SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark one)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 27, 1998
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to ______
Commission file number 0-14030
ARK RESTAURANTS CORP.
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(Exact name of registrant as specified in its charter)
New York 13-3156768
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
85 Fifth Avenue, New York, New York 10003
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including
area code (212) 206-8800
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Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.
Yes X No
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Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding shares at August 10, 1998
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(Common stock, $.01 par value) 3,842,499
ARK RESTAURANTS CORP. AND SUBSIDIARIES
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INDEX
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PART I - FINANCIAL INFORMATION: PAGE
----
Item 1. Consolidated Financial Statements:
Consolidated Condensed Balance Sheets - June 27, 1998
(Unaudited) and September 27, 1997 1
Consolidated Condensed Statements of Operations and Retained Earnings -
13-week periods ended June 27, 1998 (Unaudited) and June 28, 1997
(Unaudited) and 39-week periods ended June 27, 1998 (Unaudited) and
June 28, 1997 (Unaudited) 2
Consolidated Condensed Statements of Cash Flows - 39-week periods
ended June 27, 1998 (Unaudited) and June 28, 1997 (Unaudited) 3
Notes to Consolidated Condensed Financial
Statements (Unaudited) 4-6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7-10
PART II - OTHER INFORMATION:
Item 1. Legal Proceedings
Item 6. Exhibits and Reports on Form 8-K 11
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ARK RESTAURANTS CORP. AND SUBSIDIARIES
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CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited)
(Dollars in Thousands)
June 27, September 27,
1998 1997
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ASSETS
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CURRENT ASSETS:
Cash and cash equivalents $ 313 $ 722
Accounts receivable 2,814 1,975
Current portion of long-term receivables 305 278
Inventories 2,053 2,045
Prepaid expenses 617 433
Deferred income taxes 766 915
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Total current assets 6,868 6,368
LONG-TERM RECEIVABLES 1,247 971
ASSETS HELD FOR SALE 1,224 1,893
FIXED ASSETS - At Cost:
Leasehold improvements 22,771 22,526
Furniture, fixtures and equipment 19,030 18,387
Leasehold improvements in progress 705 50
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42,506 40,963
Less accumulated depreciation and
amortization 16,444 14,037
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26,062 26,926
INTANGIBLE ASSETS - Less accumulated
amortization of $2,724 and $2,386 5,365 3,346
OTHER ASSETS 837 683
DEFERRED INCOME TAXES 1,081 1,081
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TOTAL ASSETS $42,684 $41,268
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LIABILITIES AND SHAREHOLDERS' EQUITY
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CURRENT LIABILITIES:
Accounts payable - trade $ 3,675 $ 3,560
Accrued expenses and other current
liabilities 3,043 3,099
Current maturities of long-term debt 588 1,424
Current maturities of capital lease obligations 253 245
Accrued income taxes 831 414
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Total current liabilities 8,390 8,742
LONG-TERM DEBT - net of current maturities 3,714 4,703
OBLIGATIONS UNDER CAPITAL LEASES - net of current
maturities 196 406
OPERATING LEASE DEFERRED CREDIT 1,528 1,528
SHAREHOLDERS' EQUITY:
Common stock, par value $.01 per share -
authorized, 10,000,000 shares;
issued, 5,187,836 and 5,177,836 shares 52 52
Additional paid-in capital 14,196 14,131
Retained earnings 15,855 12,953
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30,103 27,136
Less treasury stock, 1,345,337 shares 1,247 1,247
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Total shareholders' equity 28,856 25,889
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $42,684 $41,268
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See notes to consolidated condensed financial statements
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ARK RESTAURANTS CORP. AND SUBSIDIARIES
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CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
(Unaudited)
(In Thousands, Except per share amounts)
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13 Weeks Ended 39 Weeks Ended
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June 27, June 28, June 27, June 28,
1998 1997 1998 1997
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NET SALES $33,030 $31,470 $85,168 $74,524
COST OF SALES 8,596 8,547 22,697 20,757
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GROSS RESTAURANT PROFIT 24,434 22,923 62,471 53,767
MANAGEMENT FEE INCOME 250 250 887 901
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24,684 23,173 63,358 54,668
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OPERATING EXPENSES
