Ark Restaurants Corp. (ARKR) CEO Michael Weinstein on Q2 2022 Results - Earnings Call Transcript

May 17, 2022 2:29 PM ETArk Restaurants Corp. (ARKR)
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Ark Restaurants Corp. (NASDAQ:ARKR) Q2 2022 Earnings Conference Call May 17, 2022 11:00 AM ET

Company Participants

Chris Lowe - Secretary

Michael Weinstein - Chairman and Chief Executive Officer

Anthony Sirica - President and Chief Financial Officer

Conference Call Participants

Sandy Mehta - Evaluate Research

Jeffrey Kaminski - JJK Consulting

Roger Lipton - Lipton Financial Services

Peter Katz - WIS Direct

Operator

Greetings. Welcome to Ark Restaurants’ Second Quarter 2022 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 will now turn the conference over to Chris Lowe, Secretary for Ark Restaurants. Thank you, you may begin.

Chris Lowe

Operator, good morning and thank you for joining us on our conference call for the second quarter ended April 2nd 2022. My name is Christopher Lowe and I’m the Secretary of Ark Restaurants. With me on the call today is Michael Weinstein, our Chairman and CEO; Anthony Sirica, our President and Chief Financial Officer; and Vinny Pascal, our Chief Operating Officer.

For those of you 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 home page at www.arkrestaurants.com.

Before we begin, however, I'd like to read the safe harbor statement. I need to remind everyone that part of our discussion this morning will include forward-looking statements and that these statements are not guarantees of future performance, and therefore, undue reliance should not be placed on them.

We refer everyone to our filings with the Securities and Exchange Commission for a more detailed discussion of the risks that may have a direct bearing on our operating results, performance and financial condition.

I'll now turn the call over to Michael.

Michael Weinstein

Hi, everybody. Before I, sort of, review the business, I think it's a good idea with Anthony, reviews of balance sheet.

Anthony Sirica

Thanks, Michael. Yes, we had a great quarter as everyone saw in the press release, better than we expected. Our balance sheet at the end of the second quarter remains really strong. We have close to $19 million of cash, we've collected since the end of the quarter our carryback claims on our accounts receivable, on our -- tax carry back, so that was $2.1 million those are collected subsequent to the end of the quarter.

All of our long-life and intangible assets, we've reviewed for impairment. We don't have any indicators of impairment. Our debt is down to $28.5 million from $32.6 million at year-end. We had $1.1 million of forgiveness of PPP loans in the quarter, which is we saw in the P&L of the $28.5 million of debt, $2.6 million is remaining PPP loans of which we expect $1.7 million to be forgiven and approximately 900,000 to be repaid, when we get the final forgiveness decisions based on the paperwork that we submitted. Other than that there's not a lot of changes on the balance sheet, it remains strong. Other than the fact that we did really well, it's pretty uneventful quarter as far as unusual transactions.

I'll turn it over to Michael.

Michael Weinstein

Thanks, Anthony. If Anthony gave you the $19 million cash figure, which was at the end of the quarter. Presently, today we have approximately $28 million cash on our balance sheet. And that is --

Anthony Sirica

Before float that’s --

Michael Weinstein

Before float.

Anthony Sirica

Yes.

Michael Weinstein

So, our net debt is pretty much zero at this point. Business in general, during the quarter, we -- the business was surprisingly strong in Las Vegas and Florida more than we had projected. What you should know about this quarter, which I think is interesting is that New York City and Sequoia in Washington, D.C. lost combined $1.4 million during the quarter, so the fact that we were profitable, but despite the poor performance of the two Northeast locations, New York City and Sequoia just shows you the inherent strength that we witnessed in Las Vegas, Alabama and Florida.

The main points, that I think we want to talk about is the dividend calculation. We resumed our dividend, which you saw in the announcement. Basically we extended a projection to the end of fiscal 2023, which is September 2023. And said, if you know things go according to what we're projecting this is the amount of cash that will have on our balance sheet after paying debt, after an acquisition that we are projecting we may do the payment of debt, payment of taxes, payment of interest. And we decided that conservatively we can resume our dividend payments and still not encroach on any things we want to do in terms of expanding the business.

The Meadowlands we become with what New York City is doing in terms of downstate casinos, we become constantly more confident that within the next two to three years will have a casino license at the Meadowlands. There are conversations going on that makes us feel that we're on the right path to getting that, so we're looking forward to that possibility.

