Ark Restaurants Corp. (NASDAQ:ARKR) today reported financial
results for the third quarter ended June 30, 2018.
Total revenues for the three-month period ended June 30, 2018
were $44,800,000 versus $41,350,000 for the three months ended July
1, 2017. The three-month period ended June 30, 2018 includes
revenues of $3,618,000 related to Sequoia DC which was closed for
renovation for most of three-month period ended July 1, 2017. The
three-month period ended July 1, 2017 includes revenues of $609,000
related to one property closed prior to fiscal 2018.
Total revenues for the nine-month period ended June 30, 2018
were $119,428,000 versus $114,410,000 for the nine months ended
July 1, 2017. The nine-month period ended June 30, 2018 includes
revenues of $7,152,000 related to Sequoia DC versus $2,510,000 for
the same period last year. Sequoia DC was closed for renovation for
the entire second quarter and most of third quarter of 2017. The
nine-month period ended July 1, 2017 includes revenues of
$3,867,000 related to three properties that were closed prior to
fiscal 2018.
Company-wide same store sales increased 2.3% for the three-month
period ended June 30, 2018 compared to the same three month period
last year.
The Company’s EBITDA, adjusted for non-controlling interests,
for the three-month period ended June 30, 2018 was $4,773,000
versus $3,155,000 during the same three-month period last year.
The Company’s EBITDA from restaurant operations, adjusted for
non-controlling interests, for the nine-month period ended June 30,
2018 was $7,615,000 versus $6,313,000 during the same nine-month
period last year. EBITDA from restaurant operations for the
nine-months ended July 1, 2017 excludes a gain of $1,637,000
recognized in connection with the sale of real estate.
Net income for the three-month period ended June 30, 2018 was
$2,657,000 or $0.77 per basic share, $0.75 per diluted share,
compared to $1,386,000 or $0.40 per basic, $0.39 per diluted share,
for the same three-month period last year.
Net income for the nine-month period ended June 30, 2018 was
$3,648,000 or $1.06 per basic, $1.03 per diluted share, compared to
$2,727,000, or $0.80 per basic share, $0.77 per diluted share, for
the same six-month period last year.
On July 29, 2018, the Company’s President and Chief Financial
Officer, Robert J. Stewart, passed away at the age of 61. Bob was
elected as Chief Financial Officer in June 2002 and joined the
Board of Directors in March 2012. In 2013 he was elected President.
Prior to joining Ark, Bob was a Chief Financial Officer and
Executive Vice President at Fortis Capital Holdings and held senior
financial and audit positions in Skandinaviska Enskilda Banken in
their New York, London and Stockholm offices.
Bob had great integrity, strength of character, and had a
genuine desire to be a good friend to all around him. Being a good
friend was natural to Bob and he easily succeeded in this as he did
in every aspect during his 17 years with Ark. He was loved by
everyone at the Company.
On December 22, 2017, the 2017 Tax Cuts and Jobs Act (the “Tax
Act”) was enacted into law and the new legislation contains several
key tax provisions that affected us, including a reduction of the
corporate income tax rate to 21% effective January 1, 2018. We were
required to recognize the effect of the tax law changes in the
period of enactment, such as determining the transition tax,
remeasuring our U.S. deferred tax assets and liabilities, and
reassessing the net realizability of our deferred tax assets and
liabilities. In December 2017, the Securities and Exchange
Commission (the “SEC”) staff issued Staff Accounting Bulletin No.
118, Income Tax Accounting Implications of the Tax Cuts and Jobs
Act, which allows us to record provisional amounts during a
measurement period not to extend beyond one year of the enactment
date. As a result, income tax expense reported for the six-months
ended March 31, 2018 was adjusted to reflect the effects of the
change in the tax law and resulted in a discrete income tax benefit
of approximately $1.2 million. While we were able to make a
reasonable estimate of the impact of the reduction in the corporate
tax rate, it may be affected by other analyses related to the Tax
Act. Accordingly, the Company’s accounting for impact of the Tax
Act remains incomplete as of June 30, 2018.
