SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark one)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 29, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to ______
Commission file number 0-14030
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
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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 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 _____
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 May 8, 1997 (Common stock, $.01 par value) 3,832,499
ARK RESTAURANTS CORP. AND SUBSIDIARIES
INDEX
PAGE
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PART I - FINANCIAL INFORMATION:
Item 1. Consolidated Financial Statements:
Consolidated Condensed Balance Sheets - March 29, 1997
(Unaudited) and September 28, 1996 (Unaudited) 1
Consolidated Condensed Statements of Operations and Retained Earnings -
13-week periods ended March 29, 1997 (Unaudited) and March 30, 1996
(Unaudited) and 26-week periods ended March 29, 1997 (Unaudited) and March
30, 1996 (Unaudited) 2
Consolidated Condensed Statements of Cash Flows - 26-week periods
ended March 29, 1997 (Unaudited) and March 30, 1996 (Unaudited) 3
Notes to Consolidated Condensed Financial
Statements (Unaudited) 4
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 5-8
PART II - OTHER INFORMATION:
Item 4. Submission of Matters to a Vote of Security Holders 9
Item 6. Exhibits and Reports on Form 8-K 10
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ARK RESTAURANTS CORP. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited)
(Dollars in Thousands)
March 29, September 28,
1997 1996
--------- -------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 451 $ 907
Accounts receivable 2,369 1,462
Current portion of long-term receivables 424 94
Inventories 1,276 840
Prepaid expenses 519 465
Refundable and prepaid income taxes 1,287 -
Other current assets 816 409
Deferred income taxes 681 631
------- -------
Total current assets 7,823 4,808
LONG-TERM RECEIVABLES 1,067 360
ASSETS HELD FOR SALE 1,434 2,614
FIXED ASSETS - At Cost:
Leasehold improvements 23,030 13,020
Furniture, fixtures and equipment 16,899 11,114
Leasehold improvements in progress 33 6,289
------- -------
39,962 30,423
Less accumulated depreciation and
amortization 12,557 11,325
------- -------
27,405 19,098
INTANGIBLE ASSETS - Less accumulated
amortization of $2,217 and $2,070 3,711 3,885
OTHER ASSETS 599 680
DEFERRED INCOME TAXES 1,059 934
------- -------
TOTAL ASSETS $43,098 $32,379
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable - trade $ 3,625 $ 2,365
Accrued expenses and other current
liabilities 3,438 3,031
Current maturities of long-term debt 947 151
Current maturities of capital lease obligations 234 241
Accrued income taxes - 324
------- -------
Total current liabilities 8,244 6,112
LONG-TERM DEBT - net of current maturities 10,523 6,253
OBLIGATIONS UNDER CAPITAL LEASES - net of current
maturities 546 662
OPERATING LEASE DEFERRED CREDIT 1,547 1,547
SHAREHOLDERS' EQUITY:
Common stock, par value $.01 per share -
authorized, 10,000,000 shares;
issued, 5,177,836 and 4,608,882 shares 52 46
Additional paid-in capital 13,879 7,790
Retained earnings 9,554 11,216
------- -------
23,485 19,052
Less treasury stock, 1,345,337 shares 1,247 1,247
------- -------
Total shareholders' equity 22,238 17,805
------- -------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $43,098 $32,379
======= =======
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See notes to consolidated condensed
financial statements
ARK RESTAURANTS CORP. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
(Unaudited)
(In Thousands, Except per share amounts)
13 Weeks Ended 26 Weeks Ended
----------------------- -----------------------
March 27, March 30, March 27, March 30,
1997 1996 1997 1996
--------- --------- --------- ---------
NET SALES $24,887 $15,450 $43,054 $34,173
COST OF SALES 7,112 4,302 12,210 9,480
------- ------- ------- -------
GROSS RESTAURANT PROFIT 17,775 11,148 30,844 24,693
MANAGEMENT FEE INCOME 453 454 651 630
------- ------- ------- -------
18,228 11,602 31,495 25,323
------- ------- ------- -------
OPERATING EXPENSES
Payroll and payroll benefits 10,244 6,441 17,602 13,305
Occupancy 3,365 2,556 5,797 4,791
Depreciation and amortization 858 675 1,446 1,337
Other 4,005 2,991 6,555 6,032
------- ------- ------- -------
18,472 12,663 31,400 25,465
GENERAL AND ADMINISTRATIVE
EXPENSES 1,587 1,225 3,009 2,230
------- ------- ------- -------
20,059 13,888 34,409 27,695
------- ------- ------- -------
OPERATING LOSS (1,831) (2,286) (2,914) (2,372)
------- ------- ------- -------
OTHER EXPENSE (INCOME):
Interest expense, net 219 111 238 210
Other income (203) (344) (384) (574)
------- ------- ------- ------
16 (233) (146) (364)
------- ------- ------- ------
LOSS BEFORE BENEFIT FOR
INCOME TAXES (1,847) (2,053) (2,768) (2,008)
BENEFIT FOR INCOME TAXES (739) (1,024) (1,107) (1,004)
------- ------- ------- -------
