Q2 2024 Ark Restaurants Corp Earnings Call
Yeah.
Operator: Greetings and welcome to the Ark Restaurants second quarter 2024 results conference call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I'll now turn the conference over to your host, Christopher Love, Secretary of Ark Restaurants. Thank you.
Ark restaurants: Greetings and welcome to the Ark restaurants second quarter 2024 results conference call. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation.
If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad. As a reminder, this conference is being recorded I would now turn the conference over to your host Christopher Love Secretary for Ark restaurants. Thank you you may begin.
Christopher Love: Thank you, operator. Good morning.
Purchase Philosophy: Thank you operator, good morning, and thank you for joining us on our conference call for the second quarter ended March 30, <unk> 2024, My name is purchase philosophy, and I and the Secretary of Ark restaurants with me on the call today is Michael Weinstein, our chairman and CEO and Anthony Sirica, our CFO.
Christopher Love: And thank you for joining us on a conference call for the second quarter ended March 30, 2024. My name is Christopher Love, and I am the CEO of Ark Restaurants. With me on the call today is Michael Weinstein, our chairman and CEO, and Anthony Sirica, our CFO. For those, as well as Sam Weinstein, our co-CEO. For those of you who have not yet obtained a copy of our press release, it was broadcast on the news twice yesterday, and it's available on our website.
Anthony J. Sirica: It does.
Speaker Change: As well as to the San Juan team culture.
Speaker Change: So those of you have not yet obtained a copy of our press release. It was issued over the newswire yesterday and is available on our website to review the full text of that press release, along with the associated financial tables. Please go to our homepage at Www Dot Ark restaurants.
Christopher Love: To review the full text of that press release, along with the associated financial tables, please go to our homepage at www.arkrestaurants.com. Before we begin, however, I'd like to read the Safe Harbor Statement. I need to remind everyone that part of our discussion this morning will include forward-looking statements and that these statements are not guarantees of future performance, and therefore undue reliance should not be placed on them. We refer everyone to our filings with the Securities and Exchange Commission for more detailed discussion of the risks that may have a direct bearing on our operating results, performance, and financials. I'll now turn the call over to Michael.
Ark restaurants: Before we begin however, I'd like to read the safe Harbor statements I need to remind everyone that part of our discussion. This morning will include forward looking statements and that these statements are not guarantees of future performance and therefore undue reliance should not be placed on them. We refer everyone to our filings with Securities and Exchange Commission.
Speaker 1: For a more detailed discussion of the risks that may have a direct bearing on our operating performance and financial condition.
Speaker Change: Now I'll turn the call over to.
Michael Weinstein: Hi everybody. This is a pretty bland quarter in terms of comparisons. It's really easy to outline the differences between this year and last year. Primarily, we did not do well in Florida for the quarter. Some of it was affected by weather changes, but that's always a bad excuse. Just headcounts were not where we would like them to be. Vegas did all right, but again, with fighting higher rents with the new lease. New York was pretty good. Alabama was really good.
Speaker Change: Hi, everybody.
Speaker Change: Is it pretty bland quarter in terms of.
Speaker Change: Comparisons, it's really easy.
Speaker Change: To outline the.
Speaker Change: Differences between this year and last year, primarily due.
Speaker Change: Not do well in Florida for the quarter.
Speaker Change: Some of it affected by weather changes, but that's always a bad she's just head counts would not.
Speaker Change: If I can debate.
Speaker Change: Hi.
Speaker Change: Vegas did alright, again with fighting higher rents with a new lease in.
Speaker Change: New York was pretty good Alabama was really good and Washington D. C had it had a bad winter in general.
Michael Weinstein: And Washington DC had a bad winter in general. The what we're fighting is obviously higher payrolls, which has been the case for a while now. Extremely high premiums on liability insurance and property insurance. And that's really it.
Speaker Change: The.
Speaker Change: What we're finding is obviously higher payrolls, which has been the case for a while now.
Speaker Change: Extremely high.
Speaker Change: Hi premiums on liability insurance.
Speaker Change: And property insurance.
Speaker Change: And that's really it.
Michael Weinstein: The results are marred by the fact that we refuse to raise prices to levels which we think are untenable. In the long run, we're interested in keeping custom accounts, so our prices have to be friendly. And those price increases, which were modest, that we did put through in the restaurant. [inaudible] That's really it.
Speaker Change: The results are marred by the fact that.
Speaker Change: She is to raise prices to levels, which we think containable.
She: In the long run we are interested in keeping customer accounts.
Speaker Change: Prices has to be friendly.
Speaker Change: And those those price increases are modest that we did put through the restaurants.
Speaker Change: Given the number of head counts coming true that revenue is not sufficient to make up for the higher cost of.
Speaker Change: Labor and to some extent through costs and to great extent ranch and and insurance premiums have gone up.
Speaker Change: That's really it.
Michael Weinstein: What we're seeing now is a little bit more favorable the last month or so. The results in Florida are starting to look better compared to last year. Vegas is steadily over a million dollars a week. The goal for us to make up the difference in rent is probably a million one, or a million 150. We've seen some of those weeks, not consistently, but the product there is really good, and the efficiency has improved dramatically on payroll costs.
Speaker Change: What we're seeing now.
Speaker Change: It's a little bit more favorable.
Speaker Change: Month or so.
Speaker Change: The results in Florida are assigned to comp better.
