0000930413-17-002901.txt : 20170811 0000930413-17-002901.hdr.sgml : 20170811 20170811160713 ACCESSION NUMBER: 0000930413-17-002901 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 58 CONFORMED PERIOD OF REPORT: 20170701 FILED AS OF DATE: 20170811 DATE AS OF CHANGE: 20170811 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ARK RESTAURANTS CORP CENTRAL INDEX KEY: 0000779544 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-EATING PLACES [5812] IRS NUMBER: 133156768 STATE OF INCORPORATION: NY FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-09453 FILM NUMBER: 171025068 BUSINESS ADDRESS: STREET 1: 85 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10003-3019 BUSINESS PHONE: 2122068800 MAIL ADDRESS: STREET 1: 85 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10003-3019 10-Q 1 c89127_10q.htm

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

FORM 10-Q

 

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended July 1, 2017

 

Commission file number 1-09453

 

ARK RESTAURANTS CORP.

(Exact name of registrant as specified in its charter)

 

New York   13-3156768  
(State or other jurisdiction of   (I.R.S. Employer  
incorporation or organization)   Identification No.)  
       
       
85 Fifth Avenue, New York, New York   10003  
(Address of principal executive offices)   (Zip Code)  

 

Registrant’s telephone number, including area code:    (212) 206-8800     

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) during the preceding 12 months (or for shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x    No o

 

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files).

Yes x    No o

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer o   Accelerated filer o
     
Non-accelerated filer o (Do not check if a smaller
reporting company)
  Smaller Reporting Company x  

 

In an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
o  Yes   o  No

 

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o    No x

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

 

Class     Outstanding shares at August 4, 2017
(Common stock, $.01 par value)     3,425,681
 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

On one or more occasions, we may make statements in this Quarterly Report on Form 10-Q regarding our assumptions, projections, expectations, targets, intentions or beliefs about future events. All statements, other than statements of historical facts, included or incorporated by reference herein relating to management’s current expectations of future financial performance, continued growth and changes in economic conditions or capital markets are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.

 

Words or phrases such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “projects,” “targets,” “will likely result,” “hopes,” “will continue” or similar expressions identify forward-looking statements. Forward-looking statements involve risks and uncertainties which could cause actual results or outcomes to differ materially from those expressed. We caution that while we make such statements in good faith and we believe such statements are based on reasonable assumptions, including without limitation, management’s examination of historical operating trends, data contained in records and other data available from third parties, we cannot assure you that our projections will be achieved. Factors that may cause such differences include: economic conditions generally and in each of the markets in which we are located, the amount of sales contributed by new and existing restaurants, labor costs for our personnel, fluctuations in the cost of food products, adverse weather conditions, changes in consumer preferences and the level of competition from existing or new competitors.

 

We have attempted to identify, in context, certain of the factors that we believe may cause actual future experience and results to differ materially from our current expectation regarding the relevant matter or subject area. In addition to the items specifically discussed above, our business, results of operations and financial position and your investment in our common stock are subject to the risks and uncertainties described in “Item 1A Risk Factors” in Part I of our Annual Report on Form 10-K for the fiscal year ended October 1, 2016 (“Form 10-K”) as may be updated by the information contained under the caption “Item 1A. Risk Factors” in Part II of this Quarterly Report on Form 10-Q.

 

From time to time, oral or written forward-looking statements are also included in our reports on Forms 10-K, 10-K/A, 10-Q, 10-Q/A and 8-K, our Schedule 14A, our press releases and other materials released to the public. Although we believe that at the time made, the expectations reflected in all of these forward-looking statements are and will be reasonable; any or all of the forward-looking statements may prove to be incorrect. This may occur as a result of inaccurate assumptions or as a consequence of known or unknown risks and uncertainties. Many factors discussed in this Quarterly Report on Form 10-Q, certain of which are beyond our control, will be important in determining our future performance. Consequently, actual results may differ materially from those that might be anticipated from forward-looking statements. In light of these and other uncertainties, you should not regard the inclusion of a forward-looking statement in this Quarterly Report on Form 10-Q or other public communications that we might make as a representation by us that our plans and objectives will be achieved, and you should not place undue reliance on such forward-looking statements.

 

We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. However, your attention is directed to any further disclosures made on related subjects in our subsequent periodic reports filed with the Securities and Exchange Commission on Forms 10-K, 10-K/A, 10-Q, 10-Q/A and 8-K and Schedule 14A.

 

Unless the context requires otherwise, references to “we,” “us,” “our,” “ARKR” and the “Company” refer specifically to Ark Restaurants Corp., and its subsidiaries, partnerships, variable interest entities and predecessor entities.

- 2 -

Part I. Financial Information

Item 1. Consolidated Condensed Financial Statements

 

ARK RESTAURANTS CORP. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS

(In Thousands, Except Per Share Amounts)

 

   July 1,
2017
   October 1,
2016
 
   (unaudited)   (see Note 1) 
ASSETS          
CURRENT ASSETS:          
Cash and cash equivalents (includes $397 at July 1, 2017 and $889 at October 1, 2016 related to VIEs)  $320   $7,239 
Accounts receivable (includes $515 at July 1, 2017 and $429 at October 1, 2016 related to VIEs)   3,558    3,750 
Employee receivables   388    453 
Inventories (includes $22 at July 1, 2017 and $23 at October 1, 2016 related to VIEs)   2,111    1,892 
Prepaid expenses and other current assets (includes $258 at July 1, 2017 and $228 at October 1, 2016 related to VIEs)   2,412    2,662 
Total current assets   8,789    15,996 
FIXED ASSETS - Net (includes $9 at July 1, 2017 and $22 at October 1, 2016 related to VIEs)   44,107    29,546 
INTANGIBLE ASSETS - Net   418    526 
GOODWILL   9,880    7,895 
TRADEMARKS   3,331    1,611 
DEFERRED INCOME TAXES   2,949    3,416 
INVESTMENT IN AND RECEIVABLE FROM NEW MEADOWLANDS RACETRACK   6,966    6,701 
OTHER ASSETS (includes $71 at July 1, 2017 and October 1, 2016 related to VIEs)   2,339    2,564 
TOTAL ASSETS  $78,779   $68,255 
           
LIABILITIES AND EQUITY          
CURRENT LIABILITIES:          
Accounts payable - trade (includes $88 at July 1, 2017 and $114 at October 1, 2016 related to VIEs)  $4,536   $2,876 
Accrued expenses and other current liabilities (includes $212 at July 1, 2017 and $238 at October 1, 2016 related to VIEs)   9,857    10,555 
Accrued income taxes   1,699    606 
Borrowings under credit facility   3,887    - 
Current portion of notes payable   4,040    2,617 
Total current liabilities   24,019    16,654 
OPERATING LEASE DEFERRED CREDIT (includes $56 at July 1, 2017 and $73 at October 1, 2016 related to VIEs)   3,607    3,576 
NOTES PAYABLE, LESS CURRENT PORTION, net of deferred financing costs   9,011    5,321 
TOTAL LIABILITIES   36,637    25,551 
COMMITMENTS AND CONTINGENCIES          
EQUITY:          
Common stock, par value $.01 per share - authorized, 10,000 shares; issued and outstanding, 3,426 shares at July 1, 2017 and 3,423 shares at October 1, 2016   34    34 
Additional paid-in capital   12,588    12,942 
Retained earnings   27,316    27,158 
Total Ark Restaurants Corp. shareholders’ equity   39,938    40,134 
NON-CONTROLLING INTERESTS   2,204    2,570 
TOTAL EQUITY   42,142    42,704 
TOTAL LIABILITIES AND EQUITY  $78,779   $68,255 

 

See notes to consolidated condensed financial statements.

- 3 -

ARK RESTAURANTS CORP. AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF INCOME (Unaudited)

(In Thousands, Except Per Share Amounts)

 

   13 Weeks Ended  39 Weeks Ended
   July 1,
2017
  July 2,
2016
  July 1,
2017
  July 2,
2016
REVENUES:                    
Food and beverage sales  $40,507   $40,935   $112,374   $111,385 
Other revenue   694    298    1,697    1,111 
Total revenues   41,201    41,233    114,071    112,496 
                     
COSTS AND EXPENSES:                    
Food and beverage cost of sales   11,227    10,656    30,814    29,440 
Payroll expenses   13,776    12,895    39,402    38,982 
Occupancy expenses   4,541    3,309    13,037    11,891 
Other operating costs and expenses   5,398    4,999    15,390    14,485 
General and administrative expenses   2,955    2,956    8,699    8,996 
Depreciation and amortization   1,006    1,109    3,541    3,384 
Total costs and expenses   38,903    35,924    110,883    107,178 
RESTAURANT OPERATING INCOME   2,298    5,309    3,188    5,318 
Gain on sale of Rustic Inn, Jupiter   -    -    1,637    - 
OPERATING INCOME   2,298    5,309    4,825    5,318 
OTHER (INCOME) EXPENSE:                    
Interest expense   194    116    470    316 
Interest income   (16)   (12)   (126)   (36)
Other (income) expense, net   (149)   (217)   (339)   (439)
Total other (income) expense, net   29    (113)   5    (159)
INCOME BEFORE PROVISION FOR INCOME TAXES   2,269    5,422    4,820    5,477 
Provision for income taxes   585    1,362    1,338    1,398 
CONSOLIDATED NET INCOME   1,684    4,060    3,482    4,079 
Net income attributable to non-controlling interests   (298)   (693)   (755)   (1,036)
NET INCOME ATTRIBUTABLE TO ARK RESTAURANTS CORP.  $1,386   $3,367   $2,727   $3,043 
                     
NET INCOME PER ARK RESTAURANTS CORP. COMMON SHARE:                    
Basic  $0.40   $0.99   $0.80   $0.89 
Diluted  $0.39   $0.96   $0.77   $0.87 
                     
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING:                    
Basic   3,424    3,418    3,424    3,418 
Diluted   3,549    3,494    3,532    3,504 

 

See notes to consolidated condensed financial statements.

- 4 -

ARK RESTAURANTS CORP. AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF CHANGES IN EQUITY (Unaudited)

FOR THE 39 WEEKS ENDED JULY 1, 2017 AND JULY 2, 2016

(In Thousands, Except Per Share Amounts)

 

                       Total Ark         
                       Restaurants         
           Additional           Corp.   Non-     
   Common Stock   Paid-In   Retained       Shareholders’   controlling   Total 
   Shares   Amount   Capital   Earnings   Treasury Stock   Equity   Interests   Equity 
                                 
BALANCE - October 3, 2015   4,774   $48   $25,682   $26,548   $(13,220)  $39,058   $2,173   $41,231 
                                         
Net income   -    -    -    3,043    -    3,043    1,036    4,079 
Exercise of stock options   -    -    1    -    -    1    -    1 
Stock-based compensation   -    -    286    -    -    286    -    286 
Retirement of treasury shares   (1,356)   (14)   (13,206)   -    13,220    -    -    - 
Distributions to non-controlling interests   -    -    -    -    -    -    (734)   (734)
Dividends paid - $0.75 per share   -    -    -    (2,565)   -    (2,565)   -    (2,565)
                                         
BALANCE - July 2, 2016   3,418   $34    12,763   $27,026   $-   $39,823   $2,475   $42,298 
                                         
BALANCE - October 1, 2016   3,423   $34   $12,942   $27,158   $-   $40,134   $2,570   $42,704 
                                         
Net income   -    -    -    2,727    -    2,727    755    3,482 
Exercise of stock options   3    -    36    -    -    36    -    36 
Tax benefit on exercise of stock options   -    -    7    -    -    7    -    7 
Change in excess tax benefits from stock-based compensation   -    -    (397)   -    -    (397)   -    (397)
Distributions to non-controlling interests   -    -    -    -    -    -    (1,121)   (1,121)
Dividends paid - $0.75 per share   -    -    -    (2,569)   -    (2,569)   -    (2,569)
                                         
BALANCE - July 1, 2017   3,426   $34   $12,588   $27,316   $-   $39,938   $2,204   $42,142 

 

See notes to consolidated condensed financial statements.

- 5 -

ARK RESTAURANTS CORP. AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)

(In Thousands)

 

   39 Weeks Ended
   July 1,
2017
  July 2,
2016
         
CASH FLOWS FROM OPERATING ACTIVITIES:          
Consolidated net income  $3,482   $4,079 
Adjustments to reconcile consolidated net income to net cash provided by operating activities:          
Loss on closure of restaurant   -    16 
Gain on sale of Rustic Inn, Jupiter   (1,637)   - 
Loss on disposal of assets   283    - 
Deferred income taxes   77    540 
Stock-based compensation   -    286 
Depreciation and amortization   3,258    3,384 
Amortization of deferred financing costs   35    32 
Operating lease deferred credit   31    (190)
Changes in operating assets and liabilities:          
Accounts receivable   192    (111)
Inventories   74    98 
Prepaid, refundable and accrued income taxes   1,069    (594)
Prepaid expenses and other current assets   324    (350)
Other assets   189    (373)
Accounts payable - trade   1,660    (103)
Accrued expenses and other current liabilities   (698)   (426)
Net cash provided by operating activities   8,339    6,288 
           
CASH FLOWS FROM INVESTING ACTIVITIES:          
Purchases of fixed assets   (11,843)   (1,482)
Loans and advances made to employees   (69)   (161)
Payments received on employee receivables   134    164 
Proceeds from the sale of the Rustic Inn, Jupiter   2,474    - 
Purchase of Oyster House   (3,043)   - 
Additional investment in Meadowlands Newmark LLC   (222)   - 
Purchase of Shuckers   -    (717)
Net cash used in investing activities   (12,569)   (2,196)
           
CASH FLOWS FROM FINANCING ACTIVITIES:          
Principal payments on notes payable   (2,932)   (1,879)
Borrowings under credit facility   3,897    - 
Payment of debt financing costs   -    (131)
Dividends paid   (2,569)   (2,565)
Proceeds from issuance of stock upon exercise of stock options   36    1 
Distributions to non-controlling interests   (1,121)   (734)
Net cash used in financing activities   (2,689)   (5,308)
NET DECREASE IN CASH AND CASH EQUIVALENTS   (6,919)   (1,216)
CASH AND CASH EQUIVALENTS, Beginning of period   7,239    9,735 
CASH AND CASH EQUIVALENTS, End of period  $320   $8,519 
           
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:          
Cash paid during the period for:          
Interest  $458   $316 
Income taxes  $192   $1,486 
Non-cash financing activities:          
Note payable in connection with the purchase of Oyster House  $8,000   $- 
Change in excess tax benefits from stock-based compensation  $(397)  $- 
Note payable in connection with the purchase of Shuckers  $-   $5,000 
Retirement of 1,356 treasury shares  $-   $13,220 

 

See notes to consolidated condensed financial statements.

- 6 -

ARK RESTAURANTS CORP. AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

July 1, 2017

(Unaudited)                                               

 

1. CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

 

The consolidated condensed balance sheet as of October 1, 2016, which has been derived from audited financial statements included in the Company’s annual report on Form 10-K for the year ended October 1, 2016 (“Form 10-K”), and the unaudited interim consolidated condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. All adjustments that, in the opinion of management are necessary for a fair presentation for the periods presented, have been reflected as required by Article 10 of Regulation S-X. Such adjustments are of a normal, recurring nature. These consolidated condensed financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Form 10-K. The results of operations for interim periods are not necessarily indicative of the operating results to be expected for the full year or any other interim period.

 

The Company had a working capital deficiency of $15,230,000 at July 1, 2017 as a result of our purchase of the Oyster House properties in November 2016 and costs associated with the renovation of our Sequoia property in Washington, DC. We believe that our existing cash balances, current banking facilities and cash provided by operations will be sufficient to meet our liquidity and capital spending requirements at least through the next 12 months.

 

PRINCIPLES OF CONSOLIDATION — The consolidated condensed interim financial statements include the accounts of Ark Restaurants Corp. and all of its wholly-owned subsidiaries, partnerships and other entities in which it has a controlling interest, collectively herein referred to as the “Company”. Also included in the consolidated condensed interim financial statements are certain variable interest entities (“VIEs”). All significant intercompany balances and transactions have been eliminated in consolidation.

 

RECLASSIFICATIONS — Certain reclassifications of prior period balances for the 39-weeks ended July 2, 2016 related to the statement of income presentation of $883,000 of certain administrative fees related to catering revenue received have been reclassified from payroll expense to revenue to conform to the current period presentation.

 

SEASONALITY — The Company has substantial fixed costs that do not decline proportionally with sales. The first and second fiscal quarters, which include the winter months, usually reflect lower customer traffic than in the third and fourth fiscal quarters. In addition, sales in the third and fourth fiscal quarters can be adversely affected by inclement weather due to the significant amount of outdoor seating at the Company’s restaurants.

 

FAIR VALUE OF FINANCIAL INSTRUMENTS — The carrying amount of cash and cash equivalents, receivables, accounts payable and accrued expenses approximate fair value due to the immediate or short-term maturity of these financial instruments. The fair values of notes receivable and payable are determined using current applicable rates for similar instruments as of the consolidated condensed balance sheet date and approximate the carrying value of such debt instruments.

 

CASH AND CASH EQUIVALENTS — Cash and cash equivalents include cash on hand, deposits with banks and highly liquid investments generally with original maturities of three months or less. Outstanding checks in excess of account balances, typically vendor payments, payroll and other contractual obligations disbursed after the last day of a reporting period are reported as a current liability in the accompanying consolidated condensed balance sheets.

