Exhibit 99.1
Ark Restaurants Announces Financial Results for the
Third Quarter and Nine Months Ended July 1, 2006
CONTACT:
Robert Towers
(212) 206-8800
bob@arkrestaurants.com
NEW YORK, New York - August 14, 2006 -- Ark Restaurants Corp. (NASDAQ:ARKR)
today reported financial results for the third quarter and nine month periods
ended July 1, 2006.
For the three months ended July 1, 2006, the Company's income from continuing
operations was $2,656,000, or $0.77 per share ($0.75 per diluted share),
compared to $3,013,000, or $0.88 per share ($0.84 per diluted share), for the
same period last year. Income from continuing operations for the three months
ended July 1, 2006 was negatively impacted by the Company being required to
recognize $187,000 of non-cash compensation expense with regard to the Company's
share-based compensation plan and unusually hot weather and rainstorms in the
Northeast during significant portions of the third quarter rendering outdoor
seating at the Company's New York City and Washington, D.C. facilities
(historically, a substantial contributor to the Company's operations during the
quarter) inefficient.
Total revenues from continuing operations for the three month period ended July
1, 2006 were $32.6 million versus $32.2 million in the same period last year.
Revenues from the Company's Las Vegas operations represented 47.4% of the
Company's total revenues from continuing operations during the three-month
period ended July 1, 2006. The increase in revenues as compared to the same
period last year was primarily due to the opening of the Company's Gallagher's
Steakhouse and Luna Lounge in Atlantic City, New Jersey and the reclassification
of certain of the Company's facilities to discontinued operations. Compared to
the same three month period last year, same store sales in the Company's New
York City operations increased by 2.3%, same store sales in the Company's Las
Vegas operations decreased by 0.4% and same store sales in the Company's
Washington D.C. operations decreased by 10.4%. Compared to the same three month
period last year, Company-wide same store sales decreased by 1.4%. Although the
Company does not report the sales or the financial results of the Company's
managed Florida casino operations (the Company derives income from a management
fee arrangement in part based on sales), same store sales at the Company's
Florida operations increased by 17% compared to the same three month period last
year. Sales at the Company's Florida operations totaled $2,648,000 during the
three month period ended July 1, 2006.
For the nine months ended July 1, 2006, the Company's income from continuing
operations was $3,860,000, or $1.11 per share ($1.09 per diluted share),
compared to $4,565,000, or $1.34 per share ($1.28 per diluted share), for the
same period last year. Income from continuing operations for the nine months
ended July 1, 2006 was, likewise, negatively impacted by the Company being
required to recognize $561,000 of non-cash compensation expense with regard to
the Company's share-based compensation plan.
Total revenues from continuing operations for the nine month period ended July
1, 2006 were $85.3 million versus $82.7 million in the same period last year.
Revenues from the Company's
Las Vegas operations represented 54.4% of the Company's total revenues from
continuing operations during the nine month period ended July 1, 2006. The
increase in revenues as compared to the same period last year was, likewise,
primarily due to the opening of the Company's Gallagher's Steakhouse and Luna
Lounge in Atlantic City, New Jersey and the reclassification of certain of the
Company's facilities to discontinued operations. Compared to the same nine month
period last year, same store sales in the Company's New York City operations
increased by 8.2%, same store sales in the Company's Las Vegas operations
decreased by 3.5% and same store sales in the Company's Washington D.C.
operations decreased by 4.2%. Compared to the same nine month period last year,
Company-wide same store sales decreased by 0.4%. Same store sales at the
Company's managed Florida casino operations increased by 19.7% compared to the
same nine month period last year. Sales at the Company's Florida operations
totaled $7,823,000 during the nine month period ended July 1, 2006.
EBITDA from continuing operations for the three month period ended July 1, 2006
was $4,836,000 versus $5,262,000 during the same three month period last year.
EBITDA from continuing operations for the three month period ended July 1, 2006
was, likewise, negatively impacted by the Company being required to recognize a
$187,000 non-cash compensation expense with regard to the Company's share-based
compensation plan.