NET LOSS (1,108) (1,029) (1,661) (1,004)
RETAINED EARNINGS, Beginning
of period 10,663 10,452 11,216 10,427
------- ------ ------- -------
RETAINED EARNINGS, End of period $ 9,555 $9,423 $ 9,555 $9,423
======= ======= ======= =======
NET LOSS PER SHARE $(.29) $(.32) $(.46) $(.31)
===== ===== ===== =====
WEIGHTED AVERAGE NUMBER OF SHARES
USED IN COMPUTATIONS 3,829 3,245 3,600 3,220
======= ======= ======= =======
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See notes to consolidated condensed
financial statements
ARK RESTAURANTS CORP. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
(Dollars in Thousands)
26 Weeks Ended
--------------------------
March 27, March 30,
1997 1996
-------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(1,661) $(1,004)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization of fixed assets 1,365 1,163
Amortization of intangibles 206 240
Loss (Gain) on sale of restaurants (188) 97
Deferred income taxes (175) (104)
Changes in assets and liabilities:
Decrease (Increase) in accounts receivable (907) 25
Decrease (Increase) in inventories (436) (12)
Decrease (Increase) in prepaid expenses (54) 285
Decrease (Increase) in refundable and prepaid income taxes (1,287) (1,158)
Decrease (Increase) in other assets (386) 90
Increase (Decrease) in accounts payable - trade 1,260 229
Increase (Decrease) in accrued expenses and other
current liabilities 353 (360)
Increase (Decrease) in accrued income taxes (324) (265)
------- -------
Net cash used in operating activities (2,234) (774)
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to fixed assets (9,539) (829)
Additions to intangible assets (7) -
Issuance of long-term receivables - (42)
Payments received on long-term receivables 21 41
Restaurant sales 267 -
------- -------
Net cash used in investing activities (9,258) (830)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds of long-term debt 9,750 1,500
Principal payment on long-term debt (4,686) (68)
Principal payment on capital lease obligations (123) (113)
Proceeds from common stock private placement, net 6,029 -
Exercise of stock options 66 134
------- -------
Net cash provided by financing activities 11,036 1,453
------- -------
NET DECREASE IN CASH AND CASH EQUIVALENTS (456) (151)
CASH AND CASH EQUIVALENTS, beginning of period 907 1,271
------- -------
CASH AND CASH EQUIVALENTS, end of period $ 451 $ 1,120
======= =======
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during year for:
Interest $ 629 $ 262
======= =======
Income taxes $ 693 529
======= =======
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See notes to consolidated condensed financial statements.
ARK RESTAURANTS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
1. CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
The consolidated condensed financial statements have been prepared by Ark Restaurants Corp. (the "Company"), without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position at March 29, 1997 and results of operations and changes in cash flows for the periods ended March 29, 1997 and March 30, 1996 have been made.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the consolidated financial statements and notes thereto included in the Company's annual report on Form 10-K for the year ended September 28, 1996. The results of operations for the periods ended March 29, 1997 is not necessarily indicative of the operating results for the full year.
2. RESTAURANT SALES
In the first quarter of fiscal 1997 the Company sold three of its smaller restaurants located in the borough of Manhattan in New York City. The aggregate selling price for the restaurants was $1,366,000, of which an aggregate of $308,000 was paid in cash and the balance of $1,058,000 is payable in various periods through December 2006. Gains of approximately $188,000 were recognized on these sales.
3. LONG-TERM DEBT
In January 1997, the Company borrowed from its main bank, $2,851,000 to refinance the purchase of various restaurant equipment at its food and beverage facilities in a hotel & casino in Las Vegas, Nevada. The note bears interest at 8.75% per annum and is payable in 60 equal monthly installments of $58,833 inclusive of interest, until maturity in January 2002. The Company granted the bank a security interest in such restaurant equipment. In connection with such financing, the Company granted the bank the right to purchase 35,000 shares of the Company's common stock at the exercise price of $11.625 per share through December 2001.
4. COMMON STOCK PRIVATE PLACEMENT
In December 1996, the Company raised net proceeds of $6,066,000 in a private placement of 551,454 shares of its common stock at $11 per share. The proceeds of such offering were used to repay a portion of the Company's outstanding bank borrowings and for the payment of capital expenditures on its Las Vegas restaurant facilities at the New York New York Hotel & Casino in Las Vegas, Nevada which opened in January 1997.
