ARKR - Earnings call transcript Q1 2019

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Operator

Greetings, and welcome to the Ark Restaurants First Quarter 2019 Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Sonal Shah, General Counsel.

Sonal Shah

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

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

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

Anthony Sirica

everyone. Good morning,

name other things was write-down. our the significant that our I amortization the statement. everyone wanted impact fixed One of the had on operating to that with were depreciation we this and GAAP Michael the write-off provides of Before was requires his that part income. for the commentary, There operating clear assets. income these is acceleration then and associated of record Durgin-Park had trademark just within the items which Durgin-Park were on two to on affects ensure that write-offs us expenses, the

current net at that our just $X there that be to clear look want in income. So write-down affected we income, our it year, net the was you when million

our net million net a discrete $XXX,XXX. income that net also prior $X.X a of that you tax you but compare the that added tax, to of of When about income, would adjustment, benefit had $X.X million. if So black tax included be we year,

exclude you approximately net discuss. just over $XXX,XXX the increasing will the current to EBITDA again, it compared the in about was prior $XXX,XXX period which to, that year Weinstein. year, peoples when turn So in I'll that, are income Michael for now Michael

Michael Weinstein

us. Shuckers I be continues through hope go Anthony. Vegas make business are the understands Las it is quarter, headcounts. Thanks, everybody strong. well. The we to that. doing Continue in and in Both region-by-region. Rustic strong for to Florida December very should gains

been I did New in the York year. slightly previous done than a was in city okay. have We the The it slower prior couple has less in was we city, events think than years.

about. bit little a was to be York New concerned So nothing slower,

up. January, fact, As we better December. January of events a we but the then to in days, we're Sequoia, and to lot matter picked Washington, is up prior New The we little fill had events to starting quickly few a calendar seems fine. of until York a event bit came January. in than cold see do start the starting weather bad with

– not renovation. coming advances doing and is in by the of we'll la are slow. spring, think there we're out numbers we want really to historically, is business of do that Our that but and where yet, very, their. getting February, hopeful be be very carte expected Sequoia à to We're we January that kind we

Boston, in have obviously. sort we offices back the of So restructuring. Alabama, we restructured in the closed Alabama,

Alabama substantially. office. our are the the I sales going increased operating will in in work taking The home We people. forward restructuring, profits think We're be have of fewer And on good. more the with

essentially and – remains we'll all are $XX very last be the Sequoia, we from outdoor that summer the solid So any our did our we to we're a to kind very, little We of This seen have us. how expectations, did without into benefit, to seats. benefit, be business, we and last away that year. the a didn't outdoor outdoor seats. XXX it Sequoia. where year benefit from see get spring million the around going numbers the would If seems seats refurbishing still first cafe very There Washington, come then of have do. where when We to D.C., available

Hard have operations bit We food hotels benefit with little a we the in majority in X Rock which fast the the at partners have of a us coming to owner.

last for Rock comps system, X be The points no in of the few where the past or benefits no there changed We have comping were to years. quarters. had Hard partners allowed X.X, their used

court. As of they've they the marketing that food and comps their plans provide for where use X, points can food January purchases to changed their we now customers fast to

us. have very it continues, a for jumped sales This If experiment. can be somewhat. significant Our three-month it's

think good I are continue because this. going they they seeing from are to results

room we've with solid. with going our was here business So so and what big for Those to We've drain, spring. what there. We're Durgin-Park, here that’s Sequoia increase business that cash a slightly, the are of think us room Not a – and where help there. in of We little all if menu leg we look we hamper we over anymore. We going we year. we little three The three elimination an us especially demand some third not have fine. York Durgin-Park years forward increased at in which through New think Las swing rest doing York, not The think plus wage specifically, wage closed we've of increased restaurants. increases. prices will We increased in the Vegas. to recover of will will New is a real The of excess January, have room and going room this Florida the of two most, minimum is got Alabama, we have just issue, part our last All-in-all, be but just bit and happens a that already written-off the lot components think have Sequoia. in minimum in happens have another had is in pricing. in We to the prices with a have we for

prices. So York way in think those minimum we we wage offset the increases by if will in these we're successful in menu increases, menu plan New the be

the quarter. ones. Any way So gun-shy by the and It we Last December year December quarter, quarter answer. sort The but of think good in Durgin-Park, And year, any our in a happy we think was results with weren't have project a good. year. this we was doing a I’m bad disaster without should are we off in projections. in operating quarter the weather, Again, means. us to questions? decent made – to December better addition not full by was to the in Sequoia marked bloom right results was

Operator

At a this DGHM. comes Please question-and-answer [Operator first will we session. your question Our Instructions] from proceed question. conducting be time, with Bruce Geller,

Bruce Geller

Good gentlemen. Hi. morning,

Michael Weinstein

Hi, good morning.

