Q1 2025 Ark Restaurants Corp Earnings Call
Greetings and welcome to the Ark restaurants first quarter 2025 results conference call.
At this time all participants are in a listen only mode.
A brief 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.
It is now my pleasure to introduce your host Christopher Love Secretary for Ark restaurants. Thank you Sir you may begin.
Speaker Change: Thank you operator, good morning, and thank you for joining us on our conference call for the first quarter ended December 28, 2024. My name is Christopher Love and I and the Secretary of Ark restaurants with me on the call today is Michael Weinstein, our chairman and CEO, Anthony Sirica, our CFO and Jennifer Jordan <unk>.
Speaker Change: For 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 Dot com before we begin however, I'd like to.
Speaker Change: 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 Securities and Exchange Commission.
Speaker Change: For a more detailed discussion of the risks that may have a direct bearing on our operating results performance and financial condition I'll now turn the call over to Anthony our CFO. Good morning, everyone. So a couple of items related to the income statement I just wanted to make sure I clarified for everyone.
Speaker Change: As we have discussed on last quarter's call.
Speaker Change: The Tampa Food Court.
Speaker Change: Were bought out of by the landlord, we close the operation on December 15th we received the buyout payment on December 19th of $5 5 million. So that's included in our cash balances at quarter end of that amount approximately $1 nine will be distributed to the minority partners.
Speaker Change: Of that business that will happen within the next couple of weeks include.
Speaker Change: Included in our P&L as a gain of $5 2 million related to that transaction. In addition, we had some residual losses related to the closure of Rio Grande of $146000.
Speaker Change: Again, we had discussed last quarter's call.
Speaker Change: That was closed on January <unk>.
Speaker Change: Permanently and we're in the process of vacating the space.
Speaker Change: With respect to the balance sheet, our cash balance was $13 1 million at the end of the quarter as I said at one point in onto that is spoken for is owed to the minority shareholders of the Tampa operation.
Speaker Change: Our debt is $4 7 million.
Speaker Change: We didn't have any further issues with our goodwill or right of use assets are long lived assets this quarter.
Speaker Change: We're currently working on a new.
Banking agreement Martin card facility expires on May 31.
Speaker Change: Obviously, the Bryant Park situation is gumming up that process, a little bit Michael will talk about that.
Speaker Change:
Speaker Change: And there are some minor decreases in the right of use assets and the related lease liabilities for the removal of Tampa and Hollywood Tam I'm, sorry, Tampa and Rio upon closure other than that the balance sheet remained very stable.
Alright, that's all that I have I'll turn it over to Michael Hi, everybody hub, so not much different going on here in terms of operations of.
Michael Weinstein: With sales in.
Michael Weinstein: The inflated expenses that were experiencing especially in payroll.
Michael Weinstein: And insurance premiums than just down the line everything is more expensive.
Michael Weinstein: We remain steadfast in not raising prices we think.
Michael Weinstein: Does that.
Michael Weinstein: Will service well in the end.
Michael Weinstein: We believe demand will come back at some point, we do not want to reputation, but not offering quality value equation.
Michael Weinstein: So what we're seeing is sales again in Alabama are continue to be very good sales in.
Michael Weinstein: Vegas.
Michael Weinstein: Are decent.
Michael Weinstein: The New York properties.
Michael Weinstein: Bryant Park and.
Michael Weinstein: And.
Michael Weinstein: Robert do world with events.
Michael Weinstein: Our card business is probably a little bit soft, but not much soft.
Michael Weinstein: Washington D C. We got demand problems.
Michael Weinstein: In Florida, depending upon weather.
Michael Weinstein: If the weather is good right now we seem to be exceeding last year.
Significantly by the way, but that may be.
Michael Weinstein: From a lot of bad weather.
Michael Weinstein: In Florida in general.
Michael Weinstein: <unk>.
Michael Weinstein: So the.
Michael Weinstein: The outlook.
Michael Weinstein: For EBITDA.
Michael Weinstein: In the restaurants, and let's not let's hold off on Brian talk but away from Brian part.
Michael Weinstein: We've gone on a mission to try to figure out.
Michael Weinstein: <unk> had a combined functions.
Michael Weinstein: Over the years.
Michael Weinstein: Yeah.
Michael Weinstein: We've had people who are now not as important to the operations as they once were.
Michael Weinstein: Sweep.
Michael Weinstein: Matured.
Michael Weinstein: So we've begun to for the first time in the Companys history.
Michael Weinstein: Revamp schedules and payrolls and personnel.
Michael Weinstein: To try to make us more efficient.
Michael Weinstein: Given the current levels of demand.
Michael Weinstein: As an ongoing process it'll start to show up.
Michael Weinstein: Operating.
Michael Weinstein: Profits I think this quarter.
Michael Weinstein: And going into next quarter.
We have excellent new managers in <unk>.
Michael Weinstein: General managers in both Las Vegas and Sequoia.
Michael Weinstein: We signed a new lease in.
