Ark Restaurants: Announces Q3-2021 Financial Results

New York City / NY. (arc) Ark Restaurants Corporation reported financial results for Q3-2021 ended July 03.

Financial Results

Total revenues for the 13 weeks ended July 3, 2021 were USD 42,965,000 versus USD 7,199,000 for the 13 weeks ended June 27, 2020. The 13 weeks ended July 3, 2021 includes revenues of USD 2,141,000 related to Blue Moon Fish Company, which was acquired on December 1, 2020.

Total revenues for the 39 weeks ended July 3, 2021 were USD 89,031,000 versus USD 84,716,000 for the 39 weeks ended June 27, 2020. The 39 weeks ended July 3, 2021 includes revenues of USD 4,582,000 related to Blue Moon Fish Company, which was acquired on December 1, 2020. The 39 weeks ended June 27, 2020 includes revenues of USD 2,935,000 related to Thunder Grill in Washington, D.C., which was closed March 20, 2020 and Gallagher’s Steakhouse and Gallagher’s Burger Bar in Atlantic City, NJ, which was closed on January 2, 2021.

Company-wide same store sales increased 455.0 percent for the 13 weeks ended July 3, 2021 compared to the same period of the prior year. The increase in same-store sales for the 13-week period ended July 3, 2021 as compared to the same period of the prior year, are the result of all of our properties operating with no capacity restrictions in the current period combined with the fact that all of our properties were closed for the majority of the prior period and operated at limited capacity when they reopened as a result of government mandates in connection with the Covid-19 pandemic.

Company-wide same store sales decreased 7.1 percent for the 13 weeks ended July 3, 2021 as compared to the 13 weeks ended June 29, 2019 (the comparable pre-pandemic quarter). Note that total revenues for the 13 weeks ended June 29, 2019 were USD 44,807,000, which includes revenues of USD 1,239,000 related to JB’s on the Beach in Deerfield Beach, FL, which was acquired on May 15, 2019.

The Company’s Ebitda, which includes a gain on the forgiveness of Paycheck Protection Program Loans and related accrued interest in the aggregate amount of USD 3,195,000 (PPP Loan Forgiveness), for the 13 weeks ended July 3, 2021 was USD 9,390,000 versus USD (4,642,000) for the 13-week period ended June 27, 2020. The Company’s Ebitda, excluding PPP Loan Forgiveness and adjusted for other items as set out below, for the 13 weeks ended July 3, 2021 was USD 5,610,000 versus USD (4,351,000) for the 13-week period ended June 27, 2020. Net income attributable to Ark Restaurants Corp. for the 13-weeks ended July 3, 2021 was USD 2,670,000 or USD 0.76 per basic share, USD 0.73 per diluted share, compared to a net loss of USD (2,526,000) or USD (0.72) per basic and diluted share, for the 13-week period ended June 27, 2020.

The Company’s Ebitda, which includes PPP Loan Forgiveness in the amount of USD 7,318,000, for the 39 weeks ended July 3, 2021 was USD 10,672,000 versus USD (1,935,000) for the 39-week period ended June 27, 2020. The Company’s Ebitda, excluding PPP Loan Forgiveness and adjusted for other items as set out below, for the 39 weeks ended July 3, 2021 was USD 2,745,000 versus USD (1,397,000) for the 39-week period ended June 27, 2020. Net income attributable to Ark Restaurants Corp. for the 39-weeks ended July 3, 2021 was USD 6,067,000 or USD 1.73 per basic share, USD 1.68 per diluted share, compared to a net loss of USD (2,791,000) or USD (0.80) per basic and diluted share, for the 39-week period ended June 27, 2020.

Covid-19 Update

The Covid-19 pandemic has adversely affected, and is expected to continue to adversely affect, our operations and financial results for the foreseeable future. As of July 3, 2021, all of our restaurants have re-opened and currently, national, state and local jurisdictions have removed their capacity restrictions on businesses and therefore our restaurants are serving customers in our dining rooms without social distancing requirements. However, we cannot predict whether we will be required to limit capacity or close again in the future, as these decisions will depend primarily on the actions of a number of governmental bodies over which we have no control. It is possible additional outbreaks could require us to reduce our capacity, implement social distancing or further suspend our in-restaurant dining operations, and there is no guarantee that state and local jurisdictions, that have currently eased restrictions, will not reverse or roll-back the restrictions, as many have done in the past. Additionally, our restaurant operations have been and could continue to be disrupted by employee staffing issues because of illness, fear of contracting Covid-19 or caring for family members due to Covid-19, or for other reasons. Furthermore, we remain in regular contact with our major suppliers and while to date we have not experienced significant disruptions in our supply chain due to Covid-19, we could see significant future disruptions should the impacts of Covid-19 extend for a considerable amount of time.

On August 3, 2021, New York City became the first U.S. city to require proof of at least one dose of a Covid-19 vaccine for a variety of activities for workers and customers, including indoor dining. The requirements are effective starting on August 16, 2021 with enforcement to begin on September 13, 2021.

Other Matters

On January 26, 2021, the Company exercised its right-of-first-refusal to acquire the land, building and parking lot associated with JB’s on the Beach and immediately contributed such rights and interest to an unrelated entity (Newco) that purchased the properties on March 22, 2021. In exchange, the Company received a 5 percent interest in Newco, which plans future development of the sites. In addition, all rights and privileges under the current lease were assigned to Newco, as landlord and the lease terms remain unchanged.

During the 39 weeks ended July 3, 2021, USD 7,318,000 of PPP Loans (including USD 63,000 of accrued interest) were forgiven. To the extent, if any, that any or all of the remaining PPP Loans are not forgiven, beginning one month following expiration of the Deferral Period, and continuing monthly until 24 months from the date of each applicable Note (the «Maturity Date»), each respective Borrower is obligated to make monthly payments of principal and interest to the Lender with respect to any unforgiven portion of the Notes, in such equal amounts required to fully amortize the principal amount outstanding on such Notes as of the last day of the applicable Deferral Period by the applicable Maturity Date.