Leases at New York-New York Hotel & Casino, which come due at the end of this year, we have signed -- there are three major leases in the hotel -- between the hotel and us, we have signed and New York-New York is executing one of those leases, we have signed and awaiting for New York-New York to execute the second lease, all of these leases require the reach to sign off on it. So there’s some period of time from the time we executed until the time we get all the proper parties to sign on the lease. That's what's happening with the America lease, but we’ve signed it and we expect to get that back in executed form by New York-New York in the next couple of days.

And actually, last night, we just got the third lease to review, which we haven't had time to review yet, but so all -- one leases, including the executed, another lease is about to be executed, and we have the paper work on the Thursday. So we are certainly feeling that those leases are essentially complete and gives us a lot of runway to continue our operations within the New York-New York casino.

Area by area just to repeat Vegas is extremely strong, we’re seeing -- we are I've been watching carefully conference by retailers in general, about what's happening to their business, but with interest rates going up and recession predicted and inflation on the consumers balance sheet, groceries across more gas prices. We're not seeing that in our location in Vegas. We're certainly not seeing it in New York, which I'll get to in a second. And we weren't seeing it in Florida or Alabama as of last week.

Last week, may have been one of the best weeks this company ever had in terms of sales. We are beginning to see a seasonal fall off in Florida at our full service locations, we are not seeing that at the two Hard Rock locations, where we do fast food. We've seen a dramatic pickup in New York and Washington D.C. and in part driven by a very strong event calendar, which is in May and June to give you -- but for instance, Bryant Park, which was struggling throughout the early part of this year due to 200,000, 300,000 a week, that our facilities and Bryant Park today of 100,000 last week, a lot of that driven by events and we have a calendar that is fall to the end of June. Sequoia is seeing the same thing, a lot of events on their calendar. So we expect the momentum of cash flow and earnings to continue through the June quarter, we should have an extremely strong June quarter.

So with that I hope, I've sort of covered the high points, so please if you would have any questions let’s go.

Question-and-Answer Session

Operator

Thank you. [Operator Instructions] Our first question is from Sandy Mehta with Evaluate Research. Please proceed.

Sandy Mehta

Yes. So good morning and congratulations on a strong revenue quarter, you talked a little bit about a possible acquisition now that your balance sheet has strengthened considerably. Are you still able to see deals at 3 times or 4 times cash flow? And what size acquisition may you contemplate? Thank you.

Michael Weinstein

Sandy, thank you. So the balance sheet is strong enough to do anything that we think we could absorb. The answer is we are seeing deals. There, they don't come across the desk every week maybe every three or four months. We see something that's worthwhile looking at. The minimum threshold is we don't want to do anything with the cash flow generated by operations is less than a million dollars. They have to be well established restaurants, we've been very fortunate here, our acquisitions of Rustic, Sequoia, JB's, Blue Moon, the 2 Oyster Houses in Alabama. Management is the same as the day we bought them, we've had very little it's not none of our key employees have left other than for retirement purposes. But all the key people have remained with us. We are looking at deals where we can expect that same result where key management will stay.

Seriously looking right now at one possibility and yes, it will come as 3 time, 4 times operating profit. There are others that we look at that are little more expensive than that, I don't think we want to reach beyond 3 times or 4 times. And I think they are available, we are unique, I believe in that, but if you're a seller and you have a good property and you go locally, but you're likely to find a buyer, who will put down a third and give you notes over eight years that's always we spend the format that restaurants is sold under. If you're standing there as an independent the big brands with much better balance sheets then we do don't want you, because it doesn't extend the brand unless they feel your brand is worth multiplying, but we’re there with the balance sheet, we’ll pay all the cash, we're not interested whether or not we think we can expand the brand. But we are only interested in your cash flow and trying to make you more efficient. Once we acquire you, so that's our business now quite honestly and so far we've been successful at that business.

Sandy Mehta

Great, thank you so much.

Michael Weinstein

My pleasure.

Operator

Our next question is from Jeffrey Kaminski with JJK Consulting. Please proceed.

Jeffrey Kaminski

Good morning, Michael and team, congratulations on another strong quarter. Mike on last quarter and some conversations that we've had, you discuss the pressures in terms of cost of food and inflation, we all see the headlines and all that prices are still going up, so I'm sure that continues to impact performance and pricing to the restaurants. Maybe you can discuss that a little bit?

