Ark Restaurants Announces Financial Results For The Fourth Quarter And Full Year 2011

Ark Restaurants Corp. (NASDAQ:ARKR) today reported financial results for the fourth quarter and full year ended October 1, 2011.

Effective October 3, 2010, the Company adopted amendments to ASC 810 (formerly FASB Statement of Accounting Standards (“SFAS”) No. 167— Amendments to FASB Interpretation No. 46(R) (“SFAS No 167”)). The new standard pertains to the consolidation of variable interest entities (“VIEs”) if the Company is determined to be the primary beneficiary of the VIE. As a result we were required to consolidate certain limited partnerships effective as of the adoption date. The Company did not retroactively apply this guidance.

During the three month period ended October 1, 2011, the Company recorded a charge of $2,603,000 to impair the leasehold improvements and equipment of an underperforming property in which the Company is a majority partner. The impairment amount reflected in our Consolidated Condensed Statement of Income for the three-month period and year ending October 1, 2011 is offset by the $856,000 share of the charge attributable to the limited partners. This amount is included in the line item Net (Income) Loss Attributable to Non-controlling Interests in the accompanying Consolidated Condensed Statement of Income.

As of October 1, 2011 the Company had cash, cash equivalents and short term investments totaling $10,479,000 (including $852,000 of cash related to VIEs) and no long-term debt.

Company-wide same store sales (including VIEs) increased 4.2% for the three-month period ended October 1, 2011 compared to the same three month period last year. For fiscal 2011 company-wide same store sales (including VIEs) increased 4.9% compared to the same period last year.

Total revenues for the three-month period ended October 1, 2011 were $37,456,000 (including $5,621,000 related to consolidated VIEs) versus $31,916,000 in the three months ended October 2, 2010. Total revenues for fiscal 2011 were $139,445,000 (including $22,216,000 related to consolidated VIEs) versus $117,768,000 in fiscal 2010.

Continuing Operations EBITDA adjusted for non-cash stock option expense, the impairment charge discussed above and non-controlling interests for the three-month period ended October 1, 2011 was $3,658,000 versus $2,652,000 during the same three-month period last year. The Company’s income from continuing operations for the three-month period ended October 1, 2011 was $863,000 (after the net effect of the impairment charge of $1,747,000), or $0.25 per basic and diluted share, as compared to $1,083,000, or $0.31 per basic and diluted share, for the same three-month period last year.

Continuing Operations EBITDA adjusted for non-cash stock option expense, the impairment charge discussed above and non-controlling interests for fiscal 2011 was $8,077,000 versus $8,081,000 during the same period last year. The Company’s income from continuing operations for fiscal 2011 was $1,562,000 (after the net effect of the impairment charge of $1,747,000), or $0.45 per share ($0.44 per diluted share), as compared to $2,605,000, or $0.75 per share ($0.74 per diluted share), for the same period last year.

Ark Restaurants owns and operates 20 restaurants and bars, 28 fast food concepts and catering operations in New York City, Washington, D.C. and Las Vegas, NV. Six restaurants are located in New York City, three are located in Washington, D.C., seven are located in Las Vegas, Nevada, two are located in Atlantic City, New Jersey, one is located at the Foxwoods Resort Casino in Ledyard, Connecticut and one is located in Boston, Massachusetts. The Las Vegas operations include five restaurants within the New York-New York Hotel & Casino Resort and operation of the hotel's room service, banquet facilities, employee dining room and six food court concepts; one bar within the Venetian Casino Resort, as well as three food court concepts and one restaurant within the Planet Hollywood Resort and Casino. In Atlantic City, New Jersey, the Company operates a restaurant and a bar in the Resorts Atlantic City Hotel and Casino. The operations at the Foxwoods Resort Casino include one fast food concept and six fast food concepts at the MGM Grand Casino. In Boston, Massachusetts, the Company operates a restaurant in the Faneuil Hall Marketplace. The Florida operations under management include five fast food facilities in Tampa, Florida and seven fast food facilities in Hollywood, Florida, each at a Hard Rock Hotel and Casino operated by the Seminole Indian Tribe at these locations.

Except for historical information, this news release contains forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements involve unknown risks, and uncertainties that may cause the Company's actual results or outcomes to be materially different from those anticipated and discussed herein. Important factors that might cause such differences are discussed in the Company's filings with the Securities and Exchange Commission. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Actual results could differ materially from those anticipated in these forward-looking statements, if new information becomes available in the future.