Payroll and payroll benefits 10,595 10,476 29,967 28,078
Occupancy 3,626 3,577 10,156 9,374
Depreciation and amortization 1,030 947 2,924 2,393
Other 3,929 3,737 10,954 10,292
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19,180 18,737 54,001 50,137
GENERAL AND ADMINISTRATIVE
EXPENSES 1,438 1,205 4,564 4,214
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20,618 19,942 58,565 54,351
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OPERATING INCOME (LOSS) 4,066 3,231 4,793 317
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OTHER EXPENSE (INCOME):
Interest expense, net 127 262 380 500
Other income (110) (277) (424) (661)
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17 (15) (44) (161)
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INCOME BEFORE PROVISION FOR
INCOME TAXES 4,049 3,246 4,837 478
PROVISION FOR INCOME TAXES 1,620 1,298 1,935 191
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NET INCOME 2,429 1,948 2,902 287
RETAINED EARNINGS, Beginning
of period 13,426 9,555 12,953 11,216
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RETAINED EARNINGS, End of period $15,855 $11,503 $15,855 $11,503
======= ======= ======= =======
NET INCOME PER SHARE - BASIC $.63 $.51 $.76 $.08
NET INCOME PER SHARE - DILUTED $.63 $.51 $.75 $.08
==== ==== ==== ====
WEIGHTED AVERAGE NUMBER OF SHARES - BASIC 3,842 3,832 3,840 3,675
WEIGHTED AVERAGE NUMBER OF SHARES - DILUTED 3,880 3,845 3,868 3,707
===== ===== ===== =====
See notes to consolidated condensed financial statements
2
ARK RESTAURANTS CORP. AND SUBSIDIARIES
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CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
(Dollars in Thousands)
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39 Weeks Ended
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June 27, June 28,
1998 1997
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 2,902 $ 287
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization of fixed assets 2,549 2,264
Amortization of intangibles 375 316
Loss (Gain) on sale of restaurants (185) (229)
Deferred income taxes 149 (249)
Changes in assets and liabilities:
Decrease (Increase) in accounts receivable (839) (1,240)
Decrease (Increase) in inventories (35) (895)
Decrease (Increase) in prepaid expenses and other
current assets (184) (25)
Decrease (Increase) in refundable and prepaid income taxes - (274)
Decrease (Increase) in other assets (178) 60
Increase (Decrease) in accounts payable - trade 115 1,264
Increase (Decrease) in accrued expenses and other
current liabilities (56) (140)
Increase (Decrease) in accrued income taxes 417 (324)
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Net cash provided by operating activities 5,030 815
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CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to fixed assets (1,042) (10,650)
Additions to intangible assets (121) (12)
Payments received on long-term receivables 222 138
Restaurant acquisition (2,735) -
Restaurant sales 200 308
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Net cash used in investing activities (3,476) (10,216)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds of long-term debt 4,100 10,001
Principal payment on long-term debt (5,925) (6,956)
Principal payment on capital lease obligations (203) (186)
Proceeds from common stock private placement, net - 6,023
Exercise of stock options 65 92
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Net cash provided by (used) in financing activities (1,963) 8,974
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NET DECREASE IN CASH AND CASH EQUIVALENTS (409) (427)
CASH AND CASH EQUIVALENTS, beginning of period 722 907
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CASH AND CASH EQUIVALENTS, end of period $ 313 $ 480
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SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during year for:
Interest $ 486 $ 400
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Income taxes $ 1,368 741
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See notes to consolidated condensed financial statements.
3
ARK RESTAURANTS CORP. AND SUBSIDIARIES
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NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
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1. CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
The consolidated condensed financial statements have been prepared by Ark
Restaurants Corp. (the "Company"), without audit. In the opinion of management,
all adjustments (which include only normal recurring adjustments) necessary to
present fairly the financial position at June 27, 1998 and results of operations
and changes in cash flows for the periods end June 27, 1998 and June 28, 1997
have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. It is suggested that these condensed financial
statements are read in conjunction with the consolidated financial statements
and notes thereto included in the Company's annual report on Form 10-K for the
year ended September 27, 1997. The results of operations for the periods ended
June 27, 1998 is not necessarily indicative of the operating results for the
full year.
