JACKSONVILLE, FL / ACCESSWIRE / November 15, 2019 / ARC Group, Inc. (OTCQB:RLLY), a restaurant holding company with a focus on diversified, full-service restaurants and brands, today provided a business update for the third quarter ended September 30, 2019.
Third Quarter 2019 Financial Highlights:
- Revenue increased 71% to $4,042,644 during Q3 2019 from $2,360,064 during Q3 2018.
- Loss from operations was $421,961 for Q3 2019 compared to $463,802 during Q3 2018.
- EBITDA was $183,170 for the nine months ended September 30, 2019 compared to 245,965 for the nine months ended September 30, 2018.
- Net loss was $597,514 for Q3 2019 compared to a net income of $97,467 for Q3 2018.
- Cash flows from operating activities were $565,856 during the nine months ended September 30, 2019 compared to $235,787 during the nine months ended September 30, 2018.
A reconciliation of EBITDA on a GAAP and non-GAAP basis is included in the table below entitled 'Reconciliation of GAAP to non-GAAP Financial Measures'.
Seenu G. Kasturi, CEO of ARC Group, stated, 'I am pleased to report that our revenue was $4 million for the third quarter of 2019, an increase of 71% over the same period last year which reflects organic growth at Dick's Wings and sales generated through the Fat Patty's restaurants that we acquired in August 2018. In addition to our strong top-line growth, we continue to generate positive cash flow from operations. Although our operating expenses increased, this reflects our significant investment in the business to support the next phase of growth, including our recent acquisition of WingHouse.'
'Last month, we announced that we had acquired the WingHouse Bar & Grill® restaurant concept in Florida, providing us with 24 restaurants that generated more than $60.6 million in revenue and $3.5 million of cash flow from operating activities during 2018,' added Alex Andre, CFO and General Counsel of ARC Group. 'Importantly, this acquisition increases our combined annualized revenue run rate to over $70 million and will enable us to leverage our franchising, marketing, operational, logistics and financial expertise to drive further sales growth and cash flow across all of our brands. Overall, we believe we have built a highly scalable organization, and as we continue to drive sales, we expect to generate solid margin improvement and improved profitability.'
Complete financial results are available in the Company's Form 10-Q, which has been filed with the Securities & Exchange Commission and is available at www.sec.gov.
Non-GAAP Financial Measures
The Company prepares its condensed consolidated financial statements in accordance with United States generally accepted accounting principles ('GAAP'). In addition to disclosing financial information prepared in accordance with GAAP, this release also includes non-GAAP adjusted loss from operations and EBITDA for the periods presented. Management uses non-GAAP financial measures internally for financial and operational decision-making and as a means to evaluate period-to-period comparisons. The Company's management believes that these non-GAAP financial measures provide useful supplemental information to management and investors regarding the performance of the Company's core business operations, enhance the overall understanding of past financial performance and future prospects, and allow for greater transparency with respect to key metrics used by management in its financial and operational decision making.
These non-GAAP financial measures are not recognized measures for financial statement presentation under U.S. GAAP and do not have standardized meanings. Accordingly, they may be different from similar non-GAAP financial measures presented by other companies. These non-GAAP financial measures should only be used to evaluate the Company's results of operations in conjunction with the corresponding GAAP financial measures. Investors should consider these non-GAAP financial measures as a supplement to, and not as a substitute for, corresponding financial measures calculated in accordance with GAAP.
For the purposes of this press release, the following non-GAAP financial measures have the following meanings:
'Adjusted loss from operations' means loss from operations plus depreciation expense, amortization expense, stock based compensation expense and gain from insurance recoveries on impaired fixed assets.
'EBITDA' means net loss plus depreciation expense, amortization expense and interest expense and income taxes.
For further information, please refer to the Company's Quarterly Report on Form 10-Q filed with the SEC on November 14, 2019 and available online at www.sec.gov.
For a reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures, please see the table below entitled 'Reconciliation of GAAP to Non-GAAP Financial Measures'.
About ARC Group, Inc.
ARC Group, Inc., headquartered in Jacksonville, Florida, is a holding company with a focus on the casual dining restaurant industry. ARC is the owner, operator and franchisor of Dick's Wings & Grill®, a family-oriented restaurant franchise with four company-owned and 16 franchised restaurants located in Florida and Georgia that is now in its 25th year of operations. ARC also owns the Fat Patty's® concept with four restaurants located in West Virginia and Kentucky, and recently acquired the WingHouse Bar and Grill restaurant concept with 24 company-owned restaurants located in Florida.
Safe Harbor Provision
This press release contains 'forward-looking statements' within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, that are intended to be covered by the safe harbor created thereby. All statements other than statements of historical fact contained herein, including, without limitation, statements regarding the Company's future financial position, business strategy, plans and objectives, are forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as 'may,' 'will,' 'expects,' 'intends,' 'plans,' 'projects,' 'estimates,' 'anticipates,' or 'believes' or the negative thereof or any variation thereon or similar terminology or expressions. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from results proposed in such statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can provide no assurance that such expectations will prove to have been correct. Important factors that could cause actual results to differ materially from the Company's expectations include, but are not limited to, those factors set forth in the Company's Annual Report on Form 10-K for the year ended December 31, 2018 and its other filings and submissions with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date made. Except as required by law, the Company assumes no obligation to update or revise any forward-looking statements.
Crescendo Communications, LLC
(tables to follow)
Condensed Consolidated Balance Sheets
|September 30,||December 31,|
Cash and cash equivalents
Accounts receivable, net
Ad funds receivable, net
Notes receivable, net
Other current assets
Total current assets
Notes receivable, net of current portion
Intangible assets, net
Property and equipment, net
Operating lease right-of-use assets
Financing lease right-of-use assets, net
Liabilities and stockholders' deficit
Accounts payable and accrued expenses
Accounts payable and accrued expenses - related party
Settlement agreements payable
Accrued legal contingency
Deferred franchise fees
Operating lease liability
Financing lease liability
Notes payable - related party, net
Gift card liabilities
Total current liabilities
Deferred franchise fees, net of current portion
Operating lease liability, net of current portion
Financing lease liability net of current portion
Class A common stock - $0.01 par value: 100,000,000 shares authorized,
7,080,771 and 6,680,065 shares issued and outstanding at
September 30, 2019 and December 31, 2018, respectively
Series A convertible preferred stock - $0.01 par value: 1,000,000 shares
authorized, 449,581 outstanding at September 30, 2019 and
December 31, 2018, respectively
Series B convertible preferred stock - $0.01 par value: 2,500,000 shares
authorized, -0- outstanding at September 30, 2019 and
December 31, 2018, respectively
Additional paid-in capital
Stock subscriptions payable
Total stockholders' deficit
Total liabilities and stockholders' deficit
The accompanying notes are an integral part of these financial statements
Condensed Consolidated Statements of Operations (Unaudited)