Greetings, and welcome to The ONE Group Hospitality, Inc. First Quarter 2026 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please signal an operator. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Nicole Thaung. Please go ahead.

Thank you, operator, and hello, everyone. Before we begin our formal remarks, let me remind you that part of our discussion today will include forward-looking statements. These forward-looking statements are not guarantees of future performance, and you should not place 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. Please also note that these forward-looking statements reflect our opinion only as of the date of this call. We undertake no obligation to revise or publicly release any revisions of these forward-looking statements considering new information or future events. We refer you to our recent SEC filings for a more detailed discussion of the risks that could impact our future operating results and financial condition. During today's call, we will discuss certain non-GAAP financial measures, which we believe can be useful in evaluating our performance. However, the presentation of these measures or other information should not be considered in isolation or as a substitute for results prepared in accordance with GAAP. For reconciliations of these measures, such as adjusted EBITDA, restaurant operating profit, comparable sales, annual adjusted operating income, and total food and beverage sales at company-owned, managed, licensed, and franchised units to GAAP measures, along with a discussion of why we consider these measures useful, please see our earnings release issued today. With that, I would like to turn the call over to Emanuel Hilario.

Thank you, Nicole, and good afternoon, everyone. I appreciate you joining us today. I want to start where I always do by thanking our teammates. Every day, our teams across every brand and market show up focused on creating memorable experiences for our guests. These days, consistency is more important than ever and I appreciate all that they do in executing with excellence and upholding the Vibe Dining experience that defines our brands. Today, I will begin with an overview of our first quarter performance, and then I will walk you through our progress with respect to our strategic priorities before turning it over to Nicole for the financial details. We are excited about our continued momentum. Our operational performance is resulting in strong financial results. Total GAAP revenues grew year over year and comparable sales are sequentially better than the previous quarter. Owned restaurant cost of sales improved to 19.4% from 20.8% in the prior-year quarter. Operating income increased 30%, adjusted EBITDA increased 12.1%, and capital expenditures, net of tenant improvement allowances, reduced 23% year over year as we prioritize capital efficient growth and free cash flow generation. Total GAAP revenues for the first quarter were $212.8 million, an increase from $211 million in the same quarter last year. First quarter consolidated comparable sales were relatively flat at negative 0.3%, representing a continuation of the positive momentum we experienced exiting the fourth quarter. For clarity, consolidated comparable sales are reported on the same number of days year over year. Looking at each brand, U.S. STK total comparable sales reported another positive quarter at 1.4%. Benihana comparable sales were flat, reflecting stable demand for the brand, and our growth concept comparable sales, while down 4.9%, represented the strongest quarterly performance since early 2023, and growth transactions were positive for the quarter. Each segment continues to improve from the previous quarter. What is most notable, particularly in a period of elevated inflation, is the strength of our margin performance, a direct result of the hard work we have been doing across our supply chain, including, most importantly, beef sourcing. Restaurant operating profit increased 11% to $40 million, while restaurant operating profit margins expanded 100 basis points to 19%. The margin improvement was driven by a 140 basis point reduction in food and beverage costs, reflecting menu optimization, integration synergies, and supply chain efficiencies. We also achieved a 40 basis point improvement in restaurant operating expenses as a percentage of restaurant revenues. STK delivered particularly strong results with restaurant operating profit margins expanding 280 basis points to 21%, while Benihana margins improved 130 basis points to 21%. Adjusted EBITDA grew 12% to $29 million. The improvement was driven by cost management discipline, our contracted beef pricing, continued Benihana integration synergies, and the benefit of portfolio optimization actions. The key point I want to make is that these results are execution driven. We are not dependent on macroeconomic recovery or shifts in consumer sentiment, but would certainly welcome them. Over the past eighteen months, we have implemented a series of strategic initiatives—operational improvements at Benihana, the barbell strategy at STK, portfolio optimization across the growth concepts, and rigorous cost management. It is those initiatives that are driving our performance. Now, let me update you on our four strategic priorities. Priority one, accelerating comparable sales through execution. Our first strategic priority is accelerating comparable sales through disciplined execution. I want to highlight that Valentine’s Day 2026 was a record-breaking day for our portfolio. Easter was also strong across our brands, with sales up high single digits compared to last year. These results are a testament to both the operational capabilities we have built and the strength of our brands as a celebration destination. As we look ahead, we are gearing up for what we expect to be a strong Mother’s Day and graduation season. Both occasions are critically important to us and our teams are focused on delivering exceptional guest experiences during these high-volume periods. Through the first five weeks of the second quarter, the company has positive comparable sales and transactions. Momentum has continued through all of our brands with STK and Benihana so far delivering positive comparable