Core Viewpoint - Ark Restaurants Corp. (ARKR) has experienced a significant stock performance fluctuation, gaining 10.6% post-earnings report while facing a monthly decline of 12.9% against the S&P 500's rise of 2.5% [1] Revenue and Earnings Performance - For the third quarter of fiscal 2025, Ark Restaurants reported revenues of $43.7 million, a decrease of 13.3% from $50.4 million year-over-year [2] - Food and beverage sales contributed to the revenue decline, falling 12.7% to $42.9 million from $49.2 million [2] - The company recorded a net loss of $3.5 million, or $0.96 per share, compared to a net income of $0.6 million, or $0.18 per share, in the previous year [2] - Adjusted EBITDA on a non-GAAP basis decreased by 46.9% to $1.8 million from $3.4 million [2] Year-to-Date Performance - For the 39-week period, revenues fell 8.4% to $128.4 million from $140.1 million, with a net loss widening to $9.5 million from a net income of $0.6 million last year [3] Segment Performance - Same-store sales declined by 7.4% in the quarter, with New York and Washington, D.C. experiencing steep declines of 20.9%, partially offset by a modest gain of 1.8% in Florida [4] - The decline in New York was attributed to lost catering and event revenues due to ongoing landlord litigation, while the D.C. downturn was linked to reduced traffic from hybrid work schedules and safety concerns [4] Cost and Expense Analysis - Food and beverage costs as a percentage of revenues increased to 27.6% from 26.4% year-over-year, reflecting higher commodity prices [5] - Payroll expenses decreased by 12.6% to $15.3 million, accounting for approximately 34.9% of revenues [5] - Occupancy expenses fell by 13% to $5.4 million, while other operating costs declined by 4.2%, impacted by legal fees related to the Bryant Park dispute [5] Non-Cash Charges - The company recorded $4.7 million in impairment charges at its Sequoia restaurant and recognized a $3.4 million goodwill impairment earlier in the fiscal year [6][9] - Despite these charges, Ark Restaurants maintained a solid balance sheet with $12.3 million in cash against $3.9 million in debt [6] Management Commentary - CEO Michael Weinstein noted that individual restaurants, excluding Bryant Park and Sequoia, are performing well, with Las Vegas properties growing cash flow despite a slowdown in visitors [7] - Management acknowledged that litigation-related costs and negative publicity continue to impact Bryant Park Grill, a significant source of revenue volatility [7] Factors Influencing Results - Ongoing legal disputes over Bryant Park Grill & Cafe have generated over $800,000 in legal expenses and negatively affected the restaurants' reputation, leading to lost bookings and weaker traffic [8] - The recognition of impairment charges at Sequoia highlighted broader challenges in the D.C. dining market, where demand has been suppressed due to hybrid work patterns and safety concerns [10] Year-over-Year Comparisons - The closure of El Rio Grande and the Tampa Food Court contributed to revenue declines, as these locations accounted for several million dollars in sales in prior periods [11] Guidance and Future Outlook - Management did not provide formal quantitative guidance but expressed a cautious outlook regarding the ongoing litigation over Bryant Park [12] - Potential upside exists from a possible Meadowlands casino license, which would allow Ark Restaurants to operate food and beverage concessions if approved [12] Other Developments - Ark Restaurants continues to operate Bryant Park Grill & Cafe while pursuing legal challenges, with these locations generating $19.7 million, or 15.4% of total revenues for the first nine months of fiscal 2025 [13] - The company completed extensions of key Las Vegas leases, committing to property refreshes slated for completion by late 2025 and early 2026 [14]

[Filing Information](index=1&type=section&id=Filing%20Information) This section provides key administrative details about the company's SEC filing, including stock registration and filer status Stock Registration Details | Title of each class | Trading symbol(s) | Name of each exchange on which registered | | :------------------ | :---------------- | :---------------------------------------- | | Common Stock, par value $.01 per share | ARKR | The NASDAQ Stock Market LLC | Filer Status Classification | Large accelerated filer | ☐ | Accelerated filer | ☐ | | :-------------------- | :-- | :---------------- | :-- | | Non-accelerated filer | ☒ | Smaller Reporting Company | ☒ | | Emerging Growth Company | ☐ | | | - As of August 8, 2025, there were **3,606,157 shares** of the registrant's common stock outstanding[5](index=5&type=chunk) [Special Note Regarding Forward-Looking Statements](index=3&type=section&id=SPECIAL%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section outlines forward-looking statements and inherent risks that could cause actual results to differ materially - The report contains forward-looking statements identified by words like "anticipates," "believes," "estimates," "expects," "intends," "plans," "predicts," "projects," "targets," "will