Ark Restaurants Corp. (NASDAQ:ARKR) today reported financial
results for the fourth quarter and full year ended October 1,
2016.
The Company reports fiscal years under a 52/53-week format. The
fiscal year ended October 1, 2016 was a 52 week year. The prior
fiscal year ended October 3, 2015 was a 53 week year. The three
month period ended October 1, 2016 contained 13 weeks and the prior
year’s three month period ended October 3, 2015 contained 14 weeks.
Having one more week in the fourth quarter and full year ended
October 1, 2015 distorts the comparison of results with the prior
year periods.
Total revenues for the three-month period ended October 1, 2016
were $38,539,000 versus $40,581,000 for the three months ended
October 3, 2015. The three-month period ended October 1, 2016
includes revenues of $896,000 related to Shuckers in Jensen Beach,
FL which was acquired in October 2015. Last year’s three-month
period included revenues of $1,015,000 related to two properties
closed during or subsequent to the quarter due to lease
expirations.
Total revenues for the year ended October 1, 2016 were
$150,152,000 versus $145,863,000 for the year ended October 3,
2015. The year ended October 1, 2016 includes revenues of
$7,998,000 related to three properties, Shuckers in Jensen Beach,
FL which was acquired in October 2015 and the Southwest Porch in
Bryant Park, NY which was opened on July 1, 2015 and the
incremental revenues related to our Rustic Inn property in Jupiter,
FL which was opened in January 2015. The year ended October 3, 2015
included revenues of $4,054,000 related to two properties closed
during fiscal 2016 due to lease expirations.
Company-wide same store sales decreased 7.0% for the three-month
period ended October 1, 2016 compared to the same three month
period last year. For fiscal 2016 company-wide same store sales
decreased 2.0% compared to last year.
The Company’s EBITDA, adjusted for non-cash stock option expense
and non-controlling interests, for the three-month period October
1, 2016 was $2,811,000 versus $4,626,000 during the same
three-month period last year. The Company’s EBITDA, adjusted for
non-cash stock option expense and non-controlling interests, for
the year ended October 1, 2016 was $11,203,000 versus $13,018,000
last year.
Net income for the three-month period ended October 1, 2016 was
$986,000, or $0.29 per basic share ($0.28 per diluted share), as
compared to $2,009,000, or $0.59 per basic share ($0.57 per diluted
share), for the same three-month period last year. Net income for
the year ended October 1, 2016 was $4,030,000, or $1.18 per basic
share ($1.15 per diluted share), as compared to $5,390,000, or
$1.59 per basic share ($1.54 per diluted share), for the last
year.
Included in net income for the year end October 1, 2016 is the
reversal of accrued liabilities relating to the resolution of a
legal matter resolved in the Company’s favor and the correction of
an immaterial error in previously issued financial statements
related to an overstatement of a rent liability. The adjustments
totaled $1,363,000 and were recorded as a reduction of occupancy
expenses with corresponding adjustments to tax expense and net
income attributable to non-controlling interests in the amounts of
$268,000 and $392,000, respectively ($0.21 per basic and $0.20 per
diluted share). Excluding these adjustments net income and EBITDA,
adjusted for non-cash stock option expense and non-controlling
interests would have been $3,328,000 and $10,233,000, respectively,
for the year ended October 1, 2016.
As of October 1, 2016 the Company had cash and cash equivalents
totaling $7,239,000. The Company has notes payable outstanding, the
proceeds of which were used to finance the purchases of The Rustic
Inn in Dania Beach, Florida and the purchase of Shuckers, with an
outstanding balance of $7,938,000, net of the unamortized balance
of deferred financing costs in the amount of $53,000 at October 1,
2016.
Recent Developments
On November 18, 2016, Ark Jupiter RI, LLC (“Ark Jupiter”), a
wholly-owned subsidiary of the Company, entered into a ROFR
Purchase and Sale Agreement (the “ROFR”) with SCFRC-HWG, LLC, the
landlord (the “Seller”) to purchase the land and building in which
the Company operates its Rustic Inn location in Jupiter, Florida.
The Seller had entered into a Purchase and Sale Agreement with a
third party to sell the premises; however, Ark Jupiter’s lease
provided the Company with a right of first refusal to purchase the
property. Ark Jupiter exercised the ROFR on October 4, 2016 and
made a ten (10%) percent deposit on the purchase price of
approximately Five Million Two Hundred Thousand Dollars
($5,200,000). Concurrent with the execution of the ROFR, the Ark
Jupiter entered into a Purchase and Sale Agreement with 1065 A1A,
LLC to sell this same property for Eight Million Two Hundred Fifty
Thousand Dollars ($8,250,000). In connection with the sale, Ark
Jupiter and 1065 A1A, LLC have entered into a temporary lease and
sub-lease arrangement which expires April 30, 2017 at which time
the Company expects to vacate the space.
On November 30, 2016, the Company, through newly formed,
wholly-owned subsidiaries, acquired the assets of the Original
Oyster House, Inc., a restaurant and bar located in the City of
Gulf Shores, Baldwin County, Alabama and the related real estate
and the Original Oyster House II, Inc., a restaurant and bar
located in the City of Spanish Fort, Baldwin County, Alabama and
the related real estate and an adjacent retail shopping plaza. The
total purchase price was for $10,750,000 plus inventory. The
acquisition was financed with a bank loan from the Company’s
existing lender in the amount of $8,000,000 and cash from
operations.