 

CONCENTRATIONS OF CREDIT RISK — Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. The Company reduces credit risk by placing its cash and cash equivalents with major financial institutions with high credit ratings. At times, such amounts may exceed Federally insured limits. Accounts receivable are primarily comprised of normal business receivables, such as credit card receivables, that are paid off in a short period of time and amounts due from the hotel operators where the Company has a location, and are recorded when the products or services have been delivered. The Company reviews the collectability of its receivables on an ongoing basis, and provides for an allowance when it considers the entity unable to meet its obligation. The concentration of credit risk with respect to accounts receivable is generally limited due to the short payment terms extended by the Company and the number of customers comprising the Company’s customer base.

 

For the 39-week periods ended July 1, 2017 and July 2, 2016, the Company did not make purchases from any one vendor that accounted for 10% or greater of total purchases for the respective period. For the 13-week period ended July 1, 2017, the

- 7 -

Company made purchases from one vendor that accounted for approximately 11% of total purchases. For the 13-week period ended July 2, 2016, the Company did not make purchases from any one vendor that accounted for 10% or greater of total purchases for the respective period.

 

SEGMENT REPORTING — As of July 1, 2017, the Company owned and operated 20 restaurants and bars, 19 fast food concepts and catering operations, exclusively in the United States, that have similar economic characteristics, nature of products and service, class of customers and distribution methods. The Company believes it meets the criteria for aggregating its operating segments into a single reporting segment in accordance with applicable accounting guidance.

 

NEW ACCOUNTING STANDARDS NOT YET ADOPTED — In January 2017, the Financial Accounting Standards Board (“the FASB”) issued guidance clarifying the definition of a business. The update provides that when substantially all the fair value of the assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. The new rules will be effective for the Company in the first quarter of 2019. The Company is currently evaluating the potential impact adoption of this guidance on its Consolidated Condensed Financial Statements.

 

In January 2017, the FASB guidance simplifying the test for goodwill impairment. The update simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount. The new rules will be effective for the Company in the first quarter of 2021. The Company is currently evaluating the potential impact adoption of this guidance on its Consolidated Condensed Financial Statements.

 

2. VARIABLE INTEREST ENTITIES

 

The Company consolidates any variable interest entities in which it holds a variable interest and is the primary beneficiary. Generally, a variable interest entity, or VIE, is an entity with one or more of the following characteristics: (a) the total equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support; (b) as a group the holders of the equity investment at risk lack (i) the ability to make decisions about an entity’s activities through voting or similar rights, (ii) the obligation to absorb the expected losses of the entity, or (iii) the right to receive the expected residual returns of the entity; or (c) the equity investors have voting rights that are not proportional to their economic interests and substantially all of the entity’s activities either involve, or are conducted on behalf of, an investor that has disproportionately few voting rights. The primary beneficiary of a VIE is generally the entity that has (a) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance, and (b) the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE.

 

The Company has determined that it is the primary beneficiary of three VIEs and, accordingly, consolidates the financial results of these entities. Following are the required disclosures associated with the Company’s consolidated VIEs:

 

   July 1,
2017
  October 1,
2016
   (in thousands) 
     
Cash and cash equivalents  $397   $889 
Accounts receivable   515    429 
Inventories   22    23 
Prepaid expenses and other current assets   258    228 
Due from Ark Restaurants Corp. and affiliates (1)   306    - 
Fixed assets - net   9    22 
Other assets   71    71 
Total assets  $1,578   $1,662 
           
Accounts payable - trade  $88   $114 
Accrued expenses and other current liabilities   212    238 
Due to Ark Restaurants Corp. and affiliates (1)   -    173 
Operating lease deferred credit   56    73 
Total liabilities   356    598 
Equity of variable interest entities   1,222    1,064 
Total liabilities and equity  $1,578   $1,662 

 

  (1)Amounts Due from and to Ark Restaurants Corp. and affiliates are eliminated upon consolidation.

 

The liabilities recognized as a result of consolidating these VIEs do not represent additional claims on the Company’s general assets; rather, they represent claims against the specific assets of the consolidated VIEs. Conversely, assets recognized as a result

- 8 -

of consolidating these VIEs do not represent additional assets that could be used to satisfy claims against the Company’s general assets.

 

3. RECENT RESTAURANT EXPANSION

 

On October 22, 2015, the Company, through its wholly-owned subsidiaries, Ark Shuckers, LLC and Ark Shuckers Real Estate, LLC, acquired the assets of Shuckers Inc. (“Shuckers”), a restaurant and bar located at the Island Beach Resort in Jensen Beach, FL, and six condominium units (four of which house the restaurant and bar operations). In addition, Ark Island Beach Resort LLC, a wholly-owned subsidiary of the Company, acquired Island Beach Resort Inc., a management company that administers a rental pool of certain condominium units under lease. The total purchase price was $5,717,000. The acquisition is accounted for as a business combination and was financed with a bank loan in the amount of $5,000,000 and cash from operations.

 

On November 30, 2016, the Company, through newly formed, wholly-owned subsidiaries, acquired the assets of the Original Oyster House, Inc., a restaurant and bar located in the City of Gulf Shores, Baldwin County, Alabama and the related real estate and an adjacent retail shopping plaza and the Original Oyster House II, Inc., a restaurant and bar located in the City of Spanish Fort, Baldwin County, Alabama and the related real estate. The total purchase price was for $10,750,000 plus inventory of approximately $293,000. The acquisition is accounted for as a business combination and was financed with a bank loan from the Company’s existing lender in the amount of $8,000,000 and cash from operations. The fair values of the assets acquired were allocated as follows (amounts in thousands):

 

Inventory  $293 
Land and buildings   6,650 
Furniture, fixtures and equipment   395 
Trademarks   1,720 
Goodwill and Intangibles   1,985 
   $11,043 

 

The Consolidated Condensed Statements of Income for the 13 and 39-weeks ended July 1, 2017 include revenues and income of approximately $5,569,000 and $12,015,000 and $864,000 and $1,387,000, respectively, related to the Shuckers and Oyster House properties. The 13 and 39-weeks ended July 2, 2016 include revenues and income of approximately $3,667,000 and $6,959,000 and $878,000 and $676,000, respectively, related to Sequoia DC which was closed from January 1, 2017 through June 23, 2017. The unaudited pro forma financial information set forth below is based upon the Company’s historical Consolidated Condensed Statements of Income for the 13 and 39-weeks ended July 1, 2017 and July 2, 2016 and includes the results of operations for Shuckers and the Oyster House properties for the periods prior to acquisition. The unaudited pro forma financial information is presented for informational purposes only and may not be indicative of what actual results of operations would have been had the acquisition of Shuckers and the Oyster House properties occurred on the dates indicated, nor does it purport to represent the results of operations for future periods.  

 

   13 Weeks Ended  39 Weeks Ended
   July 1,
2017
  July 2,
2016
  July 1,
2017
  July 2,
2016
                     
Total revenues  $41,201   $45,132   $115,884   $121,594 
Net income  $1,386   $4,345   $2,934   $4,430 
Net income per share - basic  $0.40   $1.27   $0.86   $1.30 
Net income per share - diluted  $0.39   $1.24   $0.83   $1.26 
                     
Basic   3,424    3,418    3,424    3,418 
Diluted   3,549    3,494    3,532    3,504 
- 9 -
4. RECENT RESTAURANT DISPOSITIONS

 

Lease Expirations – On November 30, 2015, the Company’s lease at the V-Bar located at the Venetian Casino Resort in Las Vegas, NV expired. The closure of this property did not result in a material charge.

 

The Company was advised by the landlord that it would have to vacate the Center Café property located at Union Station in Washington, DC which was on a month-to-month lease. The closure of this property occurred in February 2016 and did not result in a material charge.

 

The Company was advised by the landlord that it would have to vacate The Grill at Two Trees property at the Foxwoods Resort and Casino in Ledyard, CT, which had a no rent lease. The closure of this property occurred on January 1, 2017 and did not result in a material charge.

 

Other – On November 18, 2016, Ark Jupiter RI, LLC (“Ark Jupiter”), a wholly-owned subsidiary of the Company, entered into a ROFR Purchase and Sale Agreement (the “ROFR”) with SCFRC-HWG, LLC, the landlord (the “Seller”) to purchase the land and building in which the Company operates its Rustic Inn location in Jupiter, Florida. The Seller had entered into a Purchase and Sale Agreement with a third party to sell the premises; however, Ark Jupiter’s lease provided the Company with a right of first refusal to purchase the property. Ark Jupiter exercised the ROFR on October 4, 2016 and made a ten (10%) percent deposit on the purchase price of approximately Five Million Two Hundred Thousand Dollars ($5,200,000). Concurrent with the execution of the ROFR, Ark Jupiter entered into a Purchase and Sale Agreement with 1065 A1A, LLC to sell this same property for Eight Million Two Hundred Fifty Thousand Dollars ($8,250,000). In connection with the sale, Ark Jupiter and 1065 A1A, LLC entered into a temporary lease and sub-lease arrangement which expired on July 18, 2017. The Company vacated the space in June. In connection with these transactions the Company recognized a gain in the amount of $1,637,000 during the 13-weeks ended December 31, 2016.

 

The Company transferred its lease and the related assets of Canyon Road located in New York, NY to a former employee. In connection with this transfer, the Company recognized an impairment loss included in depreciation and amortization expense in the amount of $75,000 for the 13-weeks ended December 31, 2016.

 

5.INVESTMENT IN NEW MEADOWLANDS RACETRACK

 

On March 12, 2013, the Company made a $4,200,000 investment in the New Meadowlands Racetrack LLC (“NMR”) through its purchase of a membership interest in Meadowlands Newmark, LLC, an existing member of NMR with a 63.7% ownership interest. On November 19, 2013, the Company invested an additional $464,000 in NMR through a purchase of an additional membership interest in Meadowlands Newmark, LLC resulting in a total ownership of 11.6% of Meadowlands Newmark, LLC, and an effective ownership interest in NMR of 7.4%, subject to dilution. In 2015, the Company invested an additional $222,000 in NMR and on February 7, 2017, the Company invested an additional $222,000 in NMR, both as a result of capital calls, bringing its total investment to $5,108,000 with no change in ownership. This investment has been accounted for based on the cost method.

 

In addition to the Company’s ownership interest in NMR through Meadowlands Newmark, LLC, if casino gaming is approved at the Meadowlands and NMR is granted the right to conduct said gaming, neither of which can be assured, the Company shall be granted the exclusive right to operate the food and beverage concessions in the gaming facility with the exception of one restaurant.

 

In conjunction with this investment, the Company, through a 97% owned subsidiary, Ark Meadowlands LLC (“AM VIE”), also entered into a long-term agreement with NMR for the exclusive right to operate food and beverage concessions serving the new raceway facilities (the “Racing F&B Concessions”) located in the new raceway grandstand constructed at the Meadowlands Racetrack in northern New Jersey. Under the agreement, NMR is responsible to pay for the costs and expenses incurred in the operation of the Racing F&B Concessions, and all revenues and profits thereof inure to the benefit of NMR. AM VIE receives an annual fee equal to 5% of the net profits received by NMR from the Racing F&B Concessions during each calendar year. At July 1, 2017, it was determined that AM VIE is a variable interest entity. However, based on qualitative consideration of the contracts with AM VIE, the operating structure of AM VIE, the Company’s role with AM VIE, and that the Company is not obligated to absorb expected losses of AM VIE, the Company has concluded that it is not the primary beneficiary and not required to consolidate the operations of AM VIE.

 

The Company’s maximum exposure to loss as a result of its involvement with AM VIE is limited to a receivable from AM VIE’s primary beneficiary (NMR, a related party) which aggregated approximately $231,000 and $164,000 at July 1, 2017 and October 1, 2016, respectively, and are included in Prepaid Expenses and Other Current Assets in the Consolidated Condensed Balance Sheets.

 

On April 25, 2014, the Company loaned $1,500,000 to Meadowlands Newmark, LLC. The note bears interest at 3%, compounded monthly and added to the principal, and is due in its entirety on January 31, 2024. The note may be prepaid, in whole or in part, at any time without penalty or premium. On July 13, 2016, the Company made an additional loan to

- 10 -

Meadowlands Newmark, LLC in the amount of $200,000. Such amount is subject to the same terms and conditions as the original loan as discussed above. The principal and accrued interest related to this note in the amounts of $1,858,000 and $1,815,000, are included in Investment In and Receivable From New Meadowlands Racetrack in the Consolidated Balance Sheets at July 1, 2017 and October 1, 2016, respectively.

 

In accordance with the cost method, our initial investment is recorded at cost and we record dividend income when applicable, if dividends are declared. We review our Investment in NMR each reporting period to determine whether a significant event or change in circumstances has occurred that may have an adverse effect on its fair value, such as the defeat of the referendum for casino gaming in Northern New Jersey in November 2016. State law prohibits the issue from being put on the ballot before voters for the following two years. As a result, we performed an assessment of the recoverability of our indirect Investment in NMR as of October 1, 2016 which included estimates requiring significant management judgment, include inherent uncertainties and are often interdependent; therefore, they do not change in isolation. Factors that management estimated include, among others, the probability of gambling being approved in Northern NJ which is the most heavily weighted assumption and NMR obtaining a license to operate a casino, revenue levels, cost of capital, marketing spending, tax rates and capital spending.

 

In performing this assessment, we estimated the fair value of our Investment in NMR using our best estimate of these assumptions which we believe would be consistent with what a hypothetical marketplace participant would use. The variability of these factors depends on a number of conditions, including uncertainty about future events and our inability as a minority shareholder to control certain outcomes and thus our accounting estimates may change from period to period. If other assumptions and estimates had been used when these tests were performed, impairment charges could have resulted. As a result of the above, no impairment was deemed necessary as of July 1, 2017.

 

6. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

 

Accrued expenses and other current liabilities consist of the following:

 

   July 1,
2017
  October 1,
2016
   (In thousands) 
           
Sales tax payable  $1,162   $942 
Accrued wages and payroll related costs   2,256    2,495 
Customer advance deposits   3,520    4,077 
Accrued occupancy and other operating expenses   2,919    3,041 
           
   $9,857   $10,555 

 

7. NOTES PAYABLE – BANK

 

Long-term debt consists of the following:

 

   July 1,
2017
  October 1,
2016
   (In thousands) 
           
Promissory Note - Rustic Inn purchase  $2,694   $3,907 
Promissory Note - Shuckers purchase   3,333    4,084 
Promissory Note - Oyster House purchase   7,067    - 
    13,094    7,991 
Less: Current maturities   (4,040)   (2,617)
Less: Unamortized deferred financing costs   (43)   (53)
           
Long-term debt  $9,011   $5,321 

 

On February 25, 2013, the Company issued a promissory note to Bank Hapoalim B.M. (the “BHBM”) for $3,000,000. The note bore interest at LIBOR plus 3.5% per annum, and was payable in 36 equal monthly installments of $83,333, commencing on March 25, 2013. On February 24, 2014, in connection with the acquisition of The Rustic Inn, the Company borrowed an

- 11 -

additional $6,000,000 from BHBM under the same terms and conditions as the original loan which was consolidated with the remaining principal balance from the original borrowing at that date. The new loan is payable in 60 equal monthly installments of $134,722, which commenced on March 25, 2014.

 

On October 22, 2015, in connection with the acquisition of Shuckers, the Company issued a promissory note to BHBM for $5,000,000. The note bears interest at LIBOR plus 3.5% per annum, and is payable in 60 equal monthly installments of $83,333, commencing on November 22, 2015.

 

Also on October 22, 2015, the Company also entered into a credit agreement (the “Revolving Facility”) with BHBM which expires on October 21, 2017 and provides for total availability of the lesser of (i) $10,000,000 and (ii) $20,000,000 less the then aggregate amount of all indebtedness and obligations to BHBM. Borrowings under the Revolving Facility are evidenced by a promissory note (the “Revolving Note”) in favor of BHBM and will be payable over five years with interest at an annual rate equal to LIBOR plus 3.5% per year.

 

On November 30, 2016, in connection with the acquisition of the Oyster House properties, the Company issued a promissory note under the Revolving Facility to BHBM for $8,000,000. The note bears interest at LIBOR plus 3.5% per annum, and is payable in 60 equal monthly installments of $133,273, commencing on January 1, 2017.

 

During the 13-weeks ended July 1, 2017, the Company borrowed $3,897,000 under the Revolving Facility to finance a portion of the renovation of its Sequoia DC property. As of July 1, 2017, such borrowings had a weighted average interest rate of 4.7%.

 

Deferred financing costs incurred in connection with the Revolving Facility in the amount of $130,585 are being amortized over the life of the agreements on a straight-line basis and included in interest expense. Amortization expense of approximately $12,000 and $11,000 is included in interest expense for the 13-weeks ended July 1, 2017 and July 2, 2016, respectively. Amortization expense of $35,000 and $32,000 is included in interest expense for the 39-weeks ended July 1, 2017 and July 2, 2016, respectively.

 

Borrowings under the Revolving Facility, which include all of the above promissory notes, are secured by all tangible and intangible personal property (including accounts receivable, inventory, equipment, general intangibles, documents, chattel paper, instruments, letter-of-credit rights, investment property, intellectual property and deposit accounts) and fixtures of the Company.

