Robert Towers - President, Chief Operating Officer, Treasurer, Director Michael Weinstein - Chairman of the Board, Chief Executive Officer

Blaine Marter - Lead Partners Paul Taylor - Taylor Business Services

Good morning, ladies and gentlemen and thank you for standing by. Welcome to the Ark Restaurants third quarter 2008 financial results conference call. (Operator Instructions) I would now like to turn the conference over to Bob Towers, President of Ark Restaurants. Go ahead, sir.

Thanks, Mitch. Good morning and thank you for joining us on our conference call for the third fiscal quarter and nine months ended June 28, 2008. With me today on the call are Michael Weinstein, our Chief Executive Officer; Vincent Pascal, our Senior Vice President and Director; and Michael Buck, our General Counsel. For those of you who have not yet obtained a copy of our press release, it was issued over the newswire on Friday after the close of business and it is available on our website. To view it, you can just go to www.arkrestaurants.com. Before we begin, however, I would 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 upon 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 call over to Michael Weinstein, our Chief Executive Officer, who has some comments.

Hi, everybody. This was a fairly good quarter, especially good given conditions. The two things we are constantly fighting here are obviously food costs and comp sales. The comp sales were basically flat for the quarter. We have some challenges right now that are in specific venues. We are doing well in New York, which is probably helped a little bit by tourism, and I’m going to give you updated comps in a few seconds. We’re doing fairly well in Washington, D.C. We are doing badly in New Jersey. We’re in of course the casino there and Atlantic City is doing badly, both because of competition from Pennsylvania Slots as well as gas prices, I would imagine it’s affecting Atlantic City. We’re actually doing pretty well in two of our venues in Connecticut at Foxwoods Casino, and we are slower than we would like to be at the new MGM Grand in Connecticut at Foxwoods Casino but we are profitable there. We opened that just about five or six weeks ago and those numbers in my opinion, [our product] is good in terms of the whole casino and we have the exclusive on fast food there, so I think we are doing decent given the -- that that’s a destination place also affected greatly by gas prices. In Las Vegas, we are doing well, despite all you hear about Las Vegas, and we are doing particularly well because our largest venue at New York New York Hotel and Casino, and that casino floor is under renovation. And when I say renovation, there are days when you can’t even see our fast food because there are these black curtains dividing it from the casino floor, there’s jack-hammering going on and what’s really occurred is for the last few months and until the end of September, we are going to be basically in a construction site. So I think we are doing very well there. Our numbers in Venetian are strong. Just to give you an idea, for the four weeks just ended in July, we are up pretty much, you know, let’s see -- we’re up 2%. We’re flat in Las Vegas, New York we’re up 16%, Atlantic City we’re down 20%, Washington, D.C. we’re up a point, Connecticut is hard to compare because of the MGM is a new facility. Boston we’re up 4% so we’re up 2%. In Florida we’re up about 3.5%, 4% for the last four weeks. So our comp sales, while challenged, held up pretty well. We have said in the past that we have raised prices selectively on some of these menus where we have good demand. We are not raising prices where demand is soft and the price increases we are getting are something on the order of 1.5%, 2%. We are not in the process right now of raising anymore prices. We’re trying to hold our customers and we just would rather take that approach than try to keep up with the increased food costs. That’s the real challenge. I think our managers and chefs and buying departments in all venues are doing a good job. The bump in costs for the year so far is about 0.5% and for the quarter as well. So all in all, I think it’s pretty good. We’re controlling operating costs and expenses very well, G&A expenses we’re controlling pretty well. You know, the company is on sound footing. I would tell you that in my opinion, given the inventory that we have right now, the operations we are running, I think we are probably in the best shape we’ve ever been in terms of where these restaurants are. A lot are mature facilities, they are running well. Our newer facilities are on good track. Boston over the last year, we’ve made significant, significant improvements in the cost structure there. It was a restaurant we bought a little over a year ago and this -- so far for the fourth quarter we’re up 7% there. So all in all, very happy with the way the restaurants are running. We have a good cash position. I think it was a couple of days ago, I didn’t look at it this morning but as of Friday, it’s around $13.5 million, $14 million. We think it’s important to keep that money on our balance sheet right now. This marketplace is difficult for a lot of restaurants. We think there will be some wonderful opportunities, [that as in the past] we’ve been negotiating on a couple of deals that did not come to fruition but having cash on your balance sheet at this time and the history of [growth] seems to be a big plus. So we’ll continue to pay the present dividend. We have no inclination in the next couple of quarters of raising it despite our strong cash position, and that’s where we are. I’m happy to take questions.

