On May 16, Ark Restaurants (NASDAQ:ARKR) released Q1 2006 earnings for the period ended April 1.

  • Fully 64.5% of the quarter's revenues came from its Las Vegas locations, but those locations suffered a same-store sales decline of 1.3%.
  • Without stock-based compensation and pre-opening and early operating losses at the new Atlantic City location, net profit would have been $415,000, or $0.12 per share.
  • Discontinued operations were the main drag on income, reducing a slight profit of $14,000 to a loss of $151,000.

(Figures in thousands, except per-share data)

Income Statement Highlights

Avg. Est.

Q2 2006

Q2 2005

Change

Sales

None*

$25,592

$24,157

5.9%

Net Profit

--

($151)

$554

N/A

EPS

None*

($0.04)

$0.15

N/A

Diluted Shares

3,546

3,586

(1.1%)

*No analyst estimates

Get back to basics with a look at the income statement.

Margin Checkup

Q2 2006

Q2 2005

Change*

Gross Margin**

22.25%

22.99%

(0.74)

Operating Margin

(0.71%)

0.55%

(1.26)

Net Margin

(0.59%)

2.29%

(2.88)

*Expressed in percentage points.
 **Includes food and beverage, labor, and occupancy costs.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q2 2006

Q2 2005

Change

Cash + ST Invest.

$1,589

$560

183.8%

Receivables

$5,675

$3,670

54.6%

Inventory

$1,744

$1,660

5.1%



Liabilities

Q2 2006

Q2 2005

Change

Accounts Payable

$1,973

$2,230

(11.5%)

Long-Term Debt

$0

$0

N/A



Learn the ways of the balance sheet.

Cash Flow Highlights***

Q2 2006

Q2 2005

Change

Cash From Ops.

$1,391

$259

N/A

Capital Expenditures

$3,312

$1,594

108%

Free Cash Flow

($1,921)

($1,464)

N/A

***Through six months ending in the second quarter.

Find out why Fools always follow the money.

Related Companies:

  • Levy Restaurants and Restaurant Associates, both owned by British restaurateur Compass Group.

Related Foolishness:

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At the time of publication, Jim Mueller had no position in any company mentioned. Fool rules are here.