Ark Restaurants owns and operates 20 restaurants and bars, 19
fast food concepts and catering operations primarily in New York
City, Florida, Washington, D.C., Las Vegas, NV and the gulf coast
of Alabama. Five 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 in
Boston, Massachusetts, two are located on the east coast of 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 consist of one fast food
concept. In Boston, Massachusetts, the Company operates a
restaurant in the Faneuil Hall Marketplace. The Florida operations
include the Rustic Inn in Dania Beach, Florida and 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 operates 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 39-week periods ended June 30, 2018
and July 1, 2017
(In Thousands, Except per share amounts) 13
weeks ended 13 weeks ended 39 weeks ended 39 weeks ended
June 30, July 1, June 30, July 1,
2018
2017
2018
2017
TOTAL REVENUES
$ 44,800
$ 41,350 $
119,428 $ 114,410
COST AND EXPENSES: Food and beverage cost of
sales 11,874 11,227 31,832 30,814 Payroll expenses 14,685 13,776
41,386 39,402 Occupancy expenses 4,683 4,541 13,833 13,037 Other
operating costs and expenses 5,658 5,398 15,972 15,390 General and
administrative expenses 2,859 2,955 8,461 8,699 Depreciation and
amortization
1,255
1,006 3,837
3,541 Total costs and expenses
41,014 38,903
115,321 110,883
RESTAURANT OPERATING INCOME 3,786 2,447 4,107 3,527
Gain on sale of Rustic Inn, Jupiter property
-
- -
1,637 OPERATING INCOME
3,786 2,447
4,107 5,164
OTHER (INCOME) EXPENSE: Interest expense, net
299 178
791 344 Total other
expense, net
299 178
791 344
INCOME BEFORE PROVISION FOR INCOME TAXES 3,487 2,269
3,316 4,820 Provision for income taxes
562 585
(661 ) 1,338
CONSOLIDATED NET INCOME 2,925 1,684 3,977 3,482 Net
(income) loss attributable to non-controlling interests
(268 ) (298
) (329 )
(755 ) NET INCOME ATTRIBUTABLE TO
ARK RESTAURANTS CORP.
$ 2,657
$ 1,386 $
3,648 $ 2,727
NET INCOME PER ARK RESTAURANTS CORP. COMMON SHARE: Basic
$ 0.77 $
0.40 $ 1.06
$ 0.80 Diluted
$
0.75 $ 0.39
$ 1.03 $
0.77 WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING: Basic
3,440
3,424 3,436
3,424 Diluted
3,558
3,549 3,554
3,532 EBITDA
Reconciliation: Restaurant operating income $ 3,786 $ 2,447 $ 4,107
$ 3,527 Interest expense, net
(299
) (178 )
(791 ) (344
) Restaurant income before provision for income taxes
3,487 2,269 3,316 3,183 Gain on sale of Rustic Inn, Jupiter
property
- -
- 1,637 Pre
tax income $ 3,487 $ 2,269 $ 3,316 $ 4,820 Depreciation and
amortization 1,255 1,006 3,837 3,541 Interest expense, net
299 178
791 344 EBITDA (a)
$ 5,041 $
3,453 $ 7,944
$ 8,705 EBITDA, adjusted
for non-controlling interests and Rustic Inn, Jupiter gain: EBITDA
(as defined) (a) $ 5,041 $ 3,453 $ 7,944 $ 8,705 Net (income) loss
attributable to non-controlling interests (268 ) (298 ) (329 ) (755
) Gain on sale of Rustic Inn, Jupiter property
- -
- (1,637 )
EBITDA from restaurant operations, as adjusted
$
4,773 $ 3,155
$ 7,615 $
6,313
(a)
EBITDA is defined as earnings before
interest, taxes, depreciation and amortization. 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.
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version on businesswire.com: https://www.businesswire.com/news/home/20180813005601/en/
Ark Restaurants Corp.Michael Weinstein,
212-206-8800mweinstein@arkrestaurants.com
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