Ark Restaurants Corp. (NASDAQ:ARKR) today reported financial
results for the fourth quarter and fiscal year ended September 28,
2019.
Total revenues for the 13-weeks ended September 28, 2019 were
$41,688,000 versus $40,562,000 for the 13-weeks ended September 29,
2018. The 13-weeks ended September 28, 2019 includes revenues of
$2,141,000 related to JB’s on the Beach in Deerfield Beach, FL
which was acquired on May 15, 2019. The 13-weeks ended September
29, 2018 includes revenues of $906,000 related to Durgin-Park which
was closed January 12, 2019.
Total revenues for the year ended September 28, 2019 were
$162,354,000 versus $159,990,000 for the year ended September 29,
2018. The year ended September 28, 2019 includes revenues of
$3,380,000 related to JB’s on the Beach in Deerfield Beach, FL
which was acquired on May 15, 2019. The years ended September 28,
2019 and September 29, 2018 include revenues of $1,040,000 and
$2,838,000, respectively, related to Durgin-Park which was closed
January 12, 2019.
Company-wide same store sales decreased 0.7% for the 13-weeks
ended September 28, 2019 and increased 0.3% for the year ended
September 28, 2019 as compared to the same periods of last
year.
The Company’s EBITDA from restaurant operations, adjusted for
non-controlling interests, non-cash stock option expense and an
impairment loss, for the 13-weeks ended September 28, 2019 was
$3,065,000 versus $2,120,000 during the same 13 week period of last
year. Net loss for the 13-weeks ended September 28, 2019 was
($554,000) or ($0.16) per basic and diluted share, compared to net
income of $1,007,000 or $0.29 per basic, $0.28 per diluted share,
for the same 13 week period in the prior year.
The Company’s EBITDA from restaurant operations, adjusted for
non-controlling interests, non-cash stock option expense, losses on
the closure of Durgin-Park and an impairment loss, for the year
ended September 28, 2019 was $12,770,000 versus $9,735,000 last
year. Net income for the year ended September 28, 2019 was
$2,676,000 or $0.77 per basic, $0.76 per diluted share, compared to
$4,655,000, or $1.35 per basic share, $1.31 per diluted share, last
year.
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 was
located, and rising labor costs. As a result, included in the
Consolidated Statement of Operations for the year ended September
28, 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, FL. The total
purchase price was for $7,036,000. 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 and cash
from operations.
Management continually evaluates unfavorable cash flows, if any,
related to underperforming restaurants. Periodically it is
concluded that certain properties have become impaired based on
their existing and anticipated future economic outlook in their
respective markets. In such instances, we may impair assets to
reduce their carrying values to fair values. Estimated fair values
of impaired properties are based on comparable valuations, cash
flows and/or management judgment. As a result of the
underperformance and increased competition at Clyde Frazier's Wine
and Dine, the Company has recorded an impairment charge of
$2,857,000 for the year ended September 28, 2019 related to this
property.
Ark Restaurants owns and operates 20 restaurants and bars, 17
fast food concepts and catering operations primarily in New York
City, Florida, Washington, D.C, Las Vegas, Nevada 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 operation at the Foxwoods Resort
Casino consists of one fast food concept. The Florida operations
include the Rustic Inn in Dania Beach, Shuckers in Jensen Beach and
JB’s on the Beach in Deerfield Beach, and the operation of four
fast food facilities in Tampa and six fast food facilities in
Hollywood, 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 and one in
Spanish Fort.
Except for historical information, this news release contains
forward-looking statements, within the meaning of Section 27A of
the Securities Act of 1933, as amended and Section 21E of the
Securities Exchange Act of 1934, as amended. 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
OperationsFor the 13 and 52-week periods ended September 28, 2019
and September 29, 2018(In Thousands,
Except per share amounts)
13 Weeks Ended September 28,
2019
13 Weeks Ended September 29,
2018
52 Weeks Ended September 28,
2019
52 Weeks Ended September 29,
2018
TOTAL REVENUES
$
41,688
$
40,562
$
162,354
$
159,990
COSTS AND EXPENSES:
Food and beverage cost of
sales
11,453
11,204
43,435
43,036
Payroll expenses
14,727
14,235
56,675
55,620
Occupancy expenses
4,356
4,744
17,413
18,577
Other operating costs and
expenses
5,327
5,464
20,378
21,437
General and administrative
expenses
3,171
2,752
12,011
11,214
Depreciation and
amortization
1,665
1,237
5,233
5,074
Total costs and expenses
40,699
39,636
155,145
154,958
RESTAURANT OPERATING INCOME
989
926
7,209
5,032
Loss on closure of
Durgin-Park
—
—
(1,106
)
—
Impairment loss from write-down of
long-lived
assets
(2,857
)
—
(2,857
)
—
OPERATING INCOME (LOSS)
(1,868
)
926
3,246
5,032
OTHER (INCOME) EXPENSE:
Interest expense, net
393
315
1,376
1,106
Total other expense, net
393
315
1,376
1,106
INCOME (LOSS) BEFORE BENEFIT FOR
INCOME
TAXES
(2,261
)
611
1,870
3,926
Benefit for income taxes
(1,320
)
(486
)
(591
)
(1,147
)
CONSOLIDATED NET INCOME (LOSS)
(941
)
1,097
2,461
5,073
Net income (loss) attributable to
non-controlling
interests
387
(90
)
215
(418
)
NET INCOME (LOSS) ATTRIBUTABLE TO ARK
RESTAURANTS CORP.
$
(554
)
$
1,007
$
2,676
$
4,655
NET INCOME (LOSS) PER ARK RESTAURANTS
CORP. COMMON SHARE:
Basic
$
(0.16
)
$
0.29
$
0.77
$
1.35
Diluted
$
(0.16
)
$
0.28
$
0.76
$
1.31
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING:
Basic
3,486
3,448
3,479
3,439
Diluted
3,486
3,535
3,531
3,549
EBITDA Reconciliation:
Restaurant operating income
$
989
$
926
$
7,209
$
5,032
Interest expense, net
(393
)
(315
)
(1,376
)
(1,106
)
Restaurant income before provision for
income
taxes
596
611
5,833
3,926
Loss on closure of
Durgin-Park
—
—
(1,106
)
—
Impairment loss from write-down of
long-lived
assets
(2,857
)
—
(2,857
)
—
Pre tax income
(2,261
)
611
1,870
3,926
Depreciation and
amortization
1,665
1,237
5,233
5,074
Interest expense, net
393
315
1,376
1,106
EBITDA (a)
$
(203
)
$
2,163
$
8,479
$
10,106
EBITDA adjusted for non-controlling
interests, non-cash stock option expense, loss on closure of
Durgin-Park and impairment loss from write-down of long-lived
assets:
EBITDA (as defined) (a)
$
(203
)
$
2,163
$
8,479
$
10,106
Net (income) loss attributable to
non-controlling
interests
387
(90
)
215
(418
)
Non-cash stock option
expense
24
47
113
47
Loss closure of Durgin-Park
—
—
1,106
—
Impairment loss from write-down of
long-lived
assets
2,857
—
2,857
—
EBITDA from restaurant operations, as
adjusted
$
3,065
$
2,120
$
12,770
$
9,735
(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/20191216005533/en/
Anthony J. Sirica (212) 206-8800
ajsirica@arkrestaurants.com
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