 

The loan agreements provide, among other things, that the Company meet minimum quarterly tangible net worth amounts, as defined, maintain a fixed charge coverage ratio of not less than 1.1:1 and minimum annual net income amounts, and contain customary representations, warranties and affirmative covenants. The agreements also contain customary negative covenants, subject to negotiated exceptions, on liens, relating to other indebtedness, capital expenditures, liens, affiliate transactions, disposal of assets and certain changes in ownership. The Company was in compliance with all of its financial covenants under the Revolving Facility as of July 1, 2017 except for the fixed charge coverage ratio covenant. On August 11, 2017, we were issued a waiver for this covenant as of July 1, 2017.

 

8. COMMITMENTS AND CONTINGENCIES

 

Leases — The Company leases several restaurants, bar facilities, and administrative headquarters through its subsidiaries under terms expiring at various dates through 2032. Most of the leases provide for the payment of base rents plus real estate taxes, insurance and other expenses and, in certain instances, for the payment of a percentage of the restaurant’s sales in excess of stipulated amounts at such facility and in one instance based on profits.

 

On January 12, 2016, the Company entered into an Amended and Restated Lease for its Sequoia property in Washington D.C. extending the lease for 15 years through November 30, 2032 with one additional five-year option. Annual rent under the new lease is approximately $1,200,000 increasing annually through expiration. Under the terms of the agreement, the property was closed January 1, 2017 for renovation and reconcepting which cost approximately $10,000,000, of which approximately $8,500,000 has been incurred as of July 1, 2017. In connection with this closure, the Company recognized an impairment loss related to fixed asset disposals in the amount of $283,000, which is included in Depreciation and Amortization Expense for the 13-weeks ended December 31, 2016. The restaurant re-opened in June 2017.

 

Legal Proceedings In the ordinary course of its business, the Company is a party to various lawsuits arising from accidents at its restaurants and worker’s compensation claims, which are generally handled by the Company’s insurance carriers. The employment by the Company of management personnel, waiters, waitresses and kitchen staff at a number of different restaurants has resulted, from time to time, in litigation alleging violation by the Company of employment discrimination laws. Management believes, based in part on the advice of counsel, that the ultimate resolution of these matters will not have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows.

 

Share Repurchase Plan — On July 5, 2016, the Board of Directors authorized a share repurchase program authorizing management to purchase up to 500,000 shares of the Company’s common stock during the next twelve months. Any repurchase

- 12 -

under the program will be effected in compliance with Rule 10b-18 under the Securities Exchange Act of 1934 “Purchases of Certain Equity Securities by the Issuer and Others”, funded using the Company’s working capital and be based on management’s evaluation of market conditions and other factors. No repurchases were made during the 39-weeks ended July 1, 2017 and July 2, 2016.

 

9. STOCK OPTIONS

 

The Company has options outstanding under two stock option plans, the 2004 Stock Option Plan (the “2004 Plan”) and the 2010 Stock Option Plan (the “2010 Plan”), which was approved by shareholders in the second quarter of 2010. Effective with this approval, the Company terminated the 2004 Plan. This action terminated the 400 authorized but unissued options under the 2004 Plan, but it did not affect any of the options previously issued under the 2004 Plan. Options granted under the 2004 Plan are exercisable at prices at least equal to the fair market value of such stock on the dates the options were granted. The options expire ten years after the date of grant. Options granted under the 2010 Plan are exercisable at prices at least equal to the fair market value of such stock on the dates the options were granted. The options expire ten years after the date of grant.

 

On April 5, 2016, the shareholders of the Company approved the 2016 Stock Option Plan and the Section 162(m) Cash Bonus Plan. Under the 2016 Stock Option Plan, 500,000 options were authorized for future grant and are exercisable at prices at least equal to the fair market value of such stock on the dates the options were granted. The options expire ten years after the date of grant. Under the Section 162(m) Cash Bonus Plan, compensation paid in excess of $1,000,000 to any employee who is the chief executive officer, or one of the three highest paid executive officers on the last day of that tax year (other than the chief executive officer or the chief financial officer) will meet certain “performance-based” requirements of Section 162(m) and the related IRS regulations in order for it to be tax deductible.

 

During the quarter ended December 31, 2016, options to purchase 90,000 shares of common stock at an exercise price of $32.15 per share expired unexercised.

 

No options or performance-based awards were granted during the 39-week period ended July 1, 2017.

 

A summary of stock option activity is presented below:

 

   2017  
   Shares  Weighted
Average
Exercise
Price
  Weighted
Average
Contractual
Term
  Aggregate
Intrinsic
Value
             
Outstanding, beginning of period   518,608   $20.33    5.1 Years      
Options:                    
Granted   -                
Exercised   (4,308)  $18.74           
Canceled or expired   (90,000)  $32.15           
Outstanding and expected to vest, end of period   424,300   $17.84    5.4 Years   $2,719,000 
Exercisable, end of period   424,300   $17.84    5.4 Years   $2,719,000 

 

Compensation cost charged to operations for each of the 13-week periods ended July 1, 2017 and July 2, 2016 was $0 and $79,000, respectively, and for the 39-week periods ended July 1, 2017 and July 2, 2016 was $0 and $286,000, respectively. The compensation cost recognized is classified as a general and administrative expense in the Consolidated Condensed Statements of Income.

 

As of July 1, 2017, there was no unrecognized compensation cost related to unvested stock options.

 

10.INCOME TAXES

 

The Company’s provision for income taxes consists of Federal, state and local taxes in amounts necessary to align the Company’s year-to-date provision for income taxes with the effective tax rate that the Company expects to achieve for the full year. Each quarter, the Company updates its estimate of the annual effective tax rate and records cumulative adjustments as deemed necessary. The income tax provisions for the 39-week periods ended July 1, 2017 and July 2, 2016 reflect effective tax

- 13 -

rates of approximately 28% and 25%, respectively.  The Company expects its effective tax rate for its current fiscal year to be lower than the statutory rate as a result of the generation of FICA tax credits and operating income attributable to the non-controlling interests of the VIEs that is not taxable to the Company. The final annual tax rate cannot be determined until the end of the fiscal year; therefore, the actual tax rate could differ from current estimates.

 

The Company’s overall effective tax rate in the future will be affected by factors such as the utilization of state and local net operating loss carryforwards, the generation of FICA tax credits and the mix of earnings by state taxing jurisdiction as Nevada does not impose a state income tax, as compared to the other major state and local jurisdictions in which the Company has operations.

 

During the 13-weeks ended December 31, 2016, certain equity compensation awards expired unexercised. As such, the Company reversed the related deferred tax asset in the amount of approximately $397,000 as a charge to Additional Paid-in Capital as there was a sufficient pool of windfall tax benefit available.

 

11.INCOME PER SHARE OF COMMON STOCK

 

Net income per share is calculated on the basis of the weighted average number of common shares outstanding during each period plus, for diluted net income per share, the additional dilutive effect of potential common stock. Potential common stock using the treasury stock method consists of dilutive stock options.

 

For the 13- and 39-week periods ended July 1, 2017, the treasury stock impact of options to purchase 66,000, 158,800 and 199,500 shares of common stock at exercise prices of $12.04, $14.40 and $22.50 per share, respectively, were included in diluted earnings per share.

 

For the 13- and 39-week periods ended July 2, 2016, the treasury stock impact of options to purchase 66,000 and 164,700 shares of common stock at exercise prices of $12.04 and $14.40 per share, respectively, were included in diluted earnings per share. Options to purchase 203,000 shares of common stock at an exercise price of $22.50 per share and options to purchase 90,000 shares of common stock at an exercise price of $32.15 were not included in diluted earnings per share as their impact would be anti-dilutive.

 

12. DIVIDENDS

 

On June 5, 2017, the Board of Directors declared a quarterly dividend of $0.25 per share on the Company’s common stock to be paid on July 5, 2017 to shareholders of record at the close of business on June 19, 2017. The Company intends to continue to pay such quarterly cash dividends for the foreseeable future, however, the payment of future dividends is at the discretion of the Company’s Board of Directors and is based on future earnings, cash flow, financial condition, capital requirements, changes in U.S. taxation and other relevant factors.

- 14 -

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Overview

 

As of July 1, 2017, the Company owned and operated 20 restaurants and bars, 19 fast food concepts and catering operations, exclusively in the United States, that have similar economic characteristics, nature of products and service, class of customer and distribution methods. The Company believes it meets the criteria for aggregating its operating segments into a single reporting segment in accordance with applicable accounting guidance. The Consolidated Condensed Statements of Income for the 13 and 39-weeks ended July 1, 2017 include revenues and income of approximately $5,569,000 and $12,015,000 and $864,000 and $1,387,000, respectively, related to Shuckers, which was acquired on October 22, 2015 and the Oyster House properties, which were acquired on November 30, 2016.

 

Accounting Period

 

Our fiscal year ends on the Saturday nearest September 30. We report fiscal years under a 52/53-week format. This reporting method is used by many companies in the hospitality industry and is meant to improve year-to-year comparisons of operating results. Under this method, certain years will contain 53 weeks. The periods ended July 1, 2017 and July 2, 2016 each included 39 weeks.

 

Seasonality

 

The Company has substantial fixed costs that do not decline proportionately with sales. At our properties located in the northeast, the first and second fiscal quarters, which include the winter months, usually reflect lower customer traffic than in the third and fourth fiscal quarters. However, sales in the third and fourth fiscal quarters can be adversely affected by inclement weather due to the significant amount of outdoor seating at the Company’s restaurants.

 

Results of Operations

 

The Company’s operating income for the 13 weeks ended July 1, 2017 was $2,298,000 as compared to $5,309,000 for the 13 weeks ended July 2, 2016. This decrease resulted primarily from: (i) increased losses in the amount of $2,437,000 related to Sequoia in Washington, DC which was closed for renovation on January 4, 2017, (ii) the reversal in the 13-weeks ended July 2, 2016 of commercial rent tax liabilities in the amount of $945,000, and (iii) the correction of an immaterial error in the 13-weeks ended July 2, 2016 related to an overstatement of a rent liability in the amount of $261,000, partially offset by operating income of $527,000 related to the Oyster House properties in Gulf Shores, Alabama (which were acquired on November 30, 2016).

 

The following table summarizes the significant components of the Company’s operating results for the 13- and 39-week periods ended July 1, 2017 and July 2, 2016, respectively:

 

   13 Weeks Ended  Variance  39-Weeks Ended  Variance
   July 1,
2017
  July 2,
2016
  $  %  July 1,
2017
  July 2,
2016
  $  %
   (in thousands)          (in thousands)        
REVENUES:                                        
Food and beverage sales  $40,507   $40,935   $(428)   -1.0%  $112,374   $111,385   $989    0.9%
Other revenue   694    298    396    132.9%   1,697    1,111    586    52.7%
Total revenues   41,201    41,233    (32)   -0.1%   114,071    112,496    1,575    1.4%
COSTS AND EXPENSES:                                        
Food and beverage cost of sales   11,227    10,656    571    5.4%   30,814    29,440    1,374    4.7%
Payroll expenses   13,776    12,895    881    6.8%   39,402    38,982    420    1.1%
Occupancy expenses   4,541    3,309    1,232    37.2%   13,037    11,891    1,146    9.6%
Other operating costs and expenses   5,398    4,999    399    8.0%   15,390    14,485    905    6.2%
General and administrative expenses   2,955    2,956    (1)   0.0%   8,699    8,996    (297)   -3.3%
Depreciation and amortization   1,006    1,109    (103)   -9.3%   3,541    3,384    157    4.6%
Total costs and expenses   38,903    35,924    2,979    8.3%   110,883    107,178    3,705    3.5%
RESTAURANT OPERATING INCOME   2,298    5,309    (3,011)   -56.7%   3,188    5,318    (2,130)   -40.1%
Gain on sale of Rustic Inn, Jupiter   -    -    -    0.0%   1,637    -    1,637    N/A 
OPERATING INCOME  $2,298   $5,309   $(3,011)   -56.7%  $4,825   $5,318   $(493)   -9.3%
- 15 -

Revenues

 

During the Company’s 13- and 39-week periods ended July 1, 2017, revenues decreased 0.1% and increased 1.4%, respectively, as compared to revenues in the 13- and 39-week periods ended July 2, 2016. These changes resulted primarily from: (i) revenues related to the Oyster House properties in Gulf Shores, Alabama (which were acquired on November 30, 2016) and (ii) the same-store sales impacts discussed below, offset by the closure for renovation of Sequoia DC in Washington, DC on January 4, 2017 and the permanent closures of Center Café in Washington, DC and the V Bar in Las Vegas as a result of lease expirations.

 

Food and Beverage Same-Store Sales

 

On a Company-wide basis, same-store sales decreased 7.9% during the third fiscal quarter of 2017 as compared to the same period last year as follows:

 

   13 Weeks Ended    Variance
   July 1,
2017
  July 2,
2016
  $  %
   (in thousands)        
                 
Las Vegas  $11,222   $11,161   $61    0.5%
New York   12,082    12,360    (278)   -2.2%
Washington, DC   1,586    4,648    (3,062)   -65.9%
Atlantic City, NJ   1,938    1,705    233    13.7%
Boston   891    941    (50)   -5.3%
Connecticut   543    557    (14)   -2.5%
Florida   6,994    6,888    106    1.5%
Same-store sales   35,256    38,260   $(3,004)   -7.9%
Other   5,251    2,675           
Food and beverage sales  $40,507   $40,935           

 

Same-store sales in Las Vegas were relatively flat as expected. Same-store sales in New York decreased 2.2%, primarily as a result of poor weather conditions. Same-store sales in Washington, DC, which excludes Center Café which closed in February 2016, decreased 65.9%, as a result of the closure of Sequoia DC on January 4, 2017 for renovation. Same-store sales in Atlantic City increased 13.7%, primarily due to increased traffic at properties in which we operate our restaurants as other casinos closed. Same-store sales in Boston decreased 5.3%, primarily as a result of decreased traffic at Faneuil Hall Marketplace where our property is located. Same-store sales in Florida increased 1.5% as the impacts of the road construction project started in the second quarter of fiscal 2016 by the local municipality at The Rustic Inn in Dania Beach, FL have stabilized. Other food and beverage sales consist of sales related to new restaurants opened or acquired during the applicable period (e.g. the Oyster House properties) and sales related to properties that were closed due to lease expiration and other closures.

 

Costs and Expenses

 

Costs and expenses for the 13- and 39-weeks ended July 1, 2017 and July 2, 2016 were as follows (in thousands):

 

   13 Weeks      13 Weeks              39 Weeks      39 Weeks            
   Ended  %  Ended  %  Increase  Ended  % to  Ended  % to  Increase
   July 1,  to Total  July 2,  to Total  (Decrease)  July 1,  Total  July 2,  Total  (Decrease)
   2017  Revenues  2016  Revenues  $  %  2017  Revenues  2016  Revenues  $  %
                                                             
Food and beverage cost of sales  $11,227    27.2%  $10,656    25.8%  $571    5.4%  $30,814    27.0%  $29,440    26.2%  $1,374    4.7%
Payroll expenses   13,776    33.4%   12,895    31.3%   881    6.8%   39,402    34.5%   38,982    34.7%   420    1.1%
Occupancy expenses   4,541    11.0%   3,309    8.0%   1,232    37.2%   13,037    11.4%   11,891    10.6%   1,146    9.6%
Other operating costs and expenses   5,398    13.1%   4,999    12.1%   399    8.0%   15,390    13.5%   14,485    12.9%   905    6.2%
General and administrative expenses   2,955    7.2%   2,956    7.2%   (1)   0.0%   8,699    7.6%   8,996    8.0%   (297)   -3.3%
Depreciation and amortization   1,006    2.4%   1,109    2.7%   (103)   -9.3%   3,541    3.1%   3,384    3.0%   157    4.6%
   $38,903        $35,924        $2,979        $110,883        $107,178        $3,705      

 

The increases in food and beverage costs as a percentage of total revenues for the 13 and 39-weeks ended July 1, 2017 compared to the same periods of last year are primarily the result of higher food costs as a percentage of sales associated with The Oyster House properties, which were acquired on November 30, 2016, seafood restaurants which, consistent with the industry, operate at a higher food cost structure.

- 16 -

Payroll expenses as a percentage of total revenues for the 13-weeks ended July 1, 2017 increased as compared to the same period of last year primarily as a result of pre-opening and training costs related to Sequoia DC. Payroll expenses as a percentage of total revenues for the 39-weeks ended July 1, 2017 decreased as compared to the same period of last year primarily as a result of better labor management and the increasing mix of sales in markets where labor costs are lower, offset by pre-opening and training costs related to Sequoia DC.

 

Occupancy expenses as a percentage of total revenues, excluding the impacts in the 13- and 39-weeks ended July 2, 2016 of the reversal of commercial rent tax liabilities in the amount of $945,000 and the correction of an immaterial error related to an overstatement of a rent liability in the amount of $261,000, for the 13- and 39-weeks ended July 1, 2017 were consistent with the same periods of last year.

 

Other operating costs and expenses as a percentage of total revenues for the 13 and 39-weeks ended July 1, 2017 increased as compared to the same periods of year as a result fixed costs associated with Sequoia DC, which was closed for renovation on January 4, 2017, and fixed costs associated with properties where sales declined.

