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Kura_Sushi_Frisco_Texas_0.jpg Ron Ruggless

Kura Sushi USA sets stage for IPO

Conveyor-belt brand to offer 2.9M shares priced at $14-$16

After nearly four years without a major public offering in the restaurant industry, Kura Sushi USA Inc. is set to begin trading on Thursday.

Kura Sushi USA on Tuesday said it plans to offer 2.9 million shares at between $14 and $16 per share on the Nasdaq stock exchange, the Irvine, Calif.-based company said in a federal Securities and Exchange Commission filing. At the mid-point price of $15, the offering would raise about $43.5 million.

Kura Sushi USA, established in 2008, uses conveyor-belt-style technology developed for the Japan-based parent brand, which has more than 400 restaurants. The first restaurant opened in Japan in 1984.

The stock market hasn’t seen a big restaurant company initial public offering since 2015, when both Dallas-based Wingstop Inc. and New York-based Shake Shack Inc. made their offerings.

Earlier this week, CEC Entertainment Inc., parent company of Chuck E. Cheese and Peter Piper Pizza, ended its plans to go public in a reverse merger. CEC owner Apollo Global Management and Leo Holdings Corp. terminated their plan, initially announced in April, without giving any reasons. Irving, Texas-based CEC has 750 pizza-entertainment units.

Smaller public offerings in the past two years included one in October 2017, when Los Angeles-based Fat Brands Inc., parent to the Fatburger, Ponderosa, Bonanza and Buffalo’s Café brands, completed a $24 million Regulation A+ offering, or so-called mini-IPO.

Kura Sushi USA, in its filing Tuesday, said that its sales grew 38.9% between its fiscal year 2017 and 2018, to $51.7 million. Net income in that period grew 146.4%, to $1.7 million.

The company said it also grew its average unit volumes. “In fiscal year 2018, we generated AUVs of approximately $3.5 million, operating profit margin of 3.6% and restaurant-level contribution margin of 20.1%,” the company said.

“We have achieved positive comparable restaurant sales growth in 10 out of the last 11 quarters ending in the third fiscal quarter of 2019,” the filings noted.

Units range from 1,600 to 5,600 square feet and can fit into both inline and endcap locations at strip malls and shopping centers, the company said.

Kura Sushi USA has 22 units in the U.S., including 12 in California, seven in Texas and one each in Georgia, Illinois and Nevada.

Contact Ron Ruggless at [email protected]

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