5. INCOME PER SHARE OF COMMON STOCK
Per share data is based upon the weighted average number of shares of common stock and common stock equivalents outstanding during each period; common stock equivalents consist of dilutive stock options. For the periods ended March 29, 1997 and March 30, 1996, no effect has been given to outstanding options since the effect was not material.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This Management's Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements that involve risks and uncertainties. The Company's actual results could differ materially from those anticipated in these forward-looking statements.
NET SALES
Net sales at restaurants owned by the Company increased 61.1% in the 13-week period ended March 29, 1997 from the comparable period ended March 30, 1996 and increased 26.0% in the 26-week period ended March 29, 1997 from the comparable period last year. The increase in sales for the 13-week and 26-week periods ended March 29, 1997 was primarily due to sales of $9,577,000 from the food and beverage operations in the New York New York Hotel & Casino resort in Las Vegas all of which were realized in the 13-week period ended March 29, 1997. At such facilities the Company operates a 450 seat, twenty four hour a day restaurant (America); a 160 seat steak house (Gallagher's); a 120 seat Mexican restaurant (Gonzalez y Gonzalez), the resorts room service, banquet facilities and an employee dining facility. The Company also operates a complex of nine smaller eateries (Village Eateries) in the resort which simulate the experience of walking through New York's Little Italy and Greenwich Village.
The increase in sales for the 13-week and 26-week periods ended March 29, 1997 were offset to a minor extent by the sale of one restaurant in fiscal 1996 (the Whale's Tail) and three restaurants in fiscal 1997 (Museum Cafe, Rodeo Bar & Grill and Mackinac Bar & Grill). Same store sales in the 13-week period ended March 29, 1997 increased by 6.4% and same store sales in the 26-week period increased by 2.5% principally due to increased customer counts.
COSTS AND EXPENSES
The Company's cost of sales consists of food and beverage costs at restaurants owned by the Company. For the 13-week period ended March 29, 1997 cost of sales as a percentage of net sales was 28.6% as compared to 27.8% last year and cost of sales as a percentage of net sales for the 26-week period was 28.4% as compared to 27.7% last year. The increase in cost of sales as a percentage of food and beverage costs is due to higher cost of sales associated with the Company's food and beverage operations in the New York New York Hotel & Casino resort in Las Vegas as compared to the Company's other restaurants. The Company believes that the higher cost of sales in Las Vegas is in part due to inefficiencies typically encountered with new facilities and that such cost of sales will improve in the upcoming fiscal quarters in comparison to 13-week period ended March 29, 1997.
Operating expenses of the Company, consisting of restaurant payroll, occupancy and other expenses at restaurants owned by the Company, as a percentage of net sales, were 74.2% for the 13-week period ended March 29, 1997 as compared to 82.0% last year and for the 26-week period ended March 29, 1997 were 72.9% as compared to 74.5% last year . The decrease in operating expenses as a percentage of net sales in the 13-week period ended March 29, 1997 was principally due to benefits achieved from the 6.4% increase in same store sales and from the sale of four restaurants in fiscal 1997 and fiscal 1996 which had operated at a loss in the comparable period ended March 30, 1996. Occupancy expenses as a percentage of net sales for the 13-week period ended March 29, 1997 decreased to 13.5% of net sales as compared to 16.5% last year principally due to lower occupancy costs associated with the Company's Las Vegas restaurant facilities.
General and administrative expenses, as a percentage of net sales, were 6.4% for the 13-week period ended March 29, 1997 as compared to 7.9% last year and for the 26-week period ended March 29, 1997 were 7.0% as compared to 6.5% last year. If net sales at managed restaurants and bars were included in consolidated net sales, general and administrative expenses as a percentage of net sales would have been 5.7% for the 13-week period ended March 29, 1997 as compared to 6.9% last year and would have been 6.1% for the 26-week period ended March 29, 1997 as compared to 5.7% last year. The decrease in general and administrative expenses as a percentage of net sales for the 13-week period ended March 29, 1997 was principally due to the 61.1% increase in sales which exceeded the 29.6% increase in general and administrative expenses. For the 26-week period ended March 29, 1997, general and administrative expenses increased in corporate payroll, marketing, travel and other categories in connection with the anticipated January 1997 opening of the Company's Las Vegas restaurant facilities.
