Ark Restaurants Announces Financial Results for the Second Quarter of 2024
Ark Restaurants Corp. (NASDAQ: ARKR) reported financial results for Q2 2024, ending March 30, 2024. The company posted total revenues of $42.26 million, slightly higher than $41.90 million in Q2 2023. For the first half of 2024, revenues were $89.74 million, up from $89.34 million in the same period last year. Adjusted EBITDA for Q2 2024 was a loss of $321,000 compared to a gain of $1.00 million in Q2 2023. Net loss for Q2 2024 was $1.45 million, or $0.40 per share, worsening from a net loss of $484,000, or $0.13 per share, in Q2 2023. For the first half of 2024, adjusted EBITDA was $2.25 million, down from $4.02 million in the first half of 2023. Net loss for the first half of 2024 was $79,000 compared to net income of $1.24 million in 2023. A quarterly dividend of $0.1875 per share was announced, payable on June 12, 2024.
- Total revenues for Q2 2024 increased to $42.26 million from $41.90 million in Q2 2023.
- Total revenues for the first half of 2024 were $89.74 million, marginally higher than $89.34 million in the same period in 2023.
- The company declared a quarterly cash dividend of $0.1875 per share, payable on June 12, 2024.
- Cash balance stood at $10.41 million at the end of March 30, 2024.
- Total outstanding debt was $6.24 million as of March 30, 2024.
- Adjusted EBITDA for Q2 2024 was a loss of $321,000, compared to a gain of $1.00 million in Q2 2023.
- Net loss for Q2 2024 was $1.45 million or $0.40 per share, worsening from a net loss of $484,000 or $0.13 per share in Q2 2023.
- Adjusted EBITDA for the first half of 2024 was $2.25 million, significantly lower than $4.02 million in the same period in 2023.
- Net loss for the first half of 2024 was $79,000, compared to net income of $1.24 million in the first half of 2023.
- Revenue from Gallagher's Steakhouse in Las Vegas dropped from $2.11 million in the prior year to $714,000 for the period it was closed for renovation.
Insights
Ark Restaurants Corp.'s financial results indicate a challenging second quarter. Total revenue for the 13 weeks ended March 30, 2024, was
The dip can be partially attributed to the closure and renovation of Gallagher’s Steakhouse during the previous fiscal year. Nonetheless, this alone doesn't explain the steep drop in profitability. Investors must consider this as a warning signal, reflecting operational inefficiencies or rising costs.
In the broader view, the company's cash position remains relatively strong with
However, consistent underperformance and widening losses are generally red flags for investors, potentially signaling deeper structural or operational issues that need addressing.
From a market perspective, Ark Restaurants' slight increase in revenue is overshadowed by its significant profitability challenges. The hospitality and dining sectors have been grappling with numerous issues post-pandemic, such as increased labor costs, supply chain disruptions and changing consumer behaviors. These broader industry challenges may be impacting Ark Restaurants more severely than its competitors, as evidenced by the decline in EBITDA and net income.
Investors should also note the company's decision to proceed with a dividend payment despite a net loss. This could be seen as a move to maintain shareholder confidence, but it also raises questions about the sustainability of such payouts if financial performance doesn't improve. The dividend yield might attract income-focused investors, yet the underlying financial health remains a concern.
Given the competitive nature of the restaurant industry and the current economic headwinds, investors need to be cautious. While the company's strong cash reserves provide a cushion, ongoing losses could erode this safety net quickly if not addressed.
Financial Results
Total revenues for the 13 weeks ended March 30, 2024 were
The Company's EBITDA, adjusted for items as set out in the table below, for the 13 weeks ended March 30, 2024 was
The Company's EBITDA, excluding gains on the forgiveness of Paycheck Protection Program Loans (the "PPP Loan Forgiveness") and adjusted for the other items as set out in the table below, for the 26 weeks ended March 30, 2024 was
On May 7, 2024, the Board of Directors declared a quarterly cash dividend of
As of March 30, 2024, the Company had a cash balance of
About Ark Restaurants Corp.
