- Earnings call transcript Q4 2022

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Operator

Greetings, and welcome to Ark Restaurants' Fourth Quarter and Year End 2022 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. pleasure Restaurants. your my Secretary Christopher now Ark for is to host, introduce Love, It you. Thank

may You begin.

Christopher Love

the Officer; year on Operating Secretary CEO; President our Anthony me Thank you name today and on Pascal, Michael for for operator. is Chief joining quarter the you, Financial Good I’m our Vinny us of our morning Ark Christopher Love, conference the XXXX. October X, ended Restaurants. Weinstein, and is and thank fourth Officer. Sirica, and My and call With our and Chief Chairman call

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

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

Michael Weinstein

to last a of expense and increase is stated affected two in the payrolls us to order the substantial the adjustments comparisons September which this the to costs. last today. In are, year with September of big Anthony because increase EBITDA are are September I adjustments The last try inflated year, deflate current the in get EBITDA this the other everybody. what how were of and quarter by fourth quarter of the occupancy quarter Hi, explain year compares which our a quarter. the quarter sort in you is year occupancy year the side. for have of we sort September flow directly September first this differences, costs were the our substantial in business segments there of where and want quarter One there joining Thank year to

So, Anthony.

Anthony Sirica

So in related year, recorded to some finalization abatement quarter. the adjustments we had the of COVID that deals fourth last were

in landlords there happened we what rent were negotiating, COVID where several abatements was, So XXXX. were still negotiating

base Those quarter also $X fourth deals. because to accrued last abatements still we finalized some July had occupancy million. $XXX final year the the for adjustments year, on be current to were of the about to rents normal and time, and by recorded, Vegas to we year signed the reduced leases related will couldn't costs they based to we occupancy had percentage in the the deals even that we In beginning need to rents last the So which whole were in year back August signed the any accruing according standards, deals. accounting until record the

all-in-all, looks So occupancy so why odd. million at And items. swing that's probably between those you're two looking $X

Michael Weinstein

EBITDA X we where into that back year quarter. on full which as year This for of the for the fourth happened. that fell to year, million go had So full of about year until created we essentially the weren't XXXX were to rents Because of September, opposite reversed basically, upon an have last leases the accrual in fiscal million accrual. Vegas, the XXXX the approve based $X year January for was essentially didn't and leases because the signed allowed going those rents in our we full we in signed year year, increase $X to

So went the sales our payroll interesting million there's pandemic item. sales mirror roughly quarter costs. address pre-pandemic what the That's a as compared in here. percentages $X.X year was other end. like payrolls Payroll before now and of big $X What's a September the the up is quarter. million percentage I'd to to swing same last year, on

So we're full back to made employment. I have may mistake. essentially a

in have have them. really tough that to a my money last were pay lot trouble them us directive people. As well us. economy They restaurant going is up, turnover. started because would have my finding a don't Vegas, pay right when to And more we're they We of were service up tanking. people. that these three, after money them in having more, enough as was I mess. restaurants little thing for would people, little customers time And good just in loosen is we XXXX, We four they a a because to going on rough was spend couldn't very things the a in that laborers market we if especially was people the want And when people just to want the We to spending to bit stood XXXX to we to having we see which all about to It if got the the do very a and service or managers bad good were them opened board. find find That said our bit, more, for hire directive weeks. five leave was get restaurants. talk have

So ease been have in the didn't had good we going fill that jobs to paying we're to markets But want back more. basically, we're pre-pandemic jobs these or [indiscernible] where and be to to people right we with vacant in position the that people end, levels. don't forward. And up started

million. last a the from swing quarter and in in essentially, We So September swing sales labor costs. $X had $X.X rents $X quarter we this increased September the our year million had million

you the to they where get main differences of how and sort So will were that occurred.

aggressively would these try to restaurants, go me as in cost an when dish comfortable pricing we pound prices in I to two sort though sort that that put of mean figure us of at serving the now example. customers to going them. been them This quarter, especially raising sales an business, Florida. business We paying order prices feel restaurants, back to And XX% acute many this We're in by you've out It Rustic years. to of form at what are of king a of crabs. Inn always look of in in don't it's the unfathomable and at it is price of dish. just dish. but that to may -- $XX terms It’s people elasticity In could a out. We're it. be XX% special charging for It doesn't It the of a used four profit. of some the food be they know tell Inn to high be art we out XX even go costs, all. one you $XXX for cost, stopped. dollar we're our are used the there were be to not rationalized but the that the who a I September go to Rustic

coming pay, matter is, it an it. are cost afford XX% frequently sharing will for our They it. of even though customers as it. fact food it's almost now we’re are can't the Now the and not definite People

have of And there. But headcounts losing just blue it a anniversaries becomes when a have celebratory collar birthdays. We we're crowd people there.

rest the The in well. in and extraordinarily of sort restaurant. was a of doing an profitable on down September our Rustic some as business big plus we're fine. quarter Our That's that XX% impact had EBITDA Florida,