Michael Weinstein: When Las Vegas about two years ago, which.
Michael Weinstein: Made.
Michael Weinstein: Made the rents.
Michael Weinstein: Requiring.
Michael Weinstein: Make the rents makes sense we require.
Michael Weinstein: Ah kick in revenues.
Michael Weinstein: And Vegas was starting to see that.
Michael Weinstein: We're running ahead of last year.
Michael Weinstein: We need to do about 10% to 12% more business to justify the new rents.
Michael Weinstein: I think we will get there.
Michael Weinstein: More efficient all show in Vegas.
Michael Weinstein: Payroll basis than we were last year.
Michael Weinstein: Sequoia in Washington D. C is remains a huge problem for demand for us, but we're told that is true everywhere.
Michael Weinstein: <unk>.
Michael Weinstein: The product is really good.
Michael Weinstein: The manager, who we hired has 26 years of experience in Washington D. C. I think she'll be a tremendous tremendously helpful in increasing demand so we'll wait and see on that.
Michael Weinstein: All in all we're just margins have been squeezed.
Michael Weinstein: We're trying to pick the margins up.
Michael Weinstein: More efficient and payroll.
Michael Weinstein: Fully driving some more revenue.
Michael Weinstein: Got it.
Michael Weinstein: The easy one to talk about.
Michael Weinstein: Of the two.
Michael Weinstein: Elephants in the room metal plans Brian Park.
Michael Weinstein: Meadowlands.
Michael Weinstein: Again, we think we are.
Michael Weinstein: Most likely site for gaming.
Michael Weinstein: A casino license in the Northern New Jersey.
Michael Weinstein: But new Jersey will not move until New York State starch.
Michael Weinstein: To issue licenses for Downstate casinos median Manhattan Queens the Bronx.
Michael Weinstein: Two of those licenses.
Michael Weinstein: We suspect will be issued to aqueduct.
Michael Weinstein: Two yonkers.
Michael Weinstein: We believe that once.
Michael Weinstein: They're issued it will take a matter of months to those to become fully operational casinos because the facilities are already built.
Michael Weinstein: For the third license sitting there.
Speaker Change: Several developers.
Michael Weinstein: <unk> for those.
Michael Weinstein: That will take some time, but we think the the implementation of casino licenses Yonkers aqueduct.
Michael Weinstein: Hum.
Michael Weinstein: Will force Jersey to make a decision that they have to do something in the North Atlantic City.
Michael Weinstein: Has been dying for years and I think this would really be a desk milk and courtesy of wake up and an issue of license in the north.
Michael Weinstein: We suspect that New York State will issue licenses sometime later this year. So we also expect that that will generate a referendum to allow.
Michael Weinstein: That is a reference that voted on by the public to.
Michael Weinstein: To allow for casino gaming in Illinois, and so that's the Meadowlands Bryant Park.
Michael Weinstein: Yes.
Michael Weinstein: If we.
Michael Weinstein: Follows the headlines.
Michael Weinstein:
Michael Weinstein: The <unk>.
Speaker Change: Brian Power Corporation has said they want to go forward with somebody other than us.
Speaker Change: That deal has not been signed yet it requires.
Speaker Change: A positive okay from the parks Department in the New York Public Library.
Speaker Change: We've hired a whole team of experts.
Speaker Change: And we feel that we have a decent chance of retaining the operation of that facility.
Speaker Change: It will take months to know, but we really believe we're still in the game, we think the whole.
Speaker Change: Request for proposal process was flawed.
Speaker Change: And the.
Speaker Change: The thing that we don't understand is that the light is that the new license to operate.
Speaker Change: Will be issued to a company that has limited hospitality experience, we've been usually successful and minimum rent.
Proposal <unk> is less than us so it just doesn't sound like it's a logical business arrangement and we're looking into it and hopefully we will see something.
Speaker Change: Started to move this back into our direction.
Speaker Change: So with that any questions I'm happy to answer.
Speaker Change: Okay.
Speaker Change: Thank you we will now be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad.
Speaker Change: A confirmation tone will indicate your line is in the question queue.
You May press Star two if you would like to remove your question from Nikolay.
Speaker Change: Participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
Speaker Change: Please while we poll for questions.
Speaker Change: Okay.
Speaker Change: Thank you. Our first question comes from the line of Jeffrey Kaminsky with J J K consulting. Please proceed with your question.
Jeffrey Kaminsky: Good morning, everyone.
Mike.
Jeffrey Kaminsky: Hi, Anthony with respect to.
Speaker Change: I Am park and the process I guess, you got to you folks found out.
Jeffrey Kaminsky: The lease and the other party.
Jeffrey Kaminsky: Through.
Speaker Change: I am reading the tea leaves properly through some sort of public hearing of a public meeting. So my question is are there more of these schedules and turned the public actually attempt I mean as a shareholder I have a vested interest in what happens too Brian.
Jeffrey Kaminsky: Bryant Park as the other shareholders.
