the sushi market, and we've seen a disproportionate number of closures just because the majority of these are individually operated. And so the demand, we believe, for sushi remains unchanged or has even increased due to all the pent-up demand from staying inside. And so we think there's tremendous opportunity, and we want to be ready to capture it.

Can you comment on the real estate situation? Are you seeing different or better opportunities in real estate? Are there more tenant allowances? I assume there's some offset to the negativity in the market right now that could benefit us in the long term.

The biggest tailwind we're seeing in terms of real estate would just be the sheer availability of quality real estate, this is obviously due to the pandemic, but also because of the work done by our new CEO who has done an excellent job. The pipeline that we've built for fiscal '21 and '22 is of a quality that is far off surpasses anything that we've seen in the past. The greater pool to draw from has resulted in a really high-quality pipeline. And so we're extremely excited for the units that we'll be opening this year and next. We've seen minor favorability in terms of rent and tenant allowance. But again, the overwhelming things here that is going to be a tailwind for us is certainly the availability of very choice locations.

Our next question comes from Jeremy Hamblin with Craig-Hallum.

I wanted to start by understanding the current division of business between off-premises and in-store. What breakeven sales volumes do you need to achieve, excluding your Q1 capital expenditures, moving forward? What should your same-store sales or average unit volume be to break even on cash flow?

I'll speak a little bit to that, Jeremy. If you think about our more mature locations where they were running at $3.5 million AUV pre-COVID, something along the order of 50% of their prior volumes would put them in a place where we could be breaking even on a restaurant level cash flow basis. If you take the chain as a whole, including all of our new restaurants that are ramping up and have some additional cost, training and some of the supplies and things like that and just the ramping in general of the business, it's more like a chain average of about 65% of prior, call it, pre-COVID type AUV levels would get us to restaurant-level margins around breakeven. And if you're thinking in terms of the business as a whole, inclusive of general and administrative expenses, you're approaching almost 100% pre-COVID AUVs, which would be the point where we would be breaking even on that operating cash flow level in the business. So that's certainly where our focus is going to be as we come out of the COVID restrictions as the next step is getting back those goalposts, if you will, along the way.

Great. That's very helpful. Regarding liquidity, you've already borrowed $3 million on the revolver as of the end of Q1 and subsequently taken down another $6 million. Considering your relationship with Kura Japan, is there potential for that revolver to expand from $35 million to a higher amount if needed, especially if the pandemic continues? Can you give us an idea of whether you believe access to capital is secure? If not, would that likely impact your ability to pursue the opportunity for 20% unit growth?

I want to provide some context regarding our line expectations, and I'm sure Jimmy and Ben can elaborate on the situation in Japan. Currently, we have borrowed $9 million on the line, which includes $3 million through the end of Q1 and an additional $6 million in Q2 as our capital plan has been implemented. Looking ahead to the fiscal year-end, based on our discussions about the CapEx run rate of approximately $120,000 to $160,000 weekly going forward from Q2, and G&A remaining similar to the Q1 run rate, these investments would raise our borrowings into the high teens by year-end against a total availability of $35 million. The key variable is the restaurant level, which saw about $70,000 a week in cash usage during Q1. If that trend continues until the fiscal year-end, total borrowings could reach around $21 million to $22 million. However, this projection is contingent on many uncertainties beyond our control in the coming weeks and months. This is the borrowing level we are considering by year-end, and for additional capacity, I will let Jimmy and Ben provide more insights.

So to add on to what Steve just discussed, while we do believe that the $35 million revolver should carry us for our current CapEx plans, should the pandemic worsen, we have a variety of capital raise options that we're considering. One of them would be to expand the revolver with our parent. In terms of the parent's ability to expand the revolver, we'd like to just touch on some of their most recently publicly disclosed financials. In October and November, they had sales comps of greater than 30%, and their cash on hand is $180 million. So they've got a very strong balance sheet. Their performance is strong. They have ample breathing room. That being said, whenever we do decide to do a capital raise, that would just be one of the options, and we'll make sure to take the option that is in the best interest of our shareholders.

Great. Helpful color. Enviable results that they're posting for sure. I wanted to also just touch on 2 other things. First, in terms of just clarifying the split of your Texas stores versus your California stores, I think what I caught was in December, Texas was down 35% versus California down 82%. Could you clarify what that was for Q1 of the split between Texas and California? I didn't catch that in the prepared remarks.

