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Ark Restaurants Corporation (ARKR)
F1Q 2014 Earnings Conference Call
February 11, 2014 10:00 AM ET
Bob Stewart – CFO and Treasurer
Michael Weinstein – Chairman and CEO
Previous Statements by ARKR
» Ark Restaurants' CEO Discusses F4Q 2013 Results - Earnings Call Transcript
» Ark Restaurants Management Discusses Q2 2013 Results - Earnings Call Transcript
» Ark Restaurants Management Discusses Q1 2013 Results - Earnings Call Transcript
» Ark Restaurants F3Q08 (Qtr End 6/28/08) Earnings Call Transcript
As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Bob Stewart, Chief Financial Officer, for Ark Restaurants. Thank you, sir. You may begin.
Okay. Thank you, operator. Good morning and thank you for joining us on our conference call for the first fiscal quarter ended December 28, 2013. With me on the call today is Michael Weinstein, our Chairman and Chief Executive Officer; 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 variance on our operating results, performance, and financial condition.
I will now turn the call over to Michael.
Hi, everybody. This was a good quarter. The strength of our restaurants exceeded the weakness that was caused by Sandy last year, Hurricane Sandy. And last year’s quarter, our businesses were interrupted; some of the businesses were closed as much as five days in New York. But whatever shortfall Sandy caused last year in revenue, and therefore in EBITDA, was not as severe as the subsequent gains we had this year in the New York and Washington, D.C. areas. Our businesses in New York were extremely strong; we had very good catering results over the holidays. So it’s a good quarter.
Reason by reason, we still are having difficulty in Las Vegas, with revenues, Vegas has been under pressure, since 2008, we basically have not seen very much of a recovery there. This year’s quarter, we were down slightly than last year, obviously, there was no Hurricane Sandy in Las Vegas, so those comparisons are real comparisons. New York, we were up 15%, probably we were down 5% on Sandy – so the 15% is really, probably a 10% gain. In same-store sales New York was very strong, Washington was about flat, Atlantic City was extremely strong, but Atlantic City was decimated last year by Sandy. Our results in Atlantic City are good, what should be expected, but really no significant comparative sales gain beyond making up what we lost due to Sandy last year.
Boston is slightly up, Connecticut is slightly down. In Florida, where we own significant interest in – want me to partnership, that operates the fast food marketplace, our restaurants in the Hollywood, then Tampa, our Hard Rock Casinos, we were down but that is a result of a change in marketing philosophy at the hotels, and we are not beneficiary of a strong coupon marketing plan where we used to be. So that has redirected business somewhat away from us and we’re down about 11%.
All in all, our businesses are running well. We like the way our managers at the restaurants are approaching operating costs, inevitably operating cost go higher. We have not had the flexibility to raise prices in Las Vegas or Washington, D.C. for that matter. We have raised prices a little bit in Florida where even though the couponing has protected our businesses, our regular business demand is strong. We’ve raised prices in New York, but elsewhere we just don’t have the flexibility to raise prices.
So there is a little bit of a squeeze always because our occupancy costs are inevitably headed higher as our other operating costs and we need revenue to – to be sustained by price increases. We’ll get there eventually as demand takes up, we’re a strong believer that the world is getting better.
I guess I can take questions now.
Thank you. (Operator Instructions). Mr. Weinstein, there are no questions. Would you like to make any other comments?
Yes, I would. Thank you. So, one of the issues which – actually I’m addressing here our related [ph] shareholders. It is a basic problem that restaurant companies or retailers face which is rent. Rents in many of the areas we are in have escalated dramatically. We are subject to losing leases and not being able to renegotiate commence their terms come to an end. Philosophically, we have changed the way we’re approaching new operations. And we are trying to find operations where we are not subject to the real estate market – the only way we could effectively [ph] renegotiate leases in New York City for instance is if we have the ability to take prices up significantly to compensate for the rent escalations that are taking place in the city.