EBITDA from continuing operations for the nine month period ended July 1, 2006
was $8,200,000 versus $8,864,000 during the same nine-month period last year.
EBITDA from continuing operations for the nine month period ended July 1, 2006
was, likewise, negatively impacted by the Company being required to recognize a
$561,000 non-cash compensation expense with regard to the Company's share-based
compensation plan.
The Company had net income of $2,488,000 in the three month period ended July 1,
2006 compared to net income of $2,822,000 in the same three month period last
year. Net income for the three month period ended July 1, 2006 was negatively
impacted by unusually hot weather and rainstorms in the Northeast during
significant portions of the third quarter rendering outdoor seating at the
Company's New York City and Washington, D.C. facilities (historically, a
substantial contributor to the Company's operations during the quarter)
inefficient and the Company being required to recognize a $187,000 non-cash
compensation expense with regard to the Company's share-based compensation plan.
Net income for the nine-month period ended July 1, 2006 was $3,252,000 compared
to $4,561,000 during the same nine-month period last year. In the nine month
period in the previous year, net income was positively impacted by a $644,000
gain realized on the sale of one of the Company's restaurants. Net income for
the nine month period ended July 1, 2006 was also negatively impacted by the
Company being required to recognize a $561,000 non-cash compensation expense
with regard to the Company's share-based compensation plan and $447,000 in
pre-opening and the early operating losses experienced by the Company's
Gallagher's Steakhouse and Luna Lounge in Atlantic City, New Jersey.
On July 27, 2006, the Company entered into an agreement to operate a casual
sit-down restaurant known as The Grill at Two Trees in the Two Trees Inn, a
facility owned by the Mashantucket Pequot Tribal Nation and a part of the
Foxwoods Resort Casino, in Ledyard, Connecticut. The agreement provides that the
Company cannot take possession of the restaurant until the Company obtains a
liquor license for the facility. The Company is currently in the process of
applying for such liquor license. The Company presently manages two facilities
at the Foxwoods Resort
Casino, a marketplace style restaurant known as the Fifth Street Cafe in the
newly expanded poker room and a fast-casual restaurant in the Bingo Hall.
As of July 1, 2006, the Company had no long-term debt and a cash balance of
$5,889,000.
Ark Restaurants owns and operates 23 restaurants and bars, 28 fast food
concepts, catering operations and wholesale and retail bakeries. Eight
restaurants are located in New York City, four are located in Washington, D.C.,
nine are located in Las Vegas, Nevada, two are located in Atlantic City, New
Jersey and one is located at the Foxwoods Resort Casino in Ledyard, Connecticut.
The Las Vegas operations include three restaurants within the New York-New York
Hotel & Casino Resort and operation of the hotel's room service, banquet
facilities, employee dining room and nine food court concepts; four restaurants
and bars within the Venetian Casino Resort as well as four food court concepts.
In Las Vegas, the Company also owns and operates one restaurant within the Forum
Shops at Caesar's Shopping Center. The Florida operations under management
include five fast food facilities in Tampa, Florida and eight fast food
facilities in Hollywood, Florida, each at a Hard Rock Hotel and Casino operated
by the Seminole Indian Tribe at these locations. In Atlantic City, New Jersey,
the Company operates a restaurant and a bar in the Resorts Atlantic City Hotel
and Casino.
ARK RESTAURANTS CORP.
