8-K: Ark Restaurants Reports Second Quarter 2025 Financial Results

Ark Restaurants Corp. announces its financial results for the second quarter of 2025, showing a decrease in total revenues and adjusted EBITDA compared to the same period last year.

Summary

• Ark Restaurants Corp. reported financial results for the second quarter ended March 29, 2025.
• The company's cash and cash equivalents totaled $11,124,000, with total outstanding debt of $4,280,000 as of March 29, 2025.
• Total revenues for the 13 weeks ended March 29, 2025, were $39,725,000, compared to $42,257,000 for the same period in 2024.
• Excluding revenues from El Rio Grande and the Tampa Food Court, same-store sales increased by 0.4% for the quarter.
• Total revenues for the 26 weeks ended March 29, 2025, were $84,714,000, versus $89,743,000 for the 26 weeks ended March 30, 2024.
• The company's adjusted EBITDA for the 13 weeks ended March 29, 2025, was $(691,000) compared to $(321,000) for the same period last year.
• Net loss attributable to Ark Restaurants Corp. for the quarter was $(9,258,000), or $(2.57) per share, compared to a net loss of $(1,449,000), or $(0.40) per share, in the prior year.
• The adjusted EBITDA for the 26 weeks ended March 29, 2025, was $688,000, compared to $2,251,000 for the same period last year.
• Net loss attributable to Ark Restaurants Corp. for the 26 weeks was $(6,094,000), or $(1.69) per share, compared to a net loss of $(79,000), or $(0.02) per share, in the prior year.

Sentiment

Score: 4

Explanation: The sentiment is negative due to decreased revenues, a net loss, and uncertainty surrounding key lease renewals. However, the company does have a significant amount of cash on hand.

Positives

• The company had cash and cash equivalents of $11,124,000 as of March 29, 2025.
• Company-wide same store sales increased 0.4% for the 13 weeks ended March 29, 2025, excluding revenues related to El Rio Grande and the Tampa Food Court.
• The company recognized a gain of $140,000 related to the closure of El Rio Grande during the quarter.
• The company recognized a gain of $3,365,000 on the termination of the Tampa Food Court lease for the 26 weeks ended March 29, 2025.

Negatives

• Total revenues decreased to $39,725,000 for the 13 weeks ended March 29, 2025, from $42,257,000 for the 13 weeks ended March 30, 2024.
• The company's adjusted EBITDA for the 13 weeks ended March 29, 2025, was $(691,000).
• Net loss attributable to Ark Restaurants Corp. for the quarter was $(9,258,000), or $(2.57) per share.
• Company-wide same store sales decreased 1.0% for the 26 weeks ended March 29, 2025 as compared to the same period of the prior year.
• The company recognized a goodwill impairment charge in the amount of $3,440,000 for the 13 and 26 weeks ended March 29, 2025.
• Net loss attributable to Ark Restaurants Corp. for the 26 weeks was $(6,094,000), or $(1.69) per share.

Risks

• The company's inability to extend or renew the leases for Bryant Park Grill & Cafe and The Porch at Bryant Park on favorable terms could have a material adverse effect on its business, financial condition, and results of operations.
• The outcome of the legal proceedings related to the Bryant Park leases is uncertain.
• The company is operating the Bryant Park properties as a holdover tenant, which could lead to eviction.

Future Outlook

The company's future performance is subject to risks and uncertainties, particularly regarding the outcome of the Bryant Park lease dispute and the renewal of those leases.

Management Comments

• Management is working with outside advisors in assisting with our efforts to obtain the extensions by ensuring the RFP awards process was both fair and transparent.
• Management, after consultation with legal counsel, is unable to predict the outcome of this matter at this time.

Industry Context

The restaurant industry is highly competitive, and Ark Restaurants faces challenges in maintaining and growing its revenue and profitability.

Comparison to Industry Standards

• It is difficult to compare Ark Restaurants directly to industry standards without more detailed information on comparable companies and their performance metrics.
• However, the company's same-store sales increase of 0.4% is a key indicator of its ability to compete in the market.
• The company's EBITDA margins are lower than some of its peers, indicating potential areas for improvement.

Legal Proceedings

• The company filed a complaint in New York State Supreme Court alleging that the bid process conducted by the Landlord for the Bryant Park leases was defective.
• The company filed a motion for a preliminary injunction in Court to enjoin the Landlord from commencing legal proceedings to evict the Company from the Bryant Park Grill & Caf and The Porch at Bryant Park premises.
• The company has filed a notice of appeal of the ruling denying the motion for a preliminary injunction.
• The company also filed a motion for a preliminary injunction in the New York State Supreme Court, Appellate Division, First Department.

Stakeholder Impact

• Shareholders are impacted by the net loss and uncertainty surrounding the Bryant Park leases.
• Employees at the Bryant Park Grill & Cafe and The Porch at Bryant Park are impacted by the uncertainty surrounding the lease renewals.
• Customers of the Bryant Park Grill & Cafe and The Porch at Bryant Park may be impacted by potential changes in operators.

Next Steps

• The company will host a conference call on May 13, 2025, to review the results and discuss other topics.
• The company will continue to pursue legal options to protect its interests regarding the Bryant Park leases.
• The company will continue to operate the Bryant Park properties as a holdover tenant until a resolution is reached.

Key Dates

Keywords

financial results, Ark Restaurants, EBITDA, revenues, restaurants, leases