Ark Restaurants owns and operates 17 restaurants and bars, 16 fast food concepts and catering operations primarily in
Cautionary Note Regarding Forward-Looking Statements
Except for historical information, this news release contains forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. These statements involve unknown risks, and uncertainties that may cause the Company's actual results or outcomes to be materially different from those anticipated and discussed herein. Important factors that might cause such differences are discussed in the Company's filings with the Securities and Exchange Commission. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Actual results could differ materially from those anticipated in these forward-looking statements, if new information becomes available in the future.
Non-GAAP Financial Information
This news release includes non-generally accepted accounting principles ("GAAP") performance measures. Although Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA") is not a measure of performance or liquidity calculated in accordance with GAAP, the Company believes the use of this non-GAAP financial measure enhances an overall understanding of the Company's past financial performance as well as providing useful information to the investor because of its historical use by the Company as both a performance measure and measure of liquidity, and the use of EBITDA by virtually all companies in the restaurant sector as a measure of both performance and liquidity. However, investors should not consider this measure in isolation or as a substitute for net income (loss), operating income (loss), cash flows from operating activities or any other measure for determining the Company's operating performance or liquidity that is calculated in accordance with GAAP as it may not necessarily be comparable to similarly titled measure employed by other companies.
ARK RESTAURANTS CORP. |
Consolidated Condensed Statements of Operations |
For the 13- and 26- week periods ended March 30, 2024 and April 1, 2023 |
(In Thousands, Except per share amounts) |
|
|
13 Weeks Ended
|
|
13 Weeks Ended
|
|
26 Weeks Ended
|
|
26 Weeks Ended
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
TOTAL REVENUES |
|
$ |
42,257 |
|
|
$ |
41,897 |
|
|
$ |
89,743 |
|
|
$ |
89,342 |
|
COSTS AND EXPENSES: |
|
|
|
|
|
|
|
|
||||||||
Food and beverage cost of sales |
|
|
12,138 |
|
|
|
11,795 |
|
|
|
24,209 |
|
|
|
24,231 |
|
Payroll expenses |
|
|
15,512 |
|
|
|
15,311 |
|
|
|
32,488 |
|
|
|
31,833 |
|
Occupancy expenses |
|
|
5,775 |
|
|
|
5,255 |
|
|
|
12,107 |
|
|
|
11,438 |
|
Other operating costs and expenses |
|
|
5,836 |
|
|
|
5,352 |
|
|
|
11,928 |
|
|
|
11,283 |
|
General and administrative expenses |
|
|
3,141 |
|
|
|
3,023 |
|
|
|
6,461 |
|
|
|
6,159 |
|
Depreciation and amortization |
|
|
1,057 |
|
|
|
1,138 |
|
|
|
2,149 |
|
|
|
2,171 |
|
Total costs and expenses |
|
|
43,459 |
|
|
|
41,874 |
|
|
|
89,342 |
|
|
|
87,115 |
|
OPERATING INCOME (LOSS) |
|
|
(1,202 |
) |
|
|
23 |
|
|
|
401 |
|
|
|
2,227 |
|
OTHER (INCOME) EXPENSE: |
|
|
|
|
|
|
|
|
||||||||
Interest expense, net |
|
|
150 |
|
|
|
248 |
|
|
|