Certain reclassifications have been made to the fiscal 1997 financial
statements to conform to the fiscal 1998 presentation.
2. RESTAURANT SALES
In the first quarter of fiscal 1998 the Company sold a restaurant located in
the borough of Manhattan in New York City. The selling price for the restaurant
was $1,750,000, of which $200,000 was paid in cash and the balance of $1,550,000
is due in monthly installments of $18,569, inclusive of interest at 7.5%, from
May 1998 through April 2000 and monthly installments of $14,500, inclusive of
interest at 7.5%, from May 2000 through December 2008. At December 2008 the
remaining outstanding balance of $519,260 matures. The Company recognized on
this sale a gain of approximately $185,000 in the first quarter of fiscal 1998.
Additional deferred gains totaling approximately $1,000,000 could be recognized
in future periods as the notes are collected. The Company deferred recognition
of the gain on the sale due to the uncertainty as to the ultimate collectibility
of the outstanding notes.
3. CONTINGENCIES
A lawsuit was commenced against the Company in October 1997 in the District
Court for the Southern District of New York by 44 present and former employees
alleging various violations of Federal wage and hour laws. The complaint seeks
an injunction against further violations of the labor laws and payment of unpaid
minimum wages, overtime and other allegedly required amounts, liquidated
damages, penalties and attorneys fees. The Company believes that most of the
claims asserted in this litigation, including those with respect to minimum
wages, are insubstantial. The Company believes that there were certain
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violations of overtime requirements, which have today been largely corrected,
for which the Company will have liability. While the Company does not believe
that the liability to any single employee for overtime violations will be
consequential to it, the Company's aggregate liability will depend in large part
on the number of persons who "opt-in" to the lawsuit asserting similar
violations. A court supervised mailing to former and current employees was made
in July 1998, entitling such individuals to "opt-in" until October 1998. To
date, 71 employees have "opted-in". The uncertainty as to the number of
participating employees prevents the Company from making any reasonable estimate
of its ultimate liability. However, based upon information available to the
Company at this time, the Company does not believe that the amount of liability,
which may be sustained in this action, will have a materially adverse effect on
the Company's business or financial condition.
An action was commenced against the Company and certain of its subsidiaries
in April 1998 in New York State Supreme Court by Larry Forgione, the executive
chef and manager of three of the Company's restaurants. The action sought to
enjoin the Company from taking control of the restaurant The Grill Room or from
selling either of the restaurants An American Place or Beekman 1766 Tavern and
also seeks unspecified damages. Mr.Forgione withdrew the action in June 1998.
The action was withdrawn as part of an agreement by Mr. Forgione to buy such
restaurants from the Company (See note 6).
An action was commenced in May 1998 in Superior Court of the District of
Columbia against the Company and its Washington, DC subsidiaries by 6 present
and former employees of the restaurants owned by such subsidiaries alleging
violations of the District of Columbia Wage & Hours Act relating to minimum
wages and overtime compensation. While the action is in its early stages, the
Company does not believe that its liability if any, from an adverse result in
this matter would have a material adverse effect upon its business or financial
condition.
4. LONG-TERM DEBT
In May 1998 the Company and its main bank (Bank Leumi USA) agreed to extend
the Revolving Credit and Term Loan Facility for an additional two years until
April 2000. The Facility allows the Company to borrow up to $10,000,000 at the
interest rate of prime plus 1/2% per annum. The Agreement also includes a
$1,000,000 Letter of Credit Facility for use in lieu of lease security deposits.
The Company's subsidiaries each guaranteed the obligations of the Company
under the foregoing facilities and granted security interests in their
respective assets as collateral for such guarantees. In addition, the Company
pledged stock of such subsidiaries as security for obligations of the Company
under such facilities.
