Ark Restaurants Corp. has reported financial results for the third quarter ended July 2, 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.
As of July 2, 2011 the Company had no long-term debt and cash, cash equivalents and short term investments totaling $7,496,000 (including $424,000 of cash related to VIEs).
Total revenues for the three-month period ended July 2, 2011 were $39,357,000 versus $35,162,000 in the three months ended July 3, 2010. The three-month period ended July 2, 2011 total revenues include $5,895,000 of consolidated VIE revenues.
Total revenues for the nine-month period ended July 2, 2011 were $101,988,000 versus $85,852,000 in the nine months ended July 3, 2010. The nine-month period ended July 2, 2011 total revenues include $16,595,000 of consolidated VIE revenues.
Continuing Operations EBITDA adjusted for non-cash stock option expense and non-controlling interests for the three-month period ended July 2, 2011 was $3,808,000 versus $5,242,000 during the same three-month period last year. The Company’s income from continuing operations for the three-month period ended July 2, 2011 was $2,283,000, or $0.65 per share ($0.64 per diluted share), as compared to $2,916,000, or $0.84 per share ($0.83 per diluted share), for the same three-month period last year.
Continuing Operations EBITDA adjusted for non-cash stock option expense and non-controlling interests for the nine-month period ended July 2, 2011 was $4,419,000 versus $5,429,000 during the same nine-month period last year. The Company’s income from continuing operations for the nine-month period ended July 2, 2011 was $699,000, or $0.20 per basic and diluted share, as compared to $1,521,000, or $0.44 per share ($0.43 per diluted share), for the same nine-month period last year.
The decreases in Continuing Operations EBITDA and income from continuing operations for the three and nine month periods July 2, 2011 as compared to the same periods of fiscal 2010 were primarily the result of an interruption of business at our Sequoia property located in Washington, DC due to a flood at the Washington Harbour complex where the restaurant is located. The restaurant reopened prior to the end of the third fiscal quarter. The Company expects to recover substantially all of its losses related to the flood at the Sequoia property from insurance proceeds and/or the landlord. Such amounts will be recorded when received in accordance with Generally Accepted Accounting Principles. To a lesser extent increased food costs as a result of higher commodity prices, poor weather conditions as compared to last year, and a decrease in operating income from the VIEs that were consolidated as of October 3, 2010 adversely impacted Continuing Operations EBITDA and income from continuing operations for the three and nine month periods July 2, 2011 as compared to the same periods of fiscal 2010.
Compared to the same three month period last year (excluding Sequoia due to the flood as discussed above) Company-wide same store sales increased 2%.
Ark Restaurants owns and operates 22 restaurants and bars, 28 fast food concepts and catering operations. Seven restaurants are located in New York City, four are located in Washington, D.C., six 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.