But secondarily, one thing that I'm unclear on is the labor situation, I know that you folks and the whole for hospitality industry, probably more than just hospitality industry is facing labor shortages and difficulty finding servers and bus boys and the like. Could you talk about that a little bit as well? Thanks.

Michael Weinstein

Yes. So, sometimes the results are good. I feel that the business is managing us rather than us managing the business. We are dealing with chaos all the time, it sort of unpredictable in terms of food costs or other services that we buy, which one is going up the most, you know, next week. We've had lots of discussions with King Crab Legs here, you know, we start $1 million worth of King Crab legs for Rustic Inn, I'm repeating myself and we made a purchase that we thought was a same purchase and we were looking at costs that had more than doubled over a year, and it looked like they were going higher, they did go higher. And then all of the sudden they dropped. So not that was stuck with an inventory that we've overpaid for it, but the -- it's just unpredictable, there’s no stability in these markets with prices.

So in that regard within -- with chaos. Our cost of goods is definitely up. You know, most of our restaurants, if you get a Mother's Day prices go up right before Mother's Day or Valentine's Day, because there seems to be some elements of [Technical Difficulty]. But my managers and -- are buying apartment are doing the best they can, it's just a little bit unpredictable what you're going to be paying for certain things. So that gives you some idea of what's going on. I'll talk about in a minute, we have over -- I think the major brands in terms of purchasing.

Labor is still the problem, we are paying a significant amount of over time in these restaurants, because everybody is working double shifts. We still can open one of our restaurants, seven days a week. The -- I wouldn’t say the situation is desperate, because we seem to be getting good service and customers seem to be happy. The amount we're paying in over time is sort of offset by the fact that we have few people in our kitchens and hourly pay people as opposed to tip pay people, both of which are in shortage. We're operating these kitchens with fewer people. There are fewer people on the floor, there are fewer hostesses in some cases, fewer managers. But everybody is working really, really hard and I've said this in the past the results that we're having has to do with a very loyal labor for us that is going to work and working 14-hour days instead of eight hour days, it's extraordinary the loyalty we have in this company.

The -- so how do we offset this? Wild fluctuations on the upside and commodities and over time. Well, obviously we raised menu prices, we think and I've had this discussion with other investors, who invested in places like Cheesecake Factory and other large chains. When I look at the Cheesecake Factories research reports about how they are handling menu prices, they are not going location by location and saying, we can raise prices in Akron, because the demand and the customer is different than La Jolla, California. They are just saying, well, we're trying -- we raise menu prices 3% this year as opposed to 2% last year and that's across the board.

What we're dealing with a multitude of different concepts with different customers. At each concept, so there are places we feel very comfortable where we could get 7%, 8%, 9% raise, which we did and there are places where we said, you know, I'm not so sure that's the number may be it should be 3%, 4%, and maybe it should be on everything, because we're really looking at the items that sell the most, it's not going to be worthwhile to raise something that you sell two of the day, you're looking to raise prices on something to sell 100 of the day at restaurant.

So we're small enough that we've had the flexibility to look at every single item on every menu in each of our restaurants and say, hey, we think we can get more for this. And we're also looking at what the plate looks like, outstanding kitchen as we're pricing these things and say, hey, I know, the product is good to the chef, but this place doesn't look like it's worth more. How do we make it look like it's worth more? Do we put another vegetable on it or whatever. So we’re finessing these things as best we can to try to get the revenues to where we can support the chaos in food and labor costs. So that's how we're dealing with it.

Jeffrey Kaminski

Thank you.

Operator

Our next question is from Jason Walters, a Private Investor. Please proceed.

Unidentified Analyst

Good morning, guys. Great quarter. Had a question about the Meadowlands, Michael, I know you touched upon this in the past to some degree, but if you could just provide some color on what just roughly speaking what the financial impact of a casino license at the Meadowlands might look like in relation to the Company's business? And then --

Michael Weinstein

You go ahead.

Unidentified Analyst

Well, and then secondarily, I was just going to ask whether there is any tentative plans in motion about getting a referendum ready to go in New Jersey. I just wondered whether there is anything in motion on that?