sales, and the growth concepts sequentially improving. We have made operational improvements to position the brands for a strong spring and summer and are seeing encouraging trends as happy hour has been a real driver and is working well, while lunch traffic is also returning. Our Friends with Benefits loyalty program continues to gain momentum. Since launching last year, we added over 8,000 new organic members into the program per week. Newly enrolled guests continue to show strong repeat participation and we are seeing loyalty members spend more per visit compared to non-loyalty guests. We will be actively targeting our Friends with Benefits members for Mother’s Day and graduation celebrations, leveraging personalized outreach to drive traffic during these occasions. We continue to focus on growing membership, driving organic sign-ups, and increasing engagement within the program to strengthen brand connection and repeat visits. We are driving growth through seasonal innovation, launching new food and beverage menus four times a year across all brands. This keeps our offerings fresh, differentiates us from competitors, and generates strong engagement on social media. We are expanding our off-premises business with a focus on core operations. Highlights include burgers and sides, which continue to drive strong takeout and delivery volume across all brands, and Benihana and RA Sushi’s fried rice burritos for takeout and delivery, which have performed well. Priority two, capital efficient growth with disciplined expansion. We currently have two company-owned STK restaurants and one company-owned Benihana restaurant under construction: an STK in Phoenix, Arizona, a relocation of STK Downtown in New York City, and a Benihana in Seattle, Washington. We intend to open six to ten new venues in 2026 as we prioritize locations requiring $1.5 million or less in net capital investment to open. Capital expenditures, net of TI allowances, were 22% lower at $10 million in the first quarter compared to the year-ago period. Of this amount, $6.5 million was related to new construction with the remainder supporting existing restaurants. This reduction reflects our disciplined approach to capital allocation as we focus on high-return, capital efficient growth. On the franchise side, our 10-unit California Benihana and Benihana Express development agreement continues to progress, and our commitment for a franchised Benihana and a licensed Benihana Express in the Florida Keys remains on track. The Benihana Express format continues to generate strong franchise interest as it delivers the Benihana food experience without the teppanyaki tables, making it more labor efficient and more appealing from a cost-of-entry perspective for potential franchisees. In January, we completed the relocation of our Kona Grill in San Antonio, Texas to a smaller footprint location. And in February, we converted a franchised Benihana in Monterey, California to a company-owned restaurant to accommodate a long-term franchise partner who wished to retire. Both are tracking in line with our expectations. Priority three, portfolio optimization to improve returns. We have made significant progress improving the quality and returns of our portfolio. As we discussed last quarter, we are converting growth locations to higher-performing STKs and Benihanas. In 2025, we exited six RA Sushi and Kona Grill locations. And in January 2026, we exited one additional RA Sushi location that did not fit our conversion criteria. The remaining growth locations are healthy, profitable restaurants in quality real estate and we expect them to generate approximately $10 million in restaurant-level EBITDA and over $100 million in revenue. Five growth locations closed on 01/05/2026 for conversion to either Benihana or STK, with construction in progress and all five expected to reopen by the end of 2026. Each conversion is expected to cost between $1 million and $1.5 million and to be EBITDA accretive. As a reminder, our first conversion, the RA Sushi to STK in Scottsdale, Arizona, is currently operating at a run rate of approximately $7 million in annual sales, delivering an increase of over $4 million in sales and a return on investment of approximately four times. This validates our conversion strategy and gives us confidence in the pipeline. As we have said before, we will continue to evaluate the portfolio as leases expire. We have approximately one to two growth leases that come up each year as part of the natural end-of-cycle process, and we will make decisions on a case-by-case basis. Priority four, maintaining balance sheet strength and flexibility. Our fourth priority for 2026 is conserving cash and optimizing the balance sheet. We are significantly reducing discretionary capital expenditures, targeting company-owned development to projects requiring on average $1.5 million or less in build-out costs. We are also working through our existing lease pipeline rather than adding new commitments. This discipline gives us flexibility in an uncertain environment and positions us to invest selectively in the highest-return opportunities. We finished the quarter with $6.6 million in cash, cash equivalents and restricted cash. We have $33.7 million available under our revolving credit facility. Under current conditions, our term loan does not have a financial covenant. Cash flow from operations was a strong $22 million compared to $9 million in the prior-year quarter. This improvement was primarily attributable to increased net income and collections on holiday credit card receivables. We also reduced our debt with $2 million in repayments under the credit agreement and $7 million in repayments on the revolving facility, bringing our revolving facility balance to zero. As we discussed on our previous call, we expect to generate free cash flow in 2026. Debt reduction and creating shareholder value remain a top priority. Before I turn it over to Nicole for the financial details, I want to reiterate the items that I have outlined today are fundamentally execution driven and within our direct control. We are focused on strategic initiatives that position us to deliver results regardless of broader economic trends. With that, I will turn the call over to Nicole.

