Greetings, and welcome to the Ark Restaurants' Second Quarter 2020 Results Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Sonal Shah, General Counsel. Thank you. You may begin.

Thank you, Operator. Good afternoon, and thank you for joining us on our conference call for the second fiscal quarter ended March 28, 2020. My name is Sonal Shah, and I'm General Counsel of Ark Restaurants. With me on the call today is Michael Weinstein, our Chairman and CEO; Vinny Pascal, our Chief Operating Officer; and Anthony's Sirica, our Chief Financial Officer. For those of you who have yet to obtain 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 its associated financial tables, please go to our homepage at www.arkrestaurants.com. Before we begin, however, I'd like to read the Safe Harbor statement. I need to remind everyone that part of our discussion this afternoon 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. I assume you've all seen the earnings release. So, let me try to explain our business right now. Whatever we reported in the past is essentially not useful other than to say that the properties we had were prior to the pandemic doing very well. We thought we would have a $16 million EBITDA to the year, the way we were going. These properties were strong properties. They'll be strong again at some point, but given that pandemic closed us everywhere, we've been slowly opening where we were allowed to open and fortunately the first places we opened were in the South, Florida and Alabama. We initially opened six restaurants in a short period of time about five weeks ago, I guess and those restaurants are doing quite well. They're obviously down from - because of social distancing and 50% capacities, their volumes are down from the same time last year. However, because of in some cases limiting menus, and certainly in every case reconfiguring payroll and schedules, they're operating more efficiently. And in some cases, the cash flow coming from the restaurants is the same as in the prior period last year. So, those six restaurants were very solid right from the beginning. If there were early losses in any restaurants, they were minor. But as of the last flash cash reports on those six restaurants, which was last week, they were all profitable. About 10 days ago, we opened Las Vegas. The first week, we essentially broke even with cash flow. We haven't seen last week's P&L yet, but I anticipate that there would be some positive cash flow from that. So those southern restaurants in Las Vegas have been better than we anticipated when we opened them up. I mean, there was fear in opening…

[Operator Instructions] First questions come from the line and [Anthony Chiarenza]. Please proceed with your questions.

Can you comment a little bit about how well customers are following the protocols and wearing masks, because I had heard stories here in New York that customers come in, they wear their masks, and they take them off, and then they start walking around all over the place in the restaurant. I know it's difficult for you to enforce, but how have you seen the customer in terms of complying with what they should be doing once they are in the restaurant?

All right, we're - personally we're not traveling to Florida or Alabama or Las Vegas right now. So, we're relying on our general managers, obviously, in the Hard Rock casinos and in New York, New York Hotel & Casino. We're not in control of that, the casinos are in control of it. When you get into our restaurants, we're in control and we're enforcing it. Obviously, people can't drink or eat with mask on, but for the most part, we are being told by our managers that most people are wearing masks. In Florida, you have a big problem in general with what's going on in Miami, we're not in Miami, we're in Broward County. Palm Beach County is reckless, we’re told. One of the problems we have is our restaurant JB's in Deerfield Beach has a restaurant next to it. We're not allowing people to sit at the bar. We're following all the guidelines, social spacing. The restaurant next door has a bar that's four people deep, you know, nobody's wearing a mask. There's no social distancing and that puts us in jeopardy because their property abuts our property. And so, we're trying to enforce everything. It's awkward to go to a customer and tell them what proper behavior is, but we're doing it. We're also doing something that most restaurants I'm told are not doing. When you come to our restaurants, you have to give us your contact number. So, in case we have an incident on a particular, we can go back to the date you ate there and contact all of those people, and say we've had an incident here, you should be tested. So, we're being very careful. Unfortunately, other people are not, and I know in Miami now they've been closing places where guidelines are not being followed, but the problem is those restaurants open two days later. So, it's difficult, it's difficult but I think in our places, we are having a lot of success.

Taking down of the number is a great idea, that's an excellent idea. And I think everybody should do that because that's one of the best ways we could battle this thing, as once we identify it, we can identify who has been in contact with people who had the virus, and then we can trace it through. I know in New York City, we've had very good success doing that, and the mayor was talking about it the other day but…

Yes right, one of the other things, which is a nuance because you learn every day. We're now querying our staff does anybody have an immunology problem? We don't want them working. We don't want them in danger. And so, what happened here as staff was on unemployment, we bring them back. We find out that somebody has an immunology problem, we don't want them to risk themselves. Nobody should have - because of the economics of their life to make the decision that they have to go to work with an immunology problem, because they need to make a living. So, we're going to subsidize those people until they can get back on unemployment. You just got to be so aware of again, the nuances of the situation, it's hard.

Yes, no I can totally understand it, and you are in the minority in terms of enforcing and everything else or whatever in terms of even in the initial phases here in New York. The stories that I've heard from different people, whatever, are just revolting. I mean, that just people don't care and they just walk around, they take off their masks, and it puts a tremendous stress on the restaurant owners, you have to fight with your customer or what are you going to do? It’s a difficult situation. Now on the cash flow side, I know you don't know what's going to happen in New York and everything else. Do you think you have enough cash to maintain yourself for another six months, another year assuming things stay - let's say to some degree a slight negative cash flow, we can't-- ?

So, I'm going to make a statement that would - you have to take it at a period in time as of this date, as of this date. All right, and it could change dramatically, all right. We have enough cash flow coming out of the restaurants that have been operating five or six weeks to cover our corporate overhead.

Fantastic right.

And that does not include PPP money. All right, that can change rapidly depending upon what happens with the pandemic. We are at risk, but I don't want to sound like we're good guys. The top four people Anthony, you may chime in, but I think the top four people at our or the top five at the corporate office were salaried and bonused at $3 million last year right, that number went down to $220,000 the minute we closed. Nobody in our business was allowed to make more than $50,000 a year. I mean, we cut everybody and every manager, I mean we have managers like Paul Gordon in Las Vegas, who makes a lot of money. He went down to $50,000. Every manager - we don't have a manager in our network that doesn't make less than 100 and you know 100 and a fraction, everybody went down to $50,000. Everybody else went down by 50%. So, we were able to crush corporate overhead until we could get these restaurants open. Now, we brought everybody back up to what Anthony 65% to 70%?

65%.

Except me, all right, I'm less than 65%, but the restaurants are - the minute they turn cash flow positive, which was immediately in the South, we brought everybody up from 70% gradually to where they're at 100% of the salary. So, these cash flows are real in the sense that they're not being subsidized by people subsidizing us.

Right.

So we're operating as if there was not a pandemic in terms of, you know, the economics of the salaries of the people in the restaurants. So these cash flows are real and we have room to move them back down again, because we're, quite honestly, very fortunate in the culture of the company and the managers who have been with us, every one of these managers for the most part, except for their recent acquisitions in the last three or four years were with us to 9/11, they were with us in 2008. This is the third time they're subsidizing the life of the business by taking salary cuts. They know that their life is tied to the success of this company. And the way their lives are going to get better, always is to bet on the company. And by betting on the company, they got to subsidize it. They're all prepared to do it. We did not hear one peep, not one. And as a matter of fact, if we didn't do it, they would volunteer to do it.

That's great. That's great. You're in the minority and it's great to hear and it's great to be a shareholder and you're approaching it from the shareholder perspective, which is wonderful. I commend you.

Thank you.

[Operator Instructions] There are no further questions at this time. I would like to turn the floor back over to management for any closing comments.

Well thank you for all attending this. We’ll keep you advised. So far things are going well. Again, there are risks out there. I don't know how to assess them obviously, but so far we're doing well. And I wish you all well and stay healthy and we'll speak to you in three months. Thank you.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a great day.