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Ark Restaurants Corp. (ARKR)
F1Q08 Earnings Call
February 11, 2008 3:00 am ET
Robert J. Stewart - Chief Financial Officer
Michael Weinstein - Chairman of the Board, Chief Executive Officer
Dean Haskell - Morgan Joseph
Michael Markolis - A.G. Edwards
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Robert J. Stewart
Thank you, Operator. Good afternoon and thank you for joining us on our conference call for the first fiscal quarter ended December 29, 2007. With me on the call today is Michael Weinstein, our Chairman and CEO, and Michael Buck, our General Counsel. For those of you who have not yet obtained a copy of our first quarter press release, it was issued over the newswire Friday 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 home page 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 all of you 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 phone call over to Michael Weinstein. Michael.
Hi, everybody. We had a good quarter in terms of top line. Sales were a little over $30 million versus $27.5 million last year. EBITDA, which is the number we focus on, was 2.9 this year, 3.3 last year.
The main difference -- all the difference between EBITDA this year and last year came from pre-opening expenses involved in the construction of Yolos, our Mexican Grill and Lounge which is in the Planet Hollywood hotel which opened in December; expenses related to the expansion and renovation of the banquet facilities at New York-New York Hotel & Casino -- we did not have the availability of those banquet room so we were hurt on the sales side there, as well as having expenses at getting them up and running, and we were carrying some payroll during that period for that; and also because of the good year we had last year, the board of directors voted for bonuses, several hundred thousand dollars in excess of the prior year’s bonuses. So that was the basic difference in the December numbers.
We ran our businesses pretty well. New York-New York, which carries the expenses of the construction of the expanded banquet facilities, had additional payroll in there and they had some expenses of smallwares and other things which we write off as incurred during that period, so their P&L did not look as good as we would like it to but there were by and large reasons for it.
Our business was -- comp sales were acceptable in this environment. We are seeing some narrowing of comp sales from the September and June quarters. Obviously a lot of that has to do with the fact that we had outdoor cafes open and fully utilized for this spring and summer compared to last year, so those 10% comp sales were really pretty much the favorable comparisons of outdoor cafes this year -- this prior year compared to last year. In the December quarter when we don’t run any of those outdoor cafes, these comp sales were quite acceptable.
We continue to have positive comp sales in the March quarter. We are only into the second week of February but right now we are running up about 3% company wide. Las Vegas is up 2%. New York is up 6%. New Jersey, 13%. We are running very positive in Boston, up 10%, which is great for us there. We made some price changes and menu changes in Durgin Park. Our Hollywood and Tampa Seminole Indian properties are running about even on the whole. We’re hoping to do better as Hollywood has not gotten the full Vegas treatment in terms of the slot machines and has started to install those machines and we think we’re going to see better results in Hollywood.
So all in all, a pretty good picture here. I’ll take questions now, if you care to.
(Operator Instructions) Our first question comes from Dean Haskell with Morgan Joseph. Please go ahead.
Dean Haskell - Morgan Joseph
Good afternoon, gentlemen. Congratulations on a good quarter in a tough environment. The Florida comps in the first quarter, how did those run?
Tampa is doing -- the two properties together, about even. Tamp is up 12%. That continues to be the stronger of the two properties right now. The Hollywood property had some competition from Gulf Stream and some of the other traps that installed machines, so that’s been down a little over 12% from last year. The big news there again is the new slot machines that -- 700 of the new type slot machines and we are starting to see some positive results from that. And we would expect -- you know, Hollywood’s had a great run. We’ve been up 20% or more compounded annually since we walked in there, so this drop with the new competition was not unexpected but now that they have these machines and nobody -- and they have exclusive on these machines, we would expect that business to come back.