Michael Weinstein

Okay, so let me answer that the best I can without getting everybody too excited. So the last referendum, which took place three or four years ago was designed to sale. The legislative body in New Jersey was basically accommodating Christie's promise to investigate the possibility of putting a casino [Technical Difficulty] and that referendum was worded in a way where it didn't say with casino would be, it didn't say who is putting up the money for the casino, within say it may sound by the way, is it the State had to put money into it. And it didn't say what the tax rate was going to be or be specific of that how it's going to be used.

So there was no location, there was no specific information that would help the voter to decide. We did pull them at that time and we were prepared to do put it not weeks, the group that owns the Meadowlands and prepared -- that includes Hard Rock and includes real estate developers and hedge fund in California that makes casino in non-California, in Canada that makes casino investments call clear vest. And we were prepared to do a significant marketing campaign to try to educate the public on why this was important and it was important to the State, which is always had financial problems and in that Atlantic City had declined substantially and the amount of tax revenue the State is getting from Atlantic City was less than 50% of what has been five years before that time when this referendum came up.

Right now the Meadowlands last month, if my memory is correct and it should be. We did 65% of the sports betting that took place in the State either in-person, which is called retail at the Meadowlands or over the Internet. But I think we were the only profitable entity handling these sports betting in the State, which than means the Atlantic’s casinos -- Atlantic City casinos actually were unable to make a profit on their sports betting enterprises last month. I think we made $4 million last month FanDuel is our partner, so there are -- we do with FanDuel essentially is that the expenses that FanDuel encourage running to sports betting for us come out of the take first and then we split 50-50 with FanDuel. And essentially although we can’t show it, because it's K1 income that's not distributed. We can only show what was distributed, but essentially last year again before New York started with sports betting, but last year the value of the sports betting enterprise, the Meadowlands to Ark given our percentage of ownership was about $1 million of which Anthony, if I'm correct they have distributed $200,000 for tax payments, is that correct.

Anthony Sirica

And we -- there was another distribution this quarter. So for the year, it's about $350,000.

Michael Weinstein

$350,000, so we’re seeing roughly one-third of the -- of our share that hits our P&L. So Murphy has had conversations with Jeff Gural and others that -- he's very much favor of a casino and he is focused on the Meadowlands, why the Meadowlands? Well, first of all, there is no community around the Meadowlands, that residential community there is a lot of acreage in the Meadowlands, so community losses are unlikely.

Secondly, much like what's happened historically with casinos and other areas of the country. The licenses have gone to places where there's already betting of some sort and those we likely racetracks, hey we on the racetrack. The third reason honestly, is all the environmental studies and everything needed to support the construction of casino elsewhere on vacant land would take several years. We already have a building, we have plans to expand that building, Hard Rock is our partner, they would operate it. Hard Rock has been unusually successful in the casino operations, in hotel operations.

So what we are likely to propose to the State is not only a casino, but a new 1,000 room hotel and convention center, which we are prepared to fund without any help from the State. So we think that's what the State wants, we think the State wants New York is well on its way to not issuing these licenses, but implementing the licenses meaning revenue coming from the State sounds -- downstate locations and to New York State's coffers. We think that, that referendum will be quick to be passed by the Senate and the legislature in New Jersey. We think that timetables about two years. We are doing polling, we are starting a polling process in the next couple of weeks to try to figure out how we should be marketing that referendum, if it is asked by the legislature. So we are in the works of pointing toward getting a casino license. I think it's going to be successful, if I had confidence five years ago when we made this investment my confidence has consistently risen primarily, because Atlantic City is over, it's really over and a new gleaming casino on the Hill, I think it's what the State to look forward to. So I hope that answers your question.

Unidentified Analyst

Yes, if I could just follow-up really quickly, Michael, I just didn't know if maybe you could comment on what the financial impact would be? I know we're talking about very rough numbers in [Multiple Speakers] color on that.

Michael Weinstein

The only thing I would say is, first of all, as you know we have an exclusive on all food and beverage with the exception of a carve out by Hard Rock for one Hard Rock Café, but all food and beverage operations in casino at the Meadowlands would belong to us. How we would finance it, certainly our written deal, our contract between us and the Meadowlands and again remember we're partial owner of the New Meadowlands LLC. So we are sort of dealing with ourselves, but with certainty to minority partner there. But that requires an investment by the New Meadowlands in terms of tenant improvement money, which we’ll have to be negotiated, but it would be a big investment for us to do the eight or nine restaurants and all the bars. But I think those projections would be a positive enough that we would be able to finance it pretty easily between our balance sheet and maybe bank loans or may be bringing other investors. But I'm not too concerned, if there is a license issue about that.

