Robert J. Stewart - Chief Financial Officer Michael Weinstein - Chairman of the Board, Chief Executive Officer

Dean Haskell - Morgan Joseph Michael Markolis - A.G. Edwards

Good afternoon, ladies and gentlemen and thank you for standing by. Welcome to the Ark Restaurants first quarter 2008 financial results conference call. (Operator Instructions) I would now like to turn the conference over to Bob Stewart, Chief Financial Officer. Please go ahead, sir. Robert J. Stewart: Thank you, Operator. Good afternoon and thank you for joining us on our conference call for the first fiscal quarter ended December 29, 2007. With me on the call today is Michael Weinstein, our Chairman and CEO, and Michael Buck, our General Counsel. For those of you who have not yet obtained a copy of our first quarter press release, it was issued over the newswire Friday and is available on our website. To review the full text of that press release along with the associated financial tables, please go to our home page at www.arkrestaurants.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 afternoon 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 all of you 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 will now turn the phone call over to Michael Weinstein. Michael.

Hi, everybody. We had a good quarter in terms of top line. Sales were a little over $30 million versus $27.5 million last year. EBITDA, which is the number we focus on, was 2.9 this year, 3.3 last year. The main difference -- all the difference between EBITDA this year and last year came from pre-opening expenses involved in the construction of Yolos, our Mexican Grill and Lounge which is in the Planet Hollywood hotel which opened in December; expenses related to the expansion and renovation of the banquet facilities at New York-New York Hotel & Casino -- we did not have the availability of those banquet room so we were hurt on the sales side there, as well as having expenses at getting them up and running, and we were carrying some payroll during that period for that; and also because of the good year we had last year, the board of directors voted for bonuses, several hundred thousand dollars in excess of the prior year’s bonuses. So that was the basic difference in the December numbers. We ran our businesses pretty well. New York-New York, which carries the expenses of the construction of the expanded banquet facilities, had additional payroll in there and they had some expenses of smallwares and other things which we write off as incurred during that period, so their P&L did not look as good as we would like it to but there were by and large reasons for it. Our business was -- comp sales were acceptable in this environment. We are seeing some narrowing of comp sales from the September and June quarters. Obviously a lot of that has to do with the fact that we had outdoor cafes open and fully utilized for this spring and summer compared to last year, so those 10% comp sales were really pretty much the favorable comparisons of outdoor cafes this year -- this prior year compared to last year. In the December quarter when we don’t run any of those outdoor cafes, these comp sales were quite acceptable. We continue to have positive comp sales in the March quarter. We are only into the second week of February but right now we are running up about 3% company wide. Las Vegas is up 2%. New York is up 6%. New Jersey, 13%. We are running very positive in Boston, up 10%, which is great for us there. We made some price changes and menu changes in Durgin Park. Our Hollywood and Tampa Seminole Indian properties are running about even on the whole. We’re hoping to do better as Hollywood has not gotten the full Vegas treatment in terms of the slot machines and has started to install those machines and we think we’re going to see better results in Hollywood. So all in all, a pretty good picture here. I’ll take questions now, if you care to.

(Operator Instructions) Our first question comes from Dean Haskell with Morgan Joseph. Please go ahead. Dean Haskell - Morgan Joseph: Good afternoon, gentlemen. Congratulations on a good quarter in a tough environment. The Florida comps in the first quarter, how did those run?

Tampa is doing -- the two properties together, about even. Tamp is up 12%. That continues to be the stronger of the two properties right now. The Hollywood property had some competition from Gulf Stream and some of the other traps that installed machines, so that’s been down a little over 12% from last year. The big news there again is the new slot machines that -- 700 of the new type slot machines and we are starting to see some positive results from that. And we would expect -- you know, Hollywood’s had a great run. We’ve been up 20% or more compounded annually since we walked in there, so this drop with the new competition was not unexpected but now that they have these machines and nobody -- and they have exclusive on these machines, we would expect that business to come back. So all in all, pretty good. Dean Haskell - Morgan Joseph: So in the fiscal first quarter, Florida was flat and it’s flat now through the second quarter to date?

Correct. Dean Haskell - Morgan Joseph: Okay. CapEx for the first quarter to finish of Yolos?