The Company had a net loss of $1,108,000 for the 13-week period ended March 29, 1997 as compared to a net loss of $1,029,000 last year and had a net loss of $1,661,000 for the 26-week period ended March 29, 1997 as compared to $1,004,000 last year. The results for the 13-week period ended March 29, 1997, were impacted by approximately $700,000 in pre-opening expenses and early operating losses at the Company's Las Vegas restaurant facilities and results for the 26-week period ended March 29, 1997 were impacted by approximately $2,000,000 in pre-opening and early operating losses at the Company's Las Vegas restaurant facilities. The Las Vegas restaurant facilities have been profitable since February 1997.
During the 13-week period ended March 29, 1997 the Company managed six restaurants and two corporate dining facilities owned by third parties. Net sales of the managed locations were $2,862,000 during the 13-week period ended March 29, 1997 as compared to $2,249,000 last year and net sales for the 26-week period ended March 29, 1997 were $6,133,000 as compared to $4,943,000 last year. These increases were principally due to the addition of two management agreements. Net sales of these operations are not included in consolidated net sales.
INCOME TAXES
The provision (benefit) for income taxes reflects Federal income taxes calculated on a consolidated basis and state and local income taxes calculated by each subsidiary on a non consolidated basis. Most of the restaurants owned or managed by the Company are owned or managed by a separate subsidiary. For state and local income tax purposes, the losses incurred by a subsidiary may only be used to offset that subsidiary's income, with the exception of the restaurants which operate in the District of Columbia. Accordingly, the Company's overall effective income tax rate has varied depending on the level of the losses incurred at individual subsidiaries.
As a result of the enactment of the Revenue Reconciliation Act of 1993, the Company is entitled, to a tax credit based on the amount of FICA taxes paid by the Company with respect to the tip income of restaurant service personnel. The Company estimates that this credit will be in excess of $400,000 for the current year.
LIQUIDITY AND SOURCES OF CAPITAL
The Company's primary source of capital is cash provided by operations and funds available from the $12,000,000 revolving credit agreement with its main bank. The Company utilizes capital primarily to fund the cost of developing and opening new restaurants and acquiring existing restaurants.
The Company's Revolving Credit and Term Loan facility with its main bank includes a $7,000,000 facility for use in construction of and as working capital for the Company's recently opened Las Vegas restaurant facilities and a $5,000,000 facility for working capital purposes at the Company's other restaurants. The two facilities each have two year terms enabling the Company to borrow until March 1998 at which time outstanding loans may be converted into two year term loans. The $7,000,000 facility will convert into a two year loan amortizing $6,000,000 over the two year period with the balance of $1,000,000 paid at maturity and the $5,000,000 facility will convert into a two year self-amortizing term loan. At March 29, 1997 the Company had borrowings of $7,750,000 outstanding under those facilities.
In January 1997,pursuant to a new equipment financing facility, the Company borrowed from its main bank $2,851,000 at an interest rate of 8.75% to refinance the purchase of various restaurant equipment at the Las Vegas restaurant facilities. The note, which is payable in 60 equal monthly installments through January 2002, is secured by such restaurant equipment.
The net cash used in investing activities for the 26-week period ended March 29, 1997 ($9,258,000) was principally due to capital expenditures for the Las Vegas restaurant facilities.
The net cash provided by financing activities for the 26-week period ended March 29 includes net proceeds of $6,029,000 from the private placement in December 1996 of 551,454 shares of its common stock at $11 per share. The funds were used to repay a portion of the Company's outstanding borrowings on its Revolving Credit and Term Loan Facility and for the payment of capital expenditures on the Las Vegas restaurant facilities.
At March 29, 1997, the Company had a working capital deficit of $421,000 as compared to a working capital deficit of $1,304,000 at September 28, 1996. The restaurant business does not require the maintenance of significant inventories or receivables, thus the Company is able to operate with minimal and even negative working capital.
The Company also has a four year $1,300,000 Letter of Credit Facility with its main bank for use in lieu of lease security deposits. At March 29, 1997 the Company had delivered $1,075,000 in irrevocable letters of credit on this facility.
The amount of indebtedness that may be incurred by the Company is limited by the revolving credit agreement with its main bank. Certain provisions of the agreement may impair the Company's ability to borrow funds.
RESTAURANT EXPANSION
The Company has a lease for a new facility in the World Financial Center in downtown New York City. The Company expects to incur approximately $700,000 in capital expenditures and other pre-opening
expenses in connection with the opening of this restaurant. This restaurant, which will have approximately 150 seats, is scheduled to open in the third fiscal quarter of 1997.