 

General and administrative expenses (which relate solely to the corporate office in New York City) as a percentage of total revenues for the 13-weeks ended July 1, 2017 were consistent with the same period of last year and for the 39-weeks ended July 1, 2017 decreased slightly as a result of lower headcount partially offset by transaction costs of approximately $187,000 incurred in connection with the purchase of the Oyster House properties.

 

Depreciation and amortization expense for the 13-weeks ended July 1, 2017 decreased as compared to the same period of last year as a result of the closure of properties discussed above. Depreciation and amortization expense for the 39-weeks ended July 1, 2017 increased as compared to the same period of last year as a result of additional depreciation in the amount of $358,000 related to asset write-offs at Sequoia (which is undergoing a major renovation) and Canyon Road (whose lease was transferred to an unrelated party).

 

Income Taxes

 

The Company’s provision for income taxes consists of Federal, state and local taxes in amounts necessary to align the Company’s year-to-date provision for income taxes with the effective tax rate that the Company expects to achieve for the full year. Each quarter, the Company updates its estimate of the annual effective tax rate and records cumulative adjustments as deemed necessary. The income tax provisions for the 39-week periods ended July 1, 2017 and July 2, 2016 reflect effective tax rates of approximately 28% and 25%, respectively.  The Company expects its effective tax rate for its current fiscal year to be lower than the statutory rate as a result of the generation of FICA tax credits and operating income attributable to the non-controlling interests of the VIEs that is not taxable to the Company. The final annual tax rate cannot be determined until the end of the fiscal year; therefore, the actual tax rate could differ from current estimates.

 

The Company’s overall effective tax rate in the future will be affected by factors such as the utilization of state and local net operating loss carryforwards, the generation of FICA tax credits and the mix of earnings by state taxing jurisdiction, as Nevada does not impose a state income tax, as compared to the other major state and local jurisdictions in which the Company has operations.

 

Liquidity and Capital Resources

 

Our primary source of capital has been cash provided by operations and, in recent years, bank and other borrowings to finance specific transactions and acquisitions. We utilize cash generated from operations to fund the cost of developing and opening new restaurants and remodeling existing restaurants we own.

 

Net cash provided by operating activities for the 39-weeks ended July 1, 2017 increased to $8,339,000 as compared to $6,288,000 provided by operations in the same period of last year. This increase was attributable to changes in net working capital primarily related to accounts receivable, prepaid, refundable and accrued income taxes and accounts payable and accrued expenses.

 

Net cash used in investing activities for the 39-week period ended July 1, 2017 was $12,569,000 and resulted primarily from purchases of fixed assets at existing restaurants, costs associated with the renovation of Sequoia DC and the cash portion of the purchase of the Oyster House properties in the amount of $3,043,000, partially offset by the net proceeds in the amount of $2,474,000 from the sale of The Rustic Inn in Jupiter, Florida.

 

Net cash used in investing activities for the 39-week period ended July 2, 2016 was $2,196,000 and resulted primarily from purchases of fixed assets at existing restaurants and the cash portion of the purchase of Shuckers in the amount of $717,000.

 

Net cash used in financing activities for the 39-week periods ended July 1, 2017 and July 2, 2016 of $2,689,000 and $5,308,000, respectively, resulted primarily from the payment of dividends, principal payments on notes payable and distributions to non-controlling interests, offset by borrowings under the credit facility.

- 17 -

The Company had a working capital deficiency of $15,230,000 at July 1, 2017 as compared with a deficiency of $658,000 at October 1, 2016. This increase resulted primarily from our purchase of the Oyster House properties in November 2016 and costs associated with the renovation of our Sequoia property in Washington, DC, as discussed below. We believe that our existing cash balances, current banking facilities and cash provided by operations will be sufficient to meet our liquidity and capital spending requirements at least through the next 12 months.

 

On January 12, 2016, the Company entered into an Amended and Restated Lease for its Sequoia property in Washington D.C. extending the lease for 15 years through November 30, 2032 with one additional five-year option. Annual rent under the new lease is approximately $1,200,000 increasing annually through expiration. Under the terms of the agreement, the property was closed January 1, 2017 for renovation and reconcepting which to cost approximately $10,000,000, of which approximately $8,500,000 has been incurred as of July 1, 2017. In connection with this closure, the Company recognized an impairment loss related to fixed asset disposals as of December 31, 2016 in the amount of $283,000, which is included in Depreciation and Amortization Expense for the 39-weeks ended July 1, 2017. The restaurant re-opened in June 2017.

 

On June 5, 2017, the Board of Directors declared a quarterly dividend of $0.25 per share on the Company’s common stock to be paid on July 5, 2017 to shareholders of record at the close of business on June 19, 2017. The Company intends to continue to pay such quarterly cash dividends for the foreseeable future, however, the payment of future dividends is at the discretion of the Company’s Board of Directors and is based on future earnings, cash flow, financial condition, capital requirements, changes in U.S. taxation and other relevant factors.

 

The Company was in compliance with all of its financial covenants under its Revolving Facility as of July 1, 2017 except for the fixed charge coverage ratio covenant. On August 11, 2017, we were issued a waiver for this covenant as of July 1, 2017.

 

Recent Restaurant Expansion

 

On October 22, 2015, the Company, through its wholly-owned subsidiaries, Ark Shuckers, LLC and Ark Shuckers Real Estate, LLC, acquired the assets of Shuckers Inc. (“Shuckers”), a restaurant and bar located at the Island Beach Resort in Jensen Beach, FL, and six condominium units (four of which house the restaurant and bar operations). In addition, Ark Island Beach Resort LLC, a wholly-owned subsidiary of the Company, acquired Island Beach Resort Inc., a management company that administers a rental pool of certain condominium units under lease. The total purchase price was $5,717,000. The acquisition was accounted for as a business combination and was financed with a bank loan in the amount of $5,000,000 and cash from operations.

 

On November 30, 2016, the Company, through newly formed, wholly-owned subsidiaries, acquired the assets of the Original Oyster House, Inc., a restaurant and bar located in the City of Gulf Shores, Baldwin County, Alabama and the related real estate and an adjacent retail shopping plaza and the Original Oyster House II, Inc., a restaurant and bar located in the City of Spanish Fort, Baldwin County, Alabama and the related real estate. The total purchase price was for $10,750,000 plus inventory of approximately $293,000. The acquisition is accounted for as a business combination and was financed with a bank loan from the Company’s existing lender in the amount of $8,000,000 and cash from operations.

 

Recent Restaurant Dispositions

 

Lease Expirations – On November 30, 2015, the Company’s lease at the V-Bar located at the Venetian Casino Resort in Las Vegas, NV expired. The closure of this property did not result in a material charge.

 

The Company was advised by the landlord that it would have to vacate the Center Café property located at Union Station in Washington, DC which was on a month-to-month lease. The closure of this property occurred in February 2016 and did not result in a material charge.

 

The Company was advised by the landlord that it would have to vacate The Grill at Two Trees property at the Foxwoods Resort and Casino in Ledyard, CT, which had a no rent lease. The closure of this property occurred on January 1, 2017 and did not result in a material charge.

 

Other – On November 18, 2016, Ark Jupiter RI, LLC (“Ark Jupiter”), a wholly-owned subsidiary of the Company, entered into a ROFR Purchase and Sale Agreement (the “ROFR”) with SCFRC-HWG, LLC, the landlord (the “Seller”) to purchase the land and building in which the Company operates its Rustic Inn location in Jupiter, Florida. The Seller had entered into a Purchase and Sale Agreement with a third party to sell the premises; however, Ark Jupiter’s lease provided the Company with a right of first refusal to purchase the property. Ark Jupiter exercised the ROFR on October 4, 2016 and made a ten (10%) percent deposit on the purchase price of approximately Five Million Two Hundred Thousand Dollars ($5,200,000). Concurrent with the execution of the ROFR, Ark Jupiter entered into a Purchase and Sale Agreement with 1065 A1A, LLC to sell this same property for Eight Million Two Hundred Fifty Thousand Dollars ($8,250,000). In connection with the sale, Ark Jupiter and 1065 A1A, LLC entered into a temporary lease and sub-lease arrangement which expired on July 18, 2017. The Company vacated the space

- 18 -

in June. In connection with these transactions the Company recognized a gain in the amount of $1,637,000 during the 13-weeks ended December 31, 2016.

 

The Company transferred its lease and the related assets of Canyon Road located in New York, NY to a former employee. In connection with this transfer, the Company recognized an impairment loss included in depreciation and amortization expense in the amount of $75,000 for the 13-weeks ended December 31, 2016.

 

Critical Accounting Policies

 

The preparation of financial statements requires the application of certain accounting policies, which may require the Company to make estimates and assumptions of future events. In the process of preparing its consolidated condensed financial statements, the Company estimates the appropriate carrying value of certain assets and liabilities, which are not readily apparent from other sources. The primary estimates underlying the Company’s consolidated condensed financial statements include allowances for potential bad debts on accounts and notes receivable, leases, the useful lives and recoverability of its assets, such as property and intangibles, fair values of financial instruments, the realizable value of its tax assets and other matters. Management bases its estimates on certain assumptions, which it believes are reasonable in the circumstances, and actual results could differ from those estimates. Although management does not believe that any change in those assumptions in the near term would have a material effect on the Company’s consolidated financial position or the results of operations, differences in actual results could be material to the consolidated condensed financial statements.

 

The Company’s critical accounting policies are described in the Company’s Form 10-K for the year ended October 1, 2016. There have been no significant changes to such policies during fiscal 2017 other than those disclosed in Note 1 to the Consolidated Condensed Financial Statements.

 

Recently Adopted and Issued Accounting Standards

 

See Note 1 to the Consolidated Condensed Financial Statements for a description of recent accounting pronouncements, including those adopted in fiscal 2017 and the expected dates of adoption and the anticipated impact on the Consolidated Condensed Financial Statements.

 

Item 3.  Quantitative and Qualitative Disclosures about Market Risk

 

The Company purchases commodities such as chicken, beef, lobster, crabs and shrimp for the Company’s restaurants.  The prices of these commodities may be volatile depending upon market conditions.  The Company does not purchase forward commodity contracts because the changes in prices for these items have historically been short-term in nature and, in the Company’s view, the cost of the contracts is in excess of the benefits.

 

The Company’s business is also highly seasonal and dependent on the weather. Outdoor seating capacity, such as terraces and sidewalk cafes, is available for dining only in the warm seasons and then only in inclement weather.

 

Item 4.  Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

Under the supervision and with the participation of management, including our principal executive officer and principal financial officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this quarterly report as such term is defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based on this evaluation, our management, including our principal executive officer and principal financial officer, concluded that our disclosure controls and procedures were effective as of July 1, 2017 to ensure that all material information required to be disclosed by us in reports that we file or submit under the Exchange Act is accumulated and communicated to them as appropriate to allow timely decisions regarding required disclosure and that all such information is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

 

The scope of management’s assessment of the effectiveness of the internal control over financial reporting includes all of our subsidiaries except for the Oyster House properties, which were acquired on November 30, 2016. Our consolidated revenue for the 13- and 39-weeks ended July 1, 2017 were $41,201,000 and $114,071,000, respectively, which includes $4,098,000 and $7,638,000 related to the Oyster House properties and our total assets as of July 1, 2017 were $78,779,000, of which the Oyster House properties represented $1,062,000.

- 19 -

Changes in Internal Control over Financial Reporting

 

There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that occurred during the third quarter of fiscal 2017 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

Limitations of the Effectiveness of Internal Control

 

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the internal control system are met. Because of the inherent limitations of any internal control system, no evaluation of controls can provide absolute assurance that all control issues, if any, within a company have been detected.

- 20 -

PART II

OTHER INFORMATION

 

Item 1.  Legal Proceedings

 

The Company is not subject to pending legal proceedings, other than ordinary claims incidental to its business, which the Company does not believe will materially impact results of operations.

 

Item 1A. Risk Factors

 

The most significant risk factors applicable to the Company are described in Part I, Item 1A (Risk Factors) of the Company’s Annual Report on Form 10-K for the fiscal year ended October 1, 2016 (the “2016 Form 10-K”). There have been no material changes to the risk factors previously disclosed in the 2016 Form 10-K. The risks described in the 2016 Form 10-K are not the only risks facing the Company.  Additional risks and uncertainties not currently known to management may materially adversely affect the Company’s business, financial condition, and/or operating results.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

None.

 

Item 3. Defaults upon Senior Securities

 

None.

 

Item 4. Mine Safety Disclosures

 

Not Applicable.

 

Item 5. Other Information

 

None.

 

Item 6. Exhibits

 

31.1Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
  
31.2 Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
  
32Certificate of Chief Executive and Chief Financial Officers Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

101.INS* XBRL Instance Document

 

101.SCH* XBRL Taxonomy Extension Schema Document

 

101.CAL* XBRL Taxonomy Extension Calculation Linkbase Document

 

101.DEF* XBRL Taxonomy Extension Definition Linkbase Document

 

101.LAB* XBRL Taxonomy Extension Label Linkbase Document

 

101.PRE* XBRL Taxonomy Extension Presentation Linkbase Document

 

 

 

*Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

- 21 -

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Date: August 11, 2017
   
  ARK RESTAURANTS CORP.
   
By: /s/ Michael Weinstein
  Michael Weinstein
  Chairman & Chief Executive Officer
  (Principal Executive Officer)
   
By: /s/ Robert J. Stewart
  Robert J. Stewart
  President and Chief Financial Officer
  (Authorized Signatory and Principal
  Financial and Accounting Officer)
- 22 -
EX-31.1 2 c89127_ex31-1.htm

EXHIBIT 31.1

 

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Michael Weinstein, certify that:

 

1. I have reviewed this quarterly report on Form 10-Q of Ark Restaurants Corp.
   
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
   
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
   
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
   
  a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
     
  b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
     
  c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
     
  d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
     
5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

  a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
     
  b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Dated: August 11, 2017

 

/s/ Michael Weinstein
Michael Weinstein
Chairman and Chief Executive Officer
(Principal Executive Officer)
 
EX-31.2 3 c89127_ex31-2.htm

EXHIBIT 31.2

 

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Robert J. Stewart, certify that:

 

1. I have reviewed this quarterly report on Form 10-Q of Ark Restaurants Corp.
   
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
   
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
   
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
   
  a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
     
  b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
     
  c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
     
  d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
     
5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

  a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
     
  b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Dated: August 11, 2017

 

/s/ Robert J. Stewart
Robert J. Stewart
President and Chief Financial Officer
(Authorized Signatory and Principal
Financial and Accounting Officer)
 
EX-32 4 c89127_ex32.htm

Exhibit 32

 

Certificate of Chief Executive and Chief Financial Officers Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

In connection with the Quarterly Report on Form 10-Q for the quarter ended July 1, 2017 of Ark Restaurants Corp. (the “Registrant”) as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, Michael Weinstein and Robert J. Stewart, Chief Executive Officer and Chief Financial Officer, respectively, of the Registrant, certify, pursuant to 18 U.S.C. § 1350, that to our knowledge:

 

(i)this Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (15 U.S.C. 78m or 78o(d)); and

 

(ii)the information contained in this Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

 

Dated as of this 11th day of August 2017

 

/s/ Michael Weinstein   /s/ Robert J. Stewart  
Michael Weinstein   Robert J. Stewart  
Chairman and Chief Executive Officer   President and Chief Financial Officer  
(Principal Executive Officer)   (Authorized Signatory and Principal
Financial and Accounting Officer)
 
