Ark Restaurants Corp (ARKR) 2022 Q2 法說會逐字稿

Greetings. Welcome to Ark Restaurants Second Quarter 2022 Results Conference Call. (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.

Thank you, operator. Good morning and thank you for joining us on our conference call for the second quarter ended April 2, 2022. My name is [Christopher Lowe] and I am the Secretary of Ark Restaurant.

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 newswire yesterday and it's 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.arkrestaurant.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.

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

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 carry -- tax carryback, so that was $2.1 million. Those were collected subsequent to the end of the quarter.

All of our long-lived 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 what we saw on the P&L. Of the $28.5 million of debt, $2.6 million is remaining PPP loans, of which we expect $1.7 billion to be forgiven and approximately $900,000 to be repaid when we get the final forgiveness decision 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 a pretty uneventful quarter as far as unusual transactions.

I'll turn it over to Michael.

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…

Before float. That's before…

Before float. So our net debt is pretty much 0 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 a combined $1.4 million during the quarter. So the fact that we were profitable, despite the poor performance of the 2 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 things go according to what we're projecting, this is the amount of cash that we'll have on our balance sheet after paying debt, after an acquisition that we're 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 2 to 3 years, we'll have a casino license at the Meadowlands. There are conversations going on that make 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 can't come due at the end of this year. We have signed -- there are 3 major leases in the hotel -- between the hotel owners. We have signed and New York, New York has executed one of those leases. We have signed and are waiting for New York, New York execute the second lease. All of these leases require the REITs to sign off on it. So there's some period of time from the time we execute 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 -- 2 -- 1 lease is completely executed another lease is about to be executed, and we have the paperwork on the third lease. So we're certainly feeling that those leases are essentially complete and gives us a lot of runway to continue our operations within New York, New York casino.

Area by area, just to repeat, Vegas is extremely strong. We're seeing -- we're -- I've been watching carefully comp by retailers in general about what's happening to their business. With interest rates going up and a recession predicted inflation at the time the consumers' balance sheet, groceries are costing 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 falloff in Florida at our full-service locations. We are not seeing that at the 2 Hard Rock locations where we do fast food.

We're seeing in 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 -- for instance, Bryant Park, which was struggling throughout the early part of this year to do $200,000 to $300,000 a week, that our facilities in Bryant Park to $800,000 last week.

A lot of that's driven by events and we have a calendar that is full to the end of June. Sequoia has seen 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 sort of covered the high points, please, if you would have any questions. Let's go.

(Operator Instructions) Our first question is from Sandy Mehta with Evaluate Research.

Congratulation 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 3x or 4x cash flow? And what size acquisition may you contemplate?

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. They're -- they don't come across the desk every week, maybe every 3 or 4 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 that's less than a $1 million. They have to be well-established restaurants.

We've been very fortunate here. Our acquisitions are Rustic, Sequoia, JB's, Blue Moon, the 2 Oyster Houses in Alabama, management is the same as the day we bought. We've had very little, if not none, of our key employees have left other than for retirement purposes. But all the key people have remained with us. We're looking at deals where we can expect that same result where key management will stay.

We're seriously looking right now at 1 possibility and yes, it will come at 3x to 4x operating profit. There are others that we look at that are a little more expensive than that. I don't think we want to reach beyond 3x or 4x. And I think they're available. We're unique, I believe, in that 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 1/3 and give you notes over 8 years. That's always been the format that restaurants are sold under.

If you're standing there as an independent, the big brands who have much better balance sheets than we do, don't want you because it doesn't their extended brand unless they feel your brand is worth multiplying. But where there with the balance sheet, which would pay you all cash, we're not interested whether or not we think we can expand the brand. We're 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.

Our next question is from [Jeffrey Kaminski] with JAK Consulting.

Michael and team congratulations another strong quarter. Mike, on last quarter and some conversations that we've had, you discussed the pressures in terms of cost of food and inflation. We all see the headlines and know that prices are still going up. So I'm sure that continues to impact performance and pricing for 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 in the whole hospitality industry -- probably more than just the 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?