(Operator Instructions) Our first question comes from Blaine Marter with Lead Partners. Blaine Marter - Lead Partners: Remind me what the discontinued operation was this year that lost money versus made profits last year.

Well, it did lose money. What happened is we lost our lease at the Stage Deli at the end of June, the Stage Deli being in Caesar’s at the forum shops in Las Vegas. There was a technicality. I don’t like this whole discontinued operations thing. It gets very confusing at some point but because we were offered a new lease and we refused it as opposed to if we were not offered the new lease, that operation would have just gone away and it would not appear to discontinued operations. But because we were offered a new lease and refused it, and we refused it because the rent went from $60 a foot to $250 a foot, the accountants require that in strict observance of accounting rules that that go into discontinued operations. So we pulled out of continuing operations last year the earnings from the Stage, the sales and earnings from the Stage, and from this year also. This year, the last six months, we had a rent that was substantially higher while we waited to see if -- the lease was originally supposed to end December 31st of 2007. The landlord made an accommodation where we paid a much higher rent than we were paying in 2007 the first six months of this year while we were seeking to negotiate a new lease with them, which obviously we could not do. So essentially we lost that operation. It was pulled out into discontinued. The good news is that Yolo’s, which we established at Planet Hollywood, if you know, you want to do a trade-off here. I’m not so sure that’s the right way to look at it but Yolo’s is going at an earned operating profit right now greater than that of the Stage. So fortunately, we pick up, not in this quarter so much because it will be first time profitable in the early part of May but in June and July, we have been running very, very strong numbers at Yolo’s and it seems to be building further. We think we are about three-quarters of the way there on the sales side, so that’s become a very significant earner for us. Blaine Marter - Lead Partners: Okay. All right, good. And then, as you start to budget and look at fiscal ’09, what are you thinking in terms of growth? I mean, can you grow? Or what are you looking at in terms of new development or prospects for next year?

Well, we just signed a new lease -- first of all, we have MGM Grand, which, you know, as I said went on about five weeks ago and we’re profitable. Now, we own that with investors and we get a management fee as well as a share of the cash flow. So we think that we are going to do okay there. I don’t know when they get their marketing in line. They have admitted to us that they just fired their advertising agency and they fired all of their marketing people up there. They feel that they just had not done a good job. We see a real bit of improvement the last couple of weeks. It’s amazing to me how that facility is opened and it’s largely -- you know, it’s unknown that it’s there. People know Foxwoods is there but they don’t know the MGM Grand is there yet. And despite that, we’re doing okay. So we think that’s a growth vehicle for us in terms of operating profit. We have signed a lease. It’s signed and completed and we are in the design phase for a resident of the new Museum of Art and Design, which is at Columbus Circle in Manhattan. I would tell you that we think what we’ve designed in terms of the lease is -- we’re very optimistic about it. It’s not only a restaurant; it’s also all the exclusive rights to the catering into the facility and that’s probably the hottest new cultural venue in New York and it opens -- the museum opens in September. Our restaurant will not open until next March of 2009 but the catering starts immediately and we have so many events lined up there already without even trying to market it. I mean, our sales force is just starting to take there and we are swamped with requests. So I think that could be very good for us. Other than that, we are looking at a few things but we are -- you know, we’re in the capital preservation business here. We’re in the let’s-try-not-to-make-any-mistakes business here and we don’t have our tongue hanging out for anything. We have a formal lease that we think gives us a great deal of safety on the down side if things don’t work out, but in -- I think things will come our way. This is a time where I think we should be very, very cautious. I don’t know where the world is going yet and we just want to build cash on the balance sheet and we don’t want to make any mistakes. So we’re not in a growth spurt mode. If something comes our way that is a fat softball coming across the plate, we’ll take a swing at it but nothing else. Blaine Marter - Lead Partners: Have you bought any stock under your share repurchase authorization?

