New York City remains a “problem,” but many other parts of the country are starting to bounce back.
So said Michael Weinstein, CEO of multi-concept operator Ark Restaurants, while reporting the company’s second quarter results to analysts Tuesday.
Ark, which operates more than 35 different restaurants, bars and fast-food locations around the country, said that after a “very bad January and very bad February,” it started seeing an uptick in revenue in places like Las Vegas, Alabama and Florida, Weinstein said.
“New York is still a problem for us,” he said, noting that the Theater District and many offices remain closed, and tourism is still down. “Those volumes are severely bad.”
The operator is starting to see some events’ business come back, particularly in Washington, D.C., Weinstein said.
“I think we’ll see a significant return to events volume when restrictions are lifted,” he said.
Ark said revenue for the quarter ended April 3 topped out at about $25.7 million, down from $34 million for the same period a year ago.
During the quarter, Ark had $4.1 million in Paycheck Protection Program loans forgiven. Weinstein said he expects a total of $13 million in PPP loans to be forgiven overall.
“The cash flow is very strong at this point,” he said.
Ark’s growth strategy has changed in recent years, he said, with the company looking for one to two solid restaurants to buy each year.
“We’re more inclined to buying properties with cash flow as opposed to building properties ourselves,” Weinstein said. “These are one-off restaurants where people are retiring or no longer have an appetite to continue their business. If they’re cash-flow positive, if they have a long lease, we can buy those properties at very attractive prices. It makes far more sense than building out ourselves … We’re not looking to buy 15 restaurants a year. If one to two good properties come up, we’ll buy them and feel very comfortable we can absorb them without extending our balance sheet.”