Ark Restaurants Corp. (NASDAQ:ARKR) today reported financial
results for the first quarter ended December 31, 2016.
Total revenues for the three-month period ended December 31,
2016 were $38,392,000 versus $36,991,000 for the three months ended
January 2, 2016. The three-month period ended December 31, 2016
includes revenues of $707,000, which represents one month of sales,
related to the Oyster House properties in Gulf Shores and Spanish
Fort, AL which were acquired on November 30, 2016. The three-month
period ended January 2, 2016 includes revenues of $697,000 related
to two properties that were closed during the period.
Company-wide same store sales increased 2.7% for the three-month
period ended December 31, 2016 compared to the same three month
period last year.
Restaurant operating income was $1,305,000 for the three-month
period ended December 31, 2016 versus $633,000 for the three months
ended January 2, 2016.
The Company’s EBITDA, adjusted for non-cash stock option expense
and non-controlling interests, for the three-month period ended
December 31, 2016 was $4,102,000 versus $1,781,000 during the same
three-month period last year. Of the increase in EBITDA, adjusted
for non-cash stock option expense and non-controlling interests,
$1,637,000 resulted from the recognition of a gain (discussed
below) in connection with the sale of the real estate underlying
our Rustic Inn, Jupiter, FL property. Without the gain related to
the sale of real estate, EBITDA as adjusted for non-cash stock
option expense and non-controlling interests would have been
$2,465,000 for the three-month period ended December 31, 2016.
Net income for the three-month period ended December 31, 2016
was $1,734,000, or $0.51 per basic share ($0.49 per diluted share)
compared to $321,000, or $0.09 per basic share and diluted share,
for the same three-month period last year.
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, 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 on 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 an adjacent retail shopping plaza 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. The total
purchase price was for $10,750,000 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
$8,000,000 and cash from operations.
As of December 31, 2016 the Company had cash and cash
equivalents totaling $4,662,000. The Company has notes payable
outstanding, the proceeds of which were used to finance the
purchases of The Rustic Inn in Dania Beach, Florida, Shuckers and
the Oyster House properties, with an outstanding balance of
$15,336,000, net of the unamortized balance of deferred financing
costs in the amount of $49,000 at December 31, 2016.
Recent Developments
On February 7, 2017, the Company invested an additional $222,000
in NMR as a result of a capital call bringing its total equity
investment to $5,108,000.
Ark Restaurants owns and operates 22 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. 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 consist of one fast food concept. 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 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 week periods ended December 31, 2016 and January 2,
2016 (In Thousands, Except per share
amounts) Q1 2017 Q1 2016 13
weeks ended 13 weeks ended December 31, January 2,
2016
2016
TOTAL REVENUES
$ 38,392
$ 36,991 COST AND EXPENSES:
Food and beverage cost of sales 9,750 9,592 Payroll expenses
12,956 13,192 Occupancy expenses 4,732 4,545 Other operating costs
and expenses 4,866 4,563 General and administrative expenses 3,300
3,328 Depreciation and amortization
1,483
1,138 Total costs and
expenses
37,087
36,358 RESTAURANT OPERATING INCOME 1,305
633 Gain on sale of Rustic Inn, Jupiter property
1,637 -
OPERATING INCOME
2,942
633 OTHER (INCOME) EXPENSE:
Interest (income) expense, net 5 79 Other (income) expense, net
(28 ) (61
)
Total other (income) expense, net
(23 ) 18
INCOME BEFORE PROVISION FOR INCOME TAXES 2,965 615
Provision for income taxes
880
139 CONSOLIDATED NET INCOME 2,085
476 Net income attributable to non-controlling interests
(351 ) (155
) NET INCOME ATTRIBUTABLE TO ARK RESTAURANTS
CORP.
$ 1,734 $
321 NET INCOME PER ARK RESTAURANTS CORP.
COMMON SHARE: Basic
$ 0.51
$ 0.09 Diluted
$
0.49 $ 0.09
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING: Basic
3,423 3,418
Diluted
3,507 3,517
EBITDA Reconciliation: Restaurant operating income $
1,305 $ 633 Other income (expense), net
23
(18 ) Restaurant income
before provision for income taxes 1,328 615 Gain on sale of Rustic
Inn, Jupiter property
1,637
- Pre tax income 2,965 615 Depreciation and
amortization 1,483 1,138 Interest expense, net
5 79 EBITDA (a)
$ 4,453 $
1,832 EBITDA adjusted for non-cash stock
option expense, and non-controlling interests: EBITDA (as defined)
(a) $ 4,453 $ 1,832 Net (income) loss attributable to
non-controlling interests (351 ) (155 ) Non-cash stock option
expense
- 104
EBITDA, as adjusted
$ 4,102
$ 1,781
(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 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: http://www.businesswire.com/news/home/20170210005562/en/
Ark Restaurants Corp.Robert Stewart,
212-206-8800bstewart@arkrestaurants.com
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