Thank you, Manny. As a reminder, beginning this year, we are reporting financial information on a quarterly basis using four thirteen-week quarters, with the addition of a fifty-third week when necessary. For 2026, our fiscal calendar began on 12/29/2025, and our first quarter contained 91 days. Consolidated comparable sales are reported on the same number of days year over year. Let me start by discussing our first quarter financials in greater detail, before introducing our outlook for 2026 and reiterating our fiscal 2026 guidance with the exception of an update to our expected effective tax rate. Total consolidated GAAP revenues were $212.8 million, increasing 0.8% from $211.1 million for the same quarter last year. Growth was driven by two primary factors: the fiscal calendar shift that moved New Year’s Eve into fiscal 2026, which added approximately $8.3 million to our top line, as well as contributions from new openings and conversions completed in the second half of 2025. These gains were partially offset by the closure of underperforming growth locations as part of our portfolio optimization strategy, which reduced revenues by approximately $1.8 million. Included in total revenues were our company-owned restaurants’ net revenues of $209.3 million, which increased 0.9% from $207.4 million for the prior-year quarter. The increase was primarily due to the change in the fiscal year calendar, which resulted in a shift of New Year’s Eve into fiscal year 2026 and the sales generated by eight new restaurants. These gains were partially offset by a decrease in revenue from the growth restaurants closed and a 0.3% decrease in comparable restaurant sales. Management, license, franchise and incentive fee revenues decreased slightly to $3.5 million from $3.7 million in the prior-year quarter. The decrease is primarily attributable to the exit of a management agreement in Scottsdale, Arizona, in 2025. As Manny noted, we converted a former RA Sushi to a company-owned STK in that market. Now turning to expenses. We continue to implement targeted cost management initiatives. Last year, we made strategic adjustments to our beef tenderloin sourcing and have contracted pricing through September 2026, eliminating our exposure to significant U.S. base price fluctuations and providing significant cost certainty. We also optimized our labor structure across the business last year by improving scheduling management, and we are still realizing synergies from the Benihana acquisition. Company-owned restaurant cost of sales as a percentage of company-owned restaurant net revenue improved 140 basis points to 19.4% from 20.8%. This improvement was primarily due to menu optimization, integration synergies, supply chain initiatives, increased menu pricing, and more efficient cost of sales associated with New Year’s Eve and our record-breaking Valentine’s Day. Company-owned restaurant operating expenses as a percentage of company-owned restaurant net revenue improved 40 basis points to 61.7% from 62.1%. This reflects improvement in labor costs. Restaurant operating profit, excluding growth concepts restaurants closed, was $39.9 million, or 19.1% of owned restaurant net revenue, improving by 100 basis points from 18.1% in the prior-year quarter. On a total reported basis, general and administrative costs increased $1.9 million to $15 million from $13.1 million in the prior-year quarter, driven by inflation on salaries and bonus, higher audit-related fees, investments in information technology, specifically AI-related technologies, and increased marketing expenses. When adjusting for stock-based compensation of $1.1 million, adjusted general and administrative expenses were $13.9 million compared to $11.5 million in 2025. As a percentage of revenues, adjusting for stock-based compensation, adjusted general and administrative costs were 6.0% compared to 5.4% in the prior year. Depreciation and amortization expense was $10.4 million compared to $9.8 million in the prior-year quarter. The increase is attributed to new restaurants opened during fiscal year 2025. Lease termination and restaurant closure expenses were $2 million for this quarter, primarily as a result of the growth portfolio optimization, which included $0.5 million in non-cash expenses related to closed restaurants. Preopening expenses were approximately $1.5 million, primarily related to preopening rent for restaurants under development, including $0.5 million in non-cash rent and payroll costs for Kona Grill Landmark, opened in January 2026. Preopening expenses decreased by $0.2 million compared to the prior-year period. Transition and integration were $0.5 million, down significantly from $3.7 million in the prior-year quarter, as we are nearing completion of the integration of the Benihana and RA Sushi acquisition. Operating income was $13.9 million compared to operating income of $10.7 million in 2025, an increase of $3.2 million primarily due to improved restaurant operating profit and the reduction in transition and integration costs. For a reconciliation, please refer to our press release issued earlier today. Interest expense was $9.7 million compared to $9.8 million in the prior-year quarter. Our weighted average interest rate was 10.2% compared to 10.9% in the prior-year quarter. Provision for income taxes was $1.2 million compared to $0.3 million in the prior-year quarter, as a result of an increase in pre-tax book income. Net income attributable to The ONE Group Hospitality, Inc. was $3.2 million compared to net income of $1 million in 2025. Net loss available to common stockholders was $6.2 million, or $0.20 net loss per share, compared to $6 million in 2025, or $0.21 net loss per share. Adjusted EBITDA attributable to The ONE Group Hospitality, Inc. was $28.8 million compared to $25.7 million in the prior-year quarter, an increase of 12.1%. We finished the quarter with $6.6 million in cash and cash equivalents and restricted cash and cash equivalents. We have $33.7 million available under our revolving credit facility, subject to certain conditions. And as Manny said, as of quarter end, we had no borrowings outstanding on our revolving facility, nor does our term loan currently require a financial covenant. Now I would like to provide some forward-looking commentary regarding our business. This commentary is subject to risks and uncertainties associated with forward-looking statements as discussed in our SEC filings. We remind our investors that the actual number and timing of new restaurants for any given period is subject to factors outside of the company's control, including macroeconomic conditions, weather, and factors under the control of landlords, contractors, licensees, and regulatory and licensing authorities. Based on the information available now and the expectations as of today, we are issuing the following financial targets for 2026. Beginning with the top line, we project total GAAP revenues of between $840 million and $850 million, which reflects our anticipation of consolidated comparable sales of 1% to 2%. Management, license, franchise and incentive fee revenue are expected to be approximately $3 million to $4 million. Total company-owned operating expenses as a percentage of company-owned restaurant net revenue between 81%–82%. Total G&A, excluding stock-based compensation, between $13 million and $14 million. Adjusted EBITDA of between $24 million and $26 million. And finally, restaurant preopening expenses of between $1 million and $2 million. Based on the information available to us now and our expectations as of today, we are reiterating the following financial targets for fiscal year 2026, with the exception of increasing the range of the effective tax rate. We project total GAAP revenues of between $840 million and $850 million, which reflects our anticipation of consolidated comparable sales of 1% to 3%. Management, license, franchise and incentive fee revenues are expected to be between $14 million and $15 million. Total company-owned operating expenses as a percentage of company-owned net revenue of approximately 82% to 83%. Total G&A, excluding stock-based compensation, of approximately $53 million. Adjusted EBITDA of between $100 million and $110 million. Restaurant preopening expense of between $5 million and $6 million. An effective income tax rate of approximately 10% to 20%. Total capital expenditures, net of allowances received from landlords, of between $38 million and $42 million. And finally, we plan to open six to ten new venues. With that, I will now turn the call back to Manny.