Speaker Change: Compared to last year.
Speaker Change: Vegas is.
Speaker Change: Steadily over a million dollars a week.
Speaker Change: The goal for us to make up the difference in rent is probably a million one.
Speaker Change: 150.
Speaker Change: We've seen some of those weeks are not consistently.
Speaker Change: The product there is really good.
Speaker Change: The efficiency is improved dramatically on the payroll costs.
Michael Weinstein: We have a new food purchasing department that seems to be doing a better job with food costs. We expect that we'll achieve close to the same cash flow that we had prior to renting during the course of this year. We'll get there. New York is benefiting from events. The Olive Park business is okay, but the event business is really strong. Alabama remains strong. The food costs in Florida are very high.
Speaker Change: We have a new food purchasing.
Speaker Change: Department.
Department: Seems to be doing a better job with food costs. So we expect that we would achieve close to the same cash flow that we had prior to the rent increases during the course of this year, we will get there.
Department: New York is benefiting from a bench.
Speaker Change: The other part business is okay.
Speaker Change: The event is really strong.
unknown: Alabama remains strong the food costs in Florida are very strong.
Michael Weinstein: We just think we're seeing a take-up in demand, and we'll see if that continues. [inaudible] From my point of view, everything seems to be going well. If you have any questions, we'd be happy to answer. Thank you at this time.
Speaker Change: We just think where we've seen it.
Speaker Change: Pickup in demand.
Speaker Change: And we'll see if that continues.
Speaker Change: Hum.
Speaker Change: Sure.
Speaker Change: My point of view.
Speaker Change: Everything seems to.
Speaker Change: B in line in terms of service and quality of the product.
Speaker Change: So if you have any questions I'd be happy to answer them.
Operator: Thank you. At this time, we'll be conducting a question and answer session. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing star two. One moment, please, while we pull for questions. Once again, it's star number one to ask a question. Our first question comes from the line of Peter Katz with Herb Lantern Investments. Please proceed with your question.
Speaker Change: Thank you at this time, we'll be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue you.
Speaker Change: You May press star two if you'd like to remove your question from Nick here for <unk>.
Nick: Participants using speaker equipment, it may be necessary to pick up your handset before pressing the starches.
Speaker Change: One moment, please while we poll for questions.
Speaker Change: Once again its star one to ask a question.
Speaker Change: Everybody shows.
Speaker Change: Our first question comes from the line of Peter Katz with her Lantern investments. Please proceed with your question.
Peter Katz: Hi Michael, how are you? Good theater. Thank you. Any updates on Bryant Park?
Speaker Change: Hi, Michael how are you.
Michael Weinstein: Good theater. Thank you.
Michael Weinstein: Any updates on Brian Park.
Michael Weinstein: So.
Michael Weinstein: The process has been drawn out and somewhat disappointing in terms of the response to, you know, the needs of those people who have made bids. We were all promised, and we're finalists in the process. We don't know how many finalists there are. We suspect two or three others beside us.
Michael Weinstein: The process has been drawn out and somewhat.
Speaker Change: Disappointing in terms of who we.
Speaker Change: Sponsor too.
Speaker Change: Yeah.
Speaker Change: The needs of those people who have made bids.
Speaker Change: We were all promise.
Speaker Change: And we were finalists in the process, we don't know how many finalists there are we suspect two or three others beside us.
Michael Weinstein: We were promised in October that leases would be forthcoming for everybody to view the kind of lease that will need to be signed. That finally came two weeks ago, and when it came, it said that the respondents must reply by this Friday. So everybody had, you know, waited five months to see what they were going to have to deal with in terms of lease terms and been given seven days to respond or eight days.
Speaker Change: We were promised in October.
Speaker Change: Leases.
Speaker Change:
Speaker Change: Would be forthcoming for everybody to view the kind of at least that.
Speaker Change: Need to be signed.
Speaker Change: That finally came two weeks ago.
Speaker Change: When it came it said.
Speaker Change: The respondents must reply by this Friday, so everybody had.
Speaker Change: Weighted five months to see what they were going to have to deal with in terms of lease terms and given seven days to respond.
Michael Weinstein: So we've responded to that. Um, uh, I don't know what their timetable is for making decisions. We have no hint. They have not, you know, said to anybody that, you know, they're going to make a decision by the end of May or the end of June. So we just don't know where the process stands, other than we've replied to the lease, and we made some comments, you know. I wish I could tell you more definitively what their process was, but I can't. I've been mystified by the process.
Speaker Change: So we've responded to that.
Speaker Change: I don't know.
Speaker Change: What's the timetable is making decisions we know him they have not.
Speaker Change: Hi.
Speaker Change: Yeah.
Speaker Change: Said to anybody that they've got to make a decision by may and.
Jim: Jim So we just don't know where the process stands other than we've applied to to the lease and we made some comments.
Speaker Change: Yeah.
Jim So: I wish I could tell you what the tendency.
Speaker Change: But what that process was but I cant ive been mystified by the process from Dave.
Michael Weinstein: Does that affect your ability to plan events? Perspectively.
Dave: Does that affect your ability to plan events prospectively.
Michael Weinstein: We've already stopped taking events for 2025 after May 1, 2025. That's when our lease ends. So if people call, you know. We'll encourage conversations to keep going, but we're not signing any contracts. You know, we have to inform them that we don't know if we're going to be in possession of the property. I don't think there's too much of that now. But certainly, you know, weddings to plan well in advance of 12 months. So, you know, that's probably what will first be accepted.