The Company is exploring additional opportunities for expansion of its business. However, the Company is not currently committed to any other projects. The Company is not proceeding with a previously announced agreement in principle to manage certain restaurants at hotel and casino facilities in Primm, Nevada. The Company expects to fund its existing projects through cash from operations and existing credit facilities. Additional expansion may require additional external financing.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
A lawsuit was commenced against the Company in April 1997 in the District Court for Clark County, Nevada by one former employee and one current employee of the Company's Las Vegas subsidiary alleging that (i) the Company forced food service personnel at the Company's Las Vegas restaurant facilities to pay a portion of their tips back to the Company in violation of Nevada law and (ii) the Company failed to timely pay wages to terminated employees. The action was brought as a class action on behalf of all similarly situated employees. The Company believes that the first allegation is entirely without merit and that the Company will have no liability. The Company also believes that its liability, if any, from an adverse result in connection with the second allegation would be inconsequential. The Company intends to vigorously defend against these claims.
In addition, several unfair labor practice charges have been filed against the Company before the National Labor Relations Board with respect to the Company's Las Vegas subsidiary. The Company believes that these unfair labor practice charges and the litigation described above are part of an ongoing campaign by the Culinary Workers Union which is seeking to represent employees at the Company's Las Vegas restaurants. However, rather than pursue the normal election process pursuant to which employees are given the freedom to choose whether they should be represented by a union, a process which the Company supports, the Company believes the union is seeking to achieve recognition as the bargaining agent for such employees through a campaign directed not at the Company's employees but at the Company itself and its stockholders. The Company intends to continue to support the right of its employees to decide such matters and to oppose the efforts of the Culinary Workers Union to circumvent that process.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company held its annual meeting of shareholders on March 18, 1997. The following matters were submitted to a vote of the Company's shareholders:
(i) The election of eight directors;
(ii) The approval of an amendment to the Company's 1996 Stock Option Plan (the "Plan") to increase the maximum number of shares of the Company's Common Stock, $.01 par value per share (the "Common Stock") available for issuance under the Plan from 135,000 to 270,000;
(iii) The approval of an amendment to the Company's certificate of incorporation that will authorize the Company to issue up to 1,000,000 shares of preferred stock to be issued from time to time in such amounts and designations as authorized by the Board of Directors; and
(iv) The ratification of the appointment of Deloitte & Touche LLP as independent auditors for the 1997 fiscal year.
The Company's shareholders re-elected the entire Board of Directors consisting of Ernest Bogen, Michael Weinstein, Vincent Pascal, Robert Towers, Andrew Kuruc, Paul Gordon, Donald D. Shack, and Jay Galin.
The Company's shareholders approved the amendment to the Plan to increase the maximum number of shares of the Company's Common Stock available for issuance under the Plan from 135,000 to 270,000 shares by a vote of 2,969,495 for, 239,415 against and 128,850 abstaining.
The Company's shareholders approved the amendment to the Company's certificate of incorporation thereby authorizing the Company to issue up to 1,000,000 shares of preferred
stock to be issued from time to time in cash amounts and designations as authorized by the Board of Directors by a vote of 1,996,758 for, 460,838 against and 1,350 abstaining.
The Company's shareholders ratified the Board of Director's appointment of Deloitte & Touche LLP as the Company's independent auditors for the 1997 fiscal year by a vote of 3,347,180 for, 500 against and 751 abstaining.
ITEM 6. EXHIBITS AND REPORTS OF FORM 8-K
(A) EXHIBITS:
3.1 Certificate of Incorporation of the Registrant, filed on January 4, 1983, incorporated by reference to Exhibit 3.1 to the Registrant's Annual Report on Form 10-K for the fiscal year ended October 1, 1994 (the "1994 10-K").
3.2 Certificate of Amendment of the Certificate of Incorporation
of the Registrant filed on October 11, 1985, incorporated by
reference to Exhibit 3.2 to the 1994 10-K.
3.3 Certificate of Amendment of the Certificate of Incorporation
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of the Registrant filed on July 21, 1988, incorporated by reference to Exhibit 3.3 to the 1994 10-K.
*3.4 Certificate of Amendment of the Certificate of Incorporation of the Registrant filed on May 13, 1997.
3.5 By-Laws of the Registrant, incorporated by reference to Exhibit 3.4 to the 1994 10-K.
10.1 Amended and Restated Redemption Agreement dated June 29, 1993 between the Registrant and Michael Weinstein, incorporated by reference to Exhibit 10.1 to the 1994 10-K.
10.2 Form of Indemnification Agreement entered into between the Registrant and each of Michael Weinstein, Ernest Bogen, Vincent Pascal, Robert Towers, Jay Galin, Andrew Kuruc and Donald D. Shack, incorporated by reference to Exhibit 10.2 to the 1994 10-K.
