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Ark Restaurants Corp. (ARKR) Message Board

  • dtejd1997 dtejd1997 Feb 15, 2012 3:09 AM Flag

    Conference call of 2.14.12

    Hey All:

    Here are my notes on ARKR's 4th quarter earnings:

    The company earned $.32/share vs. loss of $.06.

    Las Vegas started to perk up. SSS were up in June & July, Later in the year there was an almost 10% SSS improvement. Another good example of business perking up is the banquet room of NYNY casino. There was no business there in 2009 & 2010. Now there is a little bit of business in the banquet room. The last 4-5 months there has been an uptrend.

    The pickup in Vegas is gradual. It is important to remember that there are a LOT more hotel rooms in Las Vegas and there are a lot more restaurant seats. For ARKR to have a significant improvement, the extra supply in other locations has to be taken up.

    NYC is doing better, along with DC & Boston.

    The other MAJOR factor is the reaction of the company to rising food costs.

    A). Raised menu prices by about 2%
    B). Slightly smaller protein sizes AND reworking of menus to emphasize profitability.

    This has led to an increase in profits. More sales, better margins.

    Important to note that 250k shares were bought back for $12.50/share. $1MM in cash was paid, with remainder of note. 1st payment due in December 2012. Payable in 24 monthly installments.

    ARKR lost lease on Grill Room. Landlord is redoing facility & getting rid of food service. ARKR got $350K early termination from landlord.

    Robert Towers got $475 severance.

    Jan & Feb. is having very strong SSS increases. Very strong customer demand in NYC.

    ?'s from shareholders.

    Mike Margolis asked ? regarding SSS & VIE.

    A: SSS were up about 9% even accounting for decline of 15% in Hollywood FL. Tampa was up. Overall profitability in FL was about the same, as Tampa made up for Hollywood.

    ?: Progress of new locations
    A: Clydes will be opening in next 3 weeks. This is in great location 9K new condos in neighborhood have been built. Hi-line (subway?) is being extended. Very near Javits Center, and MSG. Clyde is an icon in NYC.

    Basketball city should open in May or June. ARKR will have a small restaurant AND catering rights. This is a NON-UNION operation.

    Museum of African Art lease is signed. This will have 300 seat outdoor cafe and a 6k catering facility. This will be open in about a year.

    Management is working on new projects in both Las Vegas and NYC.

    ?: How is "Robert" doing?
    A: Robert is doing very well. It is booked out completely during NYC Fashion Week. Word of mouth is slowly building. Remember that ARKR has no PR people and does very little advertising. There is the future potential of a small expansion for private events at Robert.

    Ben Smith, private investor, asked about dividend policy.

    A: Dividend will be kept at $1/share for foreseeable future. Management feels secure in this.
    Management has goal of $10MM cash on hand, ready to go at all times. This cash level of $6.5MM is lowest cash level in 3-5 years.

    Cash is low because ARKR has not yet gotten $2mm landlord reimbursement for buildout of Clyde's. No problem there, paperwork is just not complete. ARKR is also due some money from insurance & landlord on flood in DC Sequoia.

    This is also slowest part of the year, as there is little outside dining.

    In June quarter, the cash "spigot" will be turned on. Management will do a special dividend when cash exceeds $10MM. It is going to be policy to return cash at levels of above $10MM.

    Cash level is also low because ARKR is building out two locations, Clyde's and Basketball City.

    MY OPINION:

    Overall, this was a strong quarter. Very nice improvement over last year's quarter.

    It is going to be interesting to see how much cash flows in the summer time. It will also be interesting to see how the two new places do. I would be very happy to get a $1/share special dividend at the end of the year!

    My thanks to ARKR's workers & management, they are doing a tremendous job!

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    • i forgot the cc was at 2pm est or else i would have called in, thankfully you always summerize the call! (of course i could call in later but why?) Thanks for doing this again. I was very pleased upon futher reviewing the 10q with changes in operation plus the additional media thats being drawn to the company and its resturant opening in nyc. if we can get a better summer this year (no floods or extreme heat please) we should see this year develop very nicely for arkr. i keep meaning to visit one of these places and may try again this weekend while im in washington. i would also like to make a table of reviews from yelp/urban spoon/google etc that could give us some direction as to what the people say about some of these establishments and what arkrs overall rating would be. i would hope they have someone monitoring these websites to address any concerns... i know its something i frequently check before choosing a place to eat. anyways good report glad to see the increasing bottom line wish i had more cash to throw at arkr. i still feel comfortable with it representing such a sizable share of my portfolio.

    • Thank you for taking the time to write up your notes from the ARKR call.

 
ARKR
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