The agreement includes restrictions relating to, among other things,
indebtedness for borrowed money, capital expenditures, advances to managed
businesses, mergers, sale of assets, dividends, and liens on the property of the
Company. The agreement also contains financial covenants requiring the Company
to maintain a minimum ratio of debt to net worth, minimum shareholders'
5
equity, and a minimum ratio of cash flow prior to debt service. The Company is
in compliance with all covenants.
5. INCOME PER SHARE OF COMMON STOCK
The Company adopted in the first quarter of fiscal 1998, The Financial
Accounting Standards Board Statement No. 128 "Earnings per Share" which
established new standards for computing and presenting earnings per share. The
Company now discloses "Basic Earnings per Share", which is based upon the
weighted average number of shares of common stock outstanding during each period
and "Diluted Earnings per Share" which requires the Company to include common
stock equivalents consisting of dilutive stock options and warrants. The Company
also applied the new standard to the periods ended June 27, 1998 and there was
no change in the previously reported earnings per share for such periods.
A reconciliation of the numerators and denominators of the basic and diluted per
share computations follow:
13 Weeks Ended June 27, 1998:
Income Shares Per-Share
(Numerator) (Denominator) Amount
BASIC EPS $2,429,000 3,842,000 $.63
Stock Options -- 38,000 --
Warrants -- -- --
DILUTED EPS $2,429,000 3,880,000 $.63
39 Weeks Ended June 27, 1998:
Income Shares Per-Share
(Numerator) (Denominator) Amount
BASIC EPS $2,902,000 3,840,000 $.76
Stock Options -- 27,000 (.01)
Warrants -- 1,000 --
DILUTED EPS $2,902,000 3,868,000 $.75
6. SUBSEQUENT EVENT
In August 1998, the Company sold two restaurants (An American Place and the
Beekman 1766 Tavern) for approximately $300,000 to Larry Forgione, the executive
chef and manager of such restaurants. The Company expects to record a gain of
approximately $100,000 on such sales.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
This Management's Discussion and Analysis of Financial Condition and Results
of Operations contains forward-looking statements that involve risks and
uncertainties. The Company's actual results could differ materially from those
anticipated in these forward-looking statements.
NET SALES
Net sales at restaurants owned by the Company increased 5.0% in the 13-week
period ended June 27, 1998 from the comparable period ended June 28, 1997 and
increased 14.3% in the 39-week period ended June 27, 1998 from the comparable
period last year. The increase in net sales for the 39-week period ended June
27, 1998 was primarily due to sales from the food and beverage operations in the
New York New York Hotel & Casino resort in Las Vegas ("the Las Vegas
facilities") which opened in January 1997. At the Las Vegas facilities the
Company operates a 450 seat, twenty four hour a day restaurant (America); a 160
seat steak house (Gallagher's); a 200 seat Mexican restaurant (Gonzalez y
Gonzalez); the resort's room service, banquet facilities and an employee dining
facility. The Company also operates a complex of nine smaller eateries (Village
Eateries) in the resort which simulate the experience of walking through New
York's Little Italy and Greenwich Village. In both 13-week and 39-week periods
ended June 27, 1998, net sales also increased as a result of 2 new restaurants
(the Stage Deli of Las Vegas, which was acquired in February 1998, and the Grill
Room, which opened in May 1997). Such increases were offset in part by the sale
of one restaurant (Jim McMullen in October 1997).
Same store sales in the 13-week period ended June 27, 1998 increased by
1.5%. The components of the increase consisted of a 6.5% increase in the
Company's non-Las Vegas operations offset by a 9.1% decrease in the Company's
Las Vegas facilities. Same store sales in the 39-week period have increased by
4.6% principally due to increased customer counts.
COSTS AND EXPENSES
The Company's cost of sales consists of food and beverage costs at
restaurants owned by the Company. For the 13-week period ended June 27, 1998
cost of sales as a percentage of net sales was 26.0% as compared to 27.2% last
year and cost of sales for the 39-week period was 26.6% as compared to 27.9%
last year. The decrease in cost of sales as a percentage of food and beverage
sales was principally due to lower food and beverage costs achieved at the
Company's Las Vegas facilities and to a lesser extent lower food and beverage
costs achieved at the Company's non-Las Vegas operations. The Company's cost of
sales percentages in the 13-week and 39-week periods ended June 28, 1997 were
impacted by expected inefficiencies encountered with the opening of the Las
Vegas facilities. The Company believes that its cost of sales as a percentage of
net sales will continue to improve in the fourth quarter of fiscal 1998 in
comparison to the prior year.