The full year comparisons for California declined by 63%. For the quarter, Texas showed a decrease of 32%, while California experienced a drop of 63%. This clearly demonstrates how different operating restrictions affect our revenue.

And for the most part, your Texas stores were capacity limits of 50% to 75% and California was more like 25% to 50% during Q1, correct?

Yes, you're correct. In Texas, we operated at 50% to 75% seating capacity. The 63% weighted indoor seating capacity referenced earlier pertains to that market. In California, we faced restrictions of 0% to 25% seating capacity. As mentioned in the prepared remarks, 7 of our locations were unable to use their indoor dining rooms at all, which reduced California's total weighted indoor seating capacity to around 10%. There is a significant difference between these markets in terms of how much of our stores we were able to use.

Great. Helpful color. And then one last thing for me. In terms of your delivery, it sounds like the Square partnership is pretty attractive, and you've seen pretty significant acceleration. I was wondering if you could provide a little more color about the economics of your deal with Square and how that compared to your prior economics with Grubhub?

In terms of the fee structure, for Grubhub, they were targeting approximately 20% for a pickup order and about 30% for delivery order, and we adjusted our pricing on the Grubhub platform to offset those margin pressures. For Square, they charge $0.30 per transaction plus credit card processing fees, which we would be paying in either case. So the per transaction fee for Square is truly minimal. And so we're able to offer the same prices on our Square platform as we do in restaurant. And so in terms of the attractiveness to our guests, the better option is obvious. The major transition from Grubhub to Square happened over November to December. November's total off-premises sales were about $470,000. Whereas once we had full Square implementation in December, the off-premises sales almost doubled to $860,000. I mean it's certainly true that the operating conditions have changed, and we now have a full ban on indoor dining in California, but we really do think that the ease of use that Square provides as well as our ability to price the same way that we do in restaurants has done a tremendous job in terms of attracting our guests. And so that $0.30 per transaction fee has been more than offset with the gain in volume.

Our next question comes from Andrew Strelzik with BMO Capital Markets.

My first question is about the new white space study you commissioned. You've mentioned some competitive changes, particularly in the sushi space. Are you able to share any findings from that study, or when do you expect to provide insights on what you've learned?

There hasn't been a lot of specific restaurant data related to Japanese restaurants or sushi released by Black Box or other typical restaurant analytics companies. We have been analyzing Yelp to understand the extent of closures in the markets where we operate. So far, it shows a significant number of closures, and we anticipate additional revenue as we move past the pandemic. The white space study and the analytics risk analysis model are still being processed, and we hope to share that information soon, though not today. Regarding our existing system of 29 units, which includes the latest opening in Aventura, we have been focusing on Japanese and sushi restaurants and have verified our findings with Yelp. Given the closures among nearby competitors, we expect to benefit from the unmet demand.

Okay. That's very helpful. My next question, as you've seen the transition to online orders here in December really, can you talk about or do you see any differences between average check or order sizes, number of items ordered between online orders versus when it was historically, the call-in orders and maybe how that compares to a typical dine-in transaction?

In terms of the ticket averages, we haven't really seen a change since we've moved to Square. The difference has really been in volume. The change in pricing are just savings that we passed along to our guests.

Okay, got it. And then just 2 last things for me. The first one, you had been piloting a loyalty program. And I'm just curious how you see that as a potential lever. As the operating environment starts to normalize, whether it's getting sign-ups as people come back to the stores and then incentivizing the frequency. I'm just curious, do you see that as an opportunity to really rebuild the volumes as capacity restrictions maybe go the other way and start to ease?

The rewards program has been incredibly beneficial for us during the pandemic. Recently, we realized its value while we were focusing on our off-premises business. Working with Grubhub revealed that 80% of our pickup orders were from existing customers. With this insight, we launched promotions in December aimed at our rewards members, which were very well received. Our guests truly appreciate us, and utilizing this database to engage with our loyal fans has proven to be very effective. When we reopened in Texas, we sent tailored emails to rewards members based on their regions, informing them about reopening dates and capacities. When we reinstated the conveyor belts, we also reached out to specific areas about that update. This strategy allowed us to increase seating capacity while adapting to regulatory changes. We have seen a monthly increase of about 3,000 rewards members during the pandemic, totaling around 84,000 members now. We believe this program will remain a vital tool for promoting our off-premises sales and indoor dining, as well as for advertising limited time offers and informing customers about store and dining room reopenings. We're also excited to announce that our new app version has launched, which consolidates the rewards program, waiting app, and online ordering into one system. We anticipate this will encourage more sign-ups, further enhancing the rewards program's contribution to our business.