Unaudited Condensed Consolidated Income Statement
For the 13 and 39 week periods ended July 1, 2006 and July 2, 2005
(In Thousands, Except per share amounts)
- --------------------------------------------------------------------------------
13 weeks 13 weeks 39 weeks 39 weeks
ended ended ended ended
July 1, July 2, July 1, July 2,
2006 2005 2006 2005
-------- -------- -------- --------
TOTAL REVENUES $ 32,606 $ 32,206 $ 85,321 $ 82,717
COST AND EXPENSES:
Food and beverage cost of sales 8,095 8,065 21,477 21,044
Payroll expenses 9,814 9,325 27,761 26,303
Occupancy expenses 4,365 4,046 12,623 11,764
Other operating costs and expenses 3,800 3,745 10,394 9,719
General and administrative expenses 1,874 1,900 5,435 5,455
Depreciation and amortization expenses 835 749 2,421 2,209
-------- -------- -------- --------
Total costs and expenses 28,783 27,830 80,111 76,494
-------- -------- -------- --------
OPERATING INCOME 3,823 4,376 5,210 6,223
-------- -------- -------- --------
OTHER INCOME:
Interest income 23 5 70 58
Other income 178 137 569 432
-------- -------- -------- --------
Total other income 201 142 639 490
-------- -------- -------- --------
Income from continuing operations
before income taxes 4,024 4,518 5,849 6,713
Provision for income taxes 1,368 1,505 1,989 2,148
-------- -------- -------- --------
Income from continuing operations 2,656 3,013 3,860 4,565
-------- -------- -------- --------
DISCONTINUED OPERATIONS:
Loss from operations of discontinued
restaurants (255) (271) (921) (6)
Benefit for income taxes (87) (80) (313) (2)
-------- -------- -------- --------
Loss from discontinued operations (168) (191) (608) (4)
-------- -------- -------- --------
NET INCOME $ 2,488 $ 2,822 $ 3,252 $ 4,561
======== ======== ======== ========
PER SHARE INFORMATION - BASIC AND
DILUTED:
Continuing operations basic $ .77 $ .88 $ 1.11 $ 1.34
Discontinued operations basic $ (.05) $ (.06) $ (.18) $ (.00)
-------- -------- -------- --------
Net basic $ .72 $ .82 $ .94 $ 1.34
======== ======== ======== ========
Continuing operations diluted $ .75 $ .84 $ 1.09 $ 1.28
Discontinued operations diluted $ (.05) $ (.05) $ (.17) $ (.00)
-------- -------- -------- --------
Net diluted $ .70 $ .79 $ .92 $ 1.28
======== ======== ======== ========
WEIGHTED AVERAGE NUMBER OF SHARES-BASIC 3,462 3,433 3,462 3,414
======== ======== ======== ========
WEIGHTED AVERAGE NUMBER OF
SHARES-DILUTED 3,546 3,586 3,546 3,560
======== ======== ======== ========
Continuing Operations EBITDA
Reconciliation
Pre tax earnings $ 4,024 $ 4,518 $ 5,849 $ 6,713
Depreciation and amortization 835 749 2,421 2,209
Interest (23) (5) (70) (58)
-------- -------- -------- --------
EBITDA (a) $ 4,836 $ 5,262 $ 8,200 $ 8,864
======== ======== ======== ========
Continuing Operations EBITDA adjusted
for non-cash stock option expense
EBITDA (as defined) (a) $ 4,836 $ 5,262 $ 8,200 $ 8,864
Non-cash stock option expense 187 - 561 -
-------- -------- -------- --------
EBITDA adjusted for non-cash stock
option expense $ 5,023 $ 5,262 $ 8,761 $ 8,864
======== ======== ======== ========
(a) EBITDA is defined as earnings before interest, taxes, depreciation and
amortization and cumulative effect of changes in accounting principle.
Although EBITDA is not a measure of performance or liquidity calculated in
accordance with generally accepted accounting principles (GAAP), the
Company believes the use of the non-GAAP financial measure EBITDA enhances
an overall understanding of the Company's past financial performance as
well as providing useful information to the investor because of its
historical use by the Company as both a performance measure and measure of
liquidity, and the use of EBITDA by virtually all companies in the
restaurant sector as a measure of both
performance and liquidity. However, investors should not consider this
measure in isolation or as a substitute for net income, operating income,
cash flows from operating activities or any other measure for determining
the Company's operating performance or liquidity that is calculated in
accordance with GAAP, it may not necessarily be comparable to similarly
titled Measures employed by other companies. A reconciliation of EBITDA to
the most comparable GAAP financial measure, net income, is included above.