Ark Restaurants Corp.

Ark Restaurants reported cash of $9.4 million and debt of $7.1 million, up about $4.5 million from the prior quarter after drawing $5 million in April for construction of America in Las Vegas. EBITDA for the 13 weeks ended June was down $1.4 million versus the prior year, primarily because sales and gross margin fell about 6.5% without a corresponding decline in payrolls. Management said overall sales were down 6% for the quarter. On outlook, the company said the partial closure of America should be fully reopened by September, the new bar at New York-New York should open in the early part of next year, and the Sequoia lease restructure should save $200,000-$300,000 annually.

Michael Weinstein said cash flow at New York-New York has improved year over year even though sales there were down 10%-11%, attributing that to better management and efficiency. He also pointed to a new bar deal with MGM at New York-New York, two potential new venues under negotiation, and continued confidence that the company can run its properties more efficiently. On Bryant Park, he said the court ruling on damages could be significant and may help create leverage for a future lease negotiation, while on Meadowlands he remained hopeful a casino referendum could still happen next year.

Anthony Sirica focused on the quarter’s financial pressure points: cash of $9.4 million, debt of $7.1 million, and EBITDA down $1.4 million year over year. He said the decline was mainly due to a roughly 6.5% drop in sales and gross margin, with payrolls remaining stubbornly high. He also broke out market weakness, citing Las Vegas down 11% and Florida down 10%, and said the newly completed 2-year Sequoia lease restructure should save $200,000-$300,000 per year.

There was no analyst Q&A on the call. The only notable back-and-forth was management’s own commentary on the causes of lower sales, including Las Vegas traffic weakness, the partial closure of America, and Florida’s difficult local economy. Management also addressed the status of Bryant Park litigation and the Meadowlands referendum, framing both as potential future upside but with no certainty.