ARKR - Earnings call transcript Q1 2018

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Operator

Greetings, and welcome to Ark Restaurants' First Quarter 2018 Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Bob Stewart, President and Chief Financial Officer. Please go ahead, Mr. Stewart.

Bob Stewart

Okay. operator. you, Thank thank call and XX, joining on us Good the you first conference for December fiscal our morning for quarter XXXX. ended our Vinny on is Officer. me call Chairman Weinstein, and With CEO; our Pascal, the and Chief Operating Michael today

who available of yet not associated To text homepage the on press our you of the Newswire of obtained issued full release, the it website. financial was For go over copy along that yesterday our to have www.arkrestaurants.com. those at a release, please and with press is tables, review our

read them. Securities the Before turn performance discussion have remind safe therefore, over undue we placed of begin, our include Michael. operating however, on I’d filings not part these everyone more should that and reliance to and statement. the like discussion to guarantees the to our Exchange refer statements a need statements risks on our performance, detailed I’ll afternoon not will for now the that financial forward-looking future may condition. I a bearing and of of to with call We be this harbor everyone direct and Commission that are results,

Michael Weinstein

Hi, everybody.

cost December quarter December quarter. year, It’s of big in our in it in be way, helpful. the the fiscal of year, us fell that that factors terms in One a Year’s XXXX, fact hard that of the quantify this Eve quarter was this EBITDA New March might into fell when but what last to

about excluding sales from But year sales. last ending this we’re compared Sequoia, $X.X up X in away weeks the For Sequoia. million to February we’re up of in year,

New the into in it’s just Year’s upside. present that the weeks number up ordinary X $X.X flow million We’re impacting that’s Eve not on the business, of

comp in by that up not sales but still much. We’re

Sequoia. that quarter, And big Year’s quarter quantifiable the quite impacted in the was factor. the one Again, but was of a it that New X-day of big just Eve reported, of switch it’s Generally, influence having again so EBITDA. not December influences

at a a almost as Sequoia You startup. have look

too carrying lot in the October, gratifying now. much people training. the train periods, doing Sequoia is prior up a But What quarter to December was way That we come that sales. We’re is December quarter quarter. payroll down the we’re September, of November, XX.X% in has as December the compared December over

good getting in operation right, might this equation the but P&L good. line. top the size very So looking elements good been line of not all this at an running the in look And we’ve of is the getting always

second summer, So the encouraged finished. up place had And we’re is open selling time winter events, by sales. the people for private events, since fall couldn’t and the we see difficult because very until not did late XX.X% thing that a about Sequoia being

So we missed sort that of season.

what’s business the event regular dramatically. the up that we we’re space event well. really facility the sure additional within rise So as And the will is business with created

who people of it’s with I’m are visit the is thing about extremely an of come it was people the ratio place the come doing the that that this like event idea our finished, once other and to got high. encouraging force booking. sales The visit there XX% into people told of as is book extremely,

are look period-to-date. space, – February January, this comp to the built, seem the the of sales fact here the we that with up we’ve event path the for So XX% be what getting place, on right additional the

healthy. So we think that’s very

Vegas The right extremely strong of now. is our Las that other business is part

a Year’s the in which flow – of Eve, December six the weeks York venue that is is for park the has big that York come XX% New But up we’re on ending York-New – New Again, to for part borders of is of that within the for we’re February, one in The reasons the Vegas. up dramatically Vegas. Hotel. Vegas. New day hockey the York-New and We’re Las is right

time we’re every tremendous So seeing a new a element. they traffic have hockey That’s game.

to economy is spending strong. right is now. the States best has in In addition Business trip Vegas, the United told, which I’m up,

pleasant So Las surprise. Vegas has been a

of One of there we and we grew goods things other of cost the both become efficient in is more volume, terms as payroll sold.

