Ark Restaurants Corp. (NASDAQ:ARKR) today reported financial
results for the fourth quarter and fiscal year ended September 29,
2018.
Total revenues for the three-month period ended September 29,
2018 were $40,562,000 versus $39,467,000 for the three months ended
September 30, 2017.
Total revenues for the year ended September 29, 2018 were
$159,990,000 versus $153,877,000 for the year ended September 30,
2017. The year ended September 29, 2018 includes revenues of
$10,141,000 related to Sequoia DC versus $4,409,000 for the year
ended September 30, 2017. Sequoia DC was closed for renovation for
the entire second quarter and third quarters of 2017. The year
ended September 30, 2017 includes revenues of $3,867,000 related to
three properties that were closed prior to fiscal 2018.
Company-wide same store sales increased 1.7% for the three-month
period ended September 29, 2018 compared to the same three month
period last year.
The Company’s EBITDA from restaurant operations, adjusted for
non-controlling interests and non-cash stock option expense, for
the three-month period ended September 29, 2018 was $2,120,000
versus $2,880,000 during the same three-month period last year.
The Company’s EBITDA from restaurant operations, adjusted for
non-controlling interests and non-cash stock option expense, for
the year ended September 29, 2018 was $9,735,000 versus $9,194,000
last year. EBITDA from restaurant operations for the year ended
September 30, 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 September 29, 2018
was $1,007,000 or $0.29 per basic share, $0.28 per diluted share,
compared to $1,311,000 or $0.38 per basic, $0.37 per diluted share,
for the same three-month period last year.
Net income for the year ended September 29, 2018 was $4,655,000
or $1.35 per basic, $1.31 per diluted share, compared to
$4,039,000, or $1.18 per basic share, $1.14 per diluted share, last
year.
On December 22, 2017 the U.S. government enacted comprehensive
tax reform commonly referred to as the Tax Cuts and Jobs Act
(“TCJA”). Under Accounting Standards Codification (“ASC”) 740, the
effects of changes in tax rates and laws are recognized in the
period which the new legislation is enacted. The TCJA makes broad
and complex changes to the U.S. tax code, including, but not
limited to: (1) reducing the U.S. federal corporate tax rate from
35% to 21% effective January 1, 2018; (2) changing rules related to
uses and limitations of net operating loss carryforwards created in
tax years beginning after December 31, 2017; (3) accelerated
expensing on certain qualified property; (4) creating a new
limitation on deductible interest expense to 30% of tax adjusted
EBITDA through 2021 and then 30% of tax adjusted EBIT thereafter;
(5) eliminating the corporate alternative minimum tax; and (6)
further limitations on the deductibility of executive compensation
under IRC §162(m) for tax years beginning after December 31, 2017.
As the reduction in the U.S. federal corporate tax rate is
administratively effective on January 1, 2018, our blended U.S.
federal tax rate for the year ended September 29, 2018 was
approximately 24%.
In connection with the TCJA, the Company recorded an income tax
benefit of $1,382,000 related to the re-measurement of our deferred
tax assets and liabilities for the reduced U.S. federal corporate
tax rate of 21%. The Company’s accounting for the TCJA is complete
as of September 29, 2018 with no significant differences from our
provisional estimates recorded during interim periods.
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 52-week periods ended September 29,
2018 and September 30, 2017
(In Thousands, Except per share amounts) 13
weeks ended 13 weeks ended 52 weeks ended 52 weeks ended
September 29, September 30, September 29, September 30,
2018
2017
2018
2017
TOTAL REVENUES
$ 40,562
$ 39,467 $
159,990 $ 153,877
COST AND EXPENSES: Food and beverage cost of
sales 11,204 10,784 43,036 41,597 Payroll expenses 14,235 13,672
55,620 53,074 Occupancy expenses 4,744 4,063 18,577 17,100 Other
operating costs and expenses 5,464 5,300 21,437 20,690 General and
administrative expenses 2,752 2,805 11,214 11,504 Depreciation and
amortization
1,237
999 5,074
4,541 Total costs and expenses
39,636 37,623
154,958 148,506
RESTAURANT OPERATING INCOME 926 1,844 5,032 5,371
Gain on sale of Ark Jupiter RI, LLC
-
- -
1,637 OPERATING INCOME
926 1,844
5,032 7,008
OTHER (INCOME) EXPENSE: Interest expense, net
315 239
1,106 583 Total
other expense, net
315
239 1,106
583 INCOME BEFORE PROVISION FOR INCOME
TAXES 611 1,605 3,926 6,425 Provision (benefit) for income
taxes
(486 )
331 (1,147 )
1,668 CONSOLIDATED NET INCOME
1,097 1,274 5,073 4,757 Net income attributable to
non-controlling interests
(90 )
37 (418
) (718 ) NET
INCOME ATTRIBUTABLE TO ARK RESTAURANTS CORP.
$
1,007 $ 1,311
$ 4,655 $
4,039 NET INCOME PER ARK RESTAURANTS
CORP. COMMON SHARE: Basic
$ 0.29
$ 0.38 $
1.35 $ 1.18
Diluted
$ 0.28 $
0.37 $ 1.31
$ 1.14 WEIGHTED AVERAGE
NUMBER OF COMMON SHARES OUTSTANDING: Basic
3,448 3,425
3,439 3,424 Diluted
3,535 3,526
3,549 3,531
EBITDA Reconciliation: Restaurant operating income $
926 $ 1,844 $ 5,032 $ 5,371 Interest expense, net
(315 ) (239
) (1,106 )
(583 ) Restaurant income before provision
for income taxes 611 1,605 3,926 4,788 Gain on sale of Rustic Inn,
Jupiter property
- -
- 1,637
Pre tax income $ 611 $ 1,605 $ 3,926 $ 6,425 Depreciation
and amortization 1,237 999 5,074 4,541 Interest expense, net
315 239
1,106 583 EBITDA (a)
$ 2,163 $
2,843 $ 10,106
$ 11,549
EBITDA, adjusted for non-controlling
interests, non-cash stock option expenseand Ark Jupiter RI, LLC
gain:
EBITDA (as defined) (a) $ 2,163 $ 2,843 $ 10,106 $ 11,549 Net
(income) loss attributable to non-controlling interests (90 ) 37
(418 ) (718 ) Non-cash stock option expense 47 - 47 - Gain on sale
of Ark Jupiter RI, LLC
-
- -
(1,637 ) EBITDA from restaurant
operations, as adjusted
$ 2,120
$ 2,880 $
9,735 $ 9,194
(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/20181219005771/en/
Anthony J. Sirica(212) 206-8800ajsirica@arkrestaurants.com
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