Yes. So sometimes, the results are good. I feel the business is managing us rather than us managing the business. We're dealing that with chaos all the time. It's sort of unpredictable in terms of food cost or other services that we buy, which one is going up the most next week. We've had lots of discussions about King crab legs here. We stocked $1 million worth of King crab legs for Rustic Inn. I'm repeating myself. We made a purchase that we thought was the same purchase that we were looking at costs that had more than doubled over a year and looked like they were going higher. They did go higher and then all of a sudden, they dropped. So not that was stuck with an inventory that we've overpaid for. But the -- it's just unpredictable.

There's no stability in these markets of prices -- so in that regard, we're dealing with chaos. Our cost of goods is definitely up most of our restaurants. If you get a Mother's Day, prices go up right before Mother's Day or Valentine's Day, because this -- there seems to be some element of (inaudible). But my managers and our buying department 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 an advantage we have over, I think, the major brands in terms of purchasing. Labor is still a problem. We are paying a significant amount of overtime in these restaurants because everybody is working double shifts. We still can't open 1 of our restaurants 7 days a week. I wouldn't say the situation is desperate, because we seem to be giving good service and customers seem to be happy. The amount we're paying in overtime is sort offset by the fact that we have fewer 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, there are 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 force that is going to work and working 14-hour days instead of 8-hour days. It's extraordinary the loyalty we have in this company. The -- so how do we offset this while fluctuations on the upside in commodities and over time? Well, obviously, we raised menu prices. We think -- and I've had this discussion with other investors who invest in places like Cheesecake Factory and other large chains.

When I look at the Cheesecake Factory's research reports about how they're handling menu prices, they're not going location by location and saying, we can't raise prices in Akron because the demand and the customer is different than La Jolla, California. They're just saying, well, we're trying to -- we'll 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 a 7%, 8%, 9% raise, which we did. And there were places where we said, oh you know I'm not so sure that's the number. Maybe it should be 3%, 4%. And maybe it shouldn't 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 2 of the day, you're looking to raise prices on something you sell a 100 of the day at the 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. I'll stand in the kitchen as we're pricing these things and say, "Hey, I know the product is good for the chef, but this plate 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 as 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.

Our next question is from [Jason Walters], private investor.

I had a question about the Meadowlands. Michael, I know you've touched upon this in the past to some degree but if you could just provide some color on what the -- 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 secondarily…

You go ahead.

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

Okay. So let me answer that the best I can without getting everybody too excited. So the last referendum, which took place 3 or 4 years ago, was designed to fail. The legislative body in New Jersey was basically accommodating Christie's promise to investigate the possibility of putting a casino in the north. And that referendum was worded in a way where it didn't say where the casino would be. It didn't say who is putting up the money for the casino. It didn't say -- it made it sound by the way, as that state had to put money into it. And it didn't say what the tax rate was going to be or be specific about how it was going to be used.

So there was no location. There was no specific information that would help the voter to decide. We did polling at that time and we were prepared to put -- not linked the group that owns the Meadowlands. We're prepared -- that includes Hard Rock and includes real estate developers and the hedge fund in California that makes casino in that -- not in California, in Canada that makes Casino investments called Clairvest. 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 has always had financial problems and in that Atlanta City had declined substantially and the amount of tax revenue the state was getting from Atlantic City was less than 50% of what has been 5 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 Netherlands or over the Internet. I think we were the only profitable entity handling sports betting in the state, which means the Atlantic Casinos -- Atlantic City Casinos actually were unable to make a profit on this sports-betting enterprises last month.

I think we made $4 million last month. FanDuel is our partner. So there are -- the deal with FanDuel essentially is that the expenses that FanDuel encourage running the sports betting for race 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 K-1 income that's not distributed, we can only show what was distributed. But essentially, last year, again, before New York started with the sports betting. But last year, the value of the sports betting enterprise, the Meadowlands to Ark, given our percentage of ownership, was about a $1 million. Of which, Anthony, if I'm correct, they distributed $200,000 for tax payments. Is that correct?

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

$350,000, so we're seeing roughly 1/3 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 in 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's a lot of acreage in the Meadowlands. So community lawsuits are unlikely. Secondly, much like what's happened historically with casinos and other areas of the country, the licenses have gone to places where it's already betting of some sort and those we -- like the race tracks, hey, we own the race track.

The third reason, honestly, is all the environmental studies and everything needed to support the construction of a 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 and hotel operations.

So what we're likely to propose to the state is not only a casino, but a new 1,000-room hotel and convention center, which we're 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 -- down states locations into New York State's coffers, we think that, that referendum will be quick to be passed by the Senate and the legislature meters.