Speaker Change: We've already stopped taking events for 2025 after may one.
Speaker Change: Of 2025, that's why are we so if people call.
Speaker Change: No.
Speaker Change: Yeah.
Speaker Change: Yeah, we'll we'll encourage the conversations to keep going but we're not signing any contracts.
We: We have we have to inform them that we don't know that we're gonna be into session that property.
We: I don't think there's too much of that now.
Speaker Change: But certainly you know what.
We: Heading to plan well.
We: And a dash at 12 months so.
We: Okay.
We: That's properly.
Speaker Change: What will be affected.
Speaker Change: Okay.
Unknown Attendee: a different question. Based on your debt and amortization schedules, do you have an expectation of what your year-end debt balance might be?
Speaker Change: A different question.
We:
Speaker Change #109: Just on your debt and amortization schedules.
Speaker Change: Do you have an expectation of what your year end debt balance might be.
Anthony J. Sirica: Well, right, Anthony can answer that question. Right now, you're at about six million. Yeah, the year-end balance will be 5,000,003.
anti: Alrighty anti can answer that question right now we're at about 6 million, yes, it's a year end balance will be.
Alrighty anti: 5 million three.
Alrighty anti: Okay.
Unknown Attendee: And as a reminder, just as a reminder, all of the loans have June 1. 25 balloon payments. So next quarter, everything moves to current.
anti: And that is reminds of just as a reminder, all of the loans have a June 125 balloon payments. So next quarter everything moves to current.
Unknown Attendee: and current. So long-term debt moves from
Speaker Change: And current.
Speaker Change: So long term that moves from six long term to six current correct.
Unknown Attendee: Correct. Yeah, as of June. Yeah, as of June 1. Everything is due by June 1, 2025.
Speaker Change: Correct, yes.
Speaker Change: Yes.
Speaker Change: June one.
Speaker Change: Everything is due by June $1 25.
Speaker Change: Got it.
Speaker Change:
Unknown Attendee: Got it, and you would most likely look to refinance that? Is that what your plan is?
Speaker Change: And you would most likely look to.
Speaker Change: Would you refinance that is that what your plan is yes.
Michael Weinstein: Yeah, well, I mean, we'll start the process of entering into a new credit agreement probably sometime after the calendar year, and you know, rolled into a new deal.
Speaker Change: We will start the process of entering into a new credit agreement probably sometime after the calendar year.
Speaker Change: Okay.
Speaker Change: Rolled into a new a new deal but.
Michael Weinstein: Yeah, but if I can interrupt, Anthony, for a second, we have about $14 million in the banks right now. Some of that represents deposits on future parties; some of it is just float. But we're going into, you know, our season, the June quarter and September quarter are our best seasons, and we should cast [inaudible] There are no current projects or purchases that require any capital. So, so, our decisions will be made, you know, based upon where the cash stands, as well as what future commitments we have, but we're in a very strong state of communication, going into, you know, our best season.
Anthony J. Sirica: If I can interrupt Anthony for a second we have about $14 million in the banks right now.
Anthony J. Sirica: Some of that represents deposits on future parties. Some of it is just float.
Speaker Change: But we're going into our season in the June quarter as separate quarter.
Anthony J. Sirica: Our best seasons, we.
Speaker Change: We should cash.
Anthony J. Sirica: Hello substantially for during those periods, we usually build cash as we build cash.
We: We have some expenditures to make in Vegas.
unknown: Refurbishing the.
Speaker Change: The food court.
Speaker Change: As there are no current projects or purchases that require.
Speaker Change: Any any capital so so our decisions will be made.
Speaker Change: Based upon where the cash stands as well as what future commitments we have.
Speaker Change: But we're in very strong shape from a cash point of view going into.
Speaker Change: S seasons.
Unknown Attendee: Great, and again, as you said, your cash cycle is such that you expect to harvest cash in the second and third quarters as opposed to the fourth quarter where you are paying out bonuses and whatever other adjustments have to be done. Is there anything else to report in terms of new business development or
Speaker Change: Great and again as you said your cash cycle is such that you are you expect to harvest cash in the second and third quarter as opposed to.
Speaker Change: The fourth.
Speaker Change: Fourth quarter, where you are paying.
Speaker Change: Hanging out bonuses and whatever other adjustments correctly correct.
Speaker Change: Okay.
Speaker Change: Is there anything else to report in terms of new business development or.
Speaker Change: Sure.
Unknown Attendee: We look at things. Sam, do you want to talk about Lucky Pig?
Speaker Change: When you look at things Sam you want to talk about.
Speaker Change: But can you take.
Michael Weinstein: Sure, we're in the process of building out a new concept in Las Vegas. It's an Asian fast food concept with a lot of rice bowls and bao buns.
Sam: Sure. We're in the process of building out a new concept in Las Vegas.
Sam: Easy fast food concepts, a lot of rice bowls and Dow bonds.
Speaker Change: Been putting the brands together for about.
Speaker Change: Eight months now.
Speaker Change: We think that it has potential to rollout a few concepts so it sort of piloting.
Michael Weinstein: We've been putting the brand together for about eight months now, and we think that it has the potential to roll out a few concepts. So we're sort of piloting New York, New York Hotel in Las Vegas. So that's the only real new concept we have on deck, but we're excited about it. And it's set up to be rolled out more as a brand rather than run as a stand alone. So we should be opening that in the next month or so. And, and we'll see how it goes. And if that's successful, we're definitely looking for new locations to place that.