But So anyway this The seeing up now the comp detour me taken to three-mile seems sales from a missing and that waiting late down. spoke recapture bridge place. Again, about where detour in we bridge weeks, What was December. well. last this that to as XX% how that benefiting recover to and a X%. we’re we to $XXX,XXX. total we that prior XX% time we bridge $XXX,XXX. the that to EBITDA from dramatic margins sales XX to is was are number be that finished we of think if in We for Again, We for that missing It get being the to Inn we’re the up we’ll by were gain last pickup about keep finished had were year. EBITDA Rustic in has the comp will about can expanded avoid sales.

So we’re about that. pleased

New remains strong. York fairly

It doing continues one We The supposed they’re properties pretty what struggle. the be much. are to Boston have few that in to has restaurant doing last struggled Alabama years.

X% about the For quarter. up sales December were XX-week period, in for we comp the

do. Coast, for think path everything a But we so us. cash But in late really be We for these we going of little bit right the interrupting if guidance seen may flat we start months, keeps the the seasonality anything first you now. gave EBITDA. that. work skewed really Alabama We at explained to overall, Sequoia anything, EBITDA we can not been going, big highly solid. we have where six a that of Gulf last least the would which capital than we summer about should is we’re that and think If the that two problem of weeks beyond summer the get be business and the to allocation old configuration of on March, April to comfortable seasonal we’ll starts they comp But get if – early February. factor. what see as into toward our Vegas going where recapture million-plus the a in going go you we be that. it’s stronger When and think in still restaurants, remains We’re new are to months way we’re Alabama. sort of $XX until don’t don’t see the the quarter

what’s an I that So you going here. gives of idea on hope

questions with And are take very We’re any. very, comfortable if point. there our at business this I’ll

Operator

we have we Meador, from question line gentlemen, And have no Instructions] a the Investor. and – [Operator Private a Robert of

Robert Meador

those you And doing? Do have so, how if City? in are properties Atlantic

Michael Weinstein

do bar good Those also bar. properties a few Broadway Atlantic Bar properties have have Well, And burger And City? us last in the Burger have from at We a have the Resorts. burger Gallagher’s across the for Atlantic we we in the we have been Gallagher’s, pretty at hall years. – City. in Tropicana

probably Although from in some were the $XX,XXX we Year’s. comp quarter which year. that prior in New we just differential sales affected by was That X% down the reported, represents about

Rock fact that is property, the think the I to and enough recently, used property, which I food have and new old of Hard Taj pathway successful, that sort down. we beverage probably were at if upon that one from old the Rock don’t the a property to capacity Mahal open, And at the Mahal. based don’t new The from And because benefit benefit property if So is Hard from going under-restaurant-ed really becomes Resorts it’s the was we’re when toured old Taj. for other. really the they Taj Taj they to

in thing The the With eight. fine, have Casinos City. just think, to, property Nothing will you that It’s But opening has whole it’s struggling. benefit building not out. are the been nice It’s run we’re just Rock, just operating might from doing in It’s amount it be year year of really sort fine. It’s and terms home a town. So of Rock. special casino. double. property obviously City And operating Philadelphia all hopefully, Tropicana new contributed of Atlantic profit. about the Hard again, Resorts a the well. Hard will casinos. does a It impact down run, of the a I of But seven Atlantic fine. same

Robert Meador

Alright, thank you.

Michael Weinstein

thank Well, you.

Operator

line Kaminski Family We Jeffrey have with the from of Consulting. coming question another Office

Jeffrey Kaminski

Hi. a Good congratulations nice morning, on gentlemen quarter.

for Just liquid a example, plan I ago a it’s how question buyback for something curious be, perhaps particularly that shareholder, safety do I buyback? Or know you was long-time as shareholders? a, corporate what’s you not a that’s special to as to institute as you, or to net that pay to – dividend and stock a reward a instituted years

