Ark Restaurants: Announces Q3-2024 Financial Results

New York City / NY. (arc) Ark Restaurants Corporation reported financial results for the third quarter ended June 29 (Q3-2024). Summary:

Total revenues for the 13 weeks ended June 29, 2024 were USD 50,396,000 versus USD 51,051,000 for the 13 weeks ended July 01, 2023 and total revenues for the 39 weeks ended June 29, 2024 were USD 140,139,000 versus USD 140,393,000 for the 39 weeks ended July 01, 2023. As required by our lease, «Gallagher’s Steakhouse» at the New York-New York Hotel and Casino in Las Vegas, NV was substantially closed for renovation in the prior period from February 05, 2023 through April 27, 2023. Revenues for the comparable current period to the Closure Period were USD 3,056,000 as compared to USD 1,068,000 for the Closure Period, of which USD 918,000 as compared to USD 354,000 related to the 13-week periods ended June 29, 2024 and July 01, 2023, respectively.

Excluding «Gallagher’s Steakhouse», Company-wide same store sales decreased 2.3 percent for the 13 weeks ended June 29, 2024 as compared to the same period of the prior year.

The Company’s Ebitda, as adjusted, for the 13 weeks ended June 29, 2024 was USD 3,375,000 versus USD 4,663,000 for the 13 weeks ended July 01, 2023, and excludes non-cash impairment charges in the aggregate amount of USD 2,500,000 and other items. Net income attributable to Ark Restaurants Corporation for the 13 weeks ended June 29, 2024, which includes the impairment charges, was USD 640,000, or USD 0.18 per basic and diluted share, compared to net income of USD 3,195,000, or USD 0.89 and USD 0.88 per basic and diluted share, respectively, for the 13 weeks ended July 01, 2023. Ebitda is a Non-GAAP Financial Measure.

The Company’s Ebitda, as adjusted, for the 39 weeks ended June 29, 2024 was USD 5,625,000 versus USD 8,682,000 for the 39 weeks ended July 01, 2023, and excludes non-cash impairment charges in the aggregate amount of USD 2,500,000, gains on the forgiveness of Paycheck Protection Program Loans and adjusted for the other items. Net income attributable to Ark Restaurants Corporation for the 39 weeks ended June 29, 2024, which includes the impairment charges and PPP Loan Forgiveness, was USD 561,000, or USD 0.16 and USD 0.15 per basic and diluted share, respectively, compared to net income of USD 4,436,000 (which includes PPP Loan Forgiveness) or USD 1.23 and USD 1.22 per basic and diluted share, respectively, for the 39 weeks ended July 01, 2023. Ebitda is a Non-GAAP Financial Measure. As of June 29, 2024, the Company had a cash balance of USD 11,467,000 and total outstanding debt of USD 5,738,000.

Other Matters

During the 13 weeks ended June 29, 2024, impairment indicators were identified at our «Sequoia» property located in Washington, D.C. due to lower-than-expected operating results. Accordingly, the Company tested the recoverability of Sequoia’s right-of-use and long-lived assets and concluded they were not recoverable. Based on a discounted cash flow analysis, the Company recognized impairment charges of USD 1,561,000 and USD 939,000 related to Sequoia’s right-of-use and long-lived assets, respectively. Given the inherent uncertainty in projecting results of restaurants, the Company will continue to monitor the recoverability of the remaining carrying value of the assets of Sequoia on an ongoing basis. If expected performance is not realized, further impairment charges may be recognized in future periods, and such charges could be material.