Ark Restaurants Corp Q3 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Jeffrey Kaminsky - JJK Consultants - Analyst : Good morning, guys. Once again, on the call, Michael, you're highlighting specifically weakness in Florida, which -- asked. And although the industry has played with same challenges, payroll and insurance costs, et cetera, et cetera. In Florida, in particular, it's a pretty robust market there as discussed, their restaurants or changes being made. And I have a question that I really would like an answer to because in the past, you discussed what is our strategy going forward. The answer is always and consistently been, we're always on the lookout to buy, acquire properties and fold it into the portfolio. Okay. That maintains -- you are still maintaining that, but you have a weakness in a big market and a market that's generally flourishing. And I would like to hear something about the strategy in Florida, how you're going to change things around? Because there's never any discussion on these calls about what Ark is going to do with the current existing properties, and how we're going to move revenues forward? And so I'd like to put that out there because this has been a very frustrating investment today and the news is being worse not better. And I'd like to hear what the vision is for the company in the immediate future?

Question: Jeffrey Kaminsky - JJK Consultants - Analyst : Michael, let me interrupt for a second. I apologize. Perhaps that's where I broke up before. I recognize that your strategy continues to be acquiring property where you think you could buy it at the right price and make some money. Let's put that aside for now, that's not happened recently, it may happen, hopefully it may not happen at all. What is the strategy of the current properties and turning them around, menu changes, happy hours, entertainment, things that drives new people.

Question: Jeffrey Kaminsky - JJK Consultants - Analyst : Okay. Well, just to respond to what you said. I was not referring to restaurants in Florida that you need to have a reservation, you can't get a reservation between 5:00 and 9:00 talking about the restaurants that discussed in the past. The El Camino is part top-down. I know you know the group that that owns Ke'e Grill and Henry's in Lauderdale, Boca and West Palm. These are all places that they're happy hour is blooming 4:00 or 5:00 in the afternoon. They're capitalizing on the work-from-home crowd. So that they get out, they leave home and they go to the bar at 4:00, 5:00 o'clock, they stay for dinner. That's what I'm referring to. And since this is a shareholder earnings call, just to remind you, the stock is going to trade near pandemic or COVID lows, it's [11:00] as we speak. And you've continued the dividend that has already been cut in half. You referenced McDonald's Starbucks. The hospitality group has been under pressure, but most are way above pandemic growths. And we are now going to test that role and eliminate the dividend. So I'm talking to you as a shareholder not as a patron of your restaurant.

Question: Bruce Geller - Geller ventures - Analyst : Hey, good morning, Gentlemen,

Question: Bruce Geller - Geller ventures - Analyst : Good. Thanks. You discussed the pressures on both sales and costs. Based on the macro environment, it's hard to see much relief on either side of those at the moment. So I'm curious kind of adding on to the previous line of questioning, what additional self-help measures can you put into place to address this environment? Because it's just waiting for the environment to get better isn't going to be enough.

Question: Bruce Geller - Geller ventures - Analyst : What about other strategies to drive revenue in the existing restaurants?

Question: Bruce Geller - Geller ventures - Analyst : No, I was going to say on that. No, I'm really surprised and just don't understand the thought behind suspending the dividend here. I mean shareholders have gotten very little return from the company over the past few years, and that was one minor source of return and the company is sitting here with net cash and you're saying, you're confident in the future, and but suspending a dividend like that is a sign of really low confidence. So it's really a disconnect. And I'm pretty disappointed to hear about this. So, I'd love for you to elaborate more on it. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 13, 2024 / 3:00PM, ARKR.OQ - Q3 2024 Ark Restaurants Corp Earnings Call

Question: Bruce Geller - Geller ventures - Analyst : Yes. But some of these are things that haven't happened yet. Like Bryant Park, we just don't know, an acquisition hasn't happened. We just don't know. You've been talking about potential acquisitions for quite some time. I could see maybe...

Question: Bruce Geller - Geller ventures - Analyst : No. I totally understand it totally understand and respect that. My point was...

Question: Bruce Geller - Geller ventures - Analyst : Yes. I just feel like it was preemptive cut as opposed to cutting it at a point where some of these items you're discussing as possibilities are definitive. It's also a little discouraging to see the -- you have a lot of spending obligations, it sounds like, but it's like you're spending a lot of money to kind of stay in the same place. You make a lot of these investments, but...

Question: Bruce Geller - Geller ventures - Analyst : Well, it's not that it doesn't look like you're not doing anything. It looks like you're spending on some of these obligations, but it's not bringing the company forward. Your results remain the same or even a little worse. And...

Question: Bruce Geller - Geller ventures - Analyst : And so the capital is being spent, but there's no visible return on those investments. I mean, Sequoia is a great example. You spent a ton of capital to completely redo that restaurant when you sign a new lease, and it hasn't gone well and now you've taken a write-down there.

Question: Bruce Geller - Geller ventures - Analyst : In the past, you've purchased other real estate in some of these deals. I'm just curious, I'm looking at the stock with the current enterprise value in 30s. What would be a ballpark estimate if you had to estimate what is the value of the underlying real estate you own? Some of these properties in great waterfront locations, I'm just curious what kind of underlying real estate value there is, is in a company that Enterprise value less than $40 million?

Question: Jeffrey Kaminsky - JJK Consultants - Analyst : Michael, just a follow-up to Bruce's comment earlier, you kind of asked the same question that I did, he used a different terminology. So I'll repeat this. He asked about self-help measures that can be undertaken to stem loss and drive traffic, et cetera, et cetera. There wasn't any real answer regarding changing the menu, adding craft cocktails or any of that. You did mention the (inaudible), so I'm just curious what are your projections in terms of revenue based on the footage, square footage and the property? And how quickly do you think it is successful that you'll be able to scale this to any meaningful enterprise that would actually contribute revenues to the company.

Question: Jeffrey Kaminsky - JJK Consultants - Analyst : Mike, a follow-up to the Meadowlands. Did the decision out of Nashville County the other day or I guess they're approving casino that was the Nashville Coliseum in Nashville County. There's something like that if it should proceed and they build out. I think...

Question: Jeffrey Kaminsky - JJK Consultants - Analyst : Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 13, 2024 / 3:00PM, ARKR.OQ - Q3 2024 Ark Restaurants Corp Earnings Call