 
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rules and regulations of the Securities and Exchange Commission (the &#x201c;SEC&#x201d;). Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. All adjustments that, in the opinion of management are necessary for a fair presentation for the periods presented, have been reflected as required by Article 10 of Regulation S-X. Such adjustments are of a normal, recurring nature. These consolidated condensed financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Form 10-K. 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Document And Entity Information - shares
9 Months Ended
Jul. 01, 2017
Aug. 04, 2017
Document and Entity Information [Abstract]    
Entity Registrant Name ARK RESTAURANTS CORP  
Document Type 10-Q  
Current Fiscal Year End Date --09-30  
Entity Common Stock, Shares Outstanding   3,425,681
Amendment Flag false  
Entity Central Index Key 0000779544  
Entity Filer Category Smaller Reporting Company  
Document Period End Date Jul. 01, 2017  
Document Fiscal Year Focus 2017  
Document Fiscal Period Focus Q3  
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CONSOLIDATED CONDENSED BALANCE SHEETS - USD ($)
$ in Thousands
Jul. 01, 2017
Oct. 01, 2016
CURRENT ASSETS:    
Cash and cash equivalents (includes $397 at July 1, 2017 and $889 at October 1, 2016 related to VIEs) $ 320 $ 7,239
Accounts receivable (includes $515 at July 1, 2017 and $429 at October 1, 2016 related to VIEs) 3,558 3,750
Employee receivables 388 453
Inventories (includes $22 at July 1, 2017 and $23 at October 1, 2016 related to VIEs) 2,111 1,892
Prepaid expenses and other current assets (includes $258 at July 1, 2017 and $228 at October 1, 2016 related to VIEs) 2,412 2,662
Total current assets 8,789 15,996
FIXED ASSETS - Net (includes $9 at July 1, 2017 and $22 at October 1, 2016 related to VIEs) 44,107 29,546
INTANGIBLE ASSETS - Net 418 526
GOODWILL 9,880 7,895
TRADEMARKS 3,331 1,611
DEFERRED INCOME TAXES 2,949 3,416
OTHER ASSETS (includes $71 at July 1, 2017 and October 1, 2016 related to VIEs) 2,339 2,564
TOTAL ASSETS 78,779 68,255
CURRENT LIABILITIES:    
Accounts payable - trade (includes $88 at July 1, 2017 and $114 at October 1, 2016 related to VIEs) 4,536 2,876
Accrued expenses and other current liabilities (includes $212 at July 1, 2017 and $238 at October 1, 2016 related to VIEs) 9,857 10,555
Accrued income taxes 1,699 606
Borrowings under credit facility 3,887  
Current portion of notes payable 4,040 2,617
Total current liabilities 24,019 16,654
OPERATING LEASE DEFERRED CREDIT (includes $56 at July 1, 2017 and $73 at October 1, 2016 related to VIEs) 3,607 3,576
NOTES PAYABLE, LESS CURRENT PORTION, net of deferred financing costs 9,011 5,321
TOTAL LIABILITIES 36,637 25,551
COMMITMENTS AND CONTINGENCIES
EQUITY:    
Common stock, par value $.01 per share - authorized, 10,000 shares; issued and outstanding, 3,426 shares at July 1, 2017 and 3,423 shares at October 1, 2016 34 34
Additional paid-in capital 12,588 12,942
Retained earnings 27,316 27,158
Total Ark Restaurants Corp. shareholders’ equity 39,938 40,134
NON-CONTROLLING INTERESTS 2,204 2,570
TOTAL EQUITY 42,142 42,704
TOTAL LIABILITIES AND EQUITY 78,779 68,255
New Meadowlands Racetrack LLC [Member]    
CURRENT ASSETS:    
INVESTMENT IN AND RECEIVABLE FROM NEW MEADOWLANDS RACETRACK $ 6,966 $ 6,701
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CONSOLIDATED CONDENSED BALANCE SHEETS (Parentheticals) - USD ($)
shares in Thousands, $ in Thousands
Jul. 01, 2017
Oct. 01, 2016
VIEs, Cash and cash equivalents $ 397 $ 889
VIEs, Accounts receivable 515 429
VIEs, Inventories 22 23
VIEs, Prepaid expenses and other current assets 258 228
VIEs, Fixed assets 9 22
VIEs, Other assets 71 71
VIEs, Accounts payable trade 88 114
VIEs, Accrued expenses and other current liabilities 212 238
VIEs, Operating lease deferred credit $ 56 $ 73
Common stock, par value (in Dollars per share) $ 0.01 $ 0.01
Common stock, shares authorized (in Shares) 10,000 10,000
Common stock, shares issued (in Shares) 3,426 3,423
Common stock, shares outstanding (in Shares) 3,426 3,423
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CONSOLIDATED CONDENSED STATEMENTS OF INCOME - USD ($)
shares in Thousands, $ in Thousands
3 Months Ended 9 Months Ended
Jul. 01, 2017
Jul. 02, 2016
Jul. 01, 2017
Jul. 02, 2016
REVENUES:        
Food and beverage sales $ 40,507 $ 40,935 $ 112,374 $ 111,385
Other revenue 694 298 1,697 1,111
Total revenues 41,201 41,233 114,071 112,496
COSTS AND EXPENSES:        
Food and beverage cost of sales 11,227 10,656 30,814 29,440
Payroll expenses 13,776 12,895 39,402 38,982
Occupancy expenses 4,541 3,309 13,037 11,891
Other operating costs and expenses 5,398 4,999 15,390 14,485
General and administrative expenses 2,955 2,956 8,699 8,996
Depreciation and amortization 1,006 1,109 3,541 3,384
Total costs and expenses 38,903 35,924 110,883 107,178
RESTAURANT OPERATING INCOME 2,298 5,309 3,188 5,318
Gain on sale of Rustic Inn, Jupiter     1,637  
OPERATING INCOME 2,298 5,309 4,825 5,318
OTHER (INCOME) EXPENSE:        
Interest expense 194 116 470 316
Interest income (16) (12) (126) (36)
Other (income) expense, net (149) (217) (339) (439)
Total other (income) expense, net 29 (113) 5 (159)
INCOME BEFORE PROVISION FOR INCOME TAXES 2,269 5,422 4,820 5,477
Provision for income taxes 585 1,362 1,338 1,398
CONSOLIDATED NET INCOME 1,684 4,060 3,482 4,079
Net income attributable to non-controlling interests (298) (693) (755) (1,036)
NET INCOME ATTRIBUTABLE TO ARK RESTAURANTS CORP. $ 1,386 $ 3,367 $ 2,727 $ 3,043
NET INCOME PER ARK RESTAURANTS CORP. COMMON SHARE:        
Basic (in Dollars per share) $ 0.40 $ 0.99 $ 0.80 $ 0.89
Diluted (in Dollars per share) $ 0.39 $ 0.96 $ 0.77 $ 0.87
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING:        
Basic (in Shares) 3,424 3,418 3,424 3,418
Diluted (in Shares) 3,549 3,494 3,532 3,504
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CONSOLIDATED CONDENSED STATEMENTS OF CHANGES IN EQUITY - USD ($)
Common Stock [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
Treasury Stock [Member]
Parent [Member]
Noncontrolling Interest [Member]
Total
BALANCE at Oct. 03, 2015 $ 48,000 $ 25,682,000 $ 26,548,000 $ (13,220,000) $ 39,058,000 $ 2,173,000 $ 41,231,000
BALANCE, Shares (in Shares) at Oct. 03, 2015 4,774,000            
Net income     3,043,000   3,043,000 1,036,000 4,079,000
Exercise of stock options   1,000     1,000   1,000
Stock-based compensation   286,000     286,000   286,000
Retirement of treasury shares $ (14,000) (13,206,000)   $ 13,220,000      
Retirement of treasury shares (in Shares) (1,356,000)            
Distributions to non-controlling interests           (734,000) (734,000)
Dividends paid     (2,565,000)   (2,565,000)   (2,565,000)
BALANCE at Jul. 02, 2016 $ 34,000 12,763,000 27,026,000   39,823,000 2,475,000 42,298,000
BALANCE, Shares (in Shares) at Jul. 02, 2016 3,418,000            
BALANCE at Oct. 01, 2016 $ 34,000 12,942,000 27,158,000   40,134,000 2,570,000 42,704,000
BALANCE, Shares (in Shares) at Oct. 01, 2016 3,423,000            
Net income     2,727,000   2,727,000 755,000 3,482,000
Exercise of stock options   36,000     36,000   $ 36,000
Exercise of stock options (in Shares) 3,000           4,308
Tax benefit on exercise of stock options   7,000     7,000   $ 7,000
Change in excess tax benefits from stock-based compensation   (397,000)     (397,000)   (397,000)
Stock-based compensation             0
Distributions to non-controlling interests           (1,121,000) (1,121,000)
Dividends paid     (2,569,000)   (2,569,000)   (2,569,000)
BALANCE at Jul. 01, 2017 $ 34,000 $ 12,588,000 $ 27,316,000   $ 39,938,000 $ 2,204,000 $ 42,142,000
BALANCE, Shares (in Shares) at Jul. 01, 2017 3,426,000            
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CONSOLIDATED CONDENSED STATEMENTS OF CHANGES IN EQUITY (Parentheticals) - $ / shares
9 Months Ended
Jul. 01, 2017
Jul. 02, 2016
Dividends, per share $ 0.75 $ 0.75
Retained Earnings [Member]    
Dividends, per share 0.75 0.75
Parent [Member]    
Dividends, per share $ 0.75 $ 0.75
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CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS - USD ($)
9 Months Ended
Jul. 01, 2017
Jul. 02, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:    
Consolidated net income $ 3,482,000 $ 4,079,000
Adjustments to reconcile consolidated net income to net cash provided by operating activities:    
Loss on closure of restaurant   16,000
Gain on sale of Rustic Inn, Jupiter (1,637,000)  
Loss on disposal of assets 283,000  
Deferred income taxes 77,000 540,000
Stock-based compensation 0 286,000
Depreciation and amortization 3,258,000 3,384,000
Amortization of deferred financing costs 35,000 32,000
Operating lease deferred credit 31,000 (190,000)
Changes in operating assets and liabilities:    
Accounts receivable 192,000 (111,000)
Inventories 74,000 98,000
Prepaid, refundable and accrued income taxes 1,069,000 (594,000)
Prepaid expenses and other current assets 324,000 (350,000)
Other assets 189,000 (373,000)
Accounts payable - trade 1,660,000 (103,000)
Accrued expenses and other current liabilities (698,000) (426,000)
Net cash provided by operating activities 8,339,000 6,288,000
CASH FLOWS FROM INVESTING ACTIVITIES:    
Purchases of fixed assets (11,843,000) (1,482,000)
Loans and advances made to employees (69,000) (161,000)
Payments received on employee receivables 134,000 164,000
Proceeds from the sale of the Rustic Inn, Jupiter 2,474,000  
Additional investment in Meadowlands Newmark LLC (222,000)  
Net cash used in investing activities (12,569,000) (2,196,000)
CASH FLOWS FROM FINANCING ACTIVITIES:    
Principal payments on notes payable (2,932,000) (1,879,000)
Borrowings under credit facility 3,897,000  
Payment of debt financing costs   (131,000)
Dividends paid (2,569,000) (2,565,000)
Proceeds from issuance of stock upon exercise of stock options 36,000 1,000
Distributions to non-controlling interests (1,121,000) (734,000)
Net cash used in financing activities (2,689,000) (5,308,000)
NET DECREASE IN CASH AND CASH EQUIVALENTS (6,919,000) (1,216,000)
CASH AND CASH EQUIVALENTS, Beginning of period 7,239,000 9,735,000
CASH AND CASH EQUIVALENTS, End of period 320,000 8,519,000
Cash paid during the period for:    
Interest 458,000 316,000
Income taxes 192,000 1,486,000
Non-cash financing activities:    
Change in excess tax benefits from stock-based compensation (397,000)  
Retirement of 1,356 treasury shares   13,220,000
Oyster House [Member]    
CASH FLOWS FROM INVESTING ACTIVITIES:    
Purchase of restaurants and bars (3,043,000)  
Non-cash financing activities:    
Note payable in connection with the purchase of restaurants and bars $ 8,000,000  
Shuckers Inc [Member]    
CASH FLOWS FROM INVESTING ACTIVITIES:    
Purchase of restaurants and bars   (717,000)
Non-cash financing activities:    
Note payable in connection with the purchase of restaurants and bars   $ 5,000,000
XML 18 R8.htm IDEA: XBRL DOCUMENT v3.7.0.1
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Parentheticals) - shares
shares in Thousands
9 Months Ended
Jul. 01, 2017
Jul. 02, 2016
Retirement of treasury shares 1,356 1,356
XML 19 R9.htm IDEA: XBRL DOCUMENT v3.7.0.1
CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
9 Months Ended
Jul. 01, 2017
Consolidated Condensed Financial Statements [Abstract]  
Consolidated Condensed Financial Statements [Text Block]

1.  CONSOLIDATED CONDENSED FINANCIAL STATEMENTS


The consolidated condensed balance sheet as of October 1, 2016, which has been derived from audited financial statements included in the Company’s annual report on Form 10-K for the year ended October 1, 2016 (“Form 10-K”), and the unaudited interim consolidated condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. All adjustments that, in the opinion of management are necessary for a fair presentation for the periods presented, have been reflected as required by Article 10 of Regulation S-X. Such adjustments are of a normal, recurring nature. These consolidated condensed financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Form 10-K. The results of operations for interim periods are not necessarily indicative of the operating results to be expected for the full year or any other interim period.


The Company had a working capital deficiency of $15,230,000 at July 1, 2017 as a result of our purchase of the Oyster House properties in November 2016 and costs associated with the renovation of our Sequoia property in Washington, DC. We believe that our existing cash balances, current banking facilities and cash provided by operations will be sufficient to meet our liquidity and capital spending requirements at least through the next 12 months.


PRINCIPLES OF CONSOLIDATION — The consolidated condensed interim financial statements include the accounts of Ark Restaurants Corp. and all of its wholly-owned subsidiaries, partnerships and other entities in which it has a controlling interest, collectively herein referred to as the “Company”. Also included in the consolidated condensed interim financial statements are certain variable interest entities (“VIEs”). All significant intercompany balances and transactions have been eliminated in consolidation.


RECLASSIFICATIONS — Certain reclassifications of prior period balances for the 39-weeks ended July 2, 2016 related to the statement of income presentation of $883,000 of certain administrative fees related to catering revenue received have been reclassified from payroll expense to revenue to conform to the current period presentation.


SEASONALITY — The Company has substantial fixed costs that do not decline proportionally with sales. The first and second fiscal quarters, which include the winter months, usually reflect lower customer traffic than in the third and fourth fiscal quarters. In addition, sales in the third and fourth fiscal quarters can be adversely affected by inclement weather due to the significant amount of outdoor seating at the Company’s restaurants.


FAIR VALUE OF FINANCIAL INSTRUMENTS — The carrying amount of cash and cash equivalents, receivables, accounts payable and accrued expenses approximate fair value due to the immediate or short-term maturity of these financial instruments. The fair values of notes receivable and payable are determined using current applicable rates for similar instruments as of the consolidated condensed balance sheet date and approximate the carrying value of such debt instruments.


CASH AND CASH EQUIVALENTS — Cash and cash equivalents include cash on hand, deposits with banks and highly liquid investments generally with original maturities of three months or less. Outstanding checks in excess of account balances, typically vendor payments, payroll and other contractual obligations disbursed after the last day of a reporting period are reported as a current liability in the accompanying consolidated condensed balance sheets.


CONCENTRATIONS OF CREDIT RISK — Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. The Company reduces credit risk by placing its cash and cash equivalents with major financial institutions with high credit ratings. At times, such amounts may exceed Federally insured limits. Accounts receivable are primarily comprised of normal business receivables, such as credit card receivables, that are paid off in a short period of time and amounts due from the hotel operators where the Company has a location, and are recorded when the products or services have been delivered. The Company reviews the collectability of its receivables on an ongoing basis, and provides for an allowance when it considers the entity unable to meet its obligation. The concentration of credit risk with respect to accounts receivable is generally limited due to the short payment terms extended by the Company and the number of customers comprising the Company’s customer base.


For the 39-week periods ended July 1, 2017 and July 2, 2016, the Company did not make purchases from any one vendor that accounted for 10% or greater of total purchases for the respective period. For the 13-week period ended July 1, 2017, the Company made purchases from one vendor that accounted for approximately 11% of total purchases. For the 13-week period ended July 2, 2016, the Company did not make purchases from any one vendor that accounted for 10% or greater of total purchases for the respective period.


SEGMENT REPORTING — As of July 1, 2017, the Company owned and operated 20 restaurants and bars, 19 fast food concepts and catering operations, exclusively in the United States, that have similar economic characteristics, nature of products and service, class of customers and distribution methods. The Company believes it meets the criteria for aggregating its operating segments into a single reporting segment in accordance with applicable accounting guidance.


NEW ACCOUNTING STANDARDS NOT YET ADOPTED — In January 2017, the Financial Accounting Standards Board (“the FASB”) issued guidance clarifying the definition of a business. The update provides that when substantially all the fair value of the assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. The new rules will be effective for the Company in the first quarter of 2019. The Company is currently evaluating the potential impact adoption of this guidance on its Consolidated Condensed Financial Statements.


In January 2017, the FASB guidance simplifying the test for goodwill impairment. The update simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount. The new rules will be effective for the Company in the first quarter of 2021. The Company is currently evaluating the potential impact adoption of this guidance on its Consolidated Condensed Financial Statements.


XML 20 R10.htm IDEA: XBRL DOCUMENT v3.7.0.1
VARIABLE INTEREST ENTITIES
9 Months Ended
Jul. 01, 2017
Variable Interest Entities [Abstract]  
Variable Interest Entities [Text Block]

2.  VARIABLE INTEREST ENTITIES


The Company consolidates any variable interest entities in which it holds a variable interest and is the primary beneficiary. Generally, a variable interest entity, or VIE, is an entity with one or more of the following characteristics: (a) the total equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support; (b) as a group the holders of the equity investment at risk lack (i) the ability to make decisions about an entity’s activities through voting or similar rights, (ii) the obligation to absorb the expected losses of the entity, or (iii) the right to receive the expected residual returns of the entity; or (c) the equity investors have voting rights that are not proportional to their economic interests and substantially all of the entity’s activities either involve, or are conducted on behalf of, an investor that has disproportionately few voting rights. The primary beneficiary of a VIE is generally the entity that has (a) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance, and (b) the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE.


The Company has determined that it is the primary beneficiary of three VIEs and, accordingly, consolidates the financial results of these entities. Following are the required disclosures associated with the Company’s consolidated VIEs:


   July 1,
2017
  October 1,
2016
   (in thousands) 
     
Cash and cash equivalents  $397   $889 
Accounts receivable   515    429 
Inventories   22    23 
Prepaid expenses and other current assets   258    228 
Due from Ark Restaurants Corp. and affiliates (1)   306    - 
Fixed assets - net   9    22 
Other assets   71    71 
Total assets  $1,578   $1,662 
           
Accounts payable - trade  $88   $114 
Accrued expenses and other current liabilities   212    238 
Due to Ark Restaurants Corp. and affiliates (1)   -    173 
Operating lease deferred credit   56    73 
Total liabilities   356    598 
Equity of variable interest entities   1,222    1,064 
Total liabilities and equity  $1,578   $1,662 

  (1)Amounts Due from and to Ark Restaurants Corp. and affiliates are eliminated upon consolidation.

