Ark Restaurants (NASDAQ:ARKR) reported fiscal Q2 2006 results on May 16. Fellow Fool Rich Smith was expecting (or rather, hoping for) some profits. However, according to generally accepted accounting principles (GAAP), Ark reported a net loss of $151,000 on $25.6 million revenue, compared with net income of $554,000 last year on $24.2 million revenue.

The company operates several restaurants and fast food concepts in New York City, Washington, D.C., Atlantic City, Las Vegas, and Florida. It also provides room service for the New York-New York casino hotel in Las Vegas. Many of Ark's locations are found in casinos in Las Vegas and Florida and include two brand-new locations at the large Foxwoods casino in Connecticut.

If one only looked at continuing operations from these locations, though, which seems valid because these are the sources of income going forward, income would have been $415,000 (not including stock-option expenses) for the quarter, compared with $267,000 last year. (A gain from the sale of a restaurant increased net income last year.) This is not according to generally accepted accounting principles, though, so investors must live with a net loss this last quarter -- the first since the December 2002 quarter.

Same-store sales, a bugaboo of this small company (the market cap is just over $100 million), continues to plague it. The Las Vegas locations, contributing 64.5% of total revenue, had a decrease of 1.3%, largely driven by a 14.6% drop in the Venetian Casino Resort location. New York City locations increased by 10.1% over last quarter, while Washington, D.C. operations slipped by 0.7%. The Florida locations are managed, not operated, by the company, and Ark receives a management fee of 5% of gross receipts. To make the list complete, comps increased by 16% in the Sunshine State.

From an investing viewpoint, it's an interesting little company. It has been divesting losing locations over the past couple of years. Currently, it's in negotiations to resolve the Venetian location, and it has allied itself with several casinos around the country. Because of this, management feels the company is somewhat insulated from downturns in the economy. I tend to agree with it, since gambling, as I noted a while back, is one addiction that humans derive a great deal of pleasure from and are not likely to give up too readily.

While the stock has not exactly grown like crazy, tending to rise for a while and then plateau for a while, Ark might be a company to delve further into. If it can get a handle on more consistent same-store sales growth, finish ridding itself of its losing sites, and then slowly expand its relationships with casino operators while exploring other destination locations, it could prove to be an interesting long-term hold. And of course, the dividend yield of 4.6% will make waiting through any plateaus or downturns a bit more pleasant. However, if you do decide to buy, be sure to use limit orders on this thinly traded stock -- an average of only 1,400 shares changing hands daily is the norm.

Related Foolishness:

Check out our suite of investing newsletters with a 30-day free trial to the newsletter service of your choice.

Fool contributor Jim Mueller is eager to go on a road trip to field test the various locations of Ark and also play at some of those casinos. He does not own shares in this company. The Fool is very strict about disclosure.