Michael Weinstein

we we bought we out of sometime for deceased or I a was there let license came really said our New But by years to about could The the passed the legislature ago, I shareholders' ourselves, a partnership issued occurred legislature, of ago question let’s referendum purchase maybe that the as likelihood shares, it we – buyback part share. in be casino is of were that we it put by to heard. garbled. first shares of place four in limited after to That that’s XXX,XXX as which a more in nobody back that $XX we three, X license value thought five. is Meadowlands, that buyback some paying aware X the additionally us. That northern and stock shareholder. XXX,XXX be the out part So answer done from said, we have we state was nobody what a may years of a to in what was few becomes that XXX,XXX me mind. was when could much think point But our as the the institute failed. stock to is of more $XX, it made about Jersey Jersey being a as eventually position issued And some much how us months with When of a becoming confident XXXX, sitting attention at confident, for at New a all, and And be. this that yawn contain

we it that the on failed EBITDA given it legislature’s postponed if does, to So for is ever it do the that EBITDA nothing. back potential for until gets another state and calendar, decided that day,

and potentially, stock back But a sits our any stock other bought is there. thinly stock haven’t buyback we the have is it reason So to still traded.

If look the a with company. a comfortable I block would presumably available, very became at it. take We’re

it, for your a hope I North. Assuming a the legislature answers sheet casino because up handle put the Meadowlands that look. what a the when our can take was purpose But the referendum of in balance the main we activity license would in question.

Jeffrey Kaminski

of consideration special an – I dividend gotten a the So the or in dividend. I Is a increased any future? had follow-up, mentioned probably had there dividend

Michael Weinstein

a Houses, and Shuckers focus. business X of we operating bit our the terms we that has in So little X Rustic we support the changed but Alabama have it. Oyster land Florida in that properties its Inn, We buildings only entities, not the and purchased the purchased purchased, –

sitting to some we’re real worth estate. deals $XX essentially, attractive with are those very million So million And deals. $XX of

X.Xx operating buying average We’re of on profit. trailing them an

sell got what So let’s to I if $X $XXX,XXX and of in to me years. hey, it, paying Well, that’s going rent in I if $X.X profit and a it’s look million, answer come are you buying that million property? guarantee $X this: the property, has deal land buying you say what it I multiple? guy and with property the at said a I’ll year for for I XX for wanted is operating pay pay to it million and I’m if a terms the this really you the the a I’m say, and making did and buildings –

$X $X it. they think for I may million million, pay

restaurant profits, leases of to very through X the decimated last deal we has lost much landlord we’ve couldn’t EBITDA operating if better anything. the have their not EBITDA That become So I’m gone here and developments million is that our a the that roof but didn’t landlord. us, they X not we in a paying reason, terminated decided And things space banks $X renew deal really the that that or for because only have one either also reconfigured our want years, for own there. for to in

purchase prefer be So we of put our of great the That for did reasons, couple to has we Not variety the a on properties also owners years, in pressure of but liquidity. spent four we now. a last reconfiguring money recreating Sequoia. only and these deal

never were a And borrowers of net where in – years not now put would borrowers. position we’ve ourselves we So until we we’re a ago. couple

existence, now, of didn’t right We’ve have We been on in foresee past I this coming at stock. represents buy leasing, we to we’re value look a properties in we might been desire see for that that the businesses than on I with us I a to find balance special sheet properties, be before, So purchase special the at and land for not because time more preference. was that an our and we for if and dividend money to attractive spaces good pretty that’s until sold building cash. spaces any happened little liquidity return our we of to management deal. leasing think of the reason a they something committed we also operating existence dividend. don’t think the it we That’s for a see dividend. the some liquidity just tighter I point. going where long one our in X% our a where in amount have sold always we an That doesn’t way significant more I – looked But But own more to property. get don’t of for have own that It need we increase dividend if and we’re that the imagine finding along mean an the price time would operation that’s the good declared need. could reduce the and a only the shareholders.

long-term to buy operations leases. the We’re our buying good properties the we purchased. that now But have places preference is underlying that

Jeffrey Kaminski

Thank you.

Michael Weinstein

My pleasure. Thank you.

Operator

you questions make at Thank additional a you. time. like this no Would gentlemen there remark? are closing to

Michael Weinstein

All we We’ll see right. We’ll you. do. see you Thank next how quarter.

Operator

And everyone. conference. this you, today’s Thank concludes

lines your for at Thank participation. You your disconnect time. may you this

Ark Restaurants (ARKR) 14 Feb 182018 Q1 Earnings call transcript