Ark Restaurants owns and operates 23 restaurants and bars, 19
fast food concepts and catering operations primarily in New York
City, Florida, Washington, D.C. and Las Vegas, NV. Six restaurants
are located in New York City, two are located in Washington, D.C.,
five are located in Las Vegas, Nevada, three are located in
Atlantic City, New Jersey, one is located at the Foxwoods Resort
Casino in Ledyard, Connecticut, one is located in Boston,
Massachusetts, three are located in Florida and two are located on
the Gulf Coast of Alabama. The Las Vegas operations include four
restaurants within the New York-New York Hotel & Casino Resort
and operation of the hotel's room service, banquet facilities,
employee dining room and six food court concepts; and one
restaurant within the Planet Hollywood Resort and Casino. In
Atlantic City, New Jersey, the Company operates a restaurant and a
bar in the Resorts Atlantic City Hotel and Casino and a restaurant
in the Tropicana Hotel and Casino. The operations at the Foxwoods
Resort Casino include one fast food concept and one restaurant. In
Boston, Massachusetts, the Company operates a restaurant in the
Faneuil Hall Marketplace. The Florida operations include two Rustic
Inn’s, one in Dania Beach, Florida and one in Jupiter, Florida, a
restaurant, Shuckers, located in Jensen Beach and the operation of
five fast food facilities in Tampa, Florida and seven fast food
facilities in Hollywood, Florida, each at a Hard Rock Hotel and
Casino operated by the Seminole Indian Tribe at these locations. In
Alabama, the Company acquired two Original Oyster Houses, one in
Gulf Shores, Alabama and one in Spanish Fort, Alabama.
Except for historical information, this news release contains
forward-looking statements, within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. These statements involve unknown risks, and
uncertainties that may cause the Company's actual results or
outcomes to be materially different from those anticipated and
discussed herein. Important factors that might cause such
differences are discussed in the Company's filings with the
Securities and Exchange Commission. The Company disclaims any
intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise. Actual results could differ materially from those
anticipated in these forward-looking statements, if new information
becomes available in the future.
ARK RESTAURANTS CORP.
Consolidated Statements of Income For the 13 and 52 week
periods ended October 1, 2016 and the 14 and 53 week periods ended
October 3, 2015 (In Thousands, Except per share
amounts) 13 weeks ended 14 weeks ended 52 weeks ended
53 weeks ended October 1, October 3, October 1, October 3,
2016 2015
2016 2015
TOTAL REVENUES
$ 38,539
$ 40,581 $
150,152 $ 145,863
COST AND EXPENSES: Food and beverage cost of
sales 10,106 10,944 39,545 39,435 Payroll expenses 12,618 12,745
50,718 46,903 Occupancy expenses 4,624 4,423 16,515 16,790 Other
operating costs and expenses 5,234 5,022 19,719 18,494 General and
administrative expenses 2,712 2,685 11,708 10,885 Depreciation and
amortization
1,170
1,107 4,553
4,415 Total costs and expenses
36,464 36,926
142,758 136,922
OPERATING INCOME
2,075
3,655 7,394
8,941 OTHER (INCOME) EXPENSE:
Interest (income) expense, net (45 ) 20 236 191 Other (income)
expense, net
10 (74
) (430 )
(238 ) Total other income, net
(35 ) (54
) (194 )
(47 ) INCOME BEFORE PROVISION FOR
INCOME TAXES 2,110 3,709 7,588 8,988 Provision for income
taxes
700 1,377
2,098 2,596
CONSOLIDATED NET INCOME 1,410 2,332 5,490 6,392
Net income attributable to non-controlling interests
(424 ) (323
) (1,460 )
(1,002 ) NET INCOME ATTRIBUTABLE
TO ARK RESTAURANTS CORP.
$ 986
$ 2,009 $
4,030 $ 5,390
NET INCOME PER ARK RESTAURANTS CORP. COMMON SHARE: Basic
$ 0.29 $
0.59 $ 1.18
$ 1.59 Diluted
$
0.28 $ 0.57
$ 1.15 $
1.54 WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING: Basic
3,419
3,408 3,418
3,393 Diluted
3,516
3,526 3,507
3,509 EBITDA
Reconciliation: Pre tax income $ 2,110 $ 3,709 $ 7,588 $ 8,988
Depreciation and amortization 1,170 1,107 4,553 4,415 Interest
expense, net
(45 )
20 236
191 EBITDA (a)
$
3,235 $ 4,836
$ 12,377 $
13,594 EBITDA adjusted for non-cash
stock option expense, and non-controlling interests: EBITDA (as
defined) (a) $ 3,235 $ 4,836 $ 12,377 $ 13,594 Net (income) loss
attributable to non-controlling interests (424 ) (323 ) (1,460 )
(1,002 ) Non-cash stock option expense
-
113 286
426 EBITDA, as adjusted
$
2,811 $ 4,626
$ 11,203 $
13,018
(a) EBITDA is defined as earnings before interest, taxes,
depreciation and amortization and cumulative effect of changes in
accounting principle. Although EBITDA is not a measure of
performance or liquidity calculated in accordance with generally
accepted accounting principles (GAAP), the Company believes the use
of this non-GAAP financial measure enhances an overall
understanding of the Company's past financial performance as well
as providing useful information to the investor because of its
historical use by the Company as both a performance measure and
measure of liquidity, and the use of EBITDA by virtually all
companies in the restaurant sector as a measure of both performance
and liquidity. However, investors should not consider this measure
in isolation or as a substitute for net income (loss), operating
income (loss), cash flows from operating activities or any other
measure for determining the Company's operating performance or
liquidity that is calculated in accordance with GAAP, it may not
necessarily be comparable to similarly titled measures employed by
other companies. A reconciliation of EBITDA to the most comparable
GAAP financial measure, pre-tax income, is included above.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20161229005311/en/
Ark Restaurants Corp.Robert Stewart,
212-206-8800bstewart@arkrestaurants.com
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