On the other side, what is casino worth in terms of cash flow? I could tell you in conversation that when we were first looking for a partner, because the original referendum that was done way back that referendum also required any casino in the North to have an operating partner that had a casino in Atlantic City. So we had conversations with MGM and their projection at that time was that the prior to paying any taxes to the State that they thought a casino of a certain size, which is bigger than the current footprint of the racetrack, but if casino with certain size that they thought could easily do $500 million a year in cash flow. So whatever that means to us, it would be a significant, significant alteration of our projected EBITDA.

But I've said this in the past, I don't think it ever gets to that. My guess is we are a minority partner to casinos that’s being run by Hard Rock, I think we won't get to see that cash flow, I think that probably be strategy on the part of Hard Rock in terms of just our ownership in the casino, not our ownership with restaurants, but in terms of our ownership in the casino to buy a side of that minority stake. That would be my guess, I never had a conversation with him now on it, Hard Rock about that is -- it’s a projection way into the future. But they behave that way in terms of the Hollywood in Tampa casinos when they built them, they bought out the minority partners, and I would expect that, that would be their preferred transaction. So anyway that's as much as I really know at this point.

Unidentified Analyst

Thank you.

Operator

Our next question is from Robert Punt, a Private Investor. Please proceed.

Unidentified Analyst

Hey, guys, congratulations on the quarter and it's good to be a shareholder again. Can you tell me, is it a safe assumption to presume that moving forward generally speaking, you guys are going to be moving capital out of the Northeast down to the Gulf Coast area?

Michael Weinstein

So I -- first of all moving capital added in Northeast, the real answer is not putting any more capitals in the Northeast. We're not going to sell anything that we own in New York and how those restaurants that we have prior to the pandemic and recently been very, very good investments and strong cash flows and we expect that to continue. Gulf Coast is not necessarily the answer, but the -- we’ll go -- what we've learned over the years is how to manage restaurants that were not close to. So we managed Gulf Coast and then literally from New York between the two planes we have to catch and the drive to get there that used to be nine hours. So we have strong management controls that allow us to do this, either with Zoom calls or just, you know, just being in touch. We do visit these properties, we want to taste the food, we want to look at the facilities to make sure they’re maintained, but that's probably once every four months.

Florida is a little bit easier from New York, so we're down there more frequently. Las Vegas, we've always had strong management in Las Vegas. The guy that runs that Paul Gordon been with us for 36-years and when he says he has a problem, I'll get on a plane or Vinny Pascal will get on a plane and we’ll go out there, because we know when he says he as a real problem, it’s a real problem. But if we're not hearing from him, we know that the maintenance is good, we know the operation is going well. He's been very effective for 25-years in Vegas now and there is no reason why that management team going forward won't be as affected.

So we can do this anywhere, it really depends upon the economics of the deal. Again our preference is to buy operating restaurants that own the land on the Netham, where we can purchase the two is a package or to purchase restaurants that have our institutional in nature will run that have long leases with landlords, who we trust, so that's our preference. The reason not to be in New York is we have a very progressive legislature in New York through circumstance, I will discuss them as socialist and their [Technical Difficulty] are getting to be such that is very, very difficult to operate restaurants in New York profitable. So we would not look at anything in New York, unless the mood of the legislature, the response to the legislature to restaurants needs change dramatically.

Unidentified Analyst

Okay, well thank you very much for that detailed explanation there. And then you'll forgive me, but there's a couple of minutes late for the call. But is there any news on the renewal of the Las Vegas leases?

Michael Weinstein

Yes, we said we've executed two leases, one, we've got back from New York-New York fully executed. The second lease which we executed, we expect to get back the executed copies in New York-New York by the end of this week, honestly. And we just received the third lease, the draft of the third lease last night. So I haven't even looked at it, but one would expect it would be -- it would mirror the term sheets and I don't and those are the three leases that are up for renewal. So I think we're just fine with all three of those leases.