Moon, Blue and well. Food Alabama all Our Vegas well. the well. well. Courts Las two Rocks JB’s, very very Shuckers, Hard performed performed performed performed

we performing having events Washington accepted. through to increases in York There which significantly of because a events to pent-up events New York and demand have been is people DC. New price and seems well be increased for big put that readily

reversals last did $X comparison said, accruals September So the the is increase this significantly those and The year of sales. and between to looks quarter different an are September's need as in why be items to as fine. business accruals labor. rents the year and two I big understood which last million, and increased this We

good labor think shape we're in very I with now.

better labor hire more going with I we efficient think to we're get as people.

think headcounts we in have We doing down, start had lot a had employees overtime. number two many to of to one will of because cases people sort the of of going go we I That's the person. the job eliminated. be or

to I become now. going efficient. So for we're think up it open questions more I'll

Operator

a conducting Thank gentlemen, at [Operator Instructions]. we this question-and-answer be time, Ladies session. you. will and

proceed from comes the investor. private Paul question Please with your first line a Johnson [ph], Our question. of

Unidentified Analyst

and morning for thank numbers. those the explanation around Good you

be this be know forward of the costs? we incurred you of of we payroll equal, going all next year is being to try to And forward? say, occupancy things level predicting for, you again, the I’m what and that give happen wondering, the going over and EBITDA, so equal do I let's guess think the normal last the payroll forward, to going thing obviously guidance, all I what a forward is economy let's occupancy should you things being say, can and that, not level but and all would modeling what So but tricky are don't should using traffic fiscal sort say fiscal costs year, that predict

Michael Weinstein

be all one It's I a to think tough there's question. I aware we can't of. -- thing that have

Our in has business well. been extremely Vegas

was and start helped Vegas. out in place was They were could left required through of this Vegas That next covered dramatically hotels ever The was Vegas new holes to when New not concerts. There's They York-New There the Conventions we one level There's My a year is. Last games that of sustainable. -- football we are in prices back. where in. on a active higher sales our coming management is, sales in new were acceptance Arena, in there best hockey scheduled management struggles board. not There's that which people to came new teams to have our York fill. in labor to boom come circumstances. with. lot more most right it impossible left of is in than We us put is the between price think of the market. T-Mobile with NBA come did What Vegas from, is concern now. increases. team reasons and two of X,XXX and up not

But the with levels. from our So was should these XX% Vegas between customer EBIT, we increases think price year must say the and before. up sales accounts, business I continue

to level As I as don't the perform think York earnings see in Sequoia this I New year, expect should are better. be volumes. to well. to Washington to sustainable. sustainable, continue honestly its $X.X hole that's for That perform levels reason current it's million that big long million but continue we EBITDA. do to had I used operating of $X.X year, anything any missing a probably do for Rustic’s annualized. to Florida the there's of down in restaurant in flow, cash And

number a So of we million EBITDA hole. $X.X the that Inn. million big from year, this Rustic that's is did missing $XX

that one-time $XXX,XXX think The General do point, should maybe not retirement I retired Gordon payment better Vegas a So Manager. who at as immediately. had Paul hopefully numbers some for

million the there's could Anthony for that's that save I'm the of $XX we're a Right speak a That credit one-time amount. to will loan paying correct, charges. a the with. line we Maybe loan that We're if sheet second. balance $XX in and -- the interest bank. with same term Anthony in item debt? But So for have down What's Anthony, for $XXX,XXX million, some bank. paying a term true expense about should speak now, the our cash us exchanging down

Anthony Sirica

XX.

Michael Weinstein

we beyond see as strong number $XX to million a long-term in in an the at We're that. acquisitions. debt, answer plus a opposed million see actually make get I that and to the position hopefully base base, being risk, that's I if million as XX $X there. as can

Unidentified Analyst

helpful. that's on Can No, you an Thank just update the you. give Meadowlands? really

Michael Weinstein

that's last site to. Yes, New of betting a for the and We a largest advantage. at site will update. the I’ll northern be casino variety Racetrack for happy has in Meadowlands reasons. been has for on, single the a an the Meadowlands think definitely Number The repeat be betting U.S. one, It's I the sports betting. of Jersey already sports the think going

off other well been in as The York, We're have through. whole neighborhood there's lawsuits. for would we is thought. not online very would an encroachment have affected residential has The we’re to in that doing with as Although not been a we drop and betting permitted environmental thing would significantly still get there. New go sites

citizens literally from downstate, approved Aqueduct the in a and passed where to We to The New we away. from operation those tax mind. those And there Manhattan. certainly groups time even get if money be think start which right building from Jersey, be it licenses Island, There designed means So referendum or by we If essentially with Yonkers, ideally flow New theory are Yonkers is that perhaps could think had three this because passed. the start Jersey recognizes that's to the about they was to one would operation and this New getting would Jersey casinos. to Long of New New vying if and for casinos New XX Manhattan. referendum days to operate licenses was the issued they constitution York operating, in The of whole change Jersey the are a literally. that two if casino having Racetrack have operating casino get York wants away of

is in New that not to going which a Jersey, Atlantic do. referendum the be already will be not Hard having said casino we Murphy did northern is the like. have which The when Jersey Taj and in They favorable. now in the our by Rock casino. first Mahal time required At in what the operators. He old one the governor venture. that are referendum operated of New referendum thing licensed company So to there very only some City casino -- They the that is is Last would New that run the Jersey. that's was look very pass, this don't partners that plan. a has know time

