Ark Restaurants Corp. Reports Operating Results (10-Q)
Ark Restaurants Corp. has a market cap of $51.24 million; its shares were traded at around $13.5 with a P/E ratio of 22.21 and P/S ratio of 0.44. The dividend yield of Ark Restaurants Corp. stocks is 6.82%.
Highlight of Business Operations: During the Companys third fiscal quarter of 2011, revenues of $33,462,000 (excluding revenues from VIEs in the amount of $5,895,000) decreased 4.8% compared to revenues of $35,162,000 in the third fiscal quarter of 2010. This decrease is primarily due to: (i) the closure of Gonzalez y Gonzalez, in January 2011, (ii) a slight decrease in sales at our properties that have significant amounts of outdoor seating due to poor weather conditions, (iii) the impact of management fees related to the VIEs which were included in Other Revenue in the prior period and are now consolidated, as discussed above, and (iv) a decrease in sales at Sequoia DC as a result of the interruption of our business due to a flood, partially offset by sales at The Sporting House in Las Vegas, which opened in October 2010.
During the Companys 39-week period ended July 2, 2011, revenues of $85,393,000 (excluding revenues from VIEs in the amount of $16,595,000) decreased 0.5% compared to revenues of $85,852,000 in the 39-week period ended July 3, 2010, primarily as a result of the above, further offset by sales related to our restaurants Robert in New York City which opened in December 2009.
On a Company-wide basis, same store sales decreased 0.3% during the third fiscal quarter of 2011 compared to the same period last year. Same-store sales in Las Vegas increased by $593,000 or 4.7% in the third fiscal quarter of 2011 compared to the third fiscal quarter of 2010 primarily as a result of combining three fast food outlets located in the Village Eateries in the New York-New York Hotel & Casino Resort in Las Vegas into a new restaurant, The Broadway Burger Bar, which opened at the end of December 2010. Same-store sales in New York decreased $165,000 or 1.6% during the third quarter of fiscal 2011 compared to 2010 primarily as a result of poor weather conditions as compared to the prior year. Same store sales in Washington D.C. decreased by $732,000 or 11.8% during the third quarter of fiscal 2011 compared to 2010 primarily as a result of the interruption of our business at Sequoia DC due to a flood. Same-store sales in Atlantic City increased by $179,000, or 29.8% in the third quarter of fiscal 2011 compared to 2010 as result of new ownership at Resorts Casino Hotel and their significant marketing efforts for the property. Same-store sales in Boston increased $12,000 or 1.0% during the third quarter of fiscal 2011 compared to 2010.
Food and beverage costs for the third quarter of 2011 as a percentage of total revenues were 27.6% (excluding food and beverage costs associated with VIEs in the amount of $1,512,000) as compared to 25.6% for the third quarter of 2010. Food and beverage costs for the 39-weeks ended July 2, 2011 as a percentage of total revenues were 27.1% (excluding food and beverage costs associated with VIEs in the amount of $4,453,000) as compared to 25.6% for the 39-week period ended July 3, 2010. These increases are the result of higher commodity prices in the current fiscal year.
On March 18, 2011, a subsidiary of the Company entered into a lease agreement to operate a yet to be named restaurant and bar in New York City. In connection with the agreement, the landlord has agreed to contribute up to $1,800,000 towards the construction of the facility, which the Company expects to be $4,000,000 to $5,000,000. The initial term of the lease for this facility will expire on March 31, 2027 and will have one five-year renewal. The Company anticipates the restaurant will open during the second quarter of the 2012 fiscal year.
During the fourth fiscal quarter of 2010, the Company closed its Pinch & SMac operation located in New York City, and re-concepted the location as Polpette, which featured meatballs and other Italian food. Sales at Polpette failed to reach the level sufficient to achieve the results the Company required. As a result, the Company closed this restaurant on February 6, 2011 and it was sold on April 28, 2011 for $400,000, including a four-year note for $100,000 bearing interest at 6%. The Company realized a loss on the sale of $71,000 which was recorded during the second quarter of fiscal 2011 as well as operating losses of $0 and $148,000 for the 13-weeks and 39-weeks ended July 2, 2011, respectively, all of which are included in discontinued operations in the accompanying Consolidated Condensed Statement of Operations.
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