Speaker Change: In New York, New York Hotel in Las Vegas.
Speaker Change: So that's the only real new concept that we have on.
Speaker Change: On deck, but.
Speaker Change: We're excited about it and it's set up to be.
unknown: <unk> rolled out more as a brand rather than one off so we should be opening that in the next month or so and.
Speaker Change: And we'll see how it goes and if thats successful, we're definitely looking to.
Speaker Change: For new locations to place that.
Unknown Attendee: Great. And finally, do... Go ahead. I'm sorry. No.
Speaker Change: Great.
Speaker Change: And finally do you go.
Speaker Change: Go ahead I'm sorry.
Michael Weinstein: No, we have a letter of intent out for the purchase of a restaurant. But I think, you know, With all of these things, with the one-offs where we're trying to buy the land or we're trying to buy cash flow, we got very lucky in the first five or six of these that we did. Management stayed, sales remained strong, and, in most cases, profitability increased.
Speaker Change: No.
Speaker Change #104: We have a letter of intent on out on the purchase of restaurants.
Speaker Change #101: Thank you.
Speaker Change: Okay.
Speaker Change: This is something that with all of these things with the one offs, we were trying to buy the land we're trying by cash flow.
Speaker Change:
Speaker Change #107: You know, we got very lucky the first five or six of these that we did.
Speaker Change: Uh huh.
Speaker Change: Management stage sales remained strong in most cases profitability increased.
Speaker Change:
Michael Weinstein: And lately, the last three or four of these deals that we've tried to do, and they were all pretty much in Florida, one was in Wisconsin that we looked at, they're trying to sell us something, you know, let's say four times cash flow, and they have in Florida, they have the same problem we have had with their cash flows disappearing a little bit compared to last year's numbers. So when we go back to renegotiate, you know, that becomes a problem for the seller because they're hoping the cash flow will build again, and they'll come back to us at a later date or whatever.
Speaker Change: And lately.
Speaker Change #112: Three or four of these deals that we've tried to do.
Speaker Change #105: And they were all pretty much in Florida.
Speaker Change #116: One was in Wisconsin that will slip.
Speaker Change: Yeah.
Speaker Change: The.
Speaker Change #106: They're trying to sell us something let's say at four times.
Speaker Change #119: Cash flow and they had in Florida. They have the same problem, we've had cash flows disappearing a little bit.
Speaker Change: Compared to last year's numbers, so when we go back to renegotiate.
Speaker Change: That that becomes a problem for the seller because theyre, hoping that cash flow builds again and they will come back to this at a later date or whatever so.
Michael Weinstein: So, you know, we're looking at stuff, we just don't, you know. We, there always seems to be a fly in the ointment, either with the sellers, you know. Cash Flow Performance, or in some cases, the landlords, are obstinate about changing clauses in the lease that we need as a public company. So, you know, it's not a lack of effort to try to find things to expand, but we're not in control of the landlords or, you know, the Cash Flow of the restaurants that we're looking at.
Speaker Change: Looking at stuff, we just stone.
unknown: That always seems to be a fly in the ointment either with the sellers.
Speaker Change:
Speaker Change: Cash flow performance or in some cases.
Speaker Change: Landlords.
Speaker Change: Our Austin and about changing clauses in the lease that we need is a couple of companies.
Speaker Change: So yeah.
Speaker Change #115: It's not a lack of effort to try to find things to expand.
Speaker Change: But we're not in control.
Speaker Change #100: The landlords or.
Speaker Change: The.
landlords: The cash flows of the restaurants that we're looking at.
landlords: I would tell you that.
I: Yeah, we're more we're more interested or excuse me I shouldn't say more interested we are as interested now and trying to build the brand that we can control.
Michael Weinstein: I would tell you that we're more interested in, or excuse me, I shouldn't say more interested. We are as interested now in trying to build a brand that we can control to have a vehicle to expand, you know, the company's cash flow. That is as interesting to us as buying cash.
Speaker Change #122: To have a vehicle to expand.
Speaker Change #103: The company's cash flow.
The company: That is as interesting to us says buying cash flow.
The company: Okay.
Michael Weinstein: and good luck on that endeavor. Well, thank you. I was just curious, you mentioned having spent a lot of money on the Gallagher's renovation. Has that brought more upscale traffic? Has there been any sort of conversations with the landlord about that process?
Speaker Change #129: And good luck on that endeavor.
Speaker Change #108: As well thanks.
landlords: Hum.
Speaker Change #124: I think I I was just curious are you you mentioned, having spent a lot of money in the gallagher's.
landlords: Renovation has that.
Speaker Change #111: Has that brought.
Speaker Change #110: More upscale traffic has there been any sort of conversations are with the landlord about that process.
Michael Weinstein: I would tell you that we're now comping against last year's results when Gallagher's was completely open. It's too early to tell whether that business has increased enough to warrant having spent that kind of money, but the answer is we didn't have a choice. In order to get the lease, we had to commit. Spammy, you know, will cost a little under 2 million bucks.
Speaker Change #110: I would tell you that we that we're now comping against last year's results when Gallagher's since completely open.
Speaker Change #110: It's too early to tell.
landlords: Whether that business has increased.
