Ark Restaurants Corp.

Greetings and welcome to the ARC Restaurant's second quarter 2020 results conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Sonal Shah, General Counsel. Thank you. You may begin.

Thank you, Operator. Good afternoon, and thank you for joining us on our conference call for the second fiscal quarter ended March 28, 2020. My name is Sonal Shah, and I'm General Counsel of ARC Restaurants. With me on the call today is Michael Weinstein, our Chairman and CEO, Vinnie Pascal, our Chief Operating Officer, and Anthony Sirica, our Chief Financial Officer. For those of you who have yet to obtain a copy of our press release, It was issued over the news wires yesterday 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 homepage at www.arcrestaurants.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 everyone 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'll now turn the call over to Michael.

Hi, everybody. I assume you've all seen the earnings release. Let me try to explain our business right now. But given that the pandemic closed us everywhere, we've been slowly opening where we were allowed to open. And fortunately, the first places we opened were in the south, Florida and Alabama. We initially opened six restaurants in a short period of time about five weeks ago, I guess. And those restaurants are doing quite well. They're obviously... are down because of social distancing and 50% capacities. Their volumes are down from the same time last year. However, because of, in some cases, limiting menus and certainly in every case, reconfiguring payroll and schedules, they're operating more efficiently and in some cases, The Cash Flow Coming From The Restaurants The first week, we essentially broke even with cash flow. We haven't seen last week's P&L yet, but I anticipate that there would be some positive cash flow from that. So those southern restaurants in Las Vegas have been better than we anticipated when we opened them up. I mean, there was fear. and opening them up. We had no idea how they would do. We opened Washington a few days ago in Sequoia. We haven't opened in Union Station yet. It's too early to tell how that's doing. We have the advantage of having a lot of outdoor seats. I think we have 307 outdoor seats after social distancing. I think as of the next couple of days, we'll be able to Also allowed by the city to sit people inside. Don't know how that's going to do. We opened Bryan Park yesterday in New York. We opened El Rio Grande today in New York. Both of those have outside seats. We're only allowed to sit outside in New York. Clyde's and Robert at the Museum of Art and Design will not open until we're, well, Clyde's, once we're allowed to open inside, will open. Robert won't open until probably mid-September because the museum that we're in is closed and museums in New York are going to be last phase and probably none of the museums are going to open until sometime September. So we have this staged opening that so far is going well. Before we count New York, again, we have no idea. We just have no way to validate anything. It becomes obvious that we're endangering our employees or our customers by remaining open. We're probably going to be faced with a decision that I see every business in the United States faced with. Do you close? Do you close until you can get everybody tested so that you have only people who tested negative in the restaurants? We can control the atmosphere in the restaurants. We can control For the most part, our employees and we're certainly following CDC guidelines plus. We're doing more than that. What we can control is where our customers have been and where our employees have been when they're not working. We sent out notices to all our employees that it's their responsibility to be considerate to their fellow employees and to their customers. and wear masks and practice social distancing, avoid crowds when they're not in the restaurants to improve the odds. But obviously, I'm sure all of you are very cognizant that there is no assurance that we can keep virus out of our restaurants. But right now, it's all going well. We did take PPP money for our restaurants. It was cheap money to take. Honestly, I thought when we went into this that we would have enough money to see us through without PPP money. The PPP money was very helpful. One of the things we face in terms of the negative is places like Sequoia, Bryant Park, Robert, Do a lot of events. Well, we're not doing events right now. And we have $4 million on deposit for Christmas events. And we're trying to reschedule people and encourage them to keep their deposits for another date. We're somewhat successful, but there are deposits flowing out of here as well. So our cash flow or our cash on hand in part was bolstered by the float of deposits and by the float of being in business where customers pay us the day they get served and we pay bills 15 to 30 days later. Those two advantages disappeared the minute we closed down. So the PPP money was of great assistance. That's about all I have to say right now. I'm happy to take questions.