We think that timetable is about 2 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 passed by the legislature. So we are in the works of pointing toward getting casino license. I think it's going to be successful if I had confidence 5 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 gleamy casino on the Hill, I think, is what the state would look forward to. So I hope that answers your question.

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 and I don't know if you can provide any color on that.

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 Cafe, but all food and beverage operations in casino at the Meadowlands would belong to us. How we would finance it? Certainly, our written deal, or contract between us and the Meadowlands. And again, remember, we're a partial owner of the new Meadowlands Group LLC. So we're sort of dealing with ourselves, but we're certainly doing already partner there.

But that requires an investment by the New Meadowlands in terms of tenant improvement money, which will have to be negotiated. But it would be a big investment for us to do the 8 or 9 restaurants and all the bars. But I think those projections would be positive enough that we would be able to finance it pretty easily between our balance sheet and maybe bank loans or maybe bringing other investors. But I'm not too concerned if there's a license issue about that.

On the other side, what is this casino worth in terms of cash flow? I could tell you a 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 a casino of a 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're a minority partner in the casino that's being run by Hard Rock. I think we won't get to see that cash flow. I think there'll probably be strategy on the part of Hardrock. In terms of just our ownership in the casino, not our ownership of the restaurants, but in terms of our ownership in the casino, to buyer side of that minority state. That would be my guess. I never had a conversation with Jim Allen.

Hard Rock about that -- it's a projection way into the future, but they behave that way in terms of the Hollywood and Tampa casinos when they built them they bought out the minority partners. And I would expect that would be their preferred transaction. So anyway, that's as much as I really know at this point.

Our next question is from [Robert Plum], private investor.

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.

So first of all, moving capital out of the Northeast, the real answer is not putting any more capital in the Northeast. We're not going to sell anything that we own in New York and have -- those restaurants that we have had prior to the pandemic and recently been very good investments and strong cash flows. And we expect that to continue. Gulf Coast is not necessarily the answer. -- the -- we'll go -- what we've learned over the years is how to manage restaurants that we're not close to.

So we manage Gulf Coast and then literally from New York between the 2 planes we have to catch and the drive to get there. That used to be 9 hours. So we have strong management controls that allow us to do this either with Zoom calls or 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 4 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 and the guy that runs at Paul Gordon's been with us from 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 has a problems, 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's no reason why that management team going forward won't be as effective. 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 underneath them, where we can purchase the 2 as a package or to purchase restaurants that have are institutional in nature, well 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. To a certain extent, I would describe as socialist. And their labor laws are tending to be such that it's very, very difficult to operate restaurants in New York profitably. So we would not look at anything in New York unless the mood of the legislature and the response of the legislatures to restaurants' needs change dramatically.

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

Yes, we've said we've executed 2 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 from 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 -- those are the 3 leases that are up for renewal. So I think we're just fine with all 3 of those leases.

Last question kind of, off the wall question here, but your inventory of shellfish like lobsters, crab, stuff such as that. Do you carry any of that as live inventory or is it all frozen or...

It's all frozen. It's all in South in Florida. We have -- we rent freezer lockers essentially, it's nearby. We also insure the product. So -- but it's all frozen. Okay.

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

Thank you very much.

Our next question is from (inaudible) with RMR Capital Partners.

Congratulations on a great quarter. I'm happy to finally be a shareholder here. I had 2 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 cost? And then the second question is second…

Go ahead, ask second question.

Yes. 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's an argument to be made that the Federal funds rate is going to go up another 400-500 basis points, that might influence or impact whatever value you can unlock out of it. Is that something you guys are considering to sort of get your value out of that before a potential recession for future acquisitions?

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.

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 1.5 year -- in the normal course of business. But in the last 1.5 years was not being able to be certain that these leases would be extended, we postponed some of those improvements.

So to catch up with those delayed improvements and to move forward with what MGM had specified that we would be responsible for, we put that -- all that, that is $7 million number. Not all of it will be spent in the next 12 months. I think it's a figure over a 24-month period. That's the likelihood that it will be spread out.

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

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

Thank you, Roger.

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

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?

So Bryant Park is -- 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. It's a profitable. It's been a good experience there for us. So yes, we will renew those leases. And there's enough room for us even to absorb increased labor costs if New York State chooses to remove the tip credit for tipped employees, that's a big issue right now.

