Greetings and welcome to the Ark 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 Ark 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 30th, 2024. My name is Christopher Love, and I am the Secretary of Ark Restaurants. With me on the call today is Michael Weinstein, our Chairman and CEO, and Anthony Sirica, our CFO, as well as Sam Weinstein, our Co-COO. For those of you who have not yet obtained a copy of our press release, it was issued over the newswire 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 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 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 headcounts 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. 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 customer counts, so our prices have to be friendly. And those, those price increases, which were modest that we did put through in the restaurants, given the number of headcounts coming through, that revenue, is not sufficient to make up for the higher cost of labor and, and, to some extent, food cost, and to a great extent, rents and, 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 $1 million a week. The goal for us to make up the difference in rent is probably $1.1 million-$1.15 million. 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 of 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 à 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. If you have any questions, I'd be happy to answer them. Thank you. At this time, we'll be conducting a question-and-answer session. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull for questions. Once again, it's star one to ask a question. Everybody fell asleep. Our first question comes from the line of Peter Katz with Herold & Lantern Investments. Please proceed with your question. Hi, Michael. How are you? Good, Peter. Thank you. Any updates on Bryant Park? So the process has been drawn out, and somewhat disappointing in terms of the response to, you know, the needs of those people who have made bids. We were all promised, and we're finalists in the process. We don't know how many finalists there are. We suspect two or three others beside us. We were promised in October that leases would be forthcoming for everybody to view, the kind of lease that would need to be signed. That finally came two weeks ago. And when it came, it said that the respondents must reply by this Friday. So everybody had, you know, waited five months to see what they were gonna have to deal with in terms of lease terms and given seven days to respond or eight days to respond. So we've responded to that. I don't know what their timetable is on making decisions. We have no hint. They have not, you know, said to anybody that, you know, they're gonna make a decision by the end of May, the end of June. So we just don't know where the process stands other than we've replied to the lease, and we made some comments, and, you know, I wish I could tell you more definitively, you know, what their process was, but I can't. I've been mystified by the process from day one. Does that affect your ability to plan events prospectively? We've already stopped taking events for 2025 after May 1, 2025. That's when our lease ends. So if people call, you know, we'll encourage the conversations to keep going, but we're not signing any contracts, and, you know, we have to inform them that we don't know that we're gonna be in possession of the property. I don't think there's too much of that now, but certainly, you know, weddings are planned well in advance of 12 months, so, you know, that's probably what will first be affected. Okay. Different question. Based on your debt and amortization schedules, do you have an expectation what your year-end debt balance might be? Well, right, Anthony can answer that question. Right now, it's about $6 million. Yeah. The year-end balance will be $5.3 million. Okay. As a reminder, all of the loans have a June 1, 2025 balloon payment, so next quarter, everything moves to current. Current, so long-term debt moves from $6 long-term to $6 current, correct? Correct. Yeah. It would be. As of June? Yeah. As of June 1, everything is due by June 1, 2025. Got it. And you would most likely look to, would you refinance that? Is that what your plan is? Yeah. We'll, I mean, we'll start the process of entering into a new credit agreement probably sometime after the calendar year and, you know, roll it into a new deal. Yeah. But if I can interrupt Anthony for a second. We have about $14 million in the banks right now. Some of that represents deposits on future parties. Some of it is just float. But we're going into, you know, our season. The June quarter and September quarter are, you know, our best seasons. We, you know, we should cash flow substantially for during those periods. Mm-hmm. We usually build cash. We build cash. We have some expenditures to make in Vegas on, you know, refurbishing the food court. There are no current projects or purchases that require any capital. So, you know, our decisions will be made, you know, based upon where the cash stands as well as what future commitments we have. But we're in very strong shape from a cash point of view, going into, you know, our best seasons. Great. Again, as you said, your cash cycle is such that you expect to harvest cash in the second and third quarter as opposed to the first and fourth quarter where you are paying out bonuses and whatever other adjustments have to be done. Right. Correct. Okay. Is there anything else to report in terms of new business development, or? We look at things. Sam, you wanna talk about Lucky Pei? Sure. We're in the process of building out a new concept in Las Vegas. It's an Asian fast food concept, a lot of rice bowls and bao buns. We've been putting the brand together for about, you know, about eight months now. We think that it has potential to roll out a few concepts, so we're sort of piloting in New York-New York Hotel and Las Vegas. So that's the only real new concept we have on deck, but we're excited about it, and it's set up to be rolled out more as a brand rather than run one-off. So we should be opening that in the next month or so, and we'll see how it goes. And if that's successful, we're definitely looking to for new locations to place that in. Great. And finally, do. Go ahead. I'm sorry. No, we have a letter of intent out on a purchase of a restaurant, but I think, you know, there's something that with all of these things, you know, with the one-offs, where we're trying to