JACKSONVILLE, FL / ACCESSWIRE / April 1, 2020 / ARC Group, Inc. (OTCQB:RLLY)('ARC Group'), a multi-brand restaurant operating company with a focus on diversified, full-service restaurants, announced a variety of steps that the Company has implemented in the face of the COVID-19 pandemic.
'First and foremost, we want to express our sincere concern for everyone who has been impacted by COVID-19,' stated Seenu G. Kasturi, Chief Executive Officer of ARC Group, Inc. 'The health and well-being of our employees, franchisees and guests is always our number one concern. We are following all local ordinances regarding our restaurant hours, occupancy limits and dining restrictions, and are continuing to follow the guidance of the CDC and our local health departments. My thoughts and prayers go out to everyone impacted by the spread of COVID-19.'
Conservation of Cash Resources
The Company has implemented a series of measures to conserve cash and enhance its financial flexibility, including suspending all new restaurant construction and non-essential capital expenditures. The Company has made significant reductions in ongoing operating expenses, including curtailing operations in several restaurant locations where take-out and delivery is not viable, furloughing a significant number of field and home office team members, reducing base salaries of certain non-furloughed team members and re-evaluating other operating costs as opportunities arise. Lastly, Mr. Kasturi and the other members of the executive team elected to defer a portion of their salaries to help the Company conserve cash.
The Company's ability to operate at full capacity has been impacted as state and local governments have effected ordinances to protect the public through social distancing. The Company is leveraging its take-out and delivery program in markets where sales are sufficient to cover the costs of staffing those locations. Delivery is available in those locations via third-party delivery networks. The Company is offering a streamlined menu available on each of our brands' respective websites featuring many customer favorites. The number of restaurants remaining open may change due to the fluidity of the situation and changing ordinances.
The Company has postponed the collection of royalties from all of its franchisees for a four-week period starting March 17, 2020.
'We are satisfied with the measures our brands have put in place and will continue to monitor and adapt going forward,' commented Mr. Kasturi. 'We are aware of the overall impact the decreased traffic is having on our franchisees' restaurants and that we will need to support our franchisees during this difficult period. We are hopeful that our landlords and other partners will do their part as well.'
Since early March 2020, COVID-19 has caused the Company to experience a significant decrease in its restaurant traffic, negatively impacting its numbers. 'It is too early to tell what the full impact of COVID-19 will be on our financial results for the next 12 months,' stated Mr. Kasturi. 'However, we believe that COVID-19 will have a significant negative impact on our results of operations during the next several months. We intend to apply for government assistance being afforded through the recently-enacted Coronavirus Aid, Relief and Economic Security Act and other programs, and have applied for economic injury disaster loans through the U.S. Small Business Administration to help stabilize our business. We have also had discussions with many of our largest banking institutions, suppliers and other partners to restructure our business relationships in light of the current crisis. We remain hopeful that the situation will improve in the near term and look forward to welcoming our guests back into our restaurants soon.'
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.
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SOURCE: ARC Group, Inc.
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