7
Operating expenses of the Company, consisting of restaurant payroll,
occupancy and other expenses at restaurants owned by the Company, as a
percentage of net sales, were 58.1% for the 13-week period ended June 27, 1998
as compared to 59.5% last year and were 63.4% for the 39-week period as compared
to 67.3% last year. The decrease in operating expenses as a percentage of net
sales in the 13-week period ended June 27, 1998 was principally due to a
decrease in payroll expenses as a percentage of net sales at the Company's
non-Las Vegas operations and to a lesser extent from efficiencies achieved at
the Company's Las Vegas facilities. The decrease in operating expenses as a
percentage of net sales in the 39-week period ended June 27, 1998 was
principally due to efficiencies achieved at the Company's Las Vegas facilities.
General and administrative expenses, as a percentage of net sales, were
4.4% for the 13-week period ended June 27, 1998 as compared to 3.8% in the
comparable period last year and was 5.4% for the 39-week period as compared to
5.7% last year. If net sales at managed restaurants and bars were included in
consolidated net sales, general and administrative expenses as a percentage of
net sales would been 4.0% for the 13-week period ended June 27, 1998 as compared
to 3.4% last year and would have been 4.8% for the 39-week period as compared to
5.0% last year.
The Company had net income of $2,429,000 for the 13-week period ended June
27, 1998 as compared to net income of $1,948,000 last year. Net income for the
39-week period ended June 27, 1998 was $2,902,000 as compared to $287,000 last
year. The results for the 39-week period ended June 28, 1997 were impacted by
approximately $2,000,000 ($1,200,000 after-tax) in pre-opening and early
operating losses at the Company's Las Vegas facilities.
During the 13-week period ended June 27, 1998 the Company managed six
restaurants and one corporate dining facility owned by third parties. Net sales
of the managed locations were $3,283,000 during the 13-week period ended June
28, 1997 as compared to $3,885,000 last year and net sales were $9,110,000
during the 39-week period as compared to $10,018,000 last year. Net sales of
these operations are not included in consolidated net sales.
INCOME TAXES
The provision for income taxes reflects Federal income taxes calculated on
a consolidated basis and state and local income taxes calculated by each
subsidiary on a non consolidated basis. Most of the restaurants owned or managed
by the Company are owned or managed by a separate subsidiary.
For state and local income tax purposes, the losses incurred by a
subsidiary may only be used to offset that subsidiary's income, with the
exception of restaurants operated in the District of Columbia. Accordingly, the
Company's overall effective income tax rate has varied depending on the level of
the losses incurred at individual subsidiaries.
The Company's overall effective tax rate in the future will be affected by
factors such as the level of losses incurred at the Company's New York
facilities (which cannot be consolidated for state and local tax purposes), the
amount of pre-tax income earned outside of New York City (Nevada has no state
8
income tax and other states in which the Company operate have income tax rates
substantially lower in comparison to New York) and the utilization of state and
local net operating loss carry forwards. In order to more effectively utilize
tax loss carry forwards at restaurants that were unprofitable, the Company has
merged certain profitable subsidiaries with certain loss subsidiaries.
As a result of the enactment of the Revenue Reconciliation Act of 1993, the
Company is entitled, commencing January 1, 1994, to a tax credit based on the
amount of tip income of restaurant service personnel. The Company estimates that
this credit will be in excess of $400,000 for the current year.
The Internal Revenue Service is currently examining the Company's Federal
Income Tax returns for the fiscal years ended September 28, 1991 through October
1, 1994, and has proposed certain adjustments, all of which are being contested
by the Company. The adjustments primarily relate to (i) pre-opening, legal and
accounting expenses incurred in connection with new or acquired restaurants that
the Internal Revenue Service asserts should have been capitalized and amortized
rather than currently expensed and (ii) travel and meal expenses for which the
Internal Revenue Service asserts the Company did not comply with certain record
keeping requirements of the Internal Revenue Code. The Company does not believe
that any adjustments resulting from such examination will have a material effect
on the Company's financial condition.