10.3 Ark Restaurants Corp. Amended Stock Option Plan, incorporated by reference to Exhibit 10.3 to the 1994 10-K.
10.4 Second Amended and Restated Credit Agreement dated as of March 5, 1996 between the Company and Bank Leumi Trust Company of New York, incorporated by reference to Exhibit 10.52 to the Registrant's Quarterly Report
on Form 10-Q for the quarterly period ended March 30, 1996 (the "March 1996 10-Q").
10.5 Ark Restaurants Corp. 1996 Stock Option Plan, incorporated by reference to Exhibit 4.1 to the Registrant's Registration Statement on Form S-8 filed with the Commission on April 17, 1997 (Registration Number 333-25363).
(b) REPORTS ON FORM 8-K:
None
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: May 13, 1997
ARK RESTAURANTS CORP.
By /S/ Michael Weinstein
---------------------------------------
Michael Weinstein, President
By /S/ Andrew B. Kuruc
---------------------------------------
Andrew B. Kuruc
Vice President, Controller and
Principal Accounting Officer
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EXHIBIT INDEX
Number Description
3.1 Certificate of Incorporation of the
Registrant, filed on January 4, 1983,
incorporated by reference to Exhibit 3.1 to
the Registrant's Annual Report on Form 10-K
for the fiscal year ended October 1, 1994
(the "1994 10-K").
3.2 Certificate of Amendment of the Certificate
of Incorporation of the Registrant filed on
October 11, 1985, incorporated by reference
to Exhibit 3.2 to the 1994 10-K.
3.3 Certificate of Amendment of the Certificate
of Incorporation of the Registrant filed on
July 21, 1988, incorporated by reference to
Exhibit 3.3 to the 1994 10-K.
3.4 Certificate of Amendment of the Certificate
of Incorporation of the Registrant filed on
May 13, 1997.
3.5 By-Laws of the Registrant, incorporated by
reference to Exhibit 3.4 to the 1994 10-K.
10.1 Amended and Restated Redemption Agreement
dated June 29, 1993 between the Registrant
and Michael Weinstein, incorporated by
reference to Exhibit 10.1 to the 1994 10-K.
10.2 Form of Indemnification Agreement entered
into between the Registrant and each of
Michael Weinstein, Ernest Bogen, Vincent
Pascal, Robert Towers, Jay Galin, Andrew
Kuruc and Donald D. Shack, incorporated by
reference to Exhibit 10.2 to the 1994 10-K.
10.3 Ark Restaurants Corp. Amended Stock Option
Plan, incorporated by reference to Exhibit
10.3 to the 1994 10-K.
10.4 Second Amended and Restated Credit Agreement
dated as of March 5, 1996 between the
Company and Bank Leumi Trust Company of New
York, incorporated by reference to Exhibit
10.52 to the Registrant's Quarterly Report
on Form 10-Q for the quarterly period ended
March 30, 1996 (the "March 1996 10-Q").
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10.5 Ark Restaurants Corp. 1996 Stock Option Plan, incorporated by reference to Exhibit 4.1 to the Registrant's Registration Statement on Form S-8 filed with the Commision on April 17, 1997 (Registration Number 333-25363).
EXHIBIT 3.4
CERTIFICATE OF AMENDMENT
OF THE
CERTIFICATE OF INCORPORATION
OF
THE REGISTRANT
CERTIFICATE OF AMENDMENT
OF THE
CERTIFICATE OF INCORPORATION
OF
ARK RESTAURANTS CORP.
UNDER SECTION 805 OF THE BUSINESS CORPORATION LAW
The undersigned, being the President and Secretary, respectively, of ARK RESTAURANTS CORP., do hereby certify:
1. The name of the corporation is ARK RESTAURANTS CORP. (the "Corporation"), and the name under which the corporation was formed was Ark Management Corp.
2. The Certificate of Incorporation of the Corporation was filed by the Department of State on January 4, 1983.
3. Paragraph 4 of the Certificate of Incorporation is hereby amended pursuant to Section 801 of the Business Corporation Law to authorize the Corporation to issue up to one million (1,000,000) shares of preferred stock, with a par value of $.01 per share (the "Preferred Stock"), to be issued from time to time in such amounts and designations as authorized by the Board of Directors.
4. To accomplish the foregoing amendment, Paragraph 4 of the Certificate of Incorporation which refers to the authorized capital of the Corporation is hereby deleted in its entirety and the following new Paragraph 4 is substituted in lieu thereof:
The total number of all classes of stock which the Corporation shall have authority to issue shall be eleven million (11,000,000), of which ten million (10,000,000) shares shall be Common Stock, with a par value of $.01 per share, and one million (1,000,000) shares shall be Preferred Stock, with a par value of $.01 per share.