Yolos cost us around 3.1, 3.2. We have a couple-hundred-thousand dollars in disputes with the contractor but maybe it will go to 3.25 or something like that. And it opened up pretty well on an ongoing basis right now, if payroll is where we know we can get it. You know, obviously we have excessive payroll the first few weeks. We’re into our fifth week, I believe right now. At the buying levels we have, with the rent deal we have, we’re profitable. Dean Haskell - Morgan Joseph: Okay. And you have no other units under construction, so you are building cash position, and no debt?

Correct. Dean Haskell - Morgan Joseph: Okay. The pre-opening expense on Yolos that was booked into the first quarter, was that roughly $300,000?

No, it was a couple-hundred-thousand dollars. Robert J. Stewart: $150,000.

$150,000, and then we had another $100,000 at New York-New York, give or take. Dean Haskell - Morgan Joseph: That’s the incremental payroll?

That’s the incremental payroll for the banquet rooms. Dean Haskell - Morgan Joseph: Right, and backing out the difference in cash flow between 3.2 and 2.9, and the two numbers you just gave me, means that the incremental bonuses was about $50,000 worth?

No, the incremental bonuses really about $200,000. We would have done better without these three items. Dean Haskell - Morgan Joseph: Yeah, exactly and that’s -- and those bonuses, that was $200,000 even?

Well, it’s $200,000 -- I think 228 in excess of last year. Dean Haskell - Morgan Joseph: Okay, so let’s just call it 225 and not quibble. Okay, and those bonuses were related to how well they were doing in the year?

The prior year. Dean Haskell - Morgan Joseph: The prior year, okay.

Fiscal 2007 -- our year end is September, you know, and -- but we always pay bonuses in the December month. Dean Haskell - Morgan Joseph: But they weren’t accrued and booked in ’07?

No. Dean Haskell - Morgan Joseph: Okay, and that’s --

Not the additional bonuses. What we accrued were basically what we paid out last year. Dean Haskell - Morgan Joseph: Okay, so end all, be all, it was a good quarter despite the negative comparison.

Yeah, I would say to you what is good about the business in this quarter is although we were not happy with some of the numbers out of New York-New York, which included these other expenses beyond payroll for the opening of the banquet room, we had high maintenance costs in general throughout the company. That sometimes happens to us -- everything breaks at the same time and every couple of years we hit a quarter like that where everything gets expensed into one quarter. But despite that, the top line was strong. We are very, very pleased with Durgin Park and the progress we made there. We are very pleased with the opening of Yolos and the volumes we are doing. We expect to do better but at this level, it would be a decent return on equity even if it stayed at this level. Dean Haskell - Morgan Joseph: What are those estimated revenue lines for Durgin Park and Yolos?

Durgin Park will be in excess of $5 million. Dean Haskell - Morgan Joseph: Okay.

And Yolos is a small space. We always said if we do $2.5 million to $3 million there, we’d be very, very happy but the $2.5 million to $3 million we do there, 60% of this thing is going to be liquor and what’s going to drop to the bottom line is significant. So if we did $2.5 million, $3 million, we’d be hitting $700,000 to $1 million in cash flow. You know, so we’d be very happy with that and we are knocking on the door already and it’s only going to get better. So all in all, you know, it’s a good quarter. We established in Yolos a good new business. We progressed on Durgin Park. Bryant Park has done -- you know, you have to look at where the real cash generators are and Bryant Park, which throws off a lot of cash flow, continues to improve at the sales line and at the bottom line. New York-New York, which one would think is a mature business -- you know, it’s been there 11 years -- continues to have positive comp sales despite the fact that we don’t have these extra banquet rooms and we were closed out of banquets for a good part of last year. So there’s a lot to be very, very pleased about. Dean Haskell - Morgan Joseph: Well, I appreciate you beating my margin estimates, so I’m happy with the quarter. Again, congratulations. I’ll let someone else ask questions.

Thank you so much.

(Operator Instructions) Our next question comes from Michael [Markolis] with A.G. Edwards. Please go ahead. Michael Markolis - A.G. Edwards: Mike, I came into the call late, so might have missed this, but can you give us any information or any ideas about future openings? What about the environment? Does it loan itself to expansion right now?