buy the land or we're trying to buy cash flow, you know, we got very lucky the first five or six of these that we did. Management stayed, sales remained strong. In most cases, profitability increased. And lately, the last three or four of these deals that we've tried to do, and they're all pretty much in Florida—one was in Wisconsin that we've looked at—you know, there's, they're trying to sell us something, you know, let's say at 4x cash flow, and they have in Florida, they have the same problem we've had. Their cash flow's disappearing a little bit, compared to last year's numbers. So when we go back to renegotiate, you know, that becomes a problem for the seller because they're hoping the cash flow will build again, and they'll come back to us at a later date or whatever. So, you know, we're looking at stuff. We just don't, you know, there always seems to be a fly in the ointment either with the seller's, you know, cash flow performance or, in some cases, the landlords are obstinate about changing clauses in the lease that we need as a public company. So, you know, it's not a lack of effort to try to find things to expand, but we're not in control, you know, of the landlords or, or, you know, the cash flows of the restaurants that we're looking at. I would tell you that we're more interested, or excuse me. I shouldn't say more interested. We are as interested now in trying to build a brand that we can control, to have a vehicle to expand, you know, the company's cash flow. That is as interesting to us as buying cash flow, so. Good luck on that endeavor as well. Thank you. I think I was just curious. You mentioned having spent a lot of money in the Gallagher's renovation. Has that brought more upscale traffic? Has there been any sort of conversations with the landlord about that process? I would tell you that we're in it that we're now comping against last year's results when Gallagher's was completely open. It's too early to tell whether that business has increased enough to, you know, to warrant having spent that kind of money, but the answer is we didn't have a choice, you know. Right. In order to get the lease, we had to commit to spending, you know, a little under $2 million. The real cost was not the amount of money we spent in the restaurant but having the restaurant closed for 12 weeks-13 weeks. Was being out of commission. Which, yeah, sure, cost us a great deal of cash flow. Right. The lease is a much steeper lease. You know, what we always thought, and to a certain extent, the relationship with MGM requires us to rely on their marketing people who were convinced that we were too far under the price points of other steakhouses, and they wanted us to increase prices to be more like other steakhouses in Vegas. I could tell you that the product is excellent, and we're seeing that in the Yelp reviews now. I mean, most of those reviews are five-star reviews. We had some problems early on because the kitchen was refigured, and we probably had the wrong chef when we reopened, but we have, you know, that's been corrected, and the product is excellent. The real problem is that, and MGM, or New York-New York put in a new Cirque du Soleil show, but they also put in competition in The Park. It's very hard for us to figure out why sales aren't 20% up or some bigger number than we're seeing now, whether it's competition, which is more expensive than us, by the way, but there's another steakhouse, you know, attached to the New York-New York property, which was a surprise to us, or if the fact of the matter is, and by the way, the T-Mobile Arena, which is in that same park, is, you know, more active than it's ever been, and we would suspect that that would be a customer who would come to Gallagher's. But the real problem is New York-New York, in terms of, you know, a property is, you know, a middle-income customer. And what you're seeing now in general throughout the company, I believe, is if you look at the fast food courts that we run in Hollywood and Tampa and New York-New York, they're all doing well. They're up. Tampa a little less than Hollywood and New York-New York. But when I looked at New York-New York's figures last week, which, you know, the food court was up 12%-14% from last year. You know, sales at the next restaurant that is modestly priced, which is our Burger Bar, are down from last year. I think there's a big shift in these properties from high-priced restaurants to lower, lower-cost tickets for the customers that aggregate to New York-New York. I must tell you that if you go to Hollywood, you know, and I think this is true everywhere, but especially Hollywood. When we built Hollywood out, and Tampa, both locations, the location in Hollywood was moved about two or three years ago when they did the Guitar Hotel. They moved us to a new section. And we said, "Look, we're gonna do fast food, but we want the quality to be restaurant quality, not fast food quality." And all of a sudden, you have, you know, really great food, you know, in terms of what customer expectations are, and the price points in the full-service restaurants and the Hollywood casino, you know, are kind of steep. So I think there's a migration from full-service restaurants to our fast food courts where we are, you know, and the properties we're in. It speaks well of the quality of product in the fast food, but it doesn't speak well to the price points in the full-service restaurants. And my question in my mind always is, how much is that limiting Gallagher's ability to really comp much better, from the prior to the renovation to now? So we have competition on one hand, but we do have T-Mobile Arena doing more business or having more dates when something's going on. We also have a show, which we didn't have, right next to Gallagher's. So I think those are positives, but the negative is the price point and the customer. We don't see a well-heeled customer. So I may be confusing in terms of an answer, but it's confusing to us to see how we're doing. What we know we're doing well is the customers that are walking into the place are really enjoying it because the reviews are quite, quite good. Thank you. Thank you. Any other questions, please? Yes. Our next question comes from the line of Roger Lipton with Lipton Financial. Please proceed with your question. Yes. Hi, Michael. Hi, Sam. Hi. Looking forward to seeing you. Good. I'm fine. Could you describe? I didn't quite get that description of the new prototype you're building at New York-New York. Could Sam describe it