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Ark Restaurants (ARKR)
Q2 2013 Earnings Call
May 14, 2013 10:00 am ET
Paul Robert Stewart - Chief Financial Officer, Principal Accounting Officer, Treasurer and Director
Michael Weinstein - Founder, Chairman and Chief Executive Officer
Bruce Howard Geller - Dalton, Greiner, Hartman, Maher & Co., LLC
Previous Statements by ARKR
» Ark Restaurants Management Discusses Q1 2013 Results - Earnings Call Transcript
» Ark Restaurants F3Q08 (Qtr End 6/28/08) Earnings Call Transcript
» Ark Restaurants F1Q08 (Qtr End 12/29/07) Earnings Call Transcript
Paul Robert Stewart
Thank you, operator. Good morning and thank you for joining us on our conference call for the second fiscal quarter ended March 30, 2013. With me on the call today is Michael Weinstein, our Chairman and CEO; and Vincent Pascal, our Chief Operating Officer.
For those of you who have not yet obtained a copy of our press release, it was issued over the Newswire yesterday and is available on our website. To review the full text of that press release, along with the associated financial tables, please go to our homepage at www.arkrestaurants.com.
Before we begin, however, I'd like to read the Safe Harbor statement. I need to remind everyone that part of our discussion this afternoon will include forward-looking statements and that these statements are not guarantees of future performance, and therefore undue reliance should not be placed on them. We refer everyone to our filings with the Securities and Exchange Commission for a more detailed discussion of the risks that may have a direct bearing on our operating results, performance and financial condition.
I will now turn the call over to Michael.
Hi, everybody. I'll just give a review area by area of the country and talk about the results in relation to that. Our big problem in this quarter was weather in the Northeast. We have several thousand outdoor café seats that were pretty much in full use last year. In March this year, we've had no utilizations of outdoor café seats at night and very little utilization during the day. The weather has just been too cold, too rainy, not at -- climatized for us to do good business. When we do have some nice weather in the afternoons, our outdoor cafés are full, the restaurants are vibrant. We just don't see any problem, economically, affecting our restaurants. This is all weather. We've had some -- we made some efforts to have some small price increases. They've been taken well. Restaurants that are not weather-oriented, like Robert at the Museum of Art and Design; Canyon Road, which is small; Thunder Grill; and then Center Café in Washington D.C., where there are very few outdoor café seats, their business is robust. What's dragging the earnings in New York down, EBITDA down, is the Bryant Park, which has 800 outdoor café seats; Sequoia in Washington, D.C., 600 outdoor café seats. Las Vegas remains very flat to down slightly from last year. And when I say down slightly, maybe 1% or 2% in sales. I had a meeting the other today with the senior people at MGM. We are obviously attached at the hip to these hotels. In New York, New York, we pretty much -- 70% of the food and beverage sales, and act as their Food and Beverage Director. We are going to make some structural payroll changes there, which we've always hesitated to do, but we think it's timely. There's been no rebound that we can see in Vegas. Demand may be increasing for hotel rooms, but there are not significant price increases in room rates, and the spend by customers coming to Vegas seems to still be down dramatically from where it was 5 years or 6 years ago.
So we're flat in Vegas. In Washington, D.C., again, Sequoia is not utilizing those outdoor café seats. Atlantic City, we're doing well. The hotel we're in, Resorts International, is being changed to a Margaritaville. It's a significant upgrade. We think we'll do better with that Grand on the marquee of the hotel. We are also about to open another burger bar in the Tropicana in Atlantic City in the quarter. We have very high hopes for that. That'll open right around June 1, 2 or 3 weeks from now. Connecticut, we're -- it's not a big deal for us. Obviously, we've had problems with Foxwoods all along. Their demand is way, way down, and it's going to go further down, I believe, once Massachusetts and Rhode Island open up, but we're cash flow positive there. And the -- yes, our business is basically good. We're running on the numbers, our food costs are good, our payrolls are good. The other area I should mention is Hollywood in Tampa, Florida, where we're in the Hard Rocks. Those sales remain strong. The hotel's comping policies have changed a little bit. So our comp sales, which are important to us in Tampa, are down slightly. And that's basically the outlook for the company, is it's weather. We get good weather, our earnings are going to increase dramatically. We don't think there's any economic conditions that are disadvantaging us, and if Vegas were to pop up again, it would be significant leverage for us in our EBITDA. With that, any questions?
[Operator Instructions] Our first question comes from the line of Bruce Geller with DGHM.