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

August 11, 2009 | About:

Ark Restaurants Corp. (ARKR) filed Quarterly Report for the period ended 2009-06-27.

Ark Restaurants Corp. is a holding company which through subsidiaries operates 29 restaurants two bakeries and a cafeteria. Of those facilities 23 restaurants and two bakeries are owned by the Company and six restaurants and the cafeteria are owned by others and managed bythe Company. Ark Restaurants Corp. has a market cap of $47.6 million; its shares were traded at around $13.65 with a P/E ratio of 12.9 and P/S ratio of 0.4. Ark Restaurants Corp. had an annual average earning growth of 4.9% over the past 5 years.

Highlight of Business Operations:

On a company wide basis same store sales decreased 14.3% during the third fiscal quarter of 2009 compared to the same period last year. Same store sales in Las Vegas decreased by $1,484,000 or 10.3% in the third fiscal quarter of 2009 compared to the third fiscal quarter of 2008. Same store sales in Las Vegas were negatively affected by the unwillingness of the public to engage in gaming activities and a decrease in tourism and convention business, all related to the current economic conditions. Same store sales in New York decreased $2,487,000 or 24.1% during the third quarter. Same store sales in New

York were particularly negatively affected during the quarter by unusually inclement weather with large amounts of rain, continuing layoffs and lack of new job creation, especially in the financial sector, a decrease in corporate parties and a decrease in tourism and convention business related to the current economic conditions. Same store sales in Washington D.C. decreased by $432,000 or 7.1% during the third quarter. Although the current economic conditions do not seem to have affected the Washington D.C. region as much as other regions, unusually inclement weather with large amounts of rain, continuing layoffs and lack of new job creation, a decrease in corporate parties and a decrease in tourism and convention business related to the current economic conditions all contributed to a decrease in sales. Same store sales in Atlantic City decreased by $179,000, or 21.9%, in the third quarter. Same store sales in Atlantic City were negatively affected by the unwillingness of the public to engage in gaming activities and a decrease in tourism and convention business related to the current economic conditions as well as the introduction of slot machine parlors in nearby Pennsylvania. Same store sales in Connecticut decreased by $51,000, or 11.4%, in the third quarter. Same store sales in Connecticut were negatively affected by the unwillingness of the public to engage in gaming activities related to the current economic conditions. Same store sales in Boston decreased $148,000 or 11.5% during the third quarter. Same store sales in Boston were negatively affected by unusually inclement weather with large amounts of rain and the current economic conditions.

Food and beverage costs for the third quarter of 2009 as a percentage of total revenues were 25.5% compared to 25.6% in the third quarter of 2008. These costs for the 39-weeks ended June 27, 2009 as a percentage of total revenues were 25.4% compared to 25.8% in the 39-week period ended June 28, 2008.

Payroll expenses as a percentage of total revenues were 30.8% for the third quarter of 2009 as compared to 28.1% in the third quarter of 2008. Payroll expenses as a percentage of total revenues were 32.6% for the 39-week period ended June 27, 2009 as compared to 30.9% for the 39-week period ended June 28, 2008. The increase in payroll expenses as a percentage of revenue, for the 39-week period ended June 27, 2009, was primarily due to a decrease in sales. Occupancy expenses as a percentage of total revenues were 13.3% during the third fiscal quarter of 2009 compared to 13.0% in the third quarter of 2008. Occupancy expenses as a percentage of total revenues were 15.1% during the 39-week period ended June 27, 2009 compared 13.5% for the 39-week period ended June 28, 2008. Other operating costs and expenses as a percentage of total revenues were 12.4% during the third fiscal quarter of 2009 compared to 11.3% in the third quarter of 2008. The increase in other operating costs and expenses as a percentage of revenue was due to decreased sales and $100,000 of legal costs associated with litigation incurred related to a New York City restaurant during the third fiscal quarter of 2009. Other operating costs and expenses as a percentage of total revenues were 13.5% for the 39-week period ended June 27, 2009 compared to 12.3% for the 39-week period ended June 28, 2008. General and administrative expenses as a percentage of total revenues were 7.1% during the third fiscal quarter of 2009 compared to 6.3% in the third quarter of 2008. General and administrative expenses as a percentage of total revenue were 8.4% for the 39-week period ended June 27, 2009 compared to 7.3% for the 39-week period ended June 28, 2008. The increase in general and administrative expenses as a percentage of revenue was primarily due to decreased sales.

The income tax provisions on continuing operations for the 39-week periods ended June 27, 2009 and June 28, 2008 reflect effective tax rates of 32.5% and 34.5%, respectively. The Company expects its annual tax rate for its current fiscal year to be approximately 34% to 38%. 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 ReportARKR is in the portfolios of Joel Greenblatt of Gotham Capital.

Rating: 2.0/5 (4 votes)

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