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Ark Restaurants Corp. Message Board

  • dtejd1997 dtejd1997 Dec 30, 2011 11:17 PM Flag

    Conference Call 12.30.11

    Hey All:

    Sorry for the delay in posting...

    This quarter's conference call was probably the shortest that I have ever heard from ARKR.

    Here is the scoop:

    The charge was related to a write down on the MGM Foxwoods casino facilities. ARKR thinks this asset is impaired and is taking a charge accordingly. The cost of the impairment charge is $.33/share.

    This year's sales were about the same as last years. NYC had 66 vs. 42 inches of rain. Of course, this negatively impacted sales, as this quarter has a lot of outdoor sales on patios.

    There have been higher food costs the last 18 to 20 months. Minimum wage is up. There are new food labeling laws in NYC. All of these are factors negatively impacting profitability.

    ARKR made several decisions:

    A). The first was not to raise prices.
    B). They cut protein portion sizes by about 5%

    Las Vegas & NYC were picking up in the month of September.

    The first 11 weeks of 2012 are doing better than the year ago period.

    February is going to have the new opening of the restaurant with Walt Frasier. This location will seat about 400 people. Other openings will happen later in the year.

    The only investor question was a request to repeat the earnings and asset charge.

    Management stated at the end of the call that things are trending better and should be better for the rest of the year. Cost of goods sold is down and margins are up.

    My thoughts & opinion to follow in post #2

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    • Hey all:

      I was somewhat let down by this latest earnings report.

      The company just can't seem to catch a break or get ahead of difficulties. Of course, neither can this country...

      If you back out the asset charge, EBIDTA is up somewhat. Sales are up. We may be on the cusp of improved earnings though. If sales continue up AND there are no asset charges, earnings should go up SIGNIFICANTLY in proportion to additional sales.

      If COGS is truly going down, earnings should improve. If the new locations open well, this company will be doing better.

      I don't think there is any danger of the dividend being cut/eliminated. There is over $10MM of cash, with no debt. I would be VERY interested to know what the cash balance is the last week of December, if it has gone up.

      I wish management had given a little bit more guidance on the opening of the new locations. I was under the impression that the first location would have been open by now. Are the other three locations also slipping behind schedule.

      No mention was made of the stock buyback. I would have liked a brief explanation of this.

      Nothing was mentioned of SSS in various markets. I am interested to see how Florida & Atlantic City is doing.

      I did not get a chance to participate in this conference call as I was in a business meeting.

      I am going to start participating in the next conference call.

      ARKR is one of my largest holdings.

      • 1 Reply to dtejd1997
      • Thanks very much for your report and analysis. I agree that with new stores coming open in the near future the possibility of higher revenue is there. But I have no idea of the costs of operations or the likely margins possible at these new locations once operations begin. I'm hoping Clyde will really bring 'em in cause there's no shortage of places to eat in NYC .

        I am worried that they cited COGS as a significant factor in recent profitably especially because they chose not to raise prices. Does that mean that they have too much competition nearby so they can't risk raising prices? Or the dining market can't bear the increases? Or--I'm hoping--the portion sizes were too much to begin with.

        Recently sold my stake but looking forward to buying more at lower prices.

 
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