Unidentified Analyst

Well, congratulations on that. And last question, kind of, a off the wall question here, but for your inventory of shellfish like lobsters, crabs stuff such as that. Do you had carry any of that is live inventory or is it all frozen or –

Michael Weinstein

This will be -- frozen. We have -- it's all in the South in Florida. We have -- we rent freezer lockers essentially, it's nearby. We also ensure the product, so -- but it's all frozen.

Unidentified Analyst

Okay, very good. Thank you and once again congratulations to you guys and all the workers at Ark on the great results and the resumption of the dividend, that means a lot to our shareholders. Thank you.

Michael Weinstein

Thank you very much.

Operator

Our next question is from [indiscernible] with RMR Capital Partners. Please proceed.

Unidentified Analyst

Yes, Hi, congratulations on a great quarter. I'm happy to finally be a shareholder here. I had two questions that were sort of go hand in hand. So the first one is with the Vegas lease renewals. Are there any stipulations in terms of renovations that have to be done? And if you know, sort of a ballpark figure of what that would cause?

And then the second question is [Multiple Speakers] yeah, on a previous call, you had mentioned something about the sale leaseback, and you can unlock about $20 million or $25 million worth of value. Right now with the Fed situation and the rates just, are going up there is an argument to be made that federal funds rate is going to go up another 400 basis points, 500 basis points that might influence or impact whatever value you can unlock out of that. Is that something you guys are considering to sort of get your value out of that before a potential recession for future acquisitions?

Michael Weinstein

So the answer to the second question is, we're not considering it. Our balance sheet is really, really strong at this point. And we expect that to continue to be strong and give us enough capital to do things that will help the company move forward with additional operating profits.

To the first question, we have projected roughly $7 million of improvements that we're going to have to make in Vegas, some of those improvements would have taken place anyway, but for the last year and in the normal course of business. But in last year and a half was not P&L to be certain that these leases will be extended, we postponed some of those improvements. So to catch up with those delayed, improvements and to move forward with what MGM has specified that we would be responsible for, we put that -- all that is about a $7 million number. Not all that will be spent in the next 12-months, I think, it's figure over a 24-month period that's the likelihood that will be spread out.

Unidentified Analyst

Got it. Thanks you.

Michael Weinstein

Okay, good. Thank you.

Operator

Our next question is from Roger Lipton with Lipton Financial Services. Please proceed.

Roger Lipton

Yes. Hi, Michael. My concerns have been adequately discussed already, so I'll talk to you soon. So thank you very much.

Michael Weinstein

Well, thank you, Roger.

Operator

And our next question is from Peter Katz with WIS Direct. Please proceed.

Peter Katz

Hi, Michael. Congratulations again. In light of your comments on the New York environment, I was just curious, are you looking to renew or continue your stay at Bryant Park? And what's going on at the Robert?

Michael Weinstein

So, Bryant Park lease renewals will come up probably the middle of next year. It's too early to discuss them now. Obviously, we want to retain that is profitable, you know, it’s been a good experience there for us. So yes, we will renew those leases. And there is enough room for us, even to absorb increased labor costs, if New York State chooses to remove the Tip credit from -- for Tip employees, that's a big issue right now. And essentially Tip employees in New York are -- the minimum wage is reduced by $5 an hour, because historically the legislature has said to pay these people are getting tips why then should you have to pay full minimum wage, but that sentiment is changing.

So if we would eliminate the tip credit some, let's say, Bryant Park that have cost us in those $700,000 a year in labor then tips. But at this point prior to the pandemic, Bryant Park could afford to continue and be profitable, despite increased labor costs by virtue of elimination of the Tip credit. There are also other changes in the labor law that are making it extremely difficult, but Bryant Park is big enough, and there is enough revenue to absorb all of that. So we would like to continue with that lease.

Robert has another 20 some odd years on the lease and so that doesn't come up for a long time. Robert has struggled dramatically even recently, because the statistic release of last month that only 8% of New York City workers are back full time, but it doesn't mean that these buildings are only 8% occupied, it means that only 8% are coming five days week. Buildings are now 30$, 40% occupied, we are in the midst of January, they were 9%, 10% occupied that's from the head, despite in, in the new Omicron virus. Robert is on the 9th floor of the Museum of Arts & Design, there the people coming into that building will greatly reduced, certainly during the pandemic, even though we were allowed to be open, social distancing when you have a 135 seats reduce the restaurant down to some 64 seats, there were no events, it’s been a struggle at Robert, it's only in the last two or three weeks that with some events being on the books and scheduled and with -- I would say, reduced concern on the part of the population that would you want to be signing that Robert that the business has picked up.