LIQUIDITY AND SOURCES OF CAPITAL
The Company's primary source of capital is cash provided by operations and
funds available from the revolving credit agreement with its main bank, Bank
Leumi USA. The Company from time to time also utilizes equipment financing in
connection with the construction of a restaurant and seller financing in
connection with the acquisition of a restaurant. The Company utilizes capital
primarily to fund the cost of developing and opening new restaurants and
acquiring existing restaurants.
The Company's Revolving Credit facility with its main bank includes a
$10,000,000 facility for use in construction and acquisition of new restaurants
and for working capital at the Company's existing restaurants. The facility
allows the Company to borrow up to $10,000,000 until April 2000 at which time
outstanding loans mature. The loans bear interest at a rate of prime plus 1/2%.
At June 28, 1998 the Company had borrowings of $1,700,000 outstanding on the
facility.
The Company also has a two-year $1,000,000 letter of credit facility for
use in lieu of lease security deposits. At June 27, 1998 the Company had
delivered $979,000 in irrevocable letters of credit on this facility.
In January 1997, pursuant to a new equipment financing facility, the
Company borrowed from its main bank $2,851,000 at an interest rate of 8.75% to
refinance the purchase of various restaurant equipment at the Las Vegas
restaurant facilities. The note, which is payable in 60 equal monthly
installments through January 2002, is secured by such restaurant equipment. At
June 27, 1998 the Company had $2,145,000 outstanding on this facility.
9
The net cash used in investing activities for the 39-week period ended June
28, 1997 ($10,216,000) was principally due to capital expenditures for the Las
Vegas food and beverage facilities.
At June 27, 1998, the Company had a working capital deficit of $1,522,000
as compared to a working capital deficit of $2,374,000 at September 27, 1997.
The restaurant business does not require the maintenance of significant
inventories or receivables; thus the Company is able to operate with minimal and
even negative working capital.
The amount of indebtedness that may be incurred by the Company is limited
by the revolving credit agreement with its main bank. Certain provisions of the
agreement may impair the Company's ability to borrow funds.
RESTAURANT EXPANSION
In February 1998 the Company purchased an existing restaurant (the Stage
Deli of Las Vegas) located in the Forum Shops at Caesar's Shopping Center in Las
Vegas for $2,735,000 in cash. The restaurant, which has seating for 200, is
operated under a license agreement with the owner of the New York City
restaurant of that name.
The Company is currently constructing in the South Street Seaport in
downtown New York City a 200 seat Southwestern style bar and restaurant. A
restaurant formerly occupied the site and the Company is receiving a $500,000
landlord construction allowance. The Company expects to incur approximately
$1,200,000 in capital expenditures and other pre-opening expenses to open this
restaurant. The Company expects to open this restaurant in the September 1998
fiscal quarter.
The Company previously announced that it entered into a joint venture
agreement with Sony Theatres' Loeks Star Partners and Millennium Partners to
develop and operate four restaurants containing a total of approximately 50,000
square feet at a large theater development in Southfield, Michigan. The Company
anticipates that its share of the required capital contributions to meet the
construction costs, initial inventories and pre-opening expenses will be
$6,000,000. The project is currently in the design phase and the Company
expects to open such restaurants in the first half of fiscal 1999.
Although the Company is not currently committed to any other projects, the
Company is exploring additional opportunities for expansion of its business. The
Company expects to fund its existing projects through cash from operations and
existing credit facilities. Additional expansion may require additional external
financing.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Incorporated by reference to note 3 of the notes to the consolidated
condensed financial statements.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
Exhibit 10.1 - The Third Amended and Restated Credit Agreement between Ark
Restaurants Corp. and Bank Leumi USA
Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K - none
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date: August 10, 1998
ARK RESTAURANTS CORP.
By /S/ Michael Weinstein
---------------------
Michael Weinstein, President
By /S/ Andrew B. Kuruc
-------------------
Andrew B. Kuruc
Vice President, Controller and
Principal Accounting Officer
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