The designations and the powers, preferences and rights, and the qualifications, limitations or restrictions, of each class of stock of the Corporation shall be the same in all respects, as though shares of one class, except as follows:
(i) Issuance
a. Authority is hereby expressly granted to and vested in the Board of Directors of the Corporation to provide for the issue of the Preferred Stock in one or more series and in connection therewith to fix by resolutions providing for the issue of such series of the number of shares to be included in such series and the designations and such voting powers, full or limited, or no voting powers, and such of the preferences and relative, participating, operational or other special rights, and the qualifications, limitations or restrictions thereof, of such series of the Preferred Stock which are not fixed by this Certificate of Amendment to the Certificate of Incorporation, to the full extent now or hereafter permitted by the laws of the State of New York. Without limiting the generality of the grant of authority contained in the preceding sentence, the Board of Directors is authorized to determine any or all of the following, and the shares of each series may vary from the shares of any other series in any or all of the following aspects:
(1) The number of shares of such series (which may subsequently be increased, except as otherwise provided by the resolutions of the Board of Directors providing for the issue of such series, or decreased to a number not less than the number of shares then outstanding) and the distinctive designations thereof;
(2) The dividend rights, if any, of such series, the dividend preferences, if any, as between such series and any other class or series of stock, whether and the extent to which shares of such series shall be entitled to participate in dividends with shares of any other series or class of stock, whether and the extent to which dividends on such series shall be cumulative, and any limitations, restrictions or conditions on the payment of such dividends;
(3) The time or times during which, the price or prices at which, and any other terms or conditions on which the shares of such series may be redeemed, if redeemable;
(4) The rights of such series, and the preferences, if any, as between such series and any other class or series of stock, in the event of any voluntary or involuntary liquidation, dissolution or winding-up of the Corporation,
and whether and the extent to which shares of any such series shall be entitled to participate in such event with any other class or series of stock;
(5) The voting powers, if any, in addition to the voting powers prescribed by law of shares of such series, and the terms of exercise of such voting powers;
(6) Whether shares of such series shall be convertible into or exchangeable for shares of any other series or class of stock, or any other securities, and the terms and conditions, if any, applicable to such right; and
(7) The terms and conditions, if any, of any purchase, retirement or sinking fund which may be provided for the shares of such series.
b. Except as otherwise provided by law, the Board of Directors shall have full authority to issue, at any time and from time to time, shares of the Corporation's Common Stock in any manner and amount and for such consideration as it, in its absolute discretion, shall determine.
(ii) Voting Rights
Except as otherwise expressly required by law, in all matters as to which the vote or consent of stockholders of the Corporation shall be required to be taken, the holders of the shares of the Common Stock shall be entitled to one vote for each share of such stock held by them. Except as otherwise expressly required by law, in all matters as to which the vote or consent of stockholders of the Corporation shall be required to be taken, the holders of the Preferred Stock shall have such voting rights as may be determined from time to time by the Board of Directors, by resolution or resolutions providing for the issuance of such Preferred Stock or any series thereof.
(iii) Conversion
a. The Board of Directors of the Corporation, by the resolution adopted for the purpose of establishing any series of Preferred Stock, may fix and determine the ratios and the terms and conditions under which such series of Preferred Stock may or shall be converted into shares of another series of Preferred Stock or shares of any other class of stock of the Corporation.
b. No fractional shares shall be issued upon any conversion pursuant to this Paragraph 4. In lieu thereof, the Corporation shall (1) pay to the holders otherwise entitled to fractional shares cash, equal to the market value thereof as at the date of conversion, such market value to be determined in good faith by the Board of Directors of the Corporation, or (2) issue and deliver to them scrip or warrants which shall entitle the holder thereof to receive a certificate for a full share upon surrender of such scrip or warrants aggregating a full share, such scrip or warrants to be in such form and to contain such provisions as shall be determined by the Board of Directors of the Corporation. Upon conversion, no allowance or adjustment shall be made with respect to shares of Preferred Stock for cash dividends declared but unpaid on such stock.
(iv) Dividends
a. The holders of the Preferred Stock shall be entitled to fixed dividends when and as declared and at the rates determined by the resolution of the Board of Directors which establishes the series to which the rates shall apply. Said resolution may determine whether the said dividends shall be cumulative, the time fixed for payment thereof, and whether the said dividends shall be set aside or paid before, on a par with, or only after, the dividends shall be set aside or paid on the Common Stock.
b. The holders of Common Stock shall be entitled to receive, as and when declared and made payable by the Board of Directors, and after all dividends, current and accrued, shall have been paid or declared and set apart for payment upon the Preferred Stock, to the extent the Board of Directors shall have directed the dividends on Preferred Stock to be paid, or declared and set apart for payment before the payment or setting apart of dividends on the Common Stock, such dividend as may be declared by the Board of Directors from time to time. Each share of Common Stock shall in all ways be treated equally in respect of dividends.
