Ark Restaurants Corp. (NASDAQ:ARKR) today reported financial
results for the third quarter ended July 1, 2017.
Total revenues for the three-month period ended July 1, 2017
were $41,201,000 versus $41,233,000 for the three months ended July
2, 2016. The three-month period ended July 1, 2017 includes
revenues of $4,098,000 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 July 2, 2016 includes
revenues of $3,667,000 related to Sequoia DC which was closed for
renovation until the last week of the just completed quarter at
which time it partially re-opened.
Excluding Sequoia DC, same store sales increased 0.4% for the
three-month period ended July 1, 2017.
Total revenues for the nine-month period ended July 1, 2017 were
$114,071,000 versus $112,496,000 for the nine months ended July 2,
2016. The nine-month period ended July 1, 2017 includes revenues of
$7,638,000 related to the Oyster House properties in Gulf Shores
and Spanish Fort, AL which were acquired on November 30, 2016. The
nine-month period ended July 2, 2016 includes revenues of
$6,959,000 related to Sequoia DC which was closed for the entire
second quarter of fiscal 2017 and reopened in the final week of our
just completed third quarter. Also, the nine month period ended
July 2, 2016 includes $931,000 related to two properties, the V-Bar
in Las Vegas and Center Café in Washington DC that were closed
during the period due to lease expirations.
Restaurant operating income was $2,298,000 for the three-month
period ended July 1, 2017 versus $5,309,000 for the three months
ended July 2, 2016. The three month period ended July 1, 2017
includes pre-opening and early operating losses for our Sequoia DC
property of $1,600,000. In the same three month period last year
Sequoia had operating income of $878,000. The three month period
ended July 2, 2016 includes positive adjustments for the impact of
the reversal of commercial rent tax liabilities in the amount of
$945,000 and an adjustment related to an overstatement of rent
liability in the amount of $261,000. Excluding these positive
adjustments, operating income would have been $4,103,000 during the
three month period ended July 2, 2016.
The Company’s EBITDA, adjusted for non-cash stock option expense
and non-controlling interests, for the three-month period ended
July 1, 2017 was $3,155,000 versus $6,021,000 during the same
three-month period last year. Net income for the three-month period
ended July 1, 2017 was $1,386,000, or $0.40 per basic ($0.39 per
diluted share) compared to $3,367,000, or $0.99 per basic share
($0.96 per diluted share), for the same three-month period last
year.
The Company’s EBITDA, adjusted for non-cash stock option expense
and non-controlling interests, for the nine-month period ended July
1, 2017 was $7,950,000 versus $8,391,000 during the same nine-month
period last year. Of the decrease 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 $6,313,000 for the
nine-month period ended July 1, 2017. In addition, EBITDA for the
nine month period ended July 2, 2016 includes positive adjustments
for the impact of the reversal of commercial rent tax liabilities
in the amount of $945,000 and an adjustment related to an
overstatement of rent liability in the amount of $261,000.
Net income for the nine-month period ended July 1, 2017 was
$2,727,000, or $0.80 per basic share, $0.77 per diluted share,
compared to $3,043,000, or $0.89 per basic share, $0.87 per diluted
share, for the same nine-month period last year.
On November 18, 2016, Ark Jupiter RI, LLC a wholly-owned
subsidiary of the Company, entered into a Purchase Agreement for
$5,200,000 to purchase the land and building in which the Company
operated its Rustic Inn location in Jupiter, Florida. Concurrent
with the execution of the purchase, Ark Jupiter RI, LLC entered
into a Sale Agreement to sell this same property for
$8,250,000.
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.
Ark Restaurants owns and operates 19 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 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 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 July 1, 2017 and
July 2, 2016
(In Thousands, Except per share
amounts)
13 weeks ended 13 weeks ended 39
weeks ended 39 weeks ended July 1, July 2, July 1, July 2,
2017
2016
2017
2016
TOTAL REVENUES
$ 41,201
$ 41,233 $
114,071 $ 112,496
COST AND EXPENSES: Food and beverage cost of
sales 11,227 10,656 30,814 29,440 Payroll expenses 13,776 12,895
39,402 38,982 Occupancy expenses 4,541 3,309 13,037 11,891 Other
operating costs and expenses 5,398 4,999 15,390 14,485 General and
administrative expenses 2,955 2,956 8,699 8,996 Depreciation and
amortization
1,006
1,109 3,541
3,384 Total costs and expenses
38,903 35,924
110,883 107,178
RESTAURANT OPERATING INCOME 2,298 5,309 3,188 5,318
Gain on sale of Rustic Inn, Jupiter property
-
- 1,637
- OPERATING INCOME
2,298 5,309
4,825 5,318
OTHER (INCOME) EXPENSE: Interest (income) expense, net 178
104 344 280 Other (income) expense, net
(149
) (217 )
(339 ) (439
) Total other income (expense), net
29 (113 )
5 (159
) INCOME BEFORE PROVISION FOR INCOME TAXES
2,269 5,422 4,820 5,477 Provision for income taxes
585 1,362
1,338 1,398
CONSOLIDATED NET INCOME 1,684 4,060 3,482 4,079 Net income
attributable to non-controlling interests
(298
) (693 )
(755 ) (1,036
) NET INCOME ATTRIBUTABLE TO ARK RESTAURANTS
CORP.
$ 1,386 $
3,367 $ 2,727
$ 3,043 NET INCOME PER ARK
RESTAURANTS CORP. COMMON SHARE: Basic
$
0.40 $ 0.99
$ 0.80 $
0.89 Diluted
$ 0.39
$ 0.96 $
0.77 $ 0.87
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING: Basic
3,424 3,418
3,424 3,418
Diluted
3,549 3,494
3,532 3,504
EBITDA Reconciliation: Restaurant operating income $
2,298 $ 5,309 $ 3,188 $ 5,318 Other income (expense), net
(29 ) 113
(5 ) 159
Restaurant income before provision for income taxes 2,269
5,422 3,183 5,477 Gain on sale of Rustic Inn, Jupiter property
- -
1,637 - Pre tax
income 2,269 5,422 4,820 5,477 Depreciation and amortization 1,006
1,109 3,541 3,384 Interest expense, net
178
104 344
280 EBITDA (a)
$
3,453 $ 6,635
$ 8,705 $
9,141 EBITDA adjusted for non-cash stock
option expense, and non-controlling interests: EBITDA (as defined)
(a) $ 3,453 $ 6,635 $ 8,705 $ 9,141 Net income attributable to
non-controlling interests (298 ) (693 ) (755 ) (1,036 ) Non-cash
stock option expense
-
79 -
286 EBITDA, as adjusted
$
3,155 $ 6,021
$ 7,950 $
8,391
(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 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: http://www.businesswire.com/news/home/20170810005860/en/
Ark Restaurants Corp.Robert Stewart,
212-206-8800bstewart@arkrestaurants.com
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