The liabilities recognized as a result of consolidating these VIEs do not represent additional claims on the Company’s general assets; rather, they represent claims against the specific assets of the consolidated VIEs. Conversely, assets recognized as a result of consolidating these VIEs do not represent additional assets that could be used to satisfy claims against the Company’s general assets.


XML 21 R11.htm IDEA: XBRL DOCUMENT v3.7.0.1
RECENT RESTAURANT EXPANSION
9 Months Ended
Jul. 01, 2017
Recent Restaurant Expansion [Abstract]  
Recent Restaurant Expansion [Text Block]

3.  RECENT RESTAURANT EXPANSION


On October 22, 2015, the Company, through its wholly-owned subsidiaries, Ark Shuckers, LLC and Ark Shuckers Real Estate, LLC, acquired the assets of Shuckers Inc. (“Shuckers”), a restaurant and bar located at the Island Beach Resort in Jensen Beach, FL, and six condominium units (four of which house the restaurant and bar operations). In addition, Ark Island Beach Resort LLC, a wholly-owned subsidiary of the Company, acquired Island Beach Resort Inc., a management company that administers a rental pool of certain condominium units under lease. The total purchase price was $5,717,000. The acquisition is accounted for as a business combination and was financed with a bank loan in the amount of $5,000,000 and cash from operations.


On November 30, 2016, the Company, through newly formed, wholly-owned subsidiaries, acquired the assets of the Original Oyster House, Inc., a restaurant and bar located in the City of Gulf Shores, Baldwin County, Alabama and the related real estate and an adjacent retail shopping plaza and the Original Oyster House II, Inc., a restaurant and bar located in the City of Spanish Fort, Baldwin County, Alabama and the related real estate. The total purchase price was for $10,750,000 plus inventory of approximately $293,000. The acquisition is accounted for as a business combination and was financed with a bank loan from the Company’s existing lender in the amount of $8,000,000 and cash from operations. The fair values of the assets acquired were allocated as follows (amounts in thousands):


Inventory  $293 
Land and buildings   6,650 
Furniture, fixtures and equipment   395 
Trademarks   1,720 
Goodwill and Intangibles   1,985 
   $11,043 

The Consolidated Condensed Statements of Income for the 13 and 39-weeks ended July 1, 2017 include revenues and income of approximately $5,569,000 and $12,015,000 and $864,000 and $1,387,000, respectively, related to the Shuckers and Oyster House properties. The 13 and 39-weeks ended July 2, 2016 include revenues and income of approximately $3,667,000 and $6,959,000 and $878,000 and $676,000, respectively, related to Sequoia DC which was closed from January 1, 2017 through June 23, 2017. The unaudited pro forma financial information set forth below is based upon the Company’s historical Consolidated Condensed Statements of Income for the 13 and 39-weeks ended July 1, 2017 and July 2, 2016 and includes the results of operations for Shuckers and the Oyster House properties for the periods prior to acquisition. The unaudited pro forma financial information is presented for informational purposes only and may not be indicative of what actual results of operations would have been had the acquisition of Shuckers and the Oyster House properties occurred on the dates indicated, nor does it purport to represent the results of operations for future periods.  


   13 Weeks Ended  39 Weeks Ended
   July 1,
2017
  July 2,
2016
  July 1,
2017
  July 2,
2016
                     
Total revenues  $41,201   $45,132   $115,884   $121,594 
Net income  $1,386   $4,345   $2,934   $4,430 
Net income per share - basic  $0.40   $1.27   $0.86   $1.30 
Net income per share - diluted  $0.39   $1.24   $0.83   $1.26 
                     
Basic   3,424    3,418    3,424    3,418 
Diluted   3,549    3,494    3,532    3,504 

XML 22 R12.htm IDEA: XBRL DOCUMENT v3.7.0.1
RECENT RESTAURANT DISPOSITIONS
9 Months Ended
Jul. 01, 2017
Recent Restaurant Dispositions [Abstract]  
Recent Restaurant Dispositions [Text Block]

4.  RECENT RESTAURANT DISPOSITIONS


Lease Expirations – On November 30, 2015, the Company’s lease at the V-Bar located at the Venetian Casino Resort in Las Vegas, NV expired. The closure of this property did not result in a material charge.


The Company was advised by the landlord that it would have to vacate the Center Café property located at Union Station in Washington, DC which was on a month-to-month lease. The closure of this property occurred in February 2016 and did not result in a material charge.


The Company was advised by the landlord that it would have to vacate The Grill at Two Trees property at the Foxwoods Resort and Casino in Ledyard, CT, which had a no rent lease. The closure of this property occurred on January 1, 2017 and did not result in a material charge.


Other – On November 18, 2016, Ark Jupiter RI, LLC (“Ark Jupiter”), a wholly-owned subsidiary of the Company, entered into a ROFR Purchase and Sale Agreement (the “ROFR”) with SCFRC-HWG, LLC, the landlord (the “Seller”) to purchase the land and building in which the Company operates its Rustic Inn location in Jupiter, Florida. The Seller had entered into a Purchase and Sale Agreement with a third party to sell the premises; however, Ark Jupiter’s lease provided the Company with a right of first refusal to purchase the property. Ark Jupiter exercised the ROFR on October 4, 2016 and made a ten (10%) percent deposit on the purchase price of approximately Five Million Two Hundred Thousand Dollars ($5,200,000). Concurrent with the execution of the ROFR, Ark Jupiter entered into a Purchase and Sale Agreement with 1065 A1A, LLC to sell this same property for Eight Million Two Hundred Fifty Thousand Dollars ($8,250,000). In connection with the sale, Ark Jupiter and 1065 A1A, LLC entered into a temporary lease and sub-lease arrangement which expired on July 18, 2017. The Company vacated the space in June. In connection with these transactions the Company recognized a gain in the amount of $1,637,000 during the 13-weeks ended December 31, 2016.


The Company transferred its lease and the related assets of Canyon Road located in New York, NY to a former employee. In connection with this transfer, the Company recognized an impairment loss included in depreciation and amortization expense in the amount of $75,000 for the 13-weeks ended December 31, 2016.


XML 23 R13.htm IDEA: XBRL DOCUMENT v3.7.0.1
INVESTMENT IN NEW MEADOWLANDS RACETRACK
9 Months Ended
Jul. 01, 2017
Disclosure Text Block Supplement [Abstract]  
Cost and Equity Method Investments Disclosure [Text Block]

5.  INVESTMENT IN NEW MEADOWLANDS RACETRACK


On March 12, 2013, the Company made a $4,200,000 investment in the New Meadowlands Racetrack LLC (“NMR”) through its purchase of a membership interest in Meadowlands Newmark, LLC, an existing member of NMR with a 63.7% ownership interest. On November 19, 2013, the Company invested an additional $464,000 in NMR through a purchase of an additional membership interest in Meadowlands Newmark, LLC resulting in a total ownership of 11.6% of Meadowlands Newmark, LLC, and an effective ownership interest in NMR of 7.4%, subject to dilution. In 2015, the Company invested an additional $222,000 in NMR and on February 7, 2017, the Company invested an additional $222,000 in NMR, both as a result of capital calls, bringing its total investment to $5,108,000 with no change in ownership. This investment has been accounted for based on the cost method.


In addition to the Company’s ownership interest in NMR through Meadowlands Newmark, LLC, if casino gaming is approved at the Meadowlands and NMR is granted the right to conduct said gaming, neither of which can be assured, the Company shall be granted the exclusive right to operate the food and beverage concessions in the gaming facility with the exception of one restaurant.


In conjunction with this investment, the Company, through a 97% owned subsidiary, Ark Meadowlands LLC (“AM VIE”), also entered into a long-term agreement with NMR for the exclusive right to operate food and beverage concessions serving the new raceway facilities (the “Racing F&B Concessions”) located in the new raceway grandstand constructed at the Meadowlands Racetrack in northern New Jersey. Under the agreement, NMR is responsible to pay for the costs and expenses incurred in the operation of the Racing F&B Concessions, and all revenues and profits thereof inure to the benefit of NMR. AM VIE receives an annual fee equal to 5% of the net profits received by NMR from the Racing F&B Concessions during each calendar year. At July 1, 2017, it was determined that AM VIE is a variable interest entity. However, based on qualitative consideration of the contracts with AM VIE, the operating structure of AM VIE, the Company’s role with AM VIE, and that the Company is not obligated to absorb expected losses of AM VIE, the Company has concluded that it is not the primary beneficiary and not required to consolidate the operations of AM VIE.


The Company’s maximum exposure to loss as a result of its involvement with AM VIE is limited to a receivable from AM VIE’s primary beneficiary (NMR, a related party) which aggregated approximately $231,000 and $164,000 at July 1, 2017 and October 1, 2016, respectively, and are included in Prepaid Expenses and Other Current Assets in the Consolidated Condensed Balance Sheets.


On April 25, 2014, the Company loaned $1,500,000 to Meadowlands Newmark, LLC. The note bears interest at 3%, compounded monthly and added to the principal, and is due in its entirety on January 31, 2024. The note may be prepaid, in whole or in part, at any time without penalty or premium. On July 13, 2016, the Company made an additional loan to Meadowlands Newmark, LLC in the amount of $200,000. Such amount is subject to the same terms and conditions as the original loan as discussed above. The principal and accrued interest related to this note in the amounts of $1,858,000 and $1,815,000, are included in Investment In and Receivable From New Meadowlands Racetrack in the Consolidated Balance Sheets at July 1, 2017 and October 1, 2016, respectively.


In accordance with the cost method, our initial investment is recorded at cost and we record dividend income when applicable, if dividends are declared. We review our Investment in NMR each reporting period to determine whether a significant event or change in circumstances has occurred that may have an adverse effect on its fair value, such as the defeat of the referendum for casino gaming in Northern New Jersey in November 2016. State law prohibits the issue from being put on the ballot before voters for the following two years. As a result, we performed an assessment of the recoverability of our indirect Investment in NMR as of October 1, 2016 which included estimates requiring significant management judgment, include inherent uncertainties and are often interdependent; therefore, they do not change in isolation. Factors that management estimated include, among others, the probability of gambling being approved in Northern NJ which is the most heavily weighted assumption and NMR obtaining a license to operate a casino, revenue levels, cost of capital, marketing spending, tax rates and capital spending.


In performing this assessment, we estimated the fair value of our Investment in NMR using our best estimate of these assumptions which we believe would be consistent with what a hypothetical marketplace participant would use. The variability of these factors depends on a number of conditions, including uncertainty about future events and our inability as a minority shareholder to control certain outcomes and thus our accounting estimates may change from period to period. If other assumptions and estimates had been used when these tests were performed, impairment charges could have resulted. As a result of the above, no impairment was deemed necessary as of July 1, 2017.


XML 24 R14.htm IDEA: XBRL DOCUMENT v3.7.0.1
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
9 Months Ended
Jul. 01, 2017
Disclosure Text Block Supplement [Abstract]  
Accounts Payable, Accrued Liabilities, and Other Liabilities Disclosure, Current [Text Block]

6.  ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES


Accrued expenses and other current liabilities consist of the following:


   July 1,
2017
  October 1,
2016
   (In thousands) 
           
Sales tax payable  $1,162   $942 
Accrued wages and payroll related costs   2,256    2,495 
Customer advance deposits   3,520    4,077 
Accrued occupancy and other operating expenses   2,919    3,041 
           
   $9,857   $10,555 

XML 25 R15.htm IDEA: XBRL DOCUMENT v3.7.0.1
NOTES PAYABLE - BANK
9 Months Ended
Jul. 01, 2017
Notes Payable [Abstract]  
Notes Payable [Text Block]

7.   NOTES PAYABLE – BANK


Long-term debt consists of the following:


   July 1,
2017
  October 1,
2016
   (In thousands) 
           
Promissory Note - Rustic Inn purchase  $2,694   $3,907 
Promissory Note - Shuckers purchase   3,333    4,084 
Promissory Note - Oyster House purchase   7,067    - 
    13,094    7,991 
Less: Current maturities   (4,040)   (2,617)
Less: Unamortized deferred financing costs   (43)   (53)
           
Long-term debt  $9,011   $5,321 

On February 25, 2013, the Company issued a promissory note to Bank Hapoalim B.M. (the “BHBM”) for $3,000,000. The note bore interest at LIBOR plus 3.5% per annum, and was payable in 36 equal monthly installments of $83,333, commencing on March 25, 2013. On February 24, 2014, in connection with the acquisition of The Rustic Inn, the Company borrowed an additional $6,000,000 from BHBM under the same terms and conditions as the original loan which was consolidated with the remaining principal balance from the original borrowing at that date. The new loan is payable in 60 equal monthly installments of $134,722, which commenced on March 25, 2014.


On October 22, 2015, in connection with the acquisition of Shuckers, the Company issued a promissory note to BHBM for $5,000,000. The note bears interest at LIBOR plus 3.5% per annum, and is payable in 60 equal monthly installments of $83,333, commencing on November 22, 2015.


Also on October 22, 2015, the Company also entered into a credit agreement (the “Revolving Facility”) with BHBM which expires on October 21, 2017 and provides for total availability of the lesser of (i) $10,000,000 and (ii) $20,000,000 less the then aggregate amount of all indebtedness and obligations to BHBM. Borrowings under the Revolving Facility are evidenced by a promissory note (the “Revolving Note”) in favor of BHBM and will be payable over five years with interest at an annual rate equal to LIBOR plus 3.5% per year.


On November 30, 2016, in connection with the acquisition of the Oyster House properties, the Company issued a promissory note under the Revolving Facility to BHBM for $8,000,000. The note bears interest at LIBOR plus 3.5% per annum, and is payable in 60 equal monthly installments of $133,273, commencing on January 1, 2017.


During the 13-weeks ended July 1, 2017, the Company borrowed $3,897,000 under the Revolving Facility to finance a portion of the renovation of its Sequoia DC property. As of July 1, 2017, such borrowings had a weighted average interest rate of 4.7%.


Deferred financing costs incurred in connection with the Revolving Facility in the amount of $130,585 are being amortized over the life of the agreements on a straight-line basis and included in interest expense. Amortization expense of approximately $12,000 and $11,000 is included in interest expense for the 13-weeks ended July 1, 2017 and July 2, 2016, respectively. Amortization expense of $35,000 and $32,000 is included in interest expense for the 39-weeks ended July 1, 2017 and July 2, 2016, respectively.


Borrowings under the Revolving Facility, which include all of the above promissory notes, are secured by all tangible and intangible personal property (including accounts receivable, inventory, equipment, general intangibles, documents, chattel paper, instruments, letter-of-credit rights, investment property, intellectual property and deposit accounts) and fixtures of the Company.


The loan agreements provide, among other things, that the Company meet minimum quarterly tangible net worth amounts, as defined, maintain a fixed charge coverage ratio of not less than 1.1:1 and minimum annual net income amounts, and contain customary representations, warranties and affirmative covenants. The agreements also contain customary negative covenants, subject to negotiated exceptions, on liens, relating to other indebtedness, capital expenditures, liens, affiliate transactions, disposal of assets and certain changes in ownership. The Company was in compliance with all of its financial covenants under the Revolving Facility as of July 1, 2017 except for the fixed charge coverage ratio covenant. On August 11, 2017, we were issued a waiver for this covenant as of July 1, 2017.


XML 26 R16.htm IDEA: XBRL DOCUMENT v3.7.0.1
COMMITMENTS AND CONTINGENCIES
9 Months Ended
Jul. 01, 2017
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Disclosure [Text Block]

8.  COMMITMENTS AND CONTINGENCIES


Leases — The Company leases several restaurants, bar facilities, and administrative headquarters through its subsidiaries under terms expiring at various dates through 2032. Most of the leases provide for the payment of base rents plus real estate taxes, insurance and other expenses and, in certain instances, for the payment of a percentage of the restaurant’s sales in excess of stipulated amounts at such facility and in one instance based on profits.


On January 12, 2016, the Company entered into an Amended and Restated Lease for its Sequoia property in Washington D.C. extending the lease for 15 years through November 30, 2032 with one additional five-year option. Annual rent under the new lease is approximately $1,200,000 increasing annually through expiration. Under the terms of the agreement, the property was closed January 1, 2017 for renovation and reconcepting which cost approximately $10,000,000, of which approximately $8,500,000 has been incurred as of July 1, 2017. In connection with this closure, the Company recognized an impairment loss related to fixed asset disposals in the amount of $283,000, which is included in Depreciation and Amortization Expense for the 13-weeks ended December 31, 2016. The restaurant re-opened in June 2017.


Legal Proceedings In the ordinary course of its business, the Company is a party to various lawsuits arising from accidents at its restaurants and worker’s compensation claims, which are generally handled by the Company’s insurance carriers. The employment by the Company of management personnel, waiters, waitresses and kitchen staff at a number of different restaurants has resulted, from time to time, in litigation alleging violation by the Company of employment discrimination laws. Management believes, based in part on the advice of counsel, that the ultimate resolution of these matters will not have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows.