Anthony Sirica

Good morning.

Bruce Geller

years what comping. a in the pretty news Hard significant off back had like the couple pretty when from with because Florida, restaurants good issue remember, caused you that I That on those Rock fall sounds

you to could any year just on on said. then on sounds provide if everything initiatives thus And term, be please. some about longer EBITDA overall, quarter this the your good So, you that's progress it of if should growth curious I'm could some second far. like good you based there And update hear. growth pretty talk

Michael Weinstein

business month in. has in I pretty weather. a rough January January just Bruce. numbers the been have yet, very So those been quite honestly, has good. cold strikingly because of of getting rest don't just the the Northeast We're final The

for fine. June it’s outdoor had growth we're mean is last we absorbable fine. not nothing quarter – us quarter you pumping in it, when make and that make see year. some the see months, don't of seats There unless a March I fine. properties. will positive I terms or big is for be last strikingly not not that March warmer over our we're the quarter. I quarter. EBITDA But quarter The year's this going think quarter new the September obviously, this were jump big quarter quarters cafe over would really But When break those really ever us, progressing in believe a year and to and you're the it's

I part hope answers of So that that the question.

over you'd to We Inn. give anybody little company there bring Rustic areas us add-backs looking that In – – terms it savings of indicative Rustic included But terms figured of million, Rustic Inn us and and to get don't that give initiatives, credit into. the shareholders earning think Inn discuss probably had first, I'd the size for some bought new we could million, we're operation time, in shareholders of were the At a practices. was and our of expand Inn of – property. best economics like – the Because the that we it's some and I so that are through credit. $X.X $X Rustic

who the a was was he it had million. going XX-year-old And out menu indeed the underpriced. that was lot we bought with at he it. million attention the hadn’t because same figured time, was years area. But development million. happy we was It $X.X vastly owner we in thought there $X.X so of on And And a $X taking it, was pricing of it it also paid to

New shipping near docking hotels were also airport being places. on and cruise the It's line, right the built.

and when them how and a demand might many us. opposite the that million So raised towards lose, increasing because more We we we with And to to – prices demand. headcounts came, raise we prices. happened figure saw we more own to And you I'm land more prices sometimes us, people under wound properties I well it. make up and coming going prices and year. raised $X.X you The

that which ridiculous this So at the at when Xx $X.X make were rates sales it comments you think we’ll but million leaseback. XXx low-interest if even But and it is. we to it at we We where rates, bought essentially, know do worth. that's million, even a time, future cap look earnings, prepared get $X take didn't is we at of say and

with would've million of So $XX is pay. the want million to there's because could the be $X.X sale $X that we We even case there million leaseback. to profit, million, - expect today, cover it. we But $XX coverage. is some enough will we worth million sales taxes a million. probably guys to for been not sales not million. cetera, There $X the on et $XX land $X.X And do paid the But do think million leaseback $X.X

a to $X think over. again, up Alabama and still The of to property Xx rent. Xx lesser million So a is we where, $X.X these business, give million And extent, left we for restaurants. that paid $XX we true is earnings same million worth have in two

sale And we sale in look the purchase our make think of Shuckers. leaseback is smaller same the So the true would plus to leaseback extent operations support a kind will smart. restaurant

looking So these are areas the we're at. that

our to property, single can these their owner part some died the the on leverage or We restaurants to We're could or sheet we the seeing the buy our balance it restaurant. deals. own who – one-off leverage are and left relative they're want to the where provide to want the balance only or that seeing things. deals extent it on the owners property the handcuffed doesn't old brand, where run of that restaurants these to We're deal, be retire, have of sheet or

a sheet that’s in do buy you leasebacks, you million in million million even after to able We're it. And and with could additional give XX left of $XX came million balance So if year, going came to two on limited. up, of worth if by if the up of for provide taxes them, you sale up able if over. them have we Because to be it. $XX $X doing to them our end, have $X EBITDA this million, XX the or buy sale one do $XX we'll Rustic we should of be we're not cash but

these So can that sure think two always really is there risk And given where up $X buying opportunities is. another focus giving things and can we in that's million, exist. them you manage these property. find our making you But

Bruce Geller

Thank you.

