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Ark Restaurants Corp. Reports Operating Results (10-Q)

February 15, 2011 | About:
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10qk

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Ark Restaurants Corp. (ARKR) filed Quarterly Report for the period ended 2011-01-01.

Ark Restaurants Corp. has a market cap of $51.3 million; its shares were traded at around $14.7 with a P/E ratio of 19.9 and P/S ratio of 0.4. The dividend yield of Ark Restaurants Corp. stocks is 6.8%.Hedge Fund Gurus that owns ARKR: Joel Greenblatt of Gotham Capital.

Highlight of Business Operations:

On a Company-wide basis, same store sales increased 0.5% during the first fiscal quarter of 2011 compared to the same period last year. Same store sales in Las Vegas decreased by $510,000 or 4.3% in the first fiscal quarter of 2011 compared to the first fiscal quarter of 2010. Same store sales in Las Vegas were negatively affected by the unwillingness of the public to engage in gaming activities and increase competition as a result of recently opened hotel and casinos. Same store sales in New York increased $349,000 or 5.3% during the first quarter of fiscal 2011 compared to 2010 primarily as a result of improved local economic conditions. Same store sales in Washington D.C. increased by $339,000 or 11.1% during the first quarter of fiscal 2011 compared to 2010 primarily as a result of improved local economic conditions. Same store sales in Atlantic City decreased by $115,000, or 18.2% in the first quarter of fiscal 2011 compared to 2010. Same store sales in Atlantic City were negatively affected by the unwillingness of the public to engage in gaming activities and the introduction of table games in the slot machine parlors located in nearby Pennsylvania. Same store sales in Boston increased $77,000 or 8.0% during the first quarter of fiscal 2011 compared to 2010 primarily as a result of improved local economic conditions.

Food and beverage costs for the first quarter of 2011 as a percentage of total revenues were 26.2% (excluding food and beverage costs associated with VIEs in the amount of $1,315,000) as compared to 25.5% for the first quarter of 2010. This increase is the result of higher commodity prices in the current quarter.

Payroll expenses as a percentage of total revenues were 35.7% for the first quarter of 2011 (excluding payroll expenses associated with VIEs in the amount of $1,342,000) as compared to 35.1% in the first quarter of 2010. The increase in payroll expenses as a percentage of revenue was primarily due to a decrease in sales in Las Vegas and start-up payroll at The Sporting House in Las Vegas. Occupancy expenses as a percentage of total revenues were 13.4% during the first fiscal quarter of 2011 (excluding occupancy costs associated with VIEs in the amount of $675,000) compared to 16.5% in the first quarter of 2010. This decrease in occupancy expenses as a percentage of revenue was due to a decrease in insurance premiums combined with increased sales at properties where rents are fixed. Other operating costs and expenses as a percentage of total revenues were 14.7% for the first fiscal quarter of 2011 (excluding other operating costs and expenses associated with VIEs in the amount of $567,000) as compared to 14.0% in the first quarter of 2010. This increase is attributable to a decrease in sales in Las Vegas. General and administrative expenses (which relate solely to the corporate office in New York City and therefore there is no impact from the VIEs) as a percentage of total revenues were 8.8% during the first fiscal quarter of 2011 compared to 9.6% in the first quarter of 2010. The decrease in general and administrative expenses as a percentage of revenue is due to the fixed nature of the expenses and the increase in revenue.

The income tax provision (benefit) on continuing operations for the 13-week periods ended January 1, 2011 and January 2, 2010 reflect effective tax rates of approximately 24% and (22%), respectively. The Company expects its effective tax rate for its current fiscal year to be approximately 23% to 27%, which is significantly lower than the statutory rate as a result of the inclusion of operating income attributable to the non-controlling interests of the VIEs that is not taxable to the Company. The final annual tax rate cannot be determined until the end of the fiscal year; therefore, the actual tax rate could differ from our current estimates.

Read the The complete Report

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10qk
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