Speaker Change #114: Two to warrant having spent that kind of money that the answer is that we didn't have a choice.
landlords: Right.
Speaker Change #113: In order to get the lease we have to commit to spending.
Speaker Change #113: Yeah.
Michael Weinstein: The real cost was not the amount of money we spent in the restaurant, but having the restaurant closed for 12, 13 [inaudible] months. The lease is a much steeper lease. You know, what we always thought, and to a certain extent, the relationship with MGM requires us to rely on their marketing, who were convinced that we were going to increase prices to be more like other steakhouses in Vegas. I can tell you that the product is excellent, and we're seeing that in the Yelp reviews now. I mean, most of those reviews are five-star reviews.
Speaker Change #118: A little a little under $2 million the real cost was not the amount of money. We spent in the restaurant, but happens restaurant close to 12014 routes adequate quickbooks its breakeven cash flow.
Speaker Change #118: Hi.
Speaker Change #132: The way the leases are much steeper lease.
Speaker Change #117: You know, what we always what we always thought.
Speaker Change #117:
Speaker Change #135: And to a certain extent the relationship with MGM requires us to rely on their marketing people who were convinced that we were.
Speaker Change #120: Too far on the price points of other steakhouses and they wanted us to.
Speaker Change #120: B.
Speaker Change #139: To increase prices to be more like of the steakhouses in Vegas.
Speaker Change #120: I can tell you that yet.
Speaker Change #120: The product is excellent and we're seeing that in the Yelp reviews now I mean, most of those reviews are five star reviews.
Michael Weinstein: We had some problems early on because the kitchen was refigured and we probably had the wrong chef when we reopened, but we have, you know, that's been corrected and the product is excellent. The real problem is that, and MGM or New York, New York put in a new Cirque du Soleil show, but they also put in competition in the park. It's very hard for us to figure out why sales aren't 20% up or some bigger number than we're seeing now, whether it's competition, which is more expensive than us, by the way, but there's another steakhouse, you know, attached to the New York, New York property, which was a surprise to us, or if the fact of the matter is, and by the way, the T-Mobile Arena, which is in that same park is, you know, more active than it's ever been.
Speaker Change #126: We had some problems early on because the kitchen was refigured and we probably had the wrong chef.
Speaker Change #125: When we reopen but we have.
Speaker Change #125: That's been corrected and the product is excellent the real problem is that and MGM.
MGM: Or in New York, New York put in a new circuit Chalet show.
MGM: But they also putting competition.
Speaker Change #123: In the park.
Speaker Change #123: It's very hard for us to figure out.
Speaker Change #141: Why sales are 20% up for some bigger number than we're seeing now.
Chalet show: Whether its competition, which is more expensive than us by the way, but there is another steakhouse.
unknown: Attached to the New York, New York property.
Speaker Change #144: Which was a surprise to us.
Speaker Change #145: Or is the fact of the matter is.
Chalet show: And by the way the the T Mobile arena, which is in that same park is.
Gallagher's: More active than it's ever been and we would suspect that that would be a customer who come to gallagher's, but the real problem is New York New York in terms of you know our property is middle income cut.
Michael Weinstein: And we would suspect that that would be a customer who would come to Gallagher's. But the real problem is New York, New York, in terms of, you know, a property is, you know, a middle-income customer, and what you're seeing now, in general throughout the company, I believe, is if you look at the fast food courts that we run in Hollywood and Tampa and New York, New York, they're all doing They're up.
Chalet show: Customer.
Chalet show: And.
Chalet show: And what Youre seeing now in general throughout the company I believe.
Speaker Change #133: Is if you look at the SaaS food courts that we run in Hollywood, and Tampa, and New York, New York, They're all doing well.
Michael Weinstein: Tampa a little less than Hollywood and New York, New York. But when I looked at New York City figures last week, which, you know, The food court was up 12, 13, 14% from last year, you know, sales at the next restaurant that is modestly priced, which is our burger bar, are down from last year. I think there's a big shift in these properties from high-priced restaurants to lower, lower cost tickets for the customers that aggregate to New York, New York.
Speaker Change #128: Europe, Tampa, a little less.
Customer: Then that Hollywood.
Speaker Change #147: And New York, New York, but when I look at New York, New York figures last week, which.
Customer: Yeah.
Speaker Change #128: Throughput was up 12 13, 14% from last year.
Speaker Change #128:
Speaker Change #128: Sales at the next.
Speaker Change #130: Restaurant that is modestly priced which is a perfect bar are down from last year I think there's a big shift.
Speaker Change #131: In each properties from high priced restaurants to lower LOE costs.
Speaker Change #151: Tickets for the customers that aggregate to New York New York.
Speaker Change #151: And I must tell you that if you go to Hollywood.
Michael Weinstein: And I must tell you that if you go to Hollywood, you know, and I think this is true everywhere, but especially Hollywood, when we built Hollywood out and Tampa, Both locations of Holly were moved about two or three years ago when they did the guitar hotel. They moved us to a new section, and we said, Look, we're going to do fast food, but we want the quality to be restaurant quality, not fast food. And all of a sudden, you have, you know, really great food, you know, in terms of what customer expectations are.
Hollywood: And I think this is true everywhere, but especially Hollywood.
Hollywood: When we built Hollywood out.
unknown: And Tampa.