310 |
|
|
|
588 |
|
Other income |
|
|
— |
|
|
|
— |
|
|
|
(26 |
) |
|
|
— |
|
Gain on forgiveness of PPP Loans |
|
|
— |
|
|
|
— |
|
|
|
(285 |
) |
|
|
(272 |
) |
Total other (income) expense, net |
|
|
150 |
|
|
|
248 |
|
|
|
(1 |
) |
|
|
316 |
|
INCOME (LOSS) BEFORE PROVISION (BENEFIT) FOR INCOME TAXES |
|
|
(1,352 |
) |
|
|
(225 |
) |
|
|
402 |
|
|
|
1,911 |
|
Provision (benefit) for income taxes |
|
|
(147 |
) |
|
|
19 |
|
|
|
11 |
|
|
|
133 |
|
CONSOLIDATED NET INCOME (LOSS) |
|
|
(1,205 |
) |
|
|
(244 |
) |
|
|
391 |
|
|
|
1,778 |
|
Net income attributable to non-controlling interests |
|
|
(244 |
) |
|
|
(240 |
) |
|
|
(470 |
) |
|
|
(537 |
) |
NET INCOME (LOSS) ATTRIBUTABLE TO ARK RESTAURANTS CORP. |
|
$ |
(1,449 |
) |
|
$ |
(484 |
) |
|
$ |
(79 |
) |
|
$ |
1,241 |
|
|
|
|
|
|
|
|
|
|
||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO ARK RESTAURANTS CORP. PER COMMON SHARE: |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
$ |
(0.40 |
) |
|
$ |
(0.13 |
) |
|
$ |
(0.02 |
) |
|
$ |
0.34 |
|
Diluted |
|
$ |
(0.40 |
) |
|
$ |
(0.13 |
) |
|
$ |
(0.02 |
) |
|
$ |
0.34 |
|
|
|
|
|
|
|
|
|
|
||||||||
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING: |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
|
3,604 |
|
|
|
3,600 |
|
|
|
3,604 |
|
|
|
3,600 |
|
Diluted |
|
|
3,604 |
|
|
|
3,600 |
|
|
|
3,604 |
|
|
|
3,646 |
|
|
|
|
|
|
|
|
|
|
||||||||
EBITDA Reconciliation: |
|
|
|
|
|
|
|
|
||||||||
Income (loss) before provision (benefit) for income taxes |
|
$ |
(1,352 |
) |
|
$ |
(225 |
) |
|
$ |
402 |
|
|
$ |
1,911 |
|
Depreciation and amortization |
|
|
1,057 |
|
|
|
1,138 |
|
|
|
2,149 |
|
|
|
2,171 |
|
Interest expense, net |
|
|
150 |
|
|
|
248 |
|
|
|
310 |
|
|
|
588 |
|
EBITDA (a) |
|
$ |
(145 |
) |
|
$ |
1,161 |
|
|
$ |
2,861 |
|
|
$ |
4,670 |
|
EBITDA, adjusted: |
|
|
|
|
|
|
|
|
||||||||
EBITDA (as defined) (a) |
|
$ |
(145 |
) |
|
$ |
1,161 |
|
|
$ |
2,861 |
|
|
$ |
4,670 |
|
Non-cash stock option expense |
|
|
68 |
|
|
|
80 |
|
|
|
145 |
|
|
|
159 |
|
Gain of forgiveness of PPP Loans |
|
|
— |
|
|
|
— |
|
|
|
(285 |
) |
|
|
(272 |
) |
Net income attributable to non-controlling interests |
|
|
(244 |
) |
|
|
(240 |
) |
|
|
(470 |
) |
|
|
(537 |
) |
EBITDA, as adjusted |
|
$ |
(321 |
) |
|
$ |
1,001 |
|
|
$ |
2,251 |
|
|
$ |
4,020 |
|
| (a) | EBITDA is defined as earnings before interest, taxes, depreciation and amortization. A reconciliation of EBITDA to the most comparable GAAP financial measure, pre-tax income, is included above. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240513556882/en/
Anthony J. Sirica
(212) 206-8800
ajsirica@arkrestaurants.com
Source: Ark Restaurants Corp.
FAQ
What were Ark Restaurants' Q2 2024 revenues?
How did Ark Restaurants' net loss in Q2 2024 compare to Q2 2023?
What is the declared cash dividend for Ark Restaurants in Q2 2024?
How much cash did Ark Restaurants have by the end of Q2 2024?
What was Ark Restaurants' adjusted EBITDA for the first half of 2024?
What was the revenue impact of Gallagher's Steakhouse renovation on Ark Restaurants?
How did Ark Restaurants' total revenue for the first half of 2024 compare to the first half of 2023?