Thank you, Nicole. Before we open up for questions, I want to emphasize how excited we are about our business. Although the current environment remains challenging, our future looks bright. With our proven ability to execute, strengthened portfolio and expanded franchise capabilities, we are well positioned to capture significant opportunities ahead of us. We thank you for your continued support and look forward to sharing our progress in the quarters ahead. And as always, a special thanks to all teammates all over the globe that live our mission every day—creating great guest memories by operating the best restaurants in every market by delivering exceptional and unforgettable guest experiences to every guest every time. Nicole and I look forward to your questions. Operator,

Thank you. We will now open the call for questions. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star and then one. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. The first question we have is from Joe Gomez of Noble Capital Markets. Please go ahead.

Good afternoon, Manny and Nicole. Thank you for taking my questions. I just want to start. The revenues were a little below what the guide was for the first quarter, and the comps were a little off from where the guide was. Maybe give us a little more color there, Manny, on what transpired during the quarter to cause that slight miss?

Hi, Joe. The only thing that was less than we expected in the quarter was the volume at our STKs in malls. This is really the first year where we have had two restaurants fully operating in the first quarter in the mall. I think that the first quarter is a little different from the other quarters for those restaurants. So the seasonality of our mall STKs was a little bit different than what we expected. Other than that, the quarter was solid. The only other noise in the quarter was spring break this year, which had a lot of variation in how people took their holidays, and Easter being much earlier created a different cadence of sales in the year. But overall, I thought the business was very strong in all our brands.

