Ark Restaurants Corp.

Greetings and welcome to the ARC Restaurants second quarter 2024 results conference call. At this time, all participants are in a listen-only mode. A 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. I'll now turn the conference over to your host, Christopher Love, Secretary for ARC Restaurants. Thank you. You may begin.

Thank you, Operator. Good morning, and thank you for joining us on our conference call for the second quarter ended March 30, 2024. My name is Christopher Love, and I am the Secretary of Arc Restaurants. With me on the call today is Michael Weinstein, our Chairman and CEO, and Anthony Zirica, our CFO, as well as Sam Weinstein, our Co-CEO. For those of you who have not yet obtained a copy of our press release, it was issued over the NewsWise yesterday, and it's 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.arkrestaurants.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 morning will include forward-looking statements and that these statements are not guarantees of future performance, and therefore, undue reliance should not be placed on it. 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 conditions. I'll now turn the call over to Michael.

Hi, everybody. This is a pretty bland quarter in terms of comparisons. It's really easy. to outline the differences between this year and last year. Primarily, we did not do well in Florida for the quarter. Some of it affected by weather changes, but that's always a bad excuse. Just head counts were not where we would like them to be. Vegas did all right, but again, we're fighting higher rents with the new lease. New York was pretty good. Alabama was really good. And Washington, D.C. had a bad winter in general. What we're fighting is obviously higher payrolls, which has been the case for a while now, extremely high premiums on liability insurance and property insurance. And that's really it. The results are marred by the fact that we refuse to raise prices to levels which we think are untenable. In the long run, we're interested in keeping custom accounts, so our prices have to be friendly. And those price increases, which were modest, that we did put through in restaurants, Given the number of headcounts coming through, that revenue is not sufficient to make up for the higher cost of labor and to some extent food costs and to a great extent rents and insurance premiums that have gone up. That's really it. What we're seeing now is a little bit more favorable the last month or so. The results in Florida are starting to comp better compared to last year. Vegas is steadily over a million dollars a week. The goal for us to make up the difference in rent is probably a million one, a million 150. We've seen some of those weeks, not consistently, but the product there is really good. The efficiency has improved dramatically on the payroll costs. We have a new food purchasing department that seems to be doing a better job with food costs. So we expect that we'll achieve close to the same cash flow that we had prior to the rent increases during the course of this year. We'll get there. New York is benefiting from events. The a la carte business is okay, but the event business is really strong. Alabama remains strong. The food costs in Florida are very strong. We just think we're seeing a tick up in demand, and we'll see if that continues. From my point of view, everything seems to... be in line in terms of service and quality of the product. So, if you have any questions, I'd be happy to answer them.