Ark Restaurants, the publicly held operator of multiple independent restaurants, said it is “cautiously optimistic” about the future and expects to return to profitability during Q3, executives noted during an earnings call Tuesday.
Ark’s restaurants in Florida are “cash-flow positive,” CEO Michael Weinstein said, though the operator is struggling by adhering to county health mandates.
“One of the things that hampers us a little bit is we operate legally,” Weinstein said. “We’re not operating our bars. But independents away from us are operating their bars and taking the fines. So, to a certain extent, some of that business is flowing to people that are neighboring us.”
For the quarter ended Jan. 2, Ark reported total revenue of about $20.3 million, a drop of roughly 47% from the same period the previous year.
Net loss for the quarter was $763,000, compared to net income of $1.5 million a year ago.
New York City-based Ark Restaurants owns and operates 18 restaurants and bars, as well as 17 fast-food concepts and catering operations.
In December, the company acquired a restaurant-bar called Blue Moon Fish Company in Lauderdale by the Sea, Fla., for $2.82 million.
“We thought it would be profitable almost immediately and it turned out to be the case,” Weinstein said.
Ark closed its Thunder Grill restaurant at Union Station in Washington, D.C., with an eye toward reconcepting the location.
“The landlord and I are very close,” Weinstein said. “They want us to reopen in that spot. Right now, it doesn’t pay to talk about it. Union Station is a homeless encampment. Being open would not do well right now, especially with reduced capacity.”
Restaurants in Washington D.C. and New York City are currently the hardest hit, with New York’s Bryant Park Grill and Cafe operating at 5% to 10% of pre-pandemic revenue.
“We have an obligation under our lease to stay open,” he said. “It’s been brutal for us there.”
It’s impossible to make money under New York City’s 25% capacity requirements, he said, but he was encouraged by seeing waiting lists for tables on Valentine’s Day.
Weinstein likened the pandemic to the restaurant business following the terrorist attacks of 9/11.
“Our restaurants were doing a meager amount of business in Washington, New York and Las Vegas,” he recalled. “I said, ‘These are strong restaurants and strong brands and they’re great assets. And, as business returns, we will do extremely well.’ And that happened. And I think that’s going to happen again.”
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