That's great insight, and I look forward to trying out the new app. My final question is for Steve. Given that you're new to the role, I’m interested in any initial observations or surprises you’ve encountered. Also, what can you share regarding your priorities moving forward?

Sure. Honestly, there's been no surprises. I think it's been more about validating what I hope to see as the growth opportunity in the business. And obviously, a lot of that doesn't come to fruition in the numbers until we can get past the COVID environment. Organizationally, I think there's some things that, as a team, Jimmy and his other executives had already been working on, and I'm certainly on board with them on what our priorities need to be around leadership in the organization and setting us up to scale the business properly. But I really felt after a month here now, the company is running toward a very successful growth story. And I'm jumping on board at a good time where I can help make the right decisions around organization and also the growth strategy along with our new Chief Development Officer. But it's all been very validating in a positive way.

Our last question comes from George Kelly with ROTH Capital Partners.

I want to follow up on a previous question. You mentioned the rapid recovery of unit level economics with your parent company in Japan, and I was curious about the extent of that growth. How quickly has that business bounced back? Is it now exceeding pre-pandemic levels? I believe you mentioned it was 30%, and I want to ensure I understood that correctly.

So for some context, we just really want to emphasize that the pandemic situation in Japan versus the pandemic situation here is completely different. The 30% plus comps that we were discussing for October and November, the infection rates in Japan were exceptionally low and restaurateurs weren't seeing any of the restrictions that we're seeing in the United States. And so it's a very different game. So we just wanted to clarify that before discussing. So in terms of the October and November comp, there were 2 major tailwinds for us. One was our reward toy partnership with this cartoon called Demon Slayer, which just released a movie. I believe it's outsold Spirited Away. It might be the best-performing Japanese movie of all time in Japan. And so that has been a huge guest offer stand. The other would be a government support program with the grammatically incorrect title, Go To Eat, where they would help subsidize restaurant bills for consumers. And that was a very, very meaningful support for the entire restaurant industry during its implementation. But those are both temporary things. And so we don't expect those trends to continue indefinitely. Yes. The 30% is a tough thing to keep up or lap.

Yes, definitely. It signals what the future holds when things normalize. People want to return to dining out. This leads to my next question regarding the dynamic you've described, including the closures, your units often exceeding capacity limits, and the strong off-premise business. It seems you’re not only maintaining your position but perhaps even more optimistic about long-term opportunities. I understand the near-term conditions are challenging to forecast. However, why not consider raising additional capital or accelerating unit openings, or at least increasing your expansion plans to achieve more than 20% growth over the next 3 to 5 years given these promising prospects? Why not fully capitalize on this potential?

So George, you're completely right that we are more bullish than ever about our long-term opportunities. We think we're very, very well positioned to become the market leader and really the first truly national sushi brand. And so looking to the future, if the expectations that we currently have pull out and that we do see a lot of competitors close, our sales recovery, we have consistent comp recovery and comp growth, we're certainly open to the possibility of accelerating our growth and doing a capital raise to support that growth. But at this point, we feel that it's too early to give concrete details. But again, every option is on the table for us. We're very much excited for what we're going to be doing over the next several years.

Okay. Great. And then last question for me is related to the incrementality of the off-premise business. And do you have any way of comparing customer lists? Or do you know who these customers are? And how do you measure whether or not they're new to the brand?

In terms of customer data, Grubhub doesn't share much information. However, with the 80% off-premises mix comprising mostly pickup versus delivery, we believe that most of those orders are coming from existing customers. Now that we've transitioned to Square and have improved data access, we're eager to utilize that data to better connect with our guests. Additionally, in Texas, even with 50% to 75% seating capacity, the off-premises mix is significantly higher than the 1% we previously saw, and we're confident about the growth of our off-premises sales following the pandemic.

Yes. As a follow-up to that, have you invested significantly in advertising to promote it, particularly through digital channels or messages tailored to that customer?

We've mainly promoted our off-premise sales through our rewards database, which has been both free and highly effective in engaging those customers. Additionally, we've shared information on our social media platforms. While we haven't yet reached a high level of data sophistication for targeted messaging, our excitement about partnering with Square is rooted in that potential.

Thank you. There are no further questions at this time. I would like to turn the floor back over to management for any closing comments.

Thank you for your time, and we look forward to seeing you at our next earnings call. Thank you.

Thank you.

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation, have a wonderful evening.