ARC Group, Inc. Provides Third Quarter 2018 Business Update; Reports 134% Increase in Revenue

JACKSONVILLE, Fla., Nov. 19, 2018 (GLOBE NEWSWIRE) -- ARC Group, Inc. (OTC: ARCK), the owner, operator and franchisor of the Dick's Wings & Grill^® and Fat Patty’s^® concepts, announced financial results for the third quarter ended September 30, 2018.

Third quarter 2018 financial highlights:

• Revenue increased 134% to approximately $2.5 million for Q3 2018 from approximately $1 million for Q3 2017.
  
• Achieved net income of $97,467, or $0.01 per share, during Q3 2018 compared to a net loss of $89, or $0.00 per share, during Q3 2017.
  
• Cash flows from operating activities were $235,787 for the nine-month period ended September 30, 2018.

Richard W. Akam, Chief Executive Officer of ARC Group, stated, “We are pleased to report that our revenues increased 134% to approximately $2.5 million for the third quarter of 2018, as we continue to grow both organically and through our recent acquisition of Fat Patty’s. During the third quarter, we acquired the Fat Patty’s franchise, which generated more than $11 million in revenue and $700,000 in net income during 2017.  In addition, we recently announced that we entered into an agreement to acquire the Tilted Kilt Pub and Eatery^®.  We expect to close this acquisition by the end of the year, which will bring our combined annualized revenue run rate to over $25 million.”

“The Fat Patty’s acquisition is consistent with our strategy of building a highly scalable and profitable organization,” stated Seenu G. Kasturi, Chairman, President and Chief Financial Officer of ARC Group.  “Notably, we completed the acquisition on very favorable terms without equity dilution to our shareholders.  Our goal is to aggressively expand the brand through the addition of new franchises.”

Mr. Kasturi continued, “We continue to demonstrate the success of our business model, which involves acquiring restaurant chains that are growing and profitable, at attractive multiples, as well as underperforming restaurant chains that can be turned around quickly.  This will provide us the opportunity to leverage our franchising, marketing, operational, logistics and financial expertise across brands, while maintaining a strict focus on driving sales, reducing costs, and expanding margins. As an example of our operational success, we increased system-wide sales of Dick’s Wings from $10 million to $22 million in just four years. Our goal is to achieve similar success with Fat Patty’s and Tilted Kilt, as well as other restaurant chains that we may acquire in the future.”

About ARC Group, Inc.  

ARC Group, Inc., headquartered in Jacksonville, Florida, is a holding company with a focus on the quick serve restaurant industry.  ARC is the owner, operator and franchisor of Dick’s Wings & Grill^®, a family-oriented restaurant chain with locations in Florida and Georgia.  Now in its 23rd year of operation, Dick’s Wings serves over 25,000 wings daily, and prides itself on its award-winning chicken wings, hog wings and duck wings spun in its signature sauces and seasonings.  ARC operates four company-owned restaurants, three company-owned concession stands, and has 17 franchised locations. ARC also owns the Fat Patty’s^® franchise, with four locations in West Virginia and Kentucky.  Fat Patty’s offers a number of specialty burgers and sandwiches, wings, appetizers, salads, wraps, and steak and chicken dinners in a family friendly, casual dining environment.

Pro Forma Financial Information

The pro forma financial information included in this press release was prepared by management for illustrative purposes only using unaudited financial information for Fat Patty’s and Tilted Kilt that was provided to ARC Group by Fat Patty’s and Tilted Kilt, respectively.  The pro forma financial information is not necessarily indicative of the financial position or results of operations that would have been realized had ARC Group completed the acquisition of Fat Patty’s and Tilted Kilt on January 1, 2018, nor is it meant to be indicative of any anticipated financial position or future results of operations that ARC Group or Tilted Kilt will experience in the event the acquisition of Tilted Kilt is completed in the future.  In addition, the pro forma financial information does not include any pro forma adjustments to reflect any operational efficiencies, cost savings or economies of scale that may be achievable, or the impact of any non-recurring charges and transaction-related costs that result directly from the proposed acquisition. Future results of operations are also subject to risks and uncertainties that could cause such results to differ materially from those reflected in the pro forma financial information.  Readers are cautioned not to place undue reliance on the pro forma financial information presented in this press release.  See “Safe Harbor Provision” below regarding forward-looking statements presented in this press release.

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, 2017 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.

Contact:

David Waldman / Natalya Rudman
Crescendo Communications, LLC
Tel: 212-671-1020
Email: arck@crescendo-ir.com

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