Share Repurchase Plan — On July 5, 2016, the Board of Directors authorized a share repurchase program authorizing management to purchase up to 500,000 shares of the Company’s common stock during the next twelve months. Any repurchase under the program will be effected in compliance with Rule 10b-18 under the Securities Exchange Act of 1934 “Purchases of Certain Equity Securities by the Issuer and Others”, funded using the Company’s working capital and be based on management’s evaluation of market conditions and other factors. No repurchases were made during the 39-weeks ended July 1, 2017 and July 2, 2016.


XML 27 R17.htm IDEA: XBRL DOCUMENT v3.7.0.1
STOCK OPTIONS
9 Months Ended
Jul. 01, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

9.  STOCK OPTIONS


The Company has options outstanding under two stock option plans, the 2004 Stock Option Plan (the “2004 Plan”) and the 2010 Stock Option Plan (the “2010 Plan”), which was approved by shareholders in the second quarter of 2010. Effective with this approval, the Company terminated the 2004 Plan. This action terminated the 400 authorized but unissued options under the 2004 Plan, but it did not affect any of the options previously issued under the 2004 Plan. Options granted under the 2004 Plan are exercisable at prices at least equal to the fair market value of such stock on the dates the options were granted. The options expire ten years after the date of grant. Options granted under the 2010 Plan are exercisable at prices at least equal to the fair market value of such stock on the dates the options were granted. The options expire ten years after the date of grant.


On April 5, 2016, the shareholders of the Company approved the 2016 Stock Option Plan and the Section 162(m) Cash Bonus Plan. Under the 2016 Stock Option Plan, 500,000 options were authorized for future grant and are exercisable at prices at least equal to the fair market value of such stock on the dates the options were granted. The options expire ten years after the date of grant. Under the Section 162(m) Cash Bonus Plan, compensation paid in excess of $1,000,000 to any employee who is the chief executive officer, or one of the three highest paid executive officers on the last day of that tax year (other than the chief executive officer or the chief financial officer) will meet certain “performance-based” requirements of Section 162(m) and the related IRS regulations in order for it to be tax deductible.


During the quarter ended December 31, 2016, options to purchase 90,000 shares of common stock at an exercise price of $32.15 per share expired unexercised.


No options or performance-based awards were granted during the 39-week period ended July 1, 2017.


A summary of stock option activity is presented below:


   2017  
   Shares  Weighted
Average
Exercise
Price
  Weighted
Average
Contractual
Term
  Aggregate
Intrinsic
Value
             
Outstanding, beginning of period   518,608   $20.33    5.1 Years      
Options:                    
Granted   -                
Exercised   (4,308)  $18.74           
Canceled or expired   (90,000)  $32.15           
Outstanding and expected to vest, end of period   424,300   $17.84    5.4 Years   $2,719,000 
Exercisable, end of period   424,300   $17.84    5.4 Years   $2,719,000 

Compensation cost charged to operations for each of the 13-week periods ended July 1, 2017 and July 2, 2016 was $0 and $79,000, respectively, and for the 39-week periods ended July 1, 2017 and July 2, 2016 was $0 and $286,000, respectively. The compensation cost recognized is classified as a general and administrative expense in the Consolidated Condensed Statements of Income.


As of July 1, 2017, there was no unrecognized compensation cost related to unvested stock options.


XML 28 R18.htm IDEA: XBRL DOCUMENT v3.7.0.1
INCOME TAXES
9 Months Ended
Jul. 01, 2017
Income Tax Disclosure [Abstract]  
Income Tax Disclosure [Text Block]

10.  INCOME TAXES


The Company’s provision for income taxes consists of Federal, state and local taxes in amounts necessary to align the Company’s year-to-date provision for income taxes with the effective tax rate that the Company expects to achieve for the full year. Each quarter, the Company updates its estimate of the annual effective tax rate and records cumulative adjustments as deemed necessary. The income tax provisions for the 39-week periods ended July 1, 2017 and July 2, 2016 reflect effective tax rates of approximately 28% and 25%, respectively.  The Company expects its effective tax rate for its current fiscal year to be lower than the statutory rate as a result of the generation of FICA tax credits and operating income attributable to the non-controlling interests of the VIEs that is not taxable to the Company. The final annual tax rate cannot be determined until the end of the fiscal year; therefore, the actual tax rate could differ from current estimates.


The Company’s overall effective tax rate in the future will be affected by factors such as the utilization of state and local net operating loss carryforwards, the generation of FICA tax credits and the mix of earnings by state taxing jurisdiction as Nevada does not impose a state income tax, as compared to the other major state and local jurisdictions in which the Company has operations.


During the 13-weeks ended December 31, 2016, certain equity compensation awards expired unexercised. As such, the Company reversed the related deferred tax asset in the amount of approximately $397,000 as a charge to Additional Paid-in Capital as there was a sufficient pool of windfall tax benefit available.


XML 29 R19.htm IDEA: XBRL DOCUMENT v3.7.0.1
INCOME PER SHARE OF COMMON STOCK
9 Months Ended
Jul. 01, 2017
Earnings Per Share [Abstract]  
Earnings Per Share [Text Block]

11.  INCOME PER SHARE OF COMMON STOCK


Net income per share is calculated on the basis of the weighted average number of common shares outstanding during each period plus, for diluted net income per share, the additional dilutive effect of potential common stock. Potential common stock using the treasury stock method consists of dilutive stock options.


For the 13- and 39-week periods ended July 1, 2017, the treasury stock impact of options to purchase 66,000, 158,800 and 199,500 shares of common stock at exercise prices of $12.04, $14.40 and $22.50 per share, respectively, were included in diluted earnings per share.


For the 13- and 39-week periods ended July 2, 2016, the treasury stock impact of options to purchase 66,000 and 164,700 shares of common stock at exercise prices of $12.04 and $14.40 per share, respectively, were included in diluted earnings per share. Options to purchase 203,000 shares of common stock at an exercise price of $22.50 per share and options to purchase 90,000 shares of common stock at an exercise price of $32.15 were not included in diluted earnings per share as their impact would be anti-dilutive.


XML 30 R20.htm IDEA: XBRL DOCUMENT v3.7.0.1
DIVIDENDS
9 Months Ended
Jul. 01, 2017
Dividends [Abstract]  
Dividends [TextBlock]

12.  DIVIDENDS


On June 5, 2017, the Board of Directors declared a quarterly dividend of $0.25 per share on the Company’s common stock to be paid on July 5, 2017 to shareholders of record at the close of business on June 19, 2017. The Company intends to continue to pay such quarterly cash dividends for the foreseeable future, however, the payment of future dividends is at the discretion of the Company’s Board of Directors and is based on future earnings, cash flow, financial condition, capital requirements, changes in U.S. taxation and other relevant factors.


XML 31 R21.htm IDEA: XBRL DOCUMENT v3.7.0.1
Accounting Policies, by Policy (Policies)
9 Months Ended
Jul. 01, 2017
Accounting Policies [Abstract]  
Consolidation, Policy [Policy Text Block]

PRINCIPLES OF CONSOLIDATION — The consolidated condensed interim financial statements include the accounts of Ark Restaurants Corp. and all of its wholly-owned subsidiaries, partnerships and other entities in which it has a controlling interest, collectively herein referred to as the “Company”. Also included in the consolidated condensed interim financial statements are certain variable interest entities (“VIEs”). All significant intercompany balances and transactions have been eliminated in consolidation.

Reclassification, Policy [Policy Text Block]

RECLASSIFICATIONS — Certain reclassifications of prior period balances for the 39-weeks ended July 2, 2016 related to the statement of income presentation of $883,000 of certain administrative fees related to catering revenue received have been reclassified from payroll expense to revenue to conform to the current period presentation.

Seasonality [Policy Text Block]

SEASONALITY — The Company has substantial fixed costs that do not decline proportionally with sales. The first and second fiscal quarters, which include the winter months, usually reflect lower customer traffic than in the third and fourth fiscal quarters. In addition, sales in the third and fourth fiscal quarters can be adversely affected by inclement weather due to the significant amount of outdoor seating at the Company’s restaurants.

Fair Value of Financial Instruments, Policy [Policy Text Block]

FAIR VALUE OF FINANCIAL INSTRUMENTS — The carrying amount of cash and cash equivalents, receivables, accounts payable and accrued expenses approximate fair value due to the immediate or short-term maturity of these financial instruments. The fair values of notes receivable and payable are determined using current applicable rates for similar instruments as of the consolidated condensed balance sheet date and approximate the carrying value of such debt instruments.

Cash and Cash Equivalents, Policy [Policy Text Block]

CASH AND CASH EQUIVALENTS — Cash and cash equivalents include cash on hand, deposits with banks and highly liquid investments generally with original maturities of three months or less. Outstanding checks in excess of account balances, typically vendor payments, payroll and other contractual obligations disbursed after the last day of a reporting period are reported as a current liability in the accompanying consolidated condensed balance sheets.

Supplier Concentration [Policy Text Block]

CONCENTRATIONS OF CREDIT RISK — Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. The Company reduces credit risk by placing its cash and cash equivalents with major financial institutions with high credit ratings. At times, such amounts may exceed Federally insured limits. Accounts receivable are primarily comprised of normal business receivables, such as credit card receivables, that are paid off in a short period of time and amounts due from the hotel operators where the Company has a location, and are recorded when the products or services have been delivered. The Company reviews the collectability of its receivables on an ongoing basis, and provides for an allowance when it considers the entity unable to meet its obligation. The concentration of credit risk with respect to accounts receivable is generally limited due to the short payment terms extended by the Company and the number of customers comprising the Company’s customer base.


For the 39-week periods ended July 1, 2017 and July 2, 2016, the Company did not make purchases from any one vendor that accounted for 10% or greater of total purchases for the respective period. For the 13-week period ended July 1, 2017, the Company made purchases from one vendor that accounted for approximately 11% of total purchases. For the 13-week period ended July 2, 2016, the Company did not make purchases from any one vendor that accounted for 10% or greater of total purchases for the respective period.

Segment Reporting, Policy [Policy Text Block]

SEGMENT REPORTING — As of July 1, 2017, the Company owned and operated 20 restaurants and bars, 19 fast food concepts and catering operations, exclusively in the United States, that have similar economic characteristics, nature of products and service, class of customers and distribution methods. The Company believes it meets the criteria for aggregating its operating segments into a single reporting segment in accordance with applicable accounting guidance.

New Accounting Pronouncements, Policy [Policy Text Block]

NEW ACCOUNTING STANDARDS NOT YET ADOPTED — In January 2017, the Financial Accounting Standards Board (“the FASB”) issued guidance clarifying the definition of a business. The update provides that when substantially all the fair value of the assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. The new rules will be effective for the Company in the first quarter of 2019. The Company is currently evaluating the potential impact adoption of this guidance on its Consolidated Condensed Financial Statements.


In January 2017, the FASB guidance simplifying the test for goodwill impairment. The update simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount. The new rules will be effective for the Company in the first quarter of 2021. The Company is currently evaluating the potential impact adoption of this guidance on its Consolidated Condensed Financial Statements.

XML 32 R22.htm IDEA: XBRL DOCUMENT v3.7.0.1
VARIABLE INTEREST ENTITIES (Tables)
9 Months Ended
Jul. 01, 2017
Variable Interest Entities [Abstract]  
Schedule of Variable Interest Entities [Table Text Block] Following are the required disclosures associated with the Company’s consolidated VIEs:

   July 1,
2017
  October 1,
2016
   (in thousands) 
     
Cash and cash equivalents  $397   $889 
Accounts receivable   515    429 
Inventories   22    23 
Prepaid expenses and other current assets   258    228 
Due from Ark Restaurants Corp. and affiliates (1)   306    - 
Fixed assets - net   9    22 
Other assets   71    71 
Total assets  $1,578   $1,662 
           
Accounts payable - trade  $88   $114 
Accrued expenses and other current liabilities   212    238 
Due to Ark Restaurants Corp. and affiliates (1)   -    173 
Operating lease deferred credit   56    73 
Total liabilities   356    598 
Equity of variable interest entities   1,222    1,064 
Total liabilities and equity  $1,578   $1,662 
  (1)Amounts Due from and to Ark Restaurants Corp. and affiliates are eliminated upon consolidation.
XML 33 R23.htm IDEA: XBRL DOCUMENT v3.7.0.1
RECENT RESTAURANT EXPANSION (Tables)
9 Months Ended
Jul. 01, 2017
Recent Restaurant Expansion [Abstract]  
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] The fair values of the assets acquired were allocated as follows (amounts in thousands):

Inventory  $293 
Land and buildings   6,650 
Furniture, fixtures and equipment   395 
Trademarks   1,720 
Goodwill and Intangibles   1,985 
   $11,043 
Schedule of Annual Financial Information [Table Text Block] The unaudited pro forma financial information set forth below is based upon the Company’s historical Consolidated Condensed Statements of Income for the 13 and 39-weeks ended July 1, 2017 and July 2, 2016

   13 Weeks Ended  39 Weeks Ended
   July 1,
2017
  July 2,
2016
  July 1,
2017
  July 2,
2016
                     
Total revenues  $41,201   $45,132   $115,884   $121,594 
Net income  $1,386   $4,345   $2,934   $4,430 
Net income per share - basic  $0.40   $1.27   $0.86   $1.30 
Net income per share - diluted  $0.39   $1.24   $0.83   $1.26 
                     
Basic   3,424    3,418    3,424    3,418 
Diluted   3,549    3,494    3,532    3,504 
XML 34 R24.htm IDEA: XBRL DOCUMENT v3.7.0.1
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables)
9 Months Ended
Jul. 01, 2017
Disclosure Text Block Supplement [Abstract]  
Schedule of Accrued Expenses And Other Current Liabilities [Table Text Block] Accrued expenses and other current liabilities consist of the following:

   July 1,
2017
  October 1,
2016
   (In thousands) 
           
Sales tax payable  $1,162   $942 
Accrued wages and payroll related costs   2,256    2,495 
Customer advance deposits   3,520    4,077 
Accrued occupancy and other operating expenses   2,919    3,041 
           
   $9,857   $10,555 
XML 35 R25.htm IDEA: XBRL DOCUMENT v3.7.0.1
NOTES PAYABLE - BANK (Tables)
9 Months Ended
Jul. 01, 2017
Notes Payable [Abstract]  
Schedule of Debt [Table Text Block] Long-term debt consists of the following:

   July 1,
2017
  October 1,
2016
   (In thousands) 
           
Promissory Note - Rustic Inn purchase  $2,694   $3,907 
Promissory Note - Shuckers purchase   3,333    4,084 
Promissory Note - Oyster House purchase   7,067    - 
    13,094    7,991 
Less: Current maturities   (4,040)   (2,617)
Less: Unamortized deferred financing costs   (43)   (53)
           
Long-term debt  $9,011   $5,321 
XML 36 R26.htm IDEA: XBRL DOCUMENT v3.7.0.1
STOCK OPTIONS (Tables)
9 Months Ended
Jul. 01, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Share-based Compensation, Stock Options, Activity [Table Text Block] A summary of stock option activity is presented below:

