ARC Group, Inc. (OTC: ARCK), the owner, operator and franchisor of the award-winning Dick's Wings & Grill® concept, announced financial results for its fiscal quarter ended March 31, 2017, reporting net income of $206,077 and record revenue of $1,088,796.
The Company achieved the following financial results for its fiscal quarter ended March 31, 2017:
A reconciliation of EBITDA and adjusted EBITDA on a GAAP and non-GAAP basis is included in the table below entitled "Reconciliation of GAAP to non-GAAP Financial Measures".
"We are very pleased with our financial results for our first fiscal quarter of 2017," stated Richard W. Akam, Chief Executive Officer of ARC Group. "Our financial results and financial position improved substantially from last year, as we generated earnings of $0.03 per share on record revenue of $1,088,796. We also generated $202,493 of cash flow from operations, an improvement of more than 130% year-over-year. This put us in the best cash position that we have been in for several years."
"A significant reason for our improvement was our acquisition of Seediv in December 2016," added Seenu G. Kasturi, President and Chief Financial Officer of ARC Group. "Seediv, which owns two of our highest grossing Dick's Wings & Grill restaurants, contributed $868,476 of revenue and $118,616 of net income to ARC Group during Q1 2017. Our results were also helped by an increase in royalties from our franchisees. Excluding royalties generated by Seediv's restaurants during Q1 2016, which we ceased receiving upon acquiring Seediv, royalties increased almost 15% year-over-year."
Akam added, "We will continue to focus on growing our legacy Dick's Wings brand and capturing market share. We intend to support this growth through increases in the number of company-owned and franchised restaurants that we have. We are also evaluating acquisition opportunities that would provide us with additional brands and offer us product and geographic diversification. This multi-faceted growth strategy will be the key driver for us throughout the remainder of 2017."
Dick's Wings restaurants are family fun fooderys® where both families and sports fans can go to enjoy a unique restaurant experience from first bite to last call®. Dick's Wings offers a variety of boldly-flavored menu items highlighted by its award-winning, Buffalo, New York-style chicken wings and hog wings and its Dick's Blingz® boneless chicken wings, for which it boasts 365 mouth-watering flavors. It also offers customers a variety of fresh sandwiches, burgers, wraps, salads and signature waffle fries. Guests enjoy these menu items in an elevated sports-themed environment that includes flat screen TVs located throughout each restaurant and children's areas filled with video games and other forms of children's entertainment.
Dick's Wings is actively offering franchise opportunities in Florida, Georgia, Alabama, Louisiana, North Carolina and South Carolina. For more information about Dick's Wings exciting menu offering and locations, and for additional franchising information, please visit www.dickswingsandgrill.com.
Non-GAAP Financial Measures
The Company prepares its 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 EBITDA and non-GAAP adjusted EBITDA data 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:
"EBITDA" means earnings before income taxes, depreciation and amortization, and is comprised of net income plus interest (income) / expense and depreciation expense.
"Adjusted EBITDA" means EBITDA plus stock-based compensation expense and loss from investment in Paradise on Wings.
For further information, please refer to the Company's Quarterly Report on Form 10-Q filed with the SEC on August 4, 2017 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 the owner, operator and franchisor of the Dick's Wings & Grill concept. Now in its 20th year of operation, Dick's Wings prides itself on its award-winning chicken wings, hog wings and duck wings spun in its signature sauces and seasonings. It also offers its own proprietary line of craft beers under the name "Dick's Craft Beers". Dick's Wings has 17 restaurants in Florida and five restaurants in Georgia. It also has two concession stands at EverBank Field, home of the NFL's Jacksonville Jaguars.
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, 2016 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.