New So I sports moving has circumstances casinos of positive that think York are forward. And nothing negative a the are still onsite do happened. lot we and betting

that think a our I into casino all license. So plays hopes well of getting

Unidentified Analyst

like I would past mentioned Rock us just conclusion to in be Hard the you. logical on that, someone the finally know Thank And out. you've buy that for

have realm would of Some is from people at market -- that the they'd the Ark. to point price that almost have speculated equal the of Is the that whole value to of they cap within possibility view? pay your

Michael Weinstein

accept won't capitalization. the to a I number equal

education, going was or partner Hard be nursing because MGM our allocated though even money tax we the to badly was it fluff. where it's I'm to, whether referendum to But When was There just state have I the with which of Rock it school was Look, did of much speaking here. XX% we a would conversation flow. homes we And were more. out operator paying which to written, when was not it did sounded North. to for like to fruition, come think when first -- million looked in going in needed that looking worth referendum partners a and like we the it $XXX the the do the MGM in Jersey in us it gave licensed deal, put it the this because thing operate cash and was mention year a projections up voted was no money, had true. taxes was after down not

this X% There diluted. of X%, our can more we thing own percentage be dilution with we fully come almost will if up equity. of So

flow that's So of interest. to even million Ark’s $XX if we that could you X%, own cash attribute

$XX business also all That's the and a an Hard million with for carve for have Rock $XX probably of We a on a Cafe. beverage the us. exclusive million, food out exception

get that's that. don't first, priced But don't worth. economics potential have extraordinary. casino stock. it’s the I don't into I think know are the what So license. certainly, We But

Unidentified Analyst

that. appreciate I you. Thank

Operator

Instructions]. [Operator

proceed a next question. private the of comes from your Walters Please question line [ph], Our with Jason investor.

Unidentified Analyst

to whether capital Any getting you below you're you the guys. morning, Thank EBITDA that know, in share on and and question the from included are trading like to I allocation. for Ark terms on repurchases, seeing Xx And on companies purchase quick b, depending land a? Xx Michael, level. A is Good level at or Thanks. that then, acquisition thoughts you. what opportunities side? of acquisitions

Michael Weinstein

it I'm or with right, And whether correct. you. depending it Xx you absolutely Xx got not is comes to land glad thank Well, upon the

further don't So another not outstanding, could the I leaving think floating opposed assets which acquire ongoing or hopefully to think where we're and right share don't XX% now than The repurchase. We about flow reducing would would be capitalization. looking. we those There it's And shares about of would shares. are even which of float hands. be you number off influence, liquidity the tell is of you should along many built acquiring think have we but them into as cash already philosophy than cash discussions, that just constantly the other. interesting of the our seen XX% long-term around. one is flow, better couple we're We've rather a consistent things. here We

So somebody if moments like has also we a necessarily this bad a That's just block that to buyer the stock because to A comes wants want and thing don't it's when have there's you up, not is enough the thing sell it shares down stock. But buy bad a find a available. there's to outstanding. maybe seller.

a don't So enough lease, buying forever. all much left We're being we that better Xx stuff at shrink XX said, a anymore. own smart we've we on shares cash years still manager has And The lucky very chef stayed to from be acquisitions, been think in extraordinary. us. with the every but that involved run an I these flow restaurant no It's that mistake, long made we to every it’s we lease land, where has should past. have of we’re confident every the acquired lasting. things. or positions luck it's make want acquisition the That lease; to if know if off Xx how just the with been We've we and

have issue we'll I'm so all be hope to that's management that retaining. But going forward. we're big place work leave we nobody us I that good into have as for. not and that and company as think have We sure of jumping have fortunate But sure with to acquisitions. us a I in got slows in make so. a expertise, well chance down we to good a

So I your answers question. hope that

Unidentified Analyst

you. Thank Yes.

Operator

further questions for in the management like There no hand back I'd are to to closing remarks. queue. call the

Michael Weinstein

We're a and gives quarter. today continue really holidays, for participation your better. in Hopefully, And Happy here. next to a to good bit speak you to are. business explain improve the working we'll you. me little things good a hard very Have day. appreciate And questions, everybody. I chance Thank the us. We and the

Operator

today's gentlemen, for participation. and Ladies this does conclude you Thank teleconference. your

disconnect lines wonderful may your You time at day. have a this and

Ark Restaurants (ARKR) 20 Dec 222022 Q4 Earnings call transcript