Speaker Change: What's preventing us here.
Speaker Change: As a member of the public in a New York resident from attending a second here.
Speaker Change: There is nothing preventing you to go.
Speaker Change: Go to public session as the community Board session is a public session.
The the.
Speaker Change: Announcement.
Speaker Change: Of his.
Speaker Change: Brian corporations selection was made at a subcommittee of the community Board.
Speaker Change: Meeting parks.
Speaker Change: Parks and recreation Subcommittee of the community Board.
Speaker Change: And it was a public forum.
Speaker Change: The.
Speaker Change: There was a lot of robust robust.
Speaker Change: Conversation about it.
Speaker Change: Regarding the process and regarding the affordability of the selection of the new restaurant tours.
Speaker Change: We are reasonably price. We don't think there is the selection of <unk> Entertainment group.
Speaker Change: And they're licensing it Greg proposed licensing agreement with John George.
Speaker Change: Speaks well of affordability for the public.
Speaker Change: So there was a large discussion about that but the community board.
Speaker Change: Advisory position in this.
Speaker Change: The sign of us they need to get a deal done with any operator has to come from Steve talks Department and from the public Library.
Speaker Change: And they have not even proposed.
Speaker Change: A change in operators to either one of those two organizations.
Speaker Change: So it varies.
Speaker Change: Go ahead I'll comment.
Speaker Change: Comments from the public weapon.
Speaker Change: And between the two sure.
Speaker Change: Your employees.
Speaker Change: I'm sorry.
Speaker Change: Yes.
Speaker Change: We had we had 25 employees that the community Board meeting.
Speaker Change: We have 250 employees that Bryant Park Corporation, who are in danger of losing their jobs.
Speaker Change: And for and literally.
Speaker Change: For 40% of those employees have been with us for 25 years or more.
Speaker Change: So that constituency is also important in this process.
Speaker Change: Right and were any of them able to speak at the meeting and you know if I. If I attended the next meeting as a shareholder what do I have an opportunity to make it.
Speaker Change: You would have amounted to two minutes to speak.
Speaker Change: Okay. Thank you.
Speaker Change: Youre welcome.
Speaker Change: As a reminder, if you would like to ask a question press star one on your telephone keypad.
Speaker Change: Our next question comes from the line of Ravi decide a private investor. Please proceed with your question.
Ravi: Hey, Michael how are you good.
Speaker Change: Ravi Thank you.
Speaker Change: Had a question moving forward as you guys think down the road six months 12 months just wanted to get a sense of how you guys are thinking about the capital allocation on.
Speaker Change: Dividends or buybacks or if you guys have any other ideas outside of the.
Speaker Change: The strategic acquisitions that Youre looking for down South.
Speaker Change: So.
Speaker Change: Sure.
Speaker Change: That's a complicated question.
Speaker Change: Because it really depends upon the outcome of Brian Park, certainly with regard to dividends.
Speaker Change: The right now without the cash flow that would be attended to an operation that Brian Park.
Speaker Change: We would not be a payer of dividends.
Speaker Change: That also is.
Speaker Change: Question.
Speaker Change: Regarding buybacks I think that that.
Speaker Change: That same.
Speaker Change: <unk> process.
Speaker Change: Applicable I don't think were going to be aggressively buying stock.
Brian Park: Yes, we know what's going on with Brian talk number one.
Speaker Change: As a company.
Speaker Change: There may there may be.
Speaker Change: People were aligned with.
Speaker Change: Who may want to take an interest in the stock.
Speaker Change: <unk>.
Speaker Change: But without Brian pockets very hard to make these decisions in terms of <unk>.
Speaker Change: Spanning the business.
Speaker Change: Sure.
Speaker Change: Have some nice opportunities we think.
Speaker Change: That don't require a tremendous amount of capital or where we would have partnerships with other organizations.
Speaker Change: <unk>.
Speaker Change: <unk> is an important part of the process.
Speaker Change: To establish some new operations.
Speaker Change: So we're looking at.
Speaker Change: It's sort of paralyzing in one respect.
Speaker Change: For our balance sheet and income statement to have this issue with Brian talked but on the other hand.
Speaker Change: We're actively engaged in China find areas, where we can expand sensibly.
Speaker Change: Hope that answered sharpen yeah that does that's that's helpful. There. So we'll see how the Bryant Park shakes out and and good luck with that I think.
Speaker Change: You know I hope that falls in your guys' favor.
Speaker Change: Thank you.
Speaker Change: A final reminder, if you would like to ask a question press star one on your telephone keypad, one moment, please while I E.
Paul: Paul for any additional questions.
Speaker Change: It appears we have no further questions at this time I'd like to turn the floor back over to you for closing comments.
Paul: Alright. Thank you all for your interest and we'll see you next quarter.
Speaker Change: Bye bye.
Speaker Change: Ladies and gentlemen, this does conclude today's teleconference. You may disconnect. Your lines at this time. Thank you for your participation and have a wonderful day.