You know, we have bought an insignificant amount. The rules for buying stock are very, very difficult. You can’t buy them in the first half hour, you can’t buy them in the second half hour. At the last half hour, if you want to -- you know, our shares don’t trade enough so we are limited to 25% of the 30-day average of -- it doesn’t allow us to buy much stock and we were trying to find a block. We were unsuccessful. Although a couple of blocks traded, we were not able to find anything significant. Blaine Marter - Lead Partners: Okay. I don’t know what’s more attractive than your own stock as far as what you are looking at in terms of assets. You seem to feel that things will come your way. I mean, is that the case or are you just sort of waiting?

No, we’re talking. We’re having conversations and we think something will happen here that will be good for shareholders. You know, Blaine, the question is always if you buy back your own stock, is it creating value for shareholders? Without a question, it’s creating value. Is there more value in finding something that gives you a fairly good flow of income for 10, 15 years as opposed to buying stock, buying somebody else’s operation with the cash flow is significant and recurring and reliable. That’s what we are looking for. If we can’t find it, we’ll buy more stock. And by the way, one doesn’t preclude the other. If the shares are attractive in terms of where we think they are attractive, we’ll buy more stock if it comes in.

We’re meeting with more developers and more casino operators than we’ve ever met with before, so as Michael said, the deal’s got to be correct before -- you know, first to move on. Blaine Marter - Lead Partners: Okay, but are these deals that would require capital?

Not necessarily. Blaine Marter - Lead Partners: Okay, so -- I mean, your sort of hording of cash almost borders on imprudent. I mean, nobody is asking you to leverage the company but if I can pay -- if I can pay $70 million for an enterprise that throws off between $7 million to $10 million of free cash flow a year, I don’t see that as imprudent.

I don’t think we would pay $70 million for $7 million in cash. I think we’d pay 30. Blaine Marter - Lead Partners: For another vehicle, another asset, another kind of set of assets?

Look, they are out there. People are in trouble, you know -- Blaine Marter - Lead Partners: No, I’m talking about your own stock.

Our own stock? Blaine Marter - Lead Partners: Your own debt-free enterprise that throws off $7 million to $10 million of free cash flow a year.

Right. Blaine Marter - Lead Partners: That I can buy right here for $70 million.

I understand that. It’s cheap. I’m not saying to you we’re not in the market looking for stock. What I’m saying to you, and I’m not saying to you trying to buy stock is mutually exclusive to trying to find something else to -- you know, another asset that throws off cash. You have to weigh one against the other. Blaine Marter - Lead Partners: Okay, guys. Thanks.

Our next question comes from Michael [Margulis]. Go ahead, please.

Thank you. My questions have already been answered.

(Operator Instructions) Our next question comes from Paul Taylor with Taylor Business Services. Go ahead, please. Paul Taylor - Taylor Business Services: I apologize for this -- this is just an editorial comment. You all did a great job in the quarter and based on my years of following the company, the company knows exactly what to do with its capital and the dividend is certainly proof of that. And if you choose to buy stock, that’s great. If you choose to wait, that makes me happy too. That’s all I have to say.

Thank you.

(Operator Instructions) We have no more audio questions at this time. I would like to turn the conference back over to management for any closing statements.

Thank you all very much. We’ll see you next quarter.

Ladies and gentlemen, this concludes the Ark Restaurants third quarter 2008 financial results conference call. Thank you for your participation and you may now disconnect.