Ark Restaurants: Announces Q4-2022 Financial Results

New York City / NY. (arc) Ark Restaurants Corporation reported financial results for the fourth quarter and fiscal year ended October 01, 2022. The Company’s fiscal year ends on the Saturday nearest September 30. The fiscal years ended October 01, 2022 and October 02, 2021 both included 52 weeks and the quarters ended October 01, 2022 and October 02, 2021 both included 13 weeks.

Financial Results

Total revenues for the 13 weeks ended October 01, 2022 were USD 46,884,000 versus USD 42,839,000 for the 13 weeks ended October 02, 2021. The 13 weeks ended October 02, 2021 includes revenues of USD 145,000 related to Clyde Frazier’s Wine and Dine in New York, NY, which was closed on September 1, 2021.

Total revenues for the year ended October 01, 2022 were USD 183,674,000 versus USD 131,870,000 for the year ended October 02, 2021. The year ended October 02, 2021 includes revenues of USD 1,296,000 related to Clyde Frazier’s Wine and Dine and Gallagher’s Steakhouse and Gallagher’s Burger Bar in Atlantic City, NJ, which were closed during fiscal 2021.

The Company’s Ebitda, excluding gains on the forgiveness of Paycheck Protection Program Loans (PPP) and adjusted for other items all as set out in the table below, for the 13 weeks ended October 01, 2022 was USD 2,352,000 versus USD 5,210,000 for the 13 weeks ended October 02, 2021. Net income attributable to Ark Restaurant Corp. for the 13 weeks ended October 01, 2022 was USD 762,000 or USD 0.21 per basic and diluted share, compared to net income of USD 6,828,000 (which includes PPP Loan Forgiveness of USD 3,082,000) or USD 1.93 and USD 1.89 per basic and diluted share, respectively, for the 13 weeks ended October 02, 2021.

The Company’s Ebitda, excluding the PPP Loan Forgiveness and adjusted for other items all as set out in the table below, for the year ended October 01, 2022 was USD 13,987,000 versus USD 7,955,000 for the year ended October 02, 2021. Net income attributable to Ark Restaurant Corp. for the year ended October 01, 2022 was USD 9,281,000 (which includes PPP Loan Forgiveness of USD 2,420,000) or USD 2.61 and USD 2.58 per basic and diluted share, respectively, compared to net income of USD 12,895,000 (which includes PPP Loan Forgiveness of USD 10,400,000) or USD 3.67 and USD 3.58 per basic and diluted share, respectively, for the year ended October 02, 2021.

As of October 01, 2022, the Company had cash and cash equivalents of USD 23,439,000, a certificate of deposit in the amount of USD 5,021,000 maturing in January 2023, and total outstanding debt of USD 23,729,000.

Covid-19 Pandemic and Inflation

Recent global events, including the Covid-19 pandemic, have adversely affected global economies, disrupted global supply chains and labor force participation and created significant volatility and disruption of financial markets.

We experienced significant and variable disruptions to our business as federal, state and local restrictions were mandated, among other remedial measures, to mitigate the spread of the Covid-19 virus. During fiscal 2021, most of our restaurants operated with no restrictions on indoor dining, although there was a significant reduction in guest traffic at our restaurants due to changes in consumer behavior as public health officials encouraged social distancing. While restrictions on the type of permitted operating model and occupancy capacity may continue to change, during fiscal 2022 all of our restaurants operated with no restrictions.

During fiscal 2022, in addition to the associated impact of Covid-19, our operating results have been impacted by geopolitical and other macroeconomic factors, leading to increased commodity and wage inflation and other increased costs. The ongoing effects of Covid-19 and its variants, along with other geopolitical and macroeconomic events, could lead to further government mandates, including but not limited to capacity restrictions, shifts in consumer behavior, wage inflation, staffing challenges, product and services cost inflation and disruptions in our supply chain. If these factors significantly impact our cash flow in the future, we may again implement mitigation actions such as suspending dividends, increasing borrowings or modifying our operating strategies. Some of these measures may have an adverse impact on our business, including possible impairments of assets.

Other Matters

On April 08, 2022, the Company extended its lease for Gallagher’s Steakhouse at the New York-New York Hotel and Casino in Las Vegas, NV through December 31, 2032. In connection with the extension, the Company has agreed to spend a minimum of USD 1,500,000 to materially refresh the premises by April 30, 2023 (as extended from September 30, 2022 due to supply chain issues), subject to additional extensions as set out in the agreement.

On June 24, 2022, the Company extended its lease for America at the New York-New York Hotel and Casino in Las Vegas, NV through December 31, 2033. In connection with the extension, the Company has agreed to spend a minimum of USD 4,000,000 to materially refresh the premises by December 31, 2024, subject to various extensions as set out in the agreement.

On July 21, 2022, the Company extended its lease for the Village Eateries at the New York-New York Hotel and Casino in Las Vegas, NV through December 31, 2034. As part of this extension, the Broadway Burger Bar and Grill and Gonzalez y Gonzalez, were carved out of the Village Eateries footprint and the extended date for those two locations is December 31, 2033. In connection with the extension, the Company has agreed to spend a minimum of USD 3,500,000 to materially refresh all three of these premises by June 30, 2023, subject to various extensions as set out in the agreement.

Ark Restaurants owns and operates 17 restaurants and bars, 16 fast food concepts and catering operations primarily in New York City, Florida, Washington, DC, Las Vegas, Nevada and the gulf coast of Alabama. Four restaurants are located in New York City, one is located in Washington, DC, five are located in Las Vegas, Nevada, one is located in Atlantic City, New Jersey, four 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 and 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 in the Tropicana Hotel and Casino. The Florida operations include the Rustic Inn in Dania Beach, Shuckers in Jensen Beach, JB’s on the Beach in Deerfield Beach, Blue Moon Fish Company in Lauderdale-by-the-Sea and the operation of four fast food facilities in Tampa and six fast food facilities in Hollywood, 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 and one in Spanish Fort.

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