I think also last quarter, you talked about the conversions—you were hoping to have them all done by mid-July, and now it sounds like at the end of the year. Anything there? Is it just extended construction cycles or being a little more conservative in the conversion opportunity?

No. It is the pacing and resources to reopen them properly. They are reloads and conversion sites, but you still have to go through the full training cycle. The timing of these restaurants is based on how we feel about the right pace of opening the units without being negatively impactful to operations. It is just timing and pace, making sure that we are moving our opening teams to the right places at the right time. It is an internal judgment relative to when we want to open the restaurants.

Okay, great. And then last one for me, I will jump back in queue. Anything new on the franchising front or some more of the nontraditional venues? You had some success that you reported in the past couple of quarters, but just wondering if there is new in the pipeline there.

Franchising continues to generate lots of interest. We are actively talking to prospective partners and have increased resources focused on securing new deals. Progress is going well and interest is particularly high for Benihana. I am very pleased with the progress and feel positive about the outlook relative to franchising, especially for Benihana.

Great. Thank you. I will get back in queue.

Thank you, sir.

The next question we have is from Anthony Lebiedzinski of Sidoti & Co. Please go ahead.

Good afternoon, everyone, and thank you for taking the question. Manny, did you see any notable regional differences in terms of your same-store sales performance in the quarter?

Yes. One market that stood out was Texas. We did see different trends there, and within Texas, Dallas showed a bit more softness in the business. Other than that, results were relatively similar across markets. Coming into the second quarter, we have a lot of momentum and sales are positive for the company in both sales and transactions. That momentum reflects the initiatives and activities we are doing to build traffic and sales.

So as it relates to Texas, was there any change in the competitive landscape, or was it something else that drove some of the softness there?

In Dallas specifically, it is a very competitive market. There is always a lot of competition coming into that market. It is an attractive, large market and many operators want to have a presence there. It is largely a factor of competitive dynamics in the marketplace.

Understood. Okay. And then in terms of the commentary about the second quarter same-store sales, which are tracking positive, can you give us a sense as to traffic versus ticket? What is the kind of breakdown approximately?

We are up in traffic. That is the most important part of the sales mix—our initiatives around value, continuous messaging about happy hour, and strong price points at lunch and dinner are resonating. Marketing is making progress communicating those value points. Benihana launched a power lunch offering starting at $15.95 with a forty-five-minute guarantee, and lunch is beginning to gain traction. Overall, initiatives are driving progress in building traffic.

Got it. Okay. And the last question for me. Nicole, you mentioned that there were some Benihana cost synergies realized in the quarter. Can you expand on that? And are there any other synergies that you think may be realized this year as it relates to the Benihana acquisition?

One of the biggest synergies we are realizing is from beef contracts—combining different brands that rely heavily on beef allowed us to secure more favorable contracted pricing, which provides cost certainty through September 2026. We are also realizing synergies from other contracts placed over the last year in areas like linens and operating supplies. Those will continue to provide benefits in the coming months.

Got it. Okay. Well, thank you very much, and best of luck.

Thank you, sir. Thank you.

The next question we have is from Mark Smith of Lake Street Capital. Please go ahead.

Hi, guys. You have got Alex Turnick on the line for Mark Smith today. Thanks for taking my questions. First one: looking at capital allocation priorities, you made good progress on the balance sheet—with the revolver now paid down to zero, free cash flow generation improving. As leverage comes down further, how are you thinking about balancing debt reduction, conversion investments, and potentially becoming more active on share repurchases?

Our focus has been on debt reduction, as shown by payments on the revolver and term loan, and that will continue to be a priority. We will balance debt reduction with a cost-effective growth portfolio of restaurants. Capital allocation and shareholder value creation remain priorities for the board, and we actively evaluate options that create value for shareholders.

Okay. And last one for me, just switching over to the restaurants. Benihana Express seems to be getting a lot of traction from a franchise interest standpoint. Maybe just talk about how you view that long-term opportunity for that format relative to the traditional Benihana concept, and what you think franchisees are finding most attractive about the model today?

Benihana Express is attractive to franchisees for several reasons. The product offering—fried rice and protein combinations—is strong and resonates with consumers. The price point positioning allows it to be premium in market while still accessible. The economics are favorable: better cost of goods for certain menu items, a more favorable labor equation because there is no teppanyaki-table service, and smaller footprints that reduce occupancy costs. Smaller footprints also increase real estate flexibility and lower development cost, making the brand appealing from a franchise cost-of-entry perspective.