Speaker Change #131:
Speaker Change #131: Both locations the location of Hollywood's was moved about two or three years ago when they when they did the Qatar both Catholic moved us to a new section and we said look we're going to do fast food, but we want the quality of the restaurant quality not fast food quality.
Speaker Change #131: And.
Speaker Change #142: And all of a sudden you have.
Speaker Change #136: Really great food.
Speaker Change #136: In terms of what customer expectations are and the price points and full service restaurants in the Hollywood Casino.
Michael Weinstein: And the price points in full service restaurants and the Hollywood casino are kind of steep. And so I think there's a migration from full service restaurants to our fast food courts where we are, you know, in the properties we're in. It speaks well of the quality of the product and fast food, but it doesn't speak well of the price points in the full service restaurants. And my question in my mind always is, how much is that limiting Gallagher's ability to really compete?
Speaker Change #136: Our current steep.
Hollywood Casino: And so I think there's a migration from full service restaurants to our cash food courts, where we are.
Hollywood Casino: And the properties were in.
Speaker Change #143: It speaks well of the quality of product in the fast food, but it doesn't speak well to the price points in the full service restaurants and.
Speaker Change #143: My question in my mind always is how much is said limiting gallagher's ability to really comp.
Michael Weinstein: Much better, from prior to the renovation to now. So we have competition on the one hand, but we do have T-Mobile Arena doing more business, having more dates when something's going on. We also have a show, which we didn't have, right next to the gallery. So I think those are positives, but the negatives are the price point and the customer. We don't see a well-heeled customer. So I may be confusing in terms of an answer, but it's confusing to us to see how we're doing. What we know we're doing well is the customers that are walking into the place are really enjoying it because it gets quite, quite a bit of reviews.
Speaker Change #158: <unk> better.
Speaker Change #136: From the prior prior to the renovation to Matt.
Speaker Change #148: So we have competition on one hand, but we do have T. Mobile arena is doing more business or having more data when something's going on we also have a show, which we didn't have extra gallagher's. So I think those are positive, but the negative is the price point than the customer.
Speaker Change #149: We don't see a well heeled testing.
Speaker Change #149: Hi.
Speaker Change #162: May be confusing in terms of the NASA, but it's confusing to us to see how we're doing what we know is doing well is the customers that are walking into the place are really enjoying it because it reviews.
Speaker Change #136: Quite quite good.
Speaker Change #136: Thank you.
Unknown Attendee: Our next question comes from Roger Lipton with Lipton Financial. Please proceed with your question. I didn't quite understand that description of the new prototype you're building in New York, New York. Could Sam describe it a little further for us?
Speaker Change #136: Any other questions. Please our next question comes from the line of Roger Lipton with Lipton Financial. Please proceed with your question, Yes, Hi, Michael I Sam.
Unknown Attendee: I hate to say it.
Unknown Attendee: Good I'm fine.
Michael Weinstein: Could you describe I didn't quite get that description of the of the new.
Unknown Attendee: Prototypes of a building in New York, New York could Sam described it a little further for us.
Michael Weinstein: Sure, it's sort of a quick service Chipotle style setup. It's an Asian concept. It's rice bowls, it's bao buns, and we're starting small. It's just three different ingredients. We have a beef, a pork, and a chicken option and a vegetarian option. It's essentially rice bowls, bao buns, and boba tea. Boba tea has become very popular. We've been seeing a lot of success in other spots in Las Vegas and other areas that we've been looking at. So we're trying to build this little concept that brings both of them together, and then we're also making our own freshly baked mochi doughnuts. That's pretty much it.
Unknown Attendee: Sure.
Sam Smith: It's sort of a quick.
Sam Smith: Quick service supposedly style setup, it's an Asian concept, it's rice bowls, it's Val bonds.
Sam Smith: And we're starting small it's just three different ingredients, we have a beef or pork and chicken option and a vegetarian option.
Sam Smith: And.
Betsy: It's essentially rice bowls baboons and both Betsy.
Betsy Baboons: Well the team has been become very popular we've been seeing a lot of success in other spots in Las Vegas.
Betsy Baboons: Other areas that we've been looking at so we're trying to build this little concept thats puts both of them together and then we're also making our own freshly.
Speaker Change #155: Baked mochi donuts so.
Speaker Change #168: That's pretty much the gist of it okay.
Unknown Attendee: Okay, and what do you think you might have? Sorry, wait, wait. Is it going to be in a food court?
Speaker Change #168: Thanks Anthony.
Speaker Change #136: Sorry.
Speaker Change #136: But what is it going to be in the food court.
Michael Weinstein: Yes, it's going to be in the New York, New York Hotel Food Court.
Anthony: Yes, it's going to be in the New York, New York Hotel Food Court.
Unknown Attendee: Okay, and when do you think you'll be getting that started?
Anthony: And when when do you think you'll be getting that started.
Michael Weinstein: End of June, it's looking like. We're about to start construction now.
Anthony: Ended June it's looking like we're about to start construction now.
Michael Weinstein: Michael, is there anything at all new in terms of the downstate casino discussions? I mean, I see periodic reports in the press, but you're probably watching a little more closely than we are. Any movement at all in terms of that? Again, yes.
Michael Weinstein: Got it okay. Good and Michael is there any thinking at all new in terms of the casino Downstate casino discussions I mean, I see periodic reports in the press, but youre, probably Washington more closely than we are any any movement at all in terms of in terms of that.