   2017  
   Shares  Weighted
Average
Exercise
Price
  Weighted
Average
Contractual
Term
  Aggregate
Intrinsic
Value
             
Outstanding, beginning of period   518,608   $20.33    5.1 Years      
Options:                    
Granted   -                
Exercised   (4,308)  $18.74           
Canceled or expired   (90,000)  $32.15           
Outstanding and expected to vest, end of period   424,300   $17.84    5.4 Years   $2,719,000 
Exercisable, end of period   424,300   $17.84    5.4 Years   $2,719,000 
XML 37 R27.htm IDEA: XBRL DOCUMENT v3.7.0.1
CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Details)
3 Months Ended 9 Months Ended
Jul. 01, 2017
USD ($)
Jul. 02, 2016
Jul. 01, 2017
USD ($)
Jul. 02, 2016
USD ($)
CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Details) [Line Items]        
Prior Period Reclassification Adjustment (in Dollars)       $ 883,000
Number of Significant Vendors 1 1 1 1
Concentration Risk, Percentage 11.00% 10.00% 10.00% 10.00%
Oyster House [Member]        
CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Details) [Line Items]        
Working Capital Deficiency (in Dollars) $ 15,230,000   $ 15,230,000  
Restaurants and Bars [Member]        
CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Details) [Line Items]        
Number of Operating Segments     20  
Fast Food Concepts and Catering Operations [Member]        
CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Details) [Line Items]        
Number of Operating Segments     19  
XML 38 R28.htm IDEA: XBRL DOCUMENT v3.7.0.1
VARIABLE INTEREST ENTITIES (Details)
Jul. 01, 2017
Variable Interest Entities [Abstract]  
Number of VIEs with Primary Benefits 3
XML 39 R29.htm IDEA: XBRL DOCUMENT v3.7.0.1
VARIABLE INTEREST ENTITIES (Details) - Schedule of variable interest entities - USD ($)
$ in Thousands
Jul. 01, 2017
Oct. 01, 2016
Schedule of variable interest entities [Abstract]    
Cash and cash equivalents $ 397 $ 889
Accounts receivable 515 429
Inventories 22 23
Prepaid expenses and other current assets 258 228
Due from Ark Restaurants Corp. and affiliates [1] 306
Fixed assets - net 9 22
Other assets 71 71
Total assets 1,578 1,662
Accounts payable - trade 88 114
Accrued expenses and other current liabilities 212 238
Due to Ark Restaurants Corp. and affiliates [1] 173
Operating lease deferred credit 56 73
Total liabilities 356 598
Equity of variable interest entities 1,222 1,064
Total liabilities and equity $ 1,578 $ 1,662
[1] Amounts Due from and to Ark Restaurants Corp. and affiliates are eliminated upon consolidation.
XML 40 R30.htm IDEA: XBRL DOCUMENT v3.7.0.1
RECENT RESTAURANT EXPANSION (Details)
1 Months Ended 3 Months Ended 9 Months Ended
Nov. 30, 2016
USD ($)
Oct. 22, 2015
USD ($)
Jul. 01, 2017
USD ($)
Jul. 02, 2016
USD ($)
Jul. 01, 2017
USD ($)
Jul. 02, 2016
USD ($)
RECENT RESTAURANT EXPANSION (Details) [Line Items]            
Net Income (Loss) Attributable to Parent     $ 1,386,000 $ 3,367,000 $ 2,727,000 $ 3,043,000
Oyster House [Member]            
RECENT RESTAURANT EXPANSION (Details) [Line Items]            
Business Combination, Consideration Transferred $ 10,750,000          
Business Combination Inventory Transferred 293,000          
Business Combination Bank Loan $ 8,000,000          
Shuckers And Oyster House [Member]            
RECENT RESTAURANT EXPANSION (Details) [Line Items]            
Sales Revenue, Services, Net     5,569,000   12,015,000  
Net Income (Loss) Attributable to Parent     $ 864,000   $ 1,387,000  
Shuckers Inc [Member]            
RECENT RESTAURANT EXPANSION (Details) [Line Items]            
Number of Condominium Unit   6        
Number of Condominium Unit of Restaurant and Bar Operations   4        
Business Combination, Consideration Transferred   $ 5,717,000        
Bank Loan Related to Acquisition   $ 5,000,000        
Sequoia DC [Member]            
RECENT RESTAURANT EXPANSION (Details) [Line Items]            
Sales Revenue, Services, Net       3,667,000   6,959,000
Net Income (Loss) Attributable to Parent       $ 878,000   $ 676,000
XML 41 R31.htm IDEA: XBRL DOCUMENT v3.7.0.1
RECENT RESTAURANT EXPANSION (Details) - Schedule of fair value assets acquired - Shuckers Inc [Member]
$ in Thousands
Jul. 01, 2017
USD ($)
RECENT RESTAURANT EXPANSION (Details) - Schedule of fair value assets acquired [Line Items]  
Inventory $ 293
Land and buildings 6,650
Furniture, fixtures and equipment 395
Trademarks 1,720
Goodwill and Intangibles 1,985
$ 11,043
XML 42 R32.htm IDEA: XBRL DOCUMENT v3.7.0.1
RECENT RESTAURANT EXPANSION (Details) - Schedule of unaudited pro forma financial information - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
3 Months Ended 9 Months Ended
Jul. 01, 2017
Jul. 02, 2016
Jul. 01, 2017
Jul. 02, 2016
Schedule of unaudited pro forma financial information [Abstract]        
Total revenues $ 41,201 $ 45,132 $ 115,884 $ 121,594
Net income $ 1,386 $ 4,345 $ 2,934 $ 4,430
Net income per share - basic $ 0.40 $ 1.27 $ 0.86 $ 1.30
Net income per share - diluted $ 0.39 $ 1.24 $ 0.83 $ 1.26
Basic 3,424 3,418 3,424 3,418
Diluted 3,549 3,494 3,532 3,504
XML 43 R33.htm IDEA: XBRL DOCUMENT v3.7.0.1
RECENT RESTAURANT DISPOSITIONS (Details) - USD ($)
3 Months Ended 9 Months Ended
Oct. 04, 2016
Dec. 31, 2016
Jul. 01, 2017
RECENT RESTAURANT DISPOSITIONS (Details) [Line Items]      
Percentage of Deposit on Purchase Price of Property 10.00%    
Investment Building and Building Improvements $ 5,200,000    
Gain (Loss) on Disposition of Property Plant Equipment     $ 1,637,000
Amount Of Impairment Loss Recognized Related to Pending Transfer   $ 75,000  
A1A LLC [Member]      
RECENT RESTAURANT DISPOSITIONS (Details) [Line Items]      
Selling Price of Property under Agreement $ 8,250,000    
Gain (Loss) on Disposition of Property Plant Equipment   $ 1,637,000  
A1A LLC [Member] | Temporary and Sub Lease Arrangement [Member]      
RECENT RESTAURANT DISPOSITIONS (Details) [Line Items]      
Lease Expiration Date Jul. 18, 2017    
XML 44 R34.htm IDEA: XBRL DOCUMENT v3.7.0.1
INVESTMENT IN NEW MEADOWLANDS RACETRACK (Details) - USD ($)
1 Months Ended 9 Months Ended 12 Months Ended
Feb. 07, 2017
Nov. 19, 2013
Mar. 12, 2013
Apr. 25, 2014
Jul. 01, 2017
Dec. 31, 2015
Oct. 01, 2016
Jul. 13, 2016
New Meadowlands Racetrack LLC [Member]                
INVESTMENT IN NEW MEADOWLANDS RACETRACK (Details) [Line Items]                
Payments to Acquire Businesses and Interest in Affiliates     $ 4,200,000          
Cost Method Investments Ownership Percentage   7.40%            
Payments to Acquire Additional Interest in Subsidiaries $ 222,000 $ 464,000       $ 222,000    
Long-term Investments         $ 5,108,000      
Meadowlands Newmark LLC [Member]                
INVESTMENT IN NEW MEADOWLANDS RACETRACK (Details) [Line Items]                
Cost Method Investments Ownership Percentage   11.60% 63.70%          
Loans and Advances to Related party       $ 1,500,000        
Interest Rate on Loan       3.00%        
Loan Maturity Date       Jan. 31, 2024        
Additional Loans And Advances To Related Party               $ 200,000
Principal and Accrued Interest Included in Other Assets         $ 1,858,000   $ 1,815,000  
Ark Meadowlands LLC [Member]                
INVESTMENT IN NEW MEADOWLANDS RACETRACK (Details) [Line Items]                
Noncontrolling Interest, Ownership Percentage by Parent         97.00%      
Profit Participation Percentage         5.00%      
Maximum Loss Relating to V I E Included In Other Current Assets         $ 231,000   $ 164,000  
XML 45 R35.htm IDEA: XBRL DOCUMENT v3.7.0.1
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - Schedule of accrued expenses and other current liabilities - USD ($)
$ in Thousands
Jul. 01, 2017
Oct. 01, 2016
Schedule of accrued expenses and other current liabilities [Abstract]    
Sales tax payable $ 1,162 $ 942
Accrued wages and payroll related costs 2,256 2,495
Customer advance deposits 3,520 4,077
Accrued occupancy and other operating expenses 2,919 3,041
$ 9,857 $ 10,555
XML 46 R36.htm IDEA: XBRL DOCUMENT v3.7.0.1
NOTES PAYABLE - BANK (Details) - USD ($)
3 Months Ended 9 Months Ended
Jul. 01, 2017
Jul. 02, 2016
Jul. 01, 2017
Jul. 02, 2016
Minimum [Member]        
NOTES PAYABLE - BANK (Details) [Line Items]        
Fixed Charge Coverage Ratio     1.10%  
Sequoia DC [Member] | Revolving Credit Facility [Member]        
NOTES PAYABLE - BANK (Details) [Line Items]        
Line Of Credit Facility Amount Borrowed $ 3,897,000   $ 3,897,000  
Debt, Weighted Average Interest Rate 4.70%   4.70%  
The Rustic Inn [Member]        
NOTES PAYABLE - BANK (Details) [Line Items]        
Number of Installments     60  
Debt Instrument, Periodic Payment     $ 134,722  
Debt Instrument, Date of First Required Payment     Mar. 25, 2014  
Bank Loan Related to Acquisition     $ 6,000,000  
Shuckers Inc [Member]        
NOTES PAYABLE - BANK (Details) [Line Items]        
Debt Instrument, Face Amount $ 5,000,000   $ 5,000,000  
Debt Instrument, Interest Rate Terms     LIBORplus 3.5% per annum  
Debt Instrument, Basis Spread on Variable Rate     3.50%  
Number of Installments     60  
Debt Instrument, Periodic Payment     $ 83,333  
Debt Instrument, Date of First Required Payment     Nov. 22, 2015  
Shuckers Inc [Member] | Revolving Credit Facility [Member]        
NOTES PAYABLE - BANK (Details) [Line Items]        
Debt Instrument, Interest Rate Terms     LIBOR plus 3.5% per year  
Debt Instrument, Basis Spread on Variable Rate     3.50%  
Line of Credit Facility, Expiration Date     Oct. 21, 2017  
Line of Credit Facility, Current Borrowing Capacity 10,000,000   $ 10,000,000  
Line of Credit Facility, Maximum Borrowing Capacity 20,000,000   $ 20,000,000  
Number of Years for Loans Payable     5 years  
Amortization of Other Deferred Charges     $ 130,585  
Amortization 12,000 $ 11,000 35,000 $ 32,000
Oyster House [Member]        
NOTES PAYABLE - BANK (Details) [Line Items]        
Debt Instrument, Face Amount 8,000,000   $ 8,000,000  
Debt Instrument, Interest Rate Terms     LIBOR plus 3.5% per annum  
Debt Instrument, Basis Spread on Variable Rate     3.50%  
Number of Installments     60  
Debt Instrument, Periodic Payment     $ 133,273  
Debt Instrument, Date of First Required Payment     Jan. 01, 2017  
Bank Hapoalim B.M. [Member]        
NOTES PAYABLE - BANK (Details) [Line Items]        
Debt Instrument, Face Amount $ 3,000,000   $ 3,000,000  
Debt Instrument, Interest Rate Terms     LIBOR plus 3.5% perannum  
Debt Instrument, Basis Spread on Variable Rate     3.50%  
Number of Installments     36  
Debt Instrument, Periodic Payment     $ 83,333  
Debt Instrument, Date of First Required Payment     Mar. 25, 2013  
XML 47 R37.htm IDEA: XBRL DOCUMENT v3.7.0.1
NOTES PAYABLE - BANK (Details) - Schedule of Long-term debt - USD ($)
$ in Thousands
Jul. 01, 2017
Oct. 01, 2016
NOTES PAYABLE - BANK (Details) - Schedule of Long-term debt [Line Items]    
Promissory Note $ 13,094 $ 7,991
Less: Current maturities (4,040) (2,617)
Less: Unamortized deferred financing costs (43) (53)
Long-term debt 9,011 5,321
The Rustic Inn [Member]    
NOTES PAYABLE - BANK (Details) - Schedule of Long-term debt [Line Items]    
Promissory Note 2,694 3,907
Shuckers Inc [Member]    
NOTES PAYABLE - BANK (Details) - Schedule of Long-term debt [Line Items]    
Promissory Note 3,333 $ 4,084
Oyster House [Member]    
NOTES PAYABLE - BANK (Details) - Schedule of Long-term debt [Line Items]    
Promissory Note $ 7,067  
XML 48 R38.htm IDEA: XBRL DOCUMENT v3.7.0.1
COMMITMENTS AND CONTINGENCIES (Details) - USD ($)
3 Months Ended 9 Months Ended
Dec. 31, 2016
Jul. 01, 2017
Jul. 02, 2016
Jul. 05, 2016
COMMITMENTS AND CONTINGENCIES (Details) [Line Items]        
Lease Expiration Year   2032    
Stock Repurchased During Period, Shares (in Shares)   0 0  
Maximum [Member]        
COMMITMENTS AND CONTINGENCIES (Details) [Line Items]        
Stock Repurchase Program, Number of Shares Authorized to be Repurchased (in Shares)       500,000
Sequoia DC [Member]        
COMMITMENTS AND CONTINGENCIES (Details) [Line Items]        
Lessee, Operating Lease, Renewal Term   15 years    
Lease Expiration Date   Nov. 30, 2032    
Operating Leases, Future Minimum Payments Due   $ 1,200,000    
Impairment Losses Related to Real Estate Partnerships $ 283,000      
Sequoia DC [Member] | Additional Lease Extension Option [Member]        
COMMITMENTS AND CONTINGENCIES (Details) [Line Items]        
Lessee, Operating Lease, Renewal Term   5 years    
Sequoia DC [Member] | Leasehold Improvements [Member]        
COMMITMENTS AND CONTINGENCIES (Details) [Line Items]        
Construction and Development Costs   $ 10,000,000    
Construction in Progress Expenditures Incurred but Not yet Paid   $ 8,500,000    
XML 49 R39.htm IDEA: XBRL DOCUMENT v3.7.0.1
STOCK OPTIONS (Details)
3 Months Ended 9 Months Ended
Jul. 01, 2017
USD ($)
shares
Dec. 31, 2016
$ / shares
shares
Jul. 02, 2016
USD ($)
Jul. 01, 2017
USD ($)
shares
Jul. 02, 2016
USD ($)
STOCK OPTIONS (Details) [Line Items]          
Number of Stock Option Plans       2  
Maximum Amount of Compensation Paid Under Cash Bonus Plan | $       $ 1,000,000  
Share-based Compensation Arrangement by Share-based Payment Award, Options, Expirations in Period (in Shares)   90,000      
Share-based Compensation Arrangements by Share-based Payment Award, Options, Expirations in Period, Weighted Average Exercise Price (in Dollars per share) | $ / shares   $ 32.15      
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in Shares)       0  
Share-based Compensation | $ $ 0   $ 79,000 $ 0 $ 286,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options | $ $ 0     $ 0  
Stock Option 2004 Plan [Member]          
STOCK OPTIONS (Details) [Line Items]          
Terminated Unissued Options (in Shares)       400  
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period       10 years  
Stock Option 2010 Plan [Member]          
STOCK OPTIONS (Details) [Line Items]          
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period       10 years  
Stock Option 2016 Plan [Member]          
STOCK OPTIONS (Details) [Line Items]          
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period       10 years  
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized (in Shares) 500,000     500,000  
XML 50 R40.htm IDEA: XBRL DOCUMENT v3.7.0.1
STOCK OPTIONS (Details) - Schedule of stock options, activity
9 Months Ended
Jul. 01, 2017
USD ($)
$ / shares
shares
Schedule of stock options, activity [Abstract]  
Outstanding, beginning of period | shares 518,608
Outstanding, beginning of period | $ / shares $ 20.33
Outstanding, beginning of period 5 years 36 days
Options:  
Exercised | shares (4,308)
Exercised | $ / shares $ 18.74
Canceled or expired | shares (90,000)
Canceled or expired | $ / shares $ 32.15
Outstanding and expected to vest, end of period | shares 424,300
Outstanding and expected to vest, end of period | $ / shares $ 17.84
Outstanding and expected to vest, end of period 5 years 146 days
Outstanding and expected to vest, end of period | $ $ 2,719,000
Exercisable, end of period | shares 424,300
Exercisable, end of period | $ / shares $ 17.84
Exercisable, end of period 5 years 146 days
Exercisable, end of period | $ $ 2,719,000
XML 51 R41.htm IDEA: XBRL DOCUMENT v3.7.0.1
INCOME TAXES (Details) - USD ($)
3 Months Ended 9 Months Ended
Dec. 31, 2016
Jul. 01, 2017
Jul. 02, 2016
Income Tax Disclosure [Abstract]      
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent   28.00% 25.00%
Deferred Tax Asset Reversed As a Charge to Additional Paid in Capital (in Dollars) $ 397,000    
XML 52 R42.htm IDEA: XBRL DOCUMENT v3.7.0.1
INCOME PER SHARE OF COMMON STOCK (Details) - $ / shares
3 Months Ended 9 Months Ended
Jul. 01, 2017
Jul. 02, 2016
Jul. 01, 2017
Jul. 02, 2016
Exercise Price One [Member]        
INCOME PER SHARE OF COMMON STOCK (Details) [Line Items]        
Dilutive Securities Included In Computation Of Earnings Per Share Amount 66,000 66,000 66,000 66,000
Exercise Price Of Common Stock Options Included In Computation Of Earnings Per Share $ 12.04 $ 12.04 $ 12.04 $ 12.04
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount   203,000   203,000
Exercise Price Of Common Stock Options Excluded From Computation Of Earnings Per Share   $ 22.50   $ 22.50
Exercise Price Two [Member]        
INCOME PER SHARE OF COMMON STOCK (Details) [Line Items]        
Dilutive Securities Included In Computation Of Earnings Per Share Amount 158,800 164,700 158,800 164,700
Exercise Price Of Common Stock Options Included In Computation Of Earnings Per Share $ 14.40 $ 14.40 $ 14.40 $ 14.40
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount   90,000   90,000
Exercise Price Of Common Stock Options Excluded From Computation Of Earnings Per Share   $ 32.15   $ 32.15
Exercise Price Three [Member]        
INCOME PER SHARE OF COMMON STOCK (Details) [Line Items]        
Dilutive Securities Included In Computation Of Earnings Per Share Amount 199,500   199,500  
Exercise Price Of Common Stock Options Included In Computation Of Earnings Per Share $ 22.50   $ 22.50  
XML 53 R43.htm IDEA: XBRL DOCUMENT v3.7.0.1
DIVIDENDS (Details)
Jun. 05, 2017
$ / shares
Dividends [Abstract]  
Dividends Payable, Amount Per Share $ 0.25
Dividends Payable, Date to be Paid Jul. 05, 2017
Dividends Payable, Date of Record Jun. 19, 2017
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