a little further for us? Sure. It's sort of a quick-service to full-flavor style setup. It's an Asian concept. It's rice bowls. It's bao buns. And we're starting small. It's just three different ingredients. We have a beef, a pork, and then a chicken option, and a vegetarian option. And it's essentially rice bowls, bao buns, and boba tea. Boba tea's become very popular. We've been seeing a lot of success in other spots in Las Vegas and other areas that we've been looking at. So we're trying to build this little concept that puts both of them together, and then we're also making our own freshly baked mochi donuts. So that's pretty much the gist of it. Okay. And when, when do you think you might have? I'm sorry? What, what is it gonna be in a food court? Yes. It's gonna be in the New York-New York Hotel food court. Okay. And when do you think you'll be getting that started? End of June, it's looking like. We're about to start construction now. Got it. Okay. Good. Michael, is there anything at all new in terms of the downstate casino discussions? I mean, I see periodic reports in the press, but you're probably watching it a little more closely than we are. Any movement at all in terms of that? I mean, again, you know, it's the opinion of my partners in the deal who are substantially, have substantially more equity in the deal than we do that, you can't move forward with a referendum in New Jersey until you have downstate casinos. That requires licenses, and the process in New York has been slow. There is a lot of activity that you read about, about the proposals of Related and, you know, and others. And now, you know, I guess Bally's is in there since they bought the Trump property, you know, and, The Bronx. In the Bronx. Certainly, Yonkers is in there and Aqueduct's in there and, you know, Venetian, I, you know, Sands has, you know, a proposal in. So there are a lot of proposals, I guess, to be analyzed. The state has basically said, "We need more time." So until those licenses are issued and I'm pretty sure everybody pretty much agrees that Yonkers and Aqueduct will be two of the three recipients. The good thing about Aqueduct and Yonkers is if they get a license, they could be in business in 60 days. Yeah. And I think that pushes Jersey to start to draft a resolution or referendum. That needs a public vote. But you know, if you look at the other side and the question's been asked all the time by investors in Ark, you know, what is Jersey waiting for? I mean, we basically, you know, the Meadowlands LLC, New Meadowlands LLC, which is the holding company that runs the Meadowlands Racetrack now, we've committed a guarantee of $500 million a year to the state. What are they waiting for? Right. But the reality is they're waiting. So it's in terms of what we're really waiting on, as it's been waiting in New York. Do you have any new feedback that maybe New York is gonna really come to grips with this thing? We have no. In the short term. We read the same thing. We read the same articles and newspapers that you read. Okay. So you might be paying a little closer attention than I can, but whatever. Well, do the best you can. You can't control it. Obviously, it's just a question of what you're observing. Right. So, So, well, all right. Thanks very much. Look forward to seeing you guys soon. Thank you so much, Roger. Thank you. Our next question comes from the line of Alan Goldberg, private investor. Please proceed with your question. Hello, Michael. How are you? Alan, very well. Yourself? Getting older, just like you are. But I'm good. Thanks for reminding me. I'm good. You may not remember, but you and I had a lovely time. You. Yes. You went to lunch, down here in Florida. I'm not in Florida. I'm in Chicago at the moment. And I was calling to see if there was any update on the Meadowlands, but since that's already been asked, I wanted to tell you that I think you are maneuvering very well through this tough time. I know this is not what you wanna hear, but in Chicago, I went to Maggiano's last night for dinner, and they had 19 patrons while I was having my dinner. And that sort of shocked me. And I asked them how things are going. They say, "Actually, what you see tonight is an anomaly. We have been so busy here and, not even barring Mother's Day. They said, "Their price point seems to be very, very good, and I think most of our price points are very, very competitive." And I, I you know, everybody wants results yesterday. And we you and I met it's certainly more than five years ago. We were a little younger. And, I'm very pleased with what you're doing. I think you're moving in the right direction. Now, you may say under your breath or in silence, "My God, he's crazy." But I'm not crazy. People are eating out more and more and more. The problem that's hurting look, if McDonald's is telling you they're slowing down because of people, concerned about money, I, I, I agree. I think it hurts all restaurants. But I also notice nobody seems to care. They give the credit card, and they just don't care. Again, I'm not teaching you your business. I know absolutely nothing about it except I enjoy your restaurants. But, I, I think we should continue doing what you've been doing. Look for, as you said, look for places that are reasonable to us. This whole this whole industry is gonna change. The, the world is changing. We've got a major election coming, as we all. I'm not teaching you economics. That's my field. But, I, I think you're doing the right thing. And as, as you know or you may not remember, I ran a hedge fund for a number of years. And, you look for things that are gonna take place in the next three to five years. That's how a good investor should invest. I'm very pleased with the way you're running it and the people on your staff with you that I don't know, but and I just wanna tell you, it's a pleasure hearing your voice. Thank you for taking my call. Thank you. If you ever have any questions of me, I'm always there for you. And thank you so much. Thank you for the meetings. Good luck to all of everybody, all of us. And thank you. Thank you, Alan. Thank you. Ladies and gentlemen, as a final reminder, it's star one to join the question queue. We'll pause a moment to allow for any others. I'm showing no other questions at this time, Mr. Weinstein. I'll turn the floor back to you for any final comments. All right. Well, thank you all for joining us, and we'll speak to you at the end of the next quarter. Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.