Ark Restaurants Announces Financial Results for the Third Quarter of 2014

2014-08-12
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  • Ark Restaurants Total revenues for the three-month period ended June 28, 2014 were $39,110,000 versus $36,473,000 for the three months ended June 29, 2013.

    Ark Restaurants Corp. (NASDAQ:ARKR) today financial results for the third quarter ended June 28, 2014.

    Total revenues for the three-month period ended June 28, 2014 were $39,110,000 versus $36,473,000 for the three months ended June 29, 2013. The three-month period ended June 28, 2014 includes revenues of $3,634,000 related to The Rustic Inn, which was acquired on February 24, 2014 and $648,000 related to Broadway Burger Bar, which was opened in the Tropicana Hotel and Casino during June 2013. The three-month period ended June 28, 2014 includes revenues of $768,000 related to two properties closed during the period due to lease expirations.

    Total revenues for the nine-month period ended June 28, 2014 were $102,286,000 versus $96,899,000 for the nine months ended June 29, 2013. The nine-month period ended June 28, 2014 includes revenues of $5,276,000 related to The Rustic Inn, which was acquired on February 24, 2014 and $1,895,000 related to Broadway Burger Bar, which was opened in the Tropicana Hotel and Casino during June 2013. The nine-month period ended June 28, 2014 includes revenues of $3,565,000 related to two properties closed during the third fiscal quarter due to lease expirations. The nine-month period ended June 29, 2013 includes revenues of $414,000 related to two properties closed in 2013.

    Company-wide same store sales decreased 2.3% for the three-month period ended June 28, 2014 compared to the same three month period last year. Company-wide same store sales decreased 0.1% for the nine-month period ended June 28, 2014 compared to the same nine month period last year.

    The Company’s EBITDA adjusted for non-cash stock option expense and non-controlling interests for the three-month period ended June 28, 2014 was $4,253,000 versus $4,926,000 during the same three-month period last year. Net income for the three-month period ended June 28, 2014 was $2,239,000, or $0.68 per basic share ($0.65 per diluted share), as compared to $2,629,000, or $0.81 per basic share ($0.77 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 June 28, 2014 was $7,579,000 versus $6,990,000 during the same nine-month period last year. Net income for the nine-month period ended June 28, 2014 was $2,627,000, or $0.80 per basic share ($0.77 per diluted share), as compared to $2,372,000, or $0.73 per basic share ($0.71 per diluted share), for the same nine-month period last year.

    On February 24, 2014, the Company completed its acquisition of The Rustic Inn Crabhouse (“The Rustic Inn’) in Dania Beach, Florida for a total purchase price of approximately $7,710,000. The acquisition was financed with a bank loan in the amount of $6,000,000 and cash from operations.

    On July 18, 2014, the Company, through a wholly-owned subsidiary, Ark Jupiter RI, LLC, entered into an agreement with Crab House, Inc., to acquire certain assets and the related lease for a restaurant and bar located in Jupiter, Florida for approximately $250,000. In connection with this transaction the Company entered into an amended lease for an initial period expiring through December 31, 2015. The Company has the option to extend the lease through 2033 and Company expects to open a Rustic Inn Crabhouse at this location in the fall.

    As of June 28, 2014 the Company had cash and cash equivalents totaling $6,738,000. The Company had a seller note from the purchase of 250,000 shares of treasury stock in December 2011 with an outstanding balance of $443,000 at June 28, 2014. The Company also had a bank note for the purchase of membership interests in Ark Hollywood/Tampa Investment, LLC and the purchase of The Rustic Inn with an outstanding balance of $7,409,000 at June 28, 2014.

    Ark Restaurants owns and operates 20 restaurants and bars, 21 fast food concepts and catering operations in New York City, Washington, D.C. and Las Vegas, NV. Five restaurants are located in New York City, three are located in Washington, D.C., six 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 and one is located in Dania Beach, Florida. 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; one bar within the Venetian Casino Resort, as well as two 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 include one fast food concept and one restaurant. 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 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.

     
    ARK RESTAURANTS CORP.
    Consolidated Condensed Statements of Income
    For the 13 and 39-week periods ended June 28, 2014 and June 29, 2013
     

    (In Thousands, Except per share amounts)

     
         
    13 weeks ended 13 weeks ended 39 weeks ended 39 weeks ended
     
    June 28, June 29, June 28, June 29,

    2014

    2013

    2014

    2013

     
    TOTAL REVENUES $ 39,110   $ 36,473   $ 102,286   $ 96,899  
     
    COST AND EXPENSES:
     
    Food and beverage cost of sales 10,738 8,959 26,965 24,142
    Payroll expenses 11,952 10,805 32,989 31,767
    Occupancy expenses 4,360 4,442 12,915 13,063
    Other operating costs and expenses 4,989 4,400 13,518 12,797
    General and administrative expenses 2,567 2,398 7,790 7,564
    Depreciation and amortization   1,130     1,082     3,384     3,179  
     
    Total costs and expenses   35,736     32,086     97,561     92,512  
     
    OPERATING INCOME   3,374     4,387     4,725     4,387  
     
    OTHER (INCOME) EXPENSE:
     
    Interest (income) expense, net 95 24 141 33
    Other income, net   (121 )   (38 )   (302 )   (210 )
    Total other income, net   (26 )   (14 )   (161 )   (177 )
     
    INCOME BEFORE PROVISION FOR INCOME TAXES 3,400 4,401 4,886 4,564
     
    Provision for income taxes   702     1,112     1,183     1,168  
     
    CONSOLIDATED NET INCOME 2,698 3,289 3,703 3,396
     
    Net income attributable to non-controlling interests   (459 )   (660 )   (1,076 )   (1,024 )
     
    NET INCOME ATTRIBUTABLE TO ARK RESTAURANTS CORP. $ 2,239   $ 2,629   $ 2,627   $ 2,372  
     
    NET INCOME PER ARK RESTAURANTS CORP. COMMON SHARE:
    Basic $ 0.68   $ 0.81   $ 0.80   $ 0.73  
    Diluted $ 0.65   $ 0.77   $ 0.77   $ 0.71  
     
    WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING:
    Basic   3,293     3,245     3,270     3,245  
    Diluted   3,429     3,396     3,413     3,362  
     
    EBITDA Reconciliation:
    Pre tax income $ 3,400 $ 4,401 $ 4,886 $ 4,564
    Depreciation and amortization 1,130 1,082 3,384 3,179
    Interest expense, net   95     24     141     33  
    EBITDA (a) $ 4,625   $ 5,507   $ 8,411   $ 7,776  
     
    EBITDA adjusted for non-cash stock option expense and non-controlling interests:
    EBITDA (as defined) (a) $ 4,625 $ 5,507 $ 8,411 $ 7,776
    Non-cash stock option expense 87 79 244 238
    Net income attributable to non-controlling interests   (459 )   (660 )   (1,076 )   (1,024 )
    EBITDA, as adjusted $ 4,253   $ 4,926   $ 7,579   $ 6,990  
     

    (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.



    Logos, product and company names mentioned are the property of their respective owners.

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