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Ark Restaurants Announces Financial Results for the Third Quarter of 2018

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Ark Restaurants Corp. (NASDAQ:ARKR) today reported financial results for
the third quarter ended June 30, 2018.

Total revenues for the three-month period ended June 30, 2018 were
$44,800,000 versus $41,350,000 for the three months ended July 1, 2017.
The three-month period ended June 30, 2018 includes revenues of
$3,618,000 related to Sequoia DC which was closed for renovation for
most of three-month period ended July 1, 2017. The three-month period
ended July 1, 2017 includes revenues of $609,000 related to one property
closed prior to fiscal 2018.

Total revenues for the nine-month period ended June 30, 2018 were
$119,428,000 versus $114,410,000 for the nine months ended July 1, 2017.
The nine-month period ended June 30, 2018 includes revenues of
$7,152,000 related to Sequoia DC versus $2,510,000 for the same period
last year. Sequoia DC was closed for renovation for the entire second
quarter and most of third quarter of 2017. The nine-month period ended
July 1, 2017 includes revenues of $3,867,000 related to three properties
that were closed prior to fiscal 2018.

Company-wide same store sales increased 2.3% for the three-month period
ended June 30, 2018 compared to the same three month period last year.

The Company's EBITDA, adjusted for non-controlling interests, for the
three-month period ended June 30, 2018 was $4,773,000 versus $3,155,000
during the same three-month period last year.

The Company's EBITDA from restaurant operations, adjusted for
non-controlling interests, for the nine-month period ended June 30, 2018
was $7,615,000 versus $6,313,000 during the same nine-month period last
year. EBITDA from restaurant operations for the nine-months ended July
1, 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 June 30, 2018 was $2,657,000
or $0.77 per basic share, $0.75 per diluted share, compared to
$1,386,000 or $0.40 per basic, $0.39 per diluted share, for the same
three-month period last year.

Net income for the nine-month period ended June 30, 2018 was $3,648,000
or $1.06 per basic, $1.03 per diluted share, compared to $2,727,000, or
$0.80 per basic share, $0.77 per diluted share, for the same six-month
period last year.

On July 29, 2018, the Company's President and Chief Financial Officer,
Robert J. Stewart, passed away at the age of 61. Bob was elected as
Chief Financial Officer in June 2002 and joined the Board of Directors
in March 2012. In 2013 he was elected President. Prior to joining Ark,
Bob was a Chief Financial Officer and Executive Vice President at Fortis
Capital Holdings and held senior financial and audit positions in
Skandinaviska Enskilda Banken in their New York, London and Stockholm
offices.

Bob had great integrity, strength of character, and had a genuine desire
to be a good friend to all around him. Being a good friend was natural
to Bob and he easily succeeded in this as he did in every aspect during
his 17 years with Ark. He was loved by everyone at the Company.

On December 22, 2017, the 2017 Tax Cuts and Jobs Act (the "Tax Act") was
enacted into law and the new legislation contains several key tax
provisions that affected us, including a reduction of the corporate
income tax rate to 21% effective January 1, 2018. We were required to
recognize the effect of the tax law changes in the period of enactment,
such as determining the transition tax, remeasuring our U.S. deferred
tax assets and liabilities, and reassessing the net realizability of our
deferred tax assets and liabilities. In December 2017, the Securities
and Exchange Commission (the "SEC") staff issued Staff Accounting
Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and
Jobs Act, which allows us to record provisional amounts during a
measurement period not to extend beyond one year of the enactment date.
As a result, income tax expense reported for the six-months ended March
31, 2018 was adjusted to reflect the effects of the change in the tax
law and resulted in a discrete income tax benefit of approximately $1.2
million. While we were able to make a reasonable estimate of the impact
of the reduction in the corporate tax rate, it may be affected by other
analyses related to the Tax Act. Accordingly, the Company's accounting
for impact of the Tax Act remains incomplete as of June 30, 2018.

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 39-week periods ended June 30, 2018 and July 1,
2017
           
(In Thousands, Except per share amounts)
 
13 weeks ended 13 weeks ended 39 weeks ended 39 weeks ended
 
June 30, July 1, June 30, July 1,

2018

2017

2018

2017

 
TOTAL REVENUES $ 44,800   $ 41,350   $ 119,428   $ 114,410  
 
COST AND EXPENSES:
 
Food and beverage cost of sales 11,874 11,227 31,832 30,814
Payroll expenses 14,685 13,776 41,386 39,402
Occupancy expenses 4,683 4,541 13,833 13,037
Other operating costs and expenses 5,658 5,398 15,972 15,390
General and administrative expenses 2,859 2,955 8,461 8,699
Depreciation and amortization   1,255     1,006     3,837     3,541  
 
Total costs and expenses   41,014     38,903     115,321     110,883  
 
RESTAURANT OPERATING INCOME 3,786 2,447 4,107 3,527
 
Gain on sale of Rustic Inn, Jupiter property   -     -     -     1,637  
 
OPERATING INCOME   3,786     2,447     4,107     5,164  
 
OTHER (INCOME) EXPENSE:
 
Interest expense, net   299     178     791     344  
Total other expense, net   299     178     791     344  
 
INCOME BEFORE PROVISION FOR INCOME TAXES 3,487 2,269 3,316 4,820
 
Provision for income taxes   562     585     (661 )   1,338  
 
CONSOLIDATED NET INCOME 2,925 1,684 3,977 3,482
 
Net (income) loss attributable to non-controlling interests   (268 )   (298 )   (329 )   (755 )
 
NET INCOME ATTRIBUTABLE TO ARK RESTAURANTS CORP. $ 2,657   $ 1,386   $ 3,648   $ 2,727  
 
NET INCOME PER ARK RESTAURANTS CORP. COMMON SHARE:
Basic $ 0.77   $ 0.40   $ 1.06   $ 0.80  
Diluted $ 0.75   $ 0.39   $ 1.03   $ 0.77  
 
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING:
Basic   3,440     3,424     3,436     3,424  
Diluted   3,558     3,549     3,554     3,532  
 
 
EBITDA Reconciliation:
Restaurant operating income $ 3,786 $ 2,447 $ 4,107 $ 3,527
Interest expense, net   (299 )   (178 )   (791 )   (344 )
Restaurant income before provision for income taxes 3,487 2,269 3,316 3,183
Gain on sale of Rustic Inn, Jupiter property   -     -     -     1,637  
Pre tax income $ 3,487 $ 2,269 $ 3,316 $ 4,820
Depreciation and amortization 1,255 1,006 3,837 3,541
Interest expense, net   299     178     791     344  
EBITDA (a) $ 5,041   $ 3,453   $ 7,944   $ 8,705  
 
EBITDA, adjusted for non-controlling interests and Rustic Inn,
Jupiter gain:
EBITDA (as defined) (a) $ 5,041 $ 3,453 $ 7,944 $ 8,705
Net (income) loss attributable to non-controlling interests (268 ) (298 ) (329 ) (755 )
Gain on sale of Rustic Inn, Jupiter property   -     -     -     (1,637 )
EBITDA from restaurant operations, as adjusted $ 4,773   $ 3,155   $ 7,615   $ 6,313  
 

(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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