Well, it -- you know, I just finished writing my shareholders’ letter for the annual report and in it I said we have no inclination to expand unless everything is going in our direction. And what that means is we have to find primary locations at leases that we can easily see a tolerable risk level. And we are just sitting here waiting. We think the environment gets better for us when things get worse and we haven’t been able to do a deal in New York in six-and-a-half years because of rents and we are now seeing a lot of stores available for the first time in six-and-a-half years. It doesn’t mean rents have come down but deals are being done well below listed rents. We just hope the environment loosens up some space for us. We have a lot of conversations going on all the time. We walk away from most of those conversations saying you just can’t do a deal here, but every once in a while we do a deal. You know, the next deal is opening up at the MGM Grand at Foxwoods. We’ve got a great lease. We got a reasonable construction cost and we think we’ll do very, very well. We’ve got to find more of those deals but if we don’t, you know -- we like our balance sheet. We hold -- I keep saying this -- we hold our cash precious. It’s not going out in aggressive deals where we have to hit a triple to make money. We want to be able to get some cash flow hitting a single. And that’s our outlook. So right now, beyond MGM we have discussions going but we haven’t signed anything. We’re not even close to signing and we use that as an opportunity to work on our existing properties, most of which have very long leases left in them and if we can improve Bryant Park marginally, what drops down to the bottom line is significant, so let’s work there and not knock our brains out because we found a lease that has too high of a rent and construction costs are going to be out of line with where we need to be. That’s our attitude. Michael Markolis - A.G. Edwards: Sounds reasonable. Thank you.

We have a follow-up question from Dean Haskell. Please go ahead. Dean Haskell - Morgan Joseph: Thanks. Mike, what’s the opening date estimated for the MGM Grand at Foxwoods?

They’re saying now May 17th. Dean Haskell - Morgan Joseph: Okay, so 5-17 -- yeah, I remember it being late April, so we’ve just pushed it a few weeks.

Yeah, and they’re pretty much holding to that schedule and we’ll be ready in time. Dean Haskell - Morgan Joseph: When will you start hiring labor?

You have no idea how hard it is to find labor up there, especially with the hotel competing against you for 2,500 employees. We’ve already started looking. Dean Haskell - Morgan Joseph: Okay, and review me -- review those of us on the call, review the project for us, please?

Well, Foxwoods has signed a licensing agreement to use the MGM Grand name on the reservation and they’ve built a very modern upscale product to go along with their mid-scale product. They have gotten some good names in terms or restaurants and entertainment and it’s just going to be a property that competes directly with Mohegan Sun, which is 20 minutes away and is far more upscale than the current Foxwoods product. So they are trying to draw their share of that market, which has been pretty much Mohegan Sun’s market. Dean Haskell - Morgan Joseph: And which brands will you use in that location?

Well, you know, when we go into -- this is a fast food court. We have six locations. We use our own brands. As we’ve said to everybody, you know, when you provide us with a good location, we’re not so sure a major brand helps drive business and basically what we’ve constructed there is a marketplace. It’s fast service but it looks like a European food market, and very cacaphonous, a lot of steel and cement, you know, very colorful. We always tell everybody that our pizza place in New York-New York, the name of which I can hardly remember sometimes but it’s [Sirico’s], 600 feet that took $4.8 million last year and I think that’s probably one of the busiest pizza locations in the world per square foot. And it’s a function of good product, fair prices but really a function of a great location. So we think we have a very good location here, again a very acceptable lease and we think we should do very, very well and we don’t think Grands will drive anything into that food court. Dean Haskell - Morgan Joseph: Okay, great. And I’m a fan of the pizza in New York-New York, by the way.

Thank you. We’ll send you some. Dean Haskell - Morgan Joseph: Great. Make sure it’s on dry ice.

Gentlemen, at this time I’m showing no further questions in the queue. Please continue with your presentation.

Well, that’s about it. I mean, we’re in a tough environment not only in the top line but also cost pressure. The same things that influenced us last year on the cost side -- food cost push, fuel push -- are present today. We got a lot of people working very, very hard and trying to work their way through and around and find options. I think our food costs in the December quarter, given what’s going on and given what we hear everybody else is facing, was really, really good. I think our purchasing department, chefs, senior management are all focusing on that. We have said before and we’ll continue to say it -- we are not raising prices. We don’t think this is an environment in which we should be raising prices. We hope our customers will stick with us because we are not raising prices and so far, that seems to be the case. We’re excited about Durgin Park’s progress. We’re excited about Yolos. We’re excited about MGM but more important -- and also the new banquet rooms at the New York-New York but more important than all of that, we’re excited about our people and the effort they are making and the fact that our customers are there every day for us. So I think we’re running a pretty good business at this point. Thank you. See you next quarter.

Ladies and gentlemen, this does conclude the Ark Restaurants first quarter 2008 financial results conference call. You may now disconnect and we thank you for using the conferencing center.