Greetings. Welcome to the Ark Restaurants Second Quarter 2019 Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded. I would now turn the conference over to your host, Sonal Shah, General Counsel. Ms. Shah, you may begin.

Thank you, Operator. Good morning, and thank you for joining us on our conference call for the second quarter ended March 30, 2019. With me on the call today is Michael Weinstein, our Chairman and CEO; and Anthony Sirica, our Chief Financial Officer. For those who have not yet obtained a copy of our press release, it was issued over the newswires yesterday and is available on our website. To review the full text of that press release, along with the associated financial tables, please go to our homepage at www.arkrestaurants.com. Before we begin, I'd like to read the Safe Harbor statement. I need to remind everyone that part of our discussion this morning will include forward-looking statements and that these statements are not guarantees of future performance, and therefore, undue reliance should not be placed on them. We refer everyone to our filings with the Securities and Exchange Commission for a more detailed discussion of the risks that may have a direct bearing on our operating results, performance, and financial condition. I'll now turn the call over to Michael.

Hi everybody. Before I get into our core business and the operating results there, I'd like to mention of two things. So first is the Meadowlands which we haven't talked much about in the past three or four quarterly conference calls, but there were significant developments tapping into Meadowlands, so I think its worthwhile passing on. Sports betting at Meadowlands has changed the economics, dynamics of the partnership. In the March quarter, sports betting and increased food and beverage business and breakeven in racing or close to breakeven in racing meant that the Meadowlands partnership of Limited Liability Corporation earned about $3.5 million. So on a dilutive basis, we own somewhere around 7.5%, 8% of that. But it's cost basis accounting which means that we really don't recognize that income until it's distributed, its K1 [ph] income, passive income of whether or not that gets distributed is up to you know General Partner, Jeff Grove and the likelihood of that money being distributed I think is fairly slim in that we are building up equity in anticipation of hopefully next year and a half, two years being granted a casino license. Again that requires a lot of movement in the state legislature – legislature, as well as both by the public for approval of that. But that money is not going to come to us. But what may come to us is the equivalent of our tax payment on that. We're anticipating that the Meadowlands on an annual basis right now is running at a positive $1million rate. So there would be recognition for us at $750,000 to $800,000 per year. In this particular year 2019, there is also going to be recognition of K-1 income for the rights that tangible [ph] and the Internet people are paid to be…

[Operator Instructions] There are no questions at this time. And I will now turn the call back over to Michael Weinstein for closing remarks. One question - one question just came through from the line of Jeffrey Kaminski, JJK Consulting. Please proceed with your question.

Hi, Michael. Good morning, guys. And congratulations on a good quarter.

Hi, Jeff.

A question regarding strategy going forward. Obviously you can't prevent or help change the weather that's going to be an unpredictable variable obviously. But in regards to your performance and minimum wage, that's not going away and likely that that is going to take place in other cities and other markets that Ark is in. So where it's a reality and it's here and it's like to continue to build momentum. So what then does Ark, what is the strategy that you guys are looking out towards to counteract that? How do you get margins back on track? Do you change menus, you change pricing, do you do more private events? I mean, is there a strategy to counteract what is clearly a movement that's not going to change in terms of a higher minimum wage?

You know, we always try to operate with some sort of an umbrella [ph] of safety. If you look at our prices at Robert for instance, we're I think 10% to 15% lower on appetizer and entrees [ph] given that you believe our quality is the same as restaurants around us. But we try to be lower. We've always tried to do that. You know, in some cases the argument has been for instance in Bryant Park, where there's always been tremendous demand, do you price - instead of pricing the front of the line you start to price the back at the box [ph]. And we've resisted that also. I think there are other factors going on in the restaurant business that makes it hard to get aggressive with pricing. Number one all the Netflix shows and HBO shows that people are staying at home and watching and delivery which has become disruptive to people leading out, you know for restaurants it's just gets disruptive. We don't use any delivery services because quite honestly when you've been charged 13%, 14%, 15% by the delivery service it leaves you with very thin margins even though it's incremental and we don't think our product travels as well as we would like and people will be disappointed. So we don't believe that we have the ability to add on to revenue by getting involved in delivery. We've increased our prices in advance because that seems to have some elasticity, but that remains to be seen. We've recently gone up 2% or 3% and it's justified. I would tell you the fight is really in New York. The argument that this will spread elsewhere, is the minimum wage for tipped employees which is the bigger of the problems, its not an issue in…

Michael…

Yeah.

The new acquisition that can be next, you're in negotiation. Is that an acquisition that includes the real estate as well?

I'm going to mention that in a second. So the plan here is to try to you know, become our own landlords. In the acquisition, the new one, its much like the Jupiter property where we have a right of first refusal on the property under us. And we think we're the logical buyer and it's a 25 year leased with you know, very modest bumps, you know, in minimum wage. But again minimum wage won't be an issue, will be in percentage rent. But we've negotiated ourselves I think into a very strong position to be the buyer of the property. I think that will take place in split order assuming this acquisition closes and basically those are the kinds of deals we're looking at. We're looking at deals where we think we can improve the margins it's because we have some degree of expertise and we can be helpful. We can be helpful to management that's been in place for a long time where they had an owner that didn't have our depth to knowledge or our commitment to making it better. I mean, when we took over Rustic, we took it from a 90 year old owner who hadn't raised prices in 10 years because it was good enough. He was making a $1.5 million a year and it was good enough. And we were looking at the prices and we say, this is nuts, nobody should have this expectation. You know, Shuckers, an 86 year old guy, beer prices were 325 for a bottle of beer on the beach. You know, the expectation of the customer was not to have to pay that. I mean, they would pay more. So you're looking at a strong performing restaurants that have room for improvement and margins. And New…

Okay. Thank you, Mike.

You're welcome.

We have reached the end of the question-and-answer session. And I will now turn the call back over to Michael Weinstein for closing remarks.

Well, thank you for attending and we'll see you next quarter.

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.