And essentially, tipped employees in New York are -- the minimum wage is reduced by $5 an hour because historically, the legislature has said, hey, these people are getting tips why then should you have to pay full minimum wage. That sentiment is changing. So if you would eliminate the tip credit from, let's say, Bryant Park, that would cost us some other $700,000 a year. in labor expenses.

But at this point, prior to the pandemic, Bryant Park could afford to continue to be profitable despite increased labor costs by virtue of elimination of tip credit. There were also other changes in the labor law that are making it extremely difficult. But Bryant Park is big enough and there's 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 there was statistic released 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 5 days a week.

Buildings are now 30% - 40% occupied, were in the midst of January they were 9% - 10% occupied. That's when they had the spike get in the new Omicron virus. Robert is on the 9th floor of the Museum of Art and Design, there -- the people coming into that building were greatly reduced. Certainly, during the pandemic, even though we were allowed to be open. Social distancing when you have a 135 seats, reduced the restaurant down to some 64 seats. There were no events. It's been a struggle at Robert.

It's only in the last 2 or 3 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 want to be dining at Robert, that the business has picked up. We probably have a breakeven there of $85,000 a week. We used to do a $160,000 a week. We broke that $85,000 revenue barrier about 3 weeks ago for the first time. So it's really been difficult. But Robert is a spectacular location, has a very good operating lease. We have a good relationship with the museum, so we'll continue there.

El Rio Grande, which is the other restaurants that we operate in New York, as an institution, has also struggled. But we do have outdoor seats there, and we are starting to see a flow of business that allows us to generally operating -- houses of operating cash flow.

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

Maybe I'm -- 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 with is if it makes sense, and has good management, good cash flow, and we could buy it at a multiple of cash flow that falls within our parameters, we'll go after it.

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 4 or 5 hours with good management and good cash flow and it's a one-off so that we could apply our equation -- acquisition equation to it, we'll go to Omaha, Nebraska.

To a certain degree, we're becoming known as somebody who could monetize a restaurant ownership for somebody who wants to retire and give them a check where they don't have to worry about notes in the future. And they would also have the 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.

The best example -- I could tell you, of all the 6 restaurants that we acquired, 4 in Florida and 2 in the Gulf Coast in Alabama, all of those restaurants are throwing more cash flow now than at the time we purchased them. And some of it has to do with increased menu prices, obviously, and better controls and maybe pent-up demand from the pandemic. But you don't take a Rustic Inn that was making -- doing cash flow of about a $1.5 million when we acquired it 3 years before the pandemic -- 3-4 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 -- excuse me, 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 -- great management in place. But great management that was being hampered by ownership who was constantly pulling all the cash out that made it tight for the restaurants to operate. They couldn't take advantage of discounts, their purveyors were being not on a timely basis. And that's generally what we see in many of these cases. The owners were living off of the restaurant, so there's a conflict between what's good for the business and what's good for the owners.

We go in with the opposite. Maintain these thing so that it looks now all the time, get consistency in product and what comes out of the kitchen. We can get more if we can establish that consistency, if we can make place more minimal to the likes of our customers. And then revenues seem to creep up. So I think that's something we're good at.

We're also very good -- there aren't many restaurant companies out there, operating 1,000 seat restaurants. We now have with the outdoor cafes open at Bryant Park, we now have some 1,300 seats operating in Bryant Park. We had 600-and-some-odd seats operating at Rustic. We have 1,100 seats operating at Sequoia. God knows we're doing $1 million weeks at New York, New York. I don't know how to even count the seats there.

But we're good at this stuff. And it's not like operating Robert, which is a 135-seat restaurant, which we're good at also. But we can operate complex facilities and teach -- when we buy those facilities or establish those facilities, teach those managements how to be more effective, how to do a better job for their customers and how to reap the benefits from doing a better job, which is what we want to see. So I don't care where the operation is, honestly, I just -- we had these parameters that we're going to stick with.

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.

I guess the -- what we're seeing here, and we're 6 weeks into a 13-week quarter -- the June quarter. We're seeing 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, and you think of them after the call, my cellphone number is (646) 322-9197 you're welcome to use it. Have a good day and speak to you in another few weeks. Bye.

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