Ark Restaurants Corp. (NASDAQ: ARKR) today reported financial
results for the third quarter ended June 29, 2019.
Total revenues for the 13 weeks ended June 29, 2019 were
$44,807,000 versus $44,800,000 for the 13 weeks ended June 30,
2018. The 13 weeks ended June 29, 2019 includes revenues of
$1,239,000, which represents six and half weeks of sales related to
JB’s on the Beach in Deerfield Beach, FL which was acquired on May
15, 2019. The 13 weeks ended June 30, 2018 includes revenues of
$725,000 related to Durgin-Park which was closed January 12,
2019.
Total revenues for the 39 weeks ended June 29, 2019 were
$120,667,000 versus $119,428,000 for the 39 weeks ended June 30,
2018. The 39 weeks ended June 29, 2019 and June 30, 2018 include
revenues of $1,040,000 and $1,933,000, respectively, related to
Durgin-Park which was closed January 12, 2019. In addition, the 39
weeks ended June 29, 2019 includes revenues of $1,239,000, which
represents six and half weeks of sales related to JB’s on the Beach
in Deerfield Beach, FL which was acquired on May 15, 2019.
Company-wide same store sales decreased 1.5% for the 13 weeks
ended June 29, 2019 compared to the same period in the prior
year.
The Company’s EBITDA, adjusted for non-controlling interests and
non-cash stock option expense for the 13 weeks ended June 29, 2019
was $5,838,000 versus $4,773,000 during the same period in the
prior year. Net income for the 13 weeks ended June 29, 2019 was
$3,962,000, or $1.14 per basic share ($1.12 per diluted share)
compared to net income of $2,657,000, or $0.77 per basic share
($0.75 per diluted share) for the same period last year.
The Company’s EBITDA, adjusted for non-controlling interests,
non-cash stock option expense and losses incurred on the closure of
Durgin-Park discussed below, for the 39 weeks ended June 29, 2019
was $9,705,000 versus $7,615,000 during the same period in the
prior year. Net income for the 39 weeks ended June 29, 2019, which
includes non-cash write-offs on the closure of Durgin-Park in the
amount of $1,106,000, was $3,231,000, or $0.93 per basic share
($0.92 per diluted share) compared to net income of $3,648,000, or
$1.06 per basic share ($1.03 per diluted share), for the same
period last year. Net income for the 39 weeks ended June 30, 2018
includes a discrete income tax benefit of $1.2 million related to
changes in the tax law.
As of December 29, 2018, the Company determined that it would
not be able to operate Durgin-Park profitably due to decreased
traffic at the Faneuil Hall Marketplace in Boston, MA, where it is
located, and rising labor costs. As a result, included in the
Consolidated Statements of Income for the 39 weeks ended June 29,
2019 are losses on closure in the amount of $1,106,000 consisting
of: (i) impairment of trademarks of $721,000, (ii) accelerated
depreciation of fixed assets of $333,000, and (iii) write-offs of
prepaid and other expenses of $52,000. The restaurant was closed on
January 12, 2019.
On May 15, 2019, the Company, through a newly formed,
wholly-owned subsidiary, acquired the assets of JB's on the Beach,
a restaurant and bar located in Deerfield Beach, Florida. The total
purchase price was for $7,000,000 plus inventory. The acquisition
is accounted for as a business combination and was financed with a
bank loan from the Company’s existing lender in the amount of
$7,000,000.
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, three 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 in
Ledyard, CT consist of one fast food concept. The Florida
operations include the Rustic Inn in Dania Beach, Shuckers, located
in Jensen Beach, the newly acquired JB’s on the Beach in Deerfield
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 29, 2019 and June 30, 2018
(In Thousands,
Except per share amounts)
13 Weeks Ended
June 29,
2019
13 Weeks Ended
June 30,
2018
39 Weeks Ended June 29,
2019
39 Weeks Ended June 30,
2018
TOTAL REVENUES
$
44,807
$
44,800
$
120,667
$
119,428
COSTS AND EXPENSES:
Food and beverage cost of sales
11,714
11,874
31,982
31,832
Payroll expenses
14,864
14,685
41,948
41,386
Occupancy expenses
4,246
4,683
13,058
13,833
Other operating costs and expenses
4,840
5,658
15,051
15,972
General and administrative expenses
3,238
2,859
8,840
8,461
Depreciation and amortization
1,174
1,255
3,568
3,837
Loss on closure of Durgin-Park
—
—
1,106
—
Total costs and expenses
40,076
41,014
115,553
115,321
OPERATING INCOME
4,731
3,786
5,114
4,107
INTEREST EXPENSE, NET
354
299
983
791
INCOME BEFORE PROVISION FOR INCOME
TAXES
4,377
3,487
4,131
3,316
Provision for income taxes
283
562
728
(661
)
CONSOLIDATED NET INCOME
4,094
2,925
3,403
3,977
Net income attributable to non-controlling
interests
(132
)
(268
)
(172
)
(329
)
NET INCOME ATTRIBUTABLE TO ARK RESTAURANTS
CORP.
$
3,962
$
2,657
$
3,231
$
3,648
NET INCOME PER ARK RESTAURANTS CORP.
COMMON SHARE:
Basic
$
1.14
$
0.77
$
0.93
$
1.06
Diluted
$
1.12
$
0.75
$
0.92
$
1.03
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING:
Basic
3,481
3,440
3,477
3,436
Diluted
3,530
3,558
3,531
3,554
EBITDA Reconciliation:
Pre-tax income
$
4,377
$
3,487
$
4,131
$
3,316
Depreciation and amortization
1,174
1,255
3,568
3,837
Interest expense, net
354
299
983
791
EBITDA (a)
$
5,905
$
5,041
$
8,682
$
7,944
EBITDA adjusted for non-controlling
interests, non-cash stock option expense and loss on closure of
Durgin-Park:
EBITDA (as defined) (a)
$
5,905
$
5,041
$
8,682
$
7,944
Net income attributable to non-controlling
interests
(132
)
(268
)
(172
)
(329
)
Non-cash stock option expense
65
—
89
—
Loss closure of Durgin-Park
—
—
1,106
—
EBITDA, as adjusted
$
5,838
$
4,773
$
9,705
$
7,615
(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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190812005029/en/
Anthony J. Sirica Chief Financial Officer (212) 206-8800
ajsirica@arkrestaurants.com
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