 
 
ARK RESTAURANTS CORP.
Consolidated Condensed Statements of Income
For the 13 week and 52 week periods ended October 1, 2011 and October 2, 2010
 
(In Thousands, Except per share amounts)                  
 
13 weeks ended 13 weeks ended 52 weeks ended 52 weeks ended
 
October 1, October 2, October 1, October 2,

2011

2010

2011

2010
 
TOTAL REVENUES (includes $5,621 and $22,216 for the 13 weeks and
52 weeks ended October 1, 2011, respectively, related to VIEs) $ 37,456   $ 31,916   $ 139,445   $ 117,768  
 
COST AND EXPENSES:
 
Food and beverage cost of sales 9,929 8,335 37,565 30,326
Payroll expenses 11,886 10,211 45,921 38,003
Occupancy expenses 4,714 4,427 19,244 16,758

Other operating costs and expenses
4,680 4,602 18,243 16,293
General and administrative expenses 2,359 2,238 9,476 9,516
Impairment loss from write-down of long lived assets 2,603 - 2,603 -
Depreciation and amortization   1,160     981     4,491     3,873  
 
Total costs and expenses (includes $4,381 and $17,569 for the 13 weeks
and 52 weeks ended October 1, 2011, respectively, related to VIEs)   37,331     30,794     137,543     114,769  
 
OPERATING INCOME   125     1,122     1,902     2,999  
 
OTHER (INCOME) EXPENSE:
 
Interest (income) expense, net 16 (1 ) (58 ) (53 )
Other (income) expense, net   (236 )   (431 )   (636 )   (386 )
Total other (income) expense, net   (220 )   (432 )   (694 )   (439 )
 
Income before provision for income taxes 345 1,554 2,596 3,438
 
Provision (benefit) for income taxes   (128 )   511     145     1,121  
 
INCOME FROM CONTINUING OPERATIONS   473     1,043     2,451     2,317  
 
DISCONTINUED OPERATIONS
 
Loss from operations of discontinued restaurant (includes a net loss on
disposal of $71 for the 52 weeks ended October 1, 2011) (3 ) - (222 ) -
 
Benefit for income taxes   (14 )   -     (75 )   -  
 
NET INCOME (LOSS) FROM DISCONTINUED OPERATIONS   11     -     (147 )   -  
 
CONSOLIDATED NET INCOME 484 1,043 2,304 2,317
 
Net (income) loss attributable to non-controlling interests   390     40     (889 )   288  
 
NET INCOME ATTRIBUTABLE TO ARK RESTAURANTS CORP. $ 874   $ 1,083   $ 1,415   $ 2,605  
 
AMOUNTS ATTRIBUTABLE TO ARK RESTAURANTS CORP.:
 
Income from continuing operations $ 863 $ 1,083 $ 1,562 $ 2,605
Income (loss) from discontinued operations, net of tax   11     -     (147 )   -  
Net income $ 874   $ 1,083   $ 1,415   $ 2,605  
 
NET (INCOME) LOSS PER ARK RESTAURANTS CORP. COMMON SHARE:
From continuing operations:
Basic $ 0.25   $ 0.31   $ 0.45   $ 0.75  
Diluted $ 0.25   $ 0.31   $ 0.44   $ 0.74  
 
From discontinued operations:
Basic $ -   $ -   $ (0.04 ) $ -  
Diluted $ -   $ -   $ (0.04 ) $ -  
 
From net income:
Basic $ 0.25   $ 0.31   $ 0.41   $ 0.75  
Diluted $ 0.25   $ 0.31   $ 0.40   $ 0.74  
 
WEIGHTED AVERAGE NUMBER OF SHARES-BASIC   3,495     3,490     3,494     3,490  
 
WEIGHTED AVERAGE NUMBER OF SHARES-DILUTED   3,522     3,513     3,525     3,514  
 
Continuing Operations EBITDA Reconciliation:
Pre tax income $ 345 $ 1,554 $ 2,596 $ 3,438
Depreciation and amortization 1,160 981 4,491 3,873
Interest   16     (1 )   (58 )   (53 )
EBITDA (a) $ 1,521   $ 2,534   $ 7,029   $ 7,258  
 
Continuing Operations EBITDA adjusted for non-cash stock option expense,
impairment charge and non-controlling interests:
EBITDA (as defined) (a) $ 1,521 $ 2,534 $ 7,029 $ 7,258
Impairment loss from write-down of long lived assets 2,603 - 2,603 -
Net (income) loss attributable to non-controlling interests 390 40 (889 ) 288
Impairment loss from write-down of long lived assets attributable
to non-controlling interests (856 ) - (856 ) -
Non-cash stock option expense   -     78     190     535  
Continuing Operations EBITDA, as adjusted $ 3,658   $ 2,652   $ 8,077   $ 8,081  

(a)
  EBITDA is defined as earnings before interest, taxes, depreciation and amortization and cumulative effect of changes in accounting principle. Although EBITDA is not a measure of performance or liquidity calculated in accordance with generally accepted accounting principles (GAAP), the Company believes the use of this non-GAAP financial measure enhances an overall understanding of the Company's past financial performance as well as providing useful information to the investor because of its historical use by the Company as both a performance measure and measure of liquidity, and the use of EBITDA by virtually all companies in the restaurant sector as a measure of both performance and liquidity. However, investors should not consider this measure in isolation or as a substitute for net income (loss), operating income (loss), cash flows from operating activities or any other measure for determining the Company's operating performance or liquidity that is calculated in accordance with GAAP, it may not necessarily be comparable to similarly titled measures employed by other companies. A reconciliation of EBITDA to the most comparable GAAP financial measure, pre-tax income (loss), is included above.
 

Copyright Business Wire 2010

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