New York City / NY. (arc) Ark Restaurants Corporation reported financial results for the first quarter ended December 28, 2019. Total revenues for the 13-weeks ended December 28, 2019 were USD 43,514,000 versus USD 40,548,000 for the 13-weeks ended December 29, 2018. The 13-weeks ended December 28, 2019 includes revenues of USD 2,422,000 related to JB’s on the Beach in Deerfield Beach, FL which was acquired on May 15, 2019. The 13-weeks ended December 29, 2018 includes revenues of USD 839,000 related to Durgin-Park which was closed on January 12, 2019.
Company-wide same store sales increased 3.5 percent for the 13-weeks ended December 28, 2019 as compared to the same period of last year.
The Company’s Ebitda from restaurant operations for the 13-weeks ended December 28, 2019, adjusted for non-controlling interests and non-cash stock option expense was USD 3,485,000 versus Ebitda from restaurant operations adjusted for non-controlling interests, non-cash stock option expense and losses incurred on the closure of Durgin-Park (discussed below) of USD 2,543,000 during the same 13-week period of last year. Net income for the 13-weeks ended December 28, 2019 was USD 1,513,000 or USD 0.43 per basic and diluted share, compared to a net loss of (USD 62,000) or (USD 0.02) per basic and diluted share, for the same 13-week period in the prior year.
As of December 29, 2018, the Company determined that it would not be able to operate Durgin-Park profitably due to decreased traffic at the Faneuil Hall Marketplace in Boston, MA, where it was located, and rising labor costs. As a result, included in the Consolidated Statement of Operations for the 13-weeks ended December 29, 2018 are losses on closure in the amount of USD 1,067,000 consisting of: (i) impairment of trademarks of USD 721,000, (ii) accelerated depreciation of fixed assets of USD 333,000, and (iii) write-offs of prepaid and other expenses of USD 13,000. The restaurant was closed on January 12, 2019.
The Company adopted the new lease accounting standards on September 29, 2019 (the first day of fiscal year 2020) which requires us to recognize assets and liabilities for leases with lease terms of more than twelve months on our balance sheet. We used a modified retrospective approach and therefore did not restate comparative periods for those lease contracts for which we have taken possession of the property as of September 28, 2019. Accordingly, prior period amounts were not revised and continue to be reported in accordance with the accounting standards then in effect. As a result of the adoption of this standard, we recorded right-of-use assets of USD 62,330,000 and lease liabilities related to our real estate operating leases of USD 63,943,000. The adoption of this standard did not materially impact retained earnings or our Consolidated Condensed Statement of Operations and had no impact on cash flows.