Michael Weinstein: Again, you know, it's the opinion of my partners in the deal, who have substantially more equity in the deal than we do, that you can't move forward with a referendum in New Jersey until you have downstate casinos. And that requires licenses, and the process in New York has been slow. There is a lot of activity that you read about, about the proposals of related and, you know, and others, and now, you know, I guess Bally's is in there since they bought the Trump property, you know, and the Bronx. Certainly, Yonkers is in there, and aqueducts are in there.
Anthony: Again, you know.
Anthony: It's the opinion of.
Speaker Change #178: My partners in the deal who are.
Anthony: Substantially.
Anthony: <unk>.
My partners: Have substantially more equity in the deal and we do that you can't move forward with a referendum in new Jersey until you have downstate casinos.
Speaker Change #163: And that requires licenses and the process in New York has been slow.
Speaker Change #163: Alright.
Speaker Change #164: There is a lot of activity that you read about about the proposals of related.
Speaker Change #164: And the others.
Speaker Change #164: And now I can.
Speaker Change #165: Style leases in there since they bought the chunk property.
Speaker Change #157: In the.
Speaker Change #156: In the Bronx.
Unknown Attendee: Certainly yonkers isn't there an aqueduct sitting there.
Speaker Change #156: Venetian.
Michael Weinstein: You know, Venetian, yeah, Sands has, you know, a proposal in. So there are a lot of proposals, I guess, to be analyzed. [inaudible] Unknown, Unknown, Unknown, Unknown, the status basically said we needed more time.
Speaker Change #169: <unk> has.
Speaker Change #177: A proposal and so there are a lot of proposals I guess to be analyzed.
Speaker Change #169:
Speaker Change #169: Hi.
The state: The state has basically said we need more time.
The state: So until those licenses are issued and I'm pretty sure.
Michael Weinstein: So until those licenses are issued, and I'm pretty sure everybody pretty much agrees that Yonkers and Aqueduct in that pack with Union City will be two of the three recipients. The good thing about Aqueduct and Yonkers is that if they get a license, they could be in business in six months. Yeah, and I think that pushes Jersey to start to draft a resolution or referendum that needs to be needs a public vote. Um, but but, Unknown Speaker Yeah, if you look at the other side, and the question's been asked all the time by investors in our, you know, what is Jersey waiting for?
Speaker Change #181: Everybody pretty much agrees that yonkers.
The state: With that will be two of the three recipients.
Speaker Change #159: The good thing about aqueduct in Yonkers is if you get a license they could be in business in 60 days.
Speaker Change #156: Yeah.
Jersey: And I think that pushes Jersey.
Speaker Change #156: To start too.
Speaker Change #156: Yeah.
Speaker Change #156: Got it.
Speaker Change #190: Draft resolution, a referendum that needs to be needs of public float.
Speaker Change #156:
Speaker Change #156: But.
Speaker Change #191: If you look at the other side the question's been asked all the time.
Speaker Change #185: By investors and.
Speaker Change #172: One is jersey waiting for I mean, we basically.
Michael Weinstein: I mean, basically, you know, the Meadowlands LLC, new Meadowlands LLC, which is the holding company, runs the Meadowlands racetrack now. We've committed a guarantee of $500 million a year to the state. What are they waiting for? But the reality is, they're waiting.
Speaker Change #172: Meadowlands LLC, new metal herself she wishes.
Speaker Change #172: The.
Meadowlands LLC: The holding company that it.
Meadowlands LLC: Runs Meadowlands race track now.
Speaker Change #172:
Meadowlands LLC: We've committed the guarantee of $500 million a year just state what are they waiting for.
Speaker Change #189: But the reality is the way.
Speaker Change #176: So we're waiting really waiting on is as it's been winning in New York State you don't have any new feedback that that would be New York is going to really come to grips with this thing.
Michael Weinstein: [inaudible] We have a short term we
Speaker Change #156: We have no short term.
Speaker Change #156: We read the same.
Unknown Attendee: Articles and newspapers that you read. Okay, so you might be paying a little, little closer.
Speaker Change #156: Articles in newspapers.
Speaker Change #179: Okay. So it might be a little little closer attention that I can but oh.
Speaker Change #156: Uh huh.
Speaker Change #166: Well whatever it would do the best you can you can't control. It I mean, it's just a question on what you're observing okay. Alright. Thanks, very much look forward to seeing you guys soon.
Rob: Thank you so much Rob.
Unknown Attendee: [inaudible]
Rob: Thank you. Our next question comes from the line of Alan Goldberg Private Investor. Please proceed with your question.
Operator: Thank you. Our next question comes from the line of Alan Goldberg, a private investor. Please proceed with your question.
Rob: Hello, Michael how are you.
Michael: I'm very well yourself.
Michael: Getting older just like you are.
Alan Goldberg: Hello Michael, how are you?
Michael: But thanks for reminding me.
Alan Goldberg: Good you may not remember, but you and I had a lovely time you went through it.
Alan Goldberg: Lunch.
Speaker Change #184: Here in Florida, I'm unemployed I'm in Chicago at the moment and I was calling to see if there was any update on the middle lands, but since that's already been asked.
Speaker Change #192: I wanted to tell you that I think you are maneuvering very well through this.
Michael: Tough time it I know this is not what you wanted to hear but in Chicago I went to Marciano last night for dinner.
Michael: And are they had.
Marciano: 19 patrons.
Marciano: While I was having dinner.