That is very helpful. Thank you for taking my questions.

Thank you.

The next question we have is from James Sanderson of Northcoast Research. Please go ahead.

Hey, thanks for the questions. I wanted to go back to your update on same-store sales and traffic and build on that. Any feedback on what your bookings are looking like for Mother’s Day and graduation events relative to where you were, say, one year ago?

Without precise numbers, traffic is positive coming into the quarter, and bookings are very solid. We manage reservations and events closely, and the forward look on the books is strong.

Excellent. Shifting over to your store margin guidance, I noticed that relative to the first half of the year, you are probably expecting some modest margin compression. Can you walk through how margin is going to progress over the year?

Seasonality is a primary factor. The third quarter is our lowest-volume quarter, so margins typically compress then. First, second, and fourth quarters are stronger. Otherwise, margin momentum is strong—cost of goods is the lowest we have ever reported as a company. The overall margin outlook for the year is solid, but we are mindful of seasonality.

And then, speaking to margin a little more, you mentioned you have beef visibility until September. Any thoughts on what you are looking at for locking in those prices as we get to the holiday quarter?

We are in active dialogue about beef pricing, but I can't forecast specifics. The beef market remains challenging. Our focus is on alternative cuts and promotional windows to leverage lower-cost proteins where possible, and to plan Q4 promotions that are less reliant on high-cost cuts like filets. Managing product mix will help mitigate cost pressure.

Very good. And I think you also reported your weighted average interest rate was down. Could you walk us through what is driving that and what your outlook for the rest of the year is?

The decline is partly driven by lower market interest rates recently. Our priority with free cash flow is to reduce debt, and we plan to continue paying down principal so we can lower interest expense over time. That remains our primary objective.

Last question for me. Any feedback on what your off-premises mix was in the first quarter and how that was broken up between third-party delivery and pickup?

Off-premises is in the low double digits as a percent of mix. The majority of that is delivery rather than pickup. We are focusing on growing pickup because it is more favorable to the P&L and presents big opportunities for improvement.

Very good. I will pass it on. Thank you very much.

Thank you, sir.

The next question we have is from Roger Lipton of Lipton Financial Services. Please go ahead.

Yes. Hi, Manny. Hi, Nicole. Thanks for taking my question. A great number of my potential questions have been answered. I did want to explore a little bit more the store-level margin, which it looks like you could have been in a position to bring down the operating expenses, bring up your margin a little bit in terms of your full-year guidance—doing, beating the first quarter by, I guess, 150 to 160 basis points over the mid-80, the 19.1% instead of 17.5%, the midpoint of your previous guidance. And in the second quarter, you are 81% to 82% instead of 82% to 83% in terms of expense totals. So it looks like maybe you have got a little room for the full year to improve upon that 82% to 83%.

Thanks, Roger. Our view is that the third quarter is a significant factor due to seasonality, and we want to be comfortable with our full-year guidance. I am very happy with the first quarter results and the progress we are making in the second quarter and forward, but we remain cautious about the environment. There is noise with factors like gas prices that can impact supply chain costs, so we take a conservative approach in our guidance for the year.

Okay. That is fair. It went over so quickly—the new economics on that Scottsdale conversion. You are saying increasing the ROI by four times. Could you just run by those numbers one more time quickly?

Sure. For clarity, that restaurant was doing about $3 million to $4 million in revenues. It is now north of $7 million. We grew revenues there by about $4 million year over year on an annual basis. We spent about $1 million to achieve that increase, so we believe that represents about a four-times return on the investment in that site. That incremental $4 million in revenues will drive a significant increase in EBITDA, so the ROI on that conversion will be very favorable.

Got it. Okay. Well, I am glad you clarified that. Thank you so much.

Thank you, Roger.

Ladies and gentlemen, we have reached the end of the question and answer session, and I would like to turn the conference call back to Manny Hilario for closing remarks.

Thank you, everyone. I appreciate everyone taking time to be with us here today. As I said earlier, we are very excited about the future for the company. And as I always tell everyone, nothing of this would be possible without the incredible contributions from all our teammates who live our mission every day. So I want to thank them all once again, and I look forward to running into all of you in our restaurants. Everybody have a great summer.

Thank you. This concludes today’s conference. Thank you for joining us. You may now disconnect your lines.