We probably have a breakeven there of $85,000 a week, we used to do $160,000 a week, we broke that $85,000 revenue barrier about three weeks ago for the first time. So it's really been difficult, but Robert is spectacular location has a very good operating lease, we have a good relationship with the Museum. So yes, we'll continue there. Rio Grande, which is the other restaurants that we operate in New York, it’s an institution. It's also struggled, but we do have outdoor seats there and we are starting to see a flow of business that allows us generally operating -- positive operating cash flow.

Peter Katz

And then aspirationally are there other markets you would like to get into in the outside of the Northeast?

Michael Weinstein

You know, maybe I should be embarrassed with this statement, but we don't look at markets. We look at deals. I don't care where the deal is, if it makes sense and has good management, good cash flow and we could buy at a multiple of cash flow that falls within our parameters, we’ll go after. Obviously we've based a lot of our new acquisitions in Southern Florida that will always probably be our top preference, but get me something in Omaha, Nebraska that I could fly within four or five hours, with good management, and good cash flow as a one-off, so that we could apply our equation -- acquisition equation to it. We’ll go to Omaha, Nebraska there to certain degree we’re becoming known as somebody, who can monetize a restaurant ownership for somebody, who wants to retire and give them a cheque, where they don't have to worry about notes in the future and they would also have confidence that their employees are going to be retained, that their management is going to be retained. And hopefully, we see opportunities to improve the cash flow.

One -- the best example, I could tell you all the six restaurants that we acquired four in Florida and the two New Gulf Coast in Alabama, all of those restaurants are throwing off more cash flow now than at the time we purchased some. And some it has to do with increased menu prices obviously and better controls and may be pent-up demand from the pandemic. But you don't take a Rustic Inn that was making -- doing cash flow about a $1.5 when we acquired it three years before the pandemic, three or four years, that the year before the pandemic did almost $4 million in cash flow.

And I will tell you, if we can get stabilization of menu prices of commodity prices there, that number is going to go higher as well. What we were able to do there with great management in place, when we bought it, great management in place, but great management that was being hampered by ownership, who is constantly pulling all the cash out that made a tight for the restaurants to operate. They couldn't take advantage of discounts, their prevails would be paid, you know, not on a timely basis, and that's generally what we see in many of these cases, the owners are living off of the restaurant, say there is a conflict between what's good for the business and we'll speak the owners. We go into the opposite, maintain this things, so it looks new all the time, get consistency in product and what comes out of the kitchen, we can get more if we can establish that consistency, that we can make the place more amenable to lights of our customers and then revenue seem to creep up.

So I think that's something we are good at. We are also very good, there aren’t many restaurant companies out there operating 1,000 seat restaurants, we now have with the outdoor cafe is open and Bryant Park, we now have some 1,300 seats operating in Bryant Park, we have 600 and some odd seats operating at Rustic, we have 1,100 seats operating at Sequoia. God knows we're doing $1 million a weeks at New York-New York, I don’t know how you can even count the seats there. But we are good at this stuff and it's not like operating Robert, which saw 135-seat restaurant, which we’re good at also. But we can operate complex facilities and teach you know when we buy those facilities or established those facilities, each of those had to be more effective added do a better job for their customers. And how to reap the benefits from doing a better job, which is what we want to say, so I am care with the operations honestly, I would just -- we had these parameters that we're going to stipulate.

Peter Katz

Thank you.

Operator

We have reached the end of our question-and-answer session. I would like to turn the conference back over to management for closing comments.

Michael Weinstein

I guess the -- what we're seeing here and we are six weeks into a 13-week quarter and June quarter. We've seen extremely strong results from the restaurants. So, I expect the June quarter to exceed our own projections and expectations. And then we'll see from there. Thank you for all getting on this call. Again if you have any questions that haven't been answered, you know, and you think of them after the call, my cellphone number 646-322-9197 you’re welcome to use it. Have a good day and speak to you in another few weeks. Bye.

Operator

Thank you. This does conclude today's conference. You may disconnect your lines at this time and thank you for your participation.

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