(v) Liquidation or Dissolution
a. The Board of Directors, by the resolution which establishes a series of Preferred Stock, shall determine a fixed liquidation amount applicable to said series. Said resolution may determine (1) that said series shall participate in any distribution on liquidation, dissolution or winding-up of the affairs of the Corporation before the payment, in full or in part, of the fixed liquidation amounts payable with respect to the Common Stock; (2) that said series shall participate in any distribution on liquidation, dissolution or winding-up of the affairs of the Corporation, ratably with the Common Stock (or any other series of Preferred Stock having liquidation rights on a par with the Common Stock) in proportion to amounts equal to the fixed liquidation amounts of the shares participating plus dividends thereon which have been declared and are unpaid; or (3) that said shares shall participate in any distribution on liquidation, dissolution or winding-up of the affairs of the Corporation only after the payment, in full or in part, of the fixed liquidation amounts plus dividends thereon which have been declared and are unpaid on the Common Stock (and any series of Preferred Stock having liquidation rights on a par with the Common Stock). Said shares shall have liquidation preferences and rights as determined in said resolution or resolutions.
b. In the event of liquidation or dissolution, the holders of the Common Stock shall be entitled to receive out of the assets of the Corporation, after payment of debts and liabilities, a pro rata distribution in proportion to the respective number of shares of Common Stock held by each of them; provided, however, (1) in the event the Board of Directors of the Corporation establishes one or more series of Preferred Stock entitled to a distribution on liquidation, dissolution or winding-up of the affairs of the Corporation before any such distribution shall be made with respect to the Common Stock, such liquidation preference in favor of the Preferred Stock shall be paid before the liquidation amount payable to the holders of Common Stock pursuant to this subparagraph b. shall be paid; and (2) in the event the Board of Directors of the Corporation establishes one or more series of Preferred Stock entitled to participate ratably with holders of shares of the Common Stock in any distribution on liquidation, dissolution or winding-up of the affairs of the Corporation, the holders of the Common Stock shall participate ratably with each said series of Preferred Stock so entitled as set forth in subparagraph a. (2) above.
5. The foregoing amendment to the Certificate of Incorporation was authorized by the unanimous written consent of the Board of Directors of the Corporation dated January 15, 1997, followed by the favorable vote of holders of a majority of all outstanding shares entitled to vote thereon of a meeting of shareholders held on March 18, 1997.
IN WITNESS WHEREOF, we have duly executed this Certificate of Amendment and affirm that the statements contained herein are true under the penalties of perjury this 9th of May, 1997.
s/ Michael Weinstein -------------------------------------- Michael Weinstein, President s/ Vincent Pascal -------------------------------------- Vincent Pascal, Secretary |
| ARTICLE 5 |
| This schedule contains summary financial information extracted from the balance sheet and income statement for the 26 weeks of Ark Restaurants Corp. and is qualified in its entirety by reference to such financial statements |
| MULTIPLIER: 1000 |
| PERIOD TYPE | 6 MOS |
| FISCAL YEAR END | SEP 27 1997 |
| PERIOD START | SEP 29 1996 |
| PERIOD END | MAR 29 1997 |
| CASH | 451 |
| SECURITIES | 0 |
| RECEIVABLES | 2,369 |
| ALLOWANCES | 0 |
| INVENTORY | 1,276 |
| CURRENT ASSETS | 7,823 |
| PP&E | 39,962 |
| DEPRECIATION | 12,557 |
| TOTAL ASSETS | 43,098 |
| CURRENT LIABILITIES | 8,244 |
| BONDS | 12,250 |
| COMMON | 52 |
| PREFERRED MANDATORY | 0 |
| PREFERRED | 0 |
| OTHER SE | 22,186 |
| TOTAL LIABILITY AND EQUITY | 43,098 |
| SALES | 43,054 |
| TOTAL REVENUES | 43,054 |
| CGS | 12,210 |
| TOTAL COSTS | 12,210 |
| OTHER EXPENSES | 34,409 |
| LOSS PROVISION | 0 |
| INTEREST EXPENSE | 238 |
| INCOME PRETAX | (2,768) |
| INCOME TAX | (1,107) |
| INCOME CONTINUING | (1,661) |
| DISCONTINUED | 0 |
| EXTRAORDINARY | 0 |
| CHANGES | 0 |
| NET INCOME | (1,661) |
| EPS PRIMARY | (.46) |
| EPS DILUTED | (.46) |