Marciano: And that's sort of shocked me.
Marciano: And I asked them, how things are going to say actually.
Speaker Change #195: What you see Tonight as a as an anomaly we have been so busy ear.
Speaker Change #173: And I'm not even barring mother's day, they said their price point.
Speaker Change #188: Seems to be very very good.
Speaker Change #175: I think most of our price points are very very competitive and I know everybody wants results yesterday, and we you and I met its certainly more than five years ago, we were a little younger and.
Michael Weinstein: getting older just like you are. I'm good. You may not remember, but you and I had a lovely time. You went to lunch down here in Florida. I'm not in Florida. I'm in Chicago at the moment.
Speaker Change #175: I'm very pleased with what you're doing I think you're moving in the right direction.
Speaker Change #194: Now you May say under your breath or in silence My God. He is crazy.
Speaker Change #204: But I'm not crazy people are eating out more and more and more the problem that's hurting.
Speaker Change #204: If Mcdonald's is telling you.
McDonald's: They're slowing down because of people.
Speaker Change #196: Concerned about money.
Speaker Change #180: I agree I think it hurts all restaurants, but I also noticed nobody seems to care they give the credit card and they just don't care.
Speaker Change #198: Again I'm not teach you your business I know absolutely nothing about it except I enjoy your restaurants.
Speaker Change #198: But.
Speaker Change #180: I think we should continue doing what you've been doing look as you said look for places that are.
Speaker Change #180: Reasonable to us.
Speaker Change #180: Yes.
Unknown Attendee: Industry is going to change the world is changing we've got a major election coming as we all I'm not teaching you economics, that's my feel.
Unknown Attendee: But.
Unknown Attendee: I think youre doing the right thing.
Unknown Attendee: And as you know or may not remember.
Speaker Change #193: I ran a hedge fund for a number of years.
Speaker Change #201: And you look for things that are going to take place in the next three to five years, that's how good investors should invest.
Speaker Change #200: And I'm very pleased with the way Youre running at.
Speaker Change #199: And the people out here with you that I don't know, but I.
Speaker Change #202: And I just want to tell you, it's a pleasure hearing your voice.
Alan Goldberg: And I was calling to see if there was any update on the Meadowlands. But since that's already been asked, I wanted to tell you that I think you are maneuvering very well through this tough time. I know this is not what you want to hear, but in Chicago, I went to Marciano's last night for dinner, and they had. 19 patrons while I was having my dinner, and that sort of shocked me, and I asked them how things were going. They said, actually, what you see tonight is an anomaly.
Alan Goldberg: We have been so busy here, and not even for Mother's Day, they said their price point seems to be very, very good. And I think most of our price points are very, very competitive. And I, you know, everybody wants results, and you and I met certainly more than five years ago. We were a little younger, and I'm very pleased with what you're doing. I think you're moving in the right direction. Now you may say under your breath or in silence, my God, he's crazy, but I'm not crazy.
Speaker Change #199: For taking my call.
Alan Goldberg: People are eating out more and more and more. The problem that's hurting. Look, if McDonald's is telling you. They're slowing down because of people.
Alan Goldberg: But, and I just want to tell you, it's a pleasure hearing your voice. Thank you for taking my call. Thank you if you ever have any questions for me. I'm always there for you, and thank you so much. Thank you for the meetings. Good luck to all of you, everybody, all of us. And thank you. Thank you.
Alan Goldberg: Concerned about money. I agree. I think it hurts all restaurants. But I also noticed nobody seems to care. They give the credit card, and they just don't care.
Unknown Attendee: If you.
Alan Goldberg: Again, I'm not teaching you your business. I know absolutely nothing about it, except that I enjoy your restaurant, but I think we should continue doing what you've been doing. Look, as you said, look for places that are reasonable to us.
Speaker Change #187: If you ever have any questions of me I'm.
Alan Goldberg: This whole industry is going to change. The world is changing. We've got a major election coming up as we all know. I'm not teaching you economics.
Alan Goldberg: That's my field. But I think you're doing the right thing, and as you know, or you may not remember, I ran a hedge fund for a number of years, and you look for things that are gonna take place in the next three to five years. That's how a good investor should invest, and I'm very pleased with the way you're running it, and the people on here with you that I don't know.
Speaker Change #203: I'm always there for you and thank you so much.
Speaker Change #203: For the meetings.
Speaker Change #187: To all everybody all of us.
Speaker Change #187: <unk>.
Alan Goldberg: Thank you Alan.
Operator: Thank you. Ladies and gentlemen, as a final reminder, it's Star One to join the question queue. We'll pause a moment to allow for any other I'm showing no other questions at this time. Mr. Weinstein, I'll turn the floor back to you for any final comments. All right, well, thank you all for joining us, and we'll speak to you at the end of the next quarter. Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.
Alan Goldberg: Thank you, ladies and gentlemen, as a final reminder, its star one to join the question queue, what Paul pause a moment to allow for any others.
Speaker Change #187: Yeah.
Michael Weinstein: I'm showing no other questions at this time, Mr. Weinstein I will turn the floor back to you for any final comments.
Michael Weinstein: Well. Thank you all for joining us and we'll speak to you at the end of the next quarter.
Michael Weinstein: Okay.
Speaker Change #205: Thank you. This concludes today's conference call you may disconnect. Your lines at this time. Thank you for your participation.
Michael Weinstein: Yeah.