Ark Restaurants(US:ARKR)2019-05-14 18:56Financial Data and Key Metrics Changes - The Meadowlands partnership earned approximately $3.5 million in the March quarter, with Ark Restaurants owning about 7.5% to 8% of that on a dilutive basis [5] - The company anticipates annual recognition from Meadowlands at a rate of $750,000 to $800,000, along with an additional $7.5 million to $8 million in K-1 income from partnerships in the sports segment [7] - The company reported an increase of over $500,000 in EBITDA for the quarter, despite disappointing results from New York due to minimum wage legislation [10] Business Line Data and Key Metrics Changes - The company closed the Durgin-Park location, eliminating previous losses from that venue [9] - The Las Vegas property and Sequoia in Washington D.C. showed significant turnaround, contributing positively to overall performance [11] - The company is not building new restaurants in New York due to unfavorable market conditions, focusing instead on acquisitions in more favorable locations like Alabama [24] Market Data and Key Metrics Changes - New York's market remains challenging due to minimum wage increases, with limited pricing elasticity affecting margins [10][18] - The company has successfully increased prices in other markets, such as Alabama, without negatively impacting headcounts [20][23] Company Strategy and Development Direction - The company is focusing on acquiring well-managed restaurants with strong cash flow, such as the recent acquisition in South Florida expected to add $1.5 million to $1.6 million in EBITDA in its first year [8][9] - The strategy includes becoming landlords through acquisitions, allowing for better control over costs and margins [22] - The company is exploring opportunistic development deals to enhance shareholder returns [24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the Meadowlands partnership and its potential growth in sports betting, despite the current lack of a casino license [5][12] - The company is experiencing challenges in New York but remains positive about performance in other regions, particularly with favorable weather conditions expected to boost results [11][12] - Management acknowledged the impact of external factors like weather and delivery services on restaurant performance, emphasizing the need for operational efficiency [18][20] Other Important Information - The company is facing a tax issue related to phantom income from the Meadowlands partnership, which may require distributions to cover tax obligations [7] - Management highlighted the importance of maintaining quality and customer experience while navigating pricing and operational challenges [18][20] Q&A Session Summary Question: Strategy to counteract higher minimum wage impacts - Management discussed the challenges posed by minimum wage increases, particularly in New York, and emphasized the need for operational efficiency and selective pricing adjustments [16][18] Question: Acquisition details regarding real estate - Management confirmed that the new acquisition includes a right of first refusal on the property, positioning the company to potentially become its own landlord [21][22]