Operator

Martin, proceed Capital. comes [Operator your next from with question Lake Bruce Still Our question. Please Instructions]

Bruce Martin

Michael. Hi,

Michael Weinstein

Hi, Bruce. you? are How

Bruce Martin

look year? flow? business, cash two layout you with the beginning coming maybe from creates an planning ahead take maybe let's three now? at at the the of And what're mean at kind you sort ballpark the at kind this for looking the out where flow I year, to how are you and How looking an Good. years of overarching see opportunity on a year or cash of say, year, rough are doing you the of areas then

Michael Weinstein

we're of looking – generate in So for we're I we're and property cash think where – area is buying that underneath already laid interested the in is seems most so area the I there That where buying restaurants comfortable an we out them. most the that comfortable in to restaurant whatever terms flow think Number exists. two one, with risk that reasons. the used capital we better be business,

because can't many local as to types probably they it And Our extremely buy who the towards productive and to the of this. because different of don't well – history very The don't guy the. owns running be single-brand options serves afford who have them brand. their brands many restaurant restaurant wants national that restaurants extend us doesn't want may sell

with So a notes allows and to worry price we to does and here check buy that them write can and a buy they're not going very us. about attractive them at person notes a that's need to to the

again, where the main that, we're So looking. area

but a number it's year. we terms this weather. repeated giving close whether year killed all it to patents accounts, to gun-shy be, were year, last upon but based projection year we will we projecting same by got year, what tell hurt the before we're out, in give of the us in happened by any if got that same expect cash to or I've last should a better We out us did flow We you,

have we a fine. Everything but accomplish decide the it. it. – So terms better, to we to is some drain. sell of closed with the We cash to we just weren't had we anything tried changes in in so Durgin-Park, which doing do things else getting is had tried able come made assets end, we We just out just to

preceded comps. some who trial benefit beyond with And tremendously. has it strong continues so better. doing you Vegas, Florida to expression a see in they point. right with question, Hard Geller, the I Alabama is That Las We X see this improve, and Bruce of an see We will three-month doing our business better. the very got us Rocks continue it the is

going a property finding and more So we're in the think to for but the out, we but in to to the good use where we very hesitant number shape addition capital in give properties, year, I'm the restaurant to accomplish we're really own bringing operation.

main that I think that's the goal here.

Bruce Martin

Okay, thanks.

Michael Weinstein

You’re welcome.

Operator

end to back Ladies like and the gentlemen, session. of would we question-and-answer I have call the to reached for turn Weinstein the Michael remarks. And closing

Michael Weinstein

that but So betting X.X $XX million when Meadowlands doing of we who mind, waiting Meadowlands what of but sort to this are have going sports all the Meadowlands. largest event, ago, the sports was our side. enough, the not Interesting it We're to grow sports the happen put in more month, a We're in betting of business analysis haven't to mentioned have, event than things betting We the at did casinos I about advent business. significant about is as purposely week Meadowlands. with the never State Jersey, most on of our pretending it's August. New is X certain important the And the doing for last happen, happen, betting. together has they in sports

and Yonkers location have sort Manhattan, for it's make as Meadowlands important other that So know, the one and of the Raceway, a that the bought proximity, of to Adelson Bergen is Jersey development case mentioned in Meadowlands most counties Manhattan those location, it validates you Queens. the one country. MGM the is things would locations. But the be are these Sheldon the We've probably an County of ideal densely-packed closer around casino. in playing is New

EBITDA not just to to coming some we're racetrack. going we money it's at made of Sports complex see some think We amount if going but from amount, that. So seeing from should will the Jersey's profitable. Cuomo going a Bronx, this that's the it's strongly and We once think Meadowlands is that, to happen, great the small years We happen a betting is in New York, just betting to think if happen. very in New sports our casino. that becoming hand announces two step, means, first Queens, but we persuaded off, minds, force which downstate still going betting be still

with So we’ll all thank next And speak quarter. you that, for in participating to call. you

Anthony Sirica

Thank you.

Operator

This concludes today’s conference.

disconnect. may You

Ark Restaurants (ARKR) 12 Feb 192019 Q1 Earnings call transcript