likely result," "hopes," "will continue" or similar expressions[9](index=9&type=chunk) - Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially, including economic conditions, sales, labor costs, food product costs, weather, consumer preferences, and competition[9](index=9&type=chunk) - Key risk factors include the adverse impact of the current political climate and economic conditions (inflation) on operating results, debt compliance, and asset impairment; increases in food, beverage, supply, wage, and benefit costs; challenges in opening new restaurants; vulnerability to consumer preferences, local conditions, adverse weather, and natural disasters; lease renewal difficulties (specifically Bryant Park Grill & Cafe and The Porch at Bryant Park); negative publicity; food safety concerns; reliance on executive officers; and IT system security breaches[10](index=10&type=chunk) [Part I. Financial Information](index=5&type=section&id=Part%20I.%20Financial%20Information) This part presents the company's comprehensive financial statements and management's detailed analysis of its performance [Item 1. Consolidated Condensed Financial Statements](index=5&type=section&id=Item%201.%20Consolidated%20Condensed%20Financial%20Statements) This section presents unaudited consolidated financial statements, including balance sheets, income, equity, and cash flows [Consolidated Condensed Balance Sheets](index=5&type=section&id=Consolidated%20Condensed%20Balance%20Sheets) This section details the company's financial position, showing assets, liabilities, and equity at specific dates Consolidated Condensed Balance Sheets (In Thousands) | ASSETS | June 28, 2025 (unaudited) | September 28, 2024 (Note 1) | | :------------------------------------------ | :-------------------------- | :-------------------------- | | Cash and cash equivalents | $12,325 | $10,273 | | Total current assets | $19,942 | $18,225 | | Fixed assets - Net | $28,390 | $31,569 | | Operating lease right-of-use assets - Net | $74,863 | $84,977 | | Goodwill | $— | $3,440 | | Total Assets | $136,340 | $156,041 | | **LIABILITIES AND EQUITY** | | | | Total current liabilities | $22,709 | $28,884 | | Operating lease liabilities, less current portion | $77,427 | $83,516 | | Notes payable, less current portion, net | $2,015 | $— | | Total Liabilities | $102,151 | $112,400 | | Total Equity | $34,189 | $43,641 | | Total Liabilities and Equity | $136,340 | $156,041 | - Goodwill decreased from **$3,440 thousand** to **$0**, indicating a full impairment during the period[16](index=16&type=chunk) - Total assets decreased by **$19,701 thousand**, and total liabilities decreased by **$10,249 thousand** from September 28, 2024, to June 28, 2025[16](index=16&type=chunk) [Consolidated Condensed Statements of Operations](index=6&type=section&id=Consolidated%20Condensed%20Statements%20of%20Operations) This section details the company's financial performance, showing revenues, expenses, and net income or loss Consolidated Condensed Statements of Operations (In Thousands, Unaudited) | Item | 13 Weeks Ended June 28, 2025 | 13 Weeks Ended June 29, 2024 | 39 Weeks Ended June 28, 2025 | 39 Weeks Ended June 29, 2024 | | :------------------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total revenues | $43,715 | $50,396 | $128,428 | $140,139 | | Total costs and expenses | $47,130 | $49,572 | $130,770 | $138,914 | | Operating income (loss) | $(3,415) | $824 | $(2,342) | $1,225 | | Income (loss) before income taxes | $(3,114) | $686 | $(2,245) | $1,088 | | Provision (benefit) for income taxes | $81 | $(213) | $5,019 | $(202) | | Consolidated net income (loss) | $(3,195) | $899 | $(7,264) | $1,290 | | Net income (loss) attributable to Ark Restaurants Corp. | $(3,454) | $640 | $(9,548) | $561 | | Basic EPS | $(0.96) | $0.18 | $(2.65) | $0.16 | | Diluted EPS | $(0.96) | $0.18 | $(2.65) | $0.15 | - The Company reported a significant operating loss of **$(3,415) thousand** for the 13 weeks ended June 28, 2025, compared to an operating income of **$824 thousand** in the prior year period, a **514.4% decrease**[17](index=17&type=chunk) - For the 39 weeks ended June 28, 2025, total revenues decreased by **8.4%** to **$128,428 thousand**, and the Company incurred a net loss attributable to Ark Restaurants Corp. of **$(9,548) thousand**, a substantial decline from a net income of **$561 thousand** in the prior year[17](index=17&type=chunk) [Consolidated Condensed Statements of Changes in Equity](index=7&type=section&id=Consolidated%20Condensed%20Statements%20of%20Changes%20in%20Equity) This section tracks changes in the company's equity, reflecting net income, stock transactions, and distributions Consolidated Condensed Statements of Changes in Equity (In Thousands) | Item | Balance - September 28, 2024 | Net income (loss) | Exercise of stock options | Stock-based compensation activity | Distributions to non-controlling interests | Balance - June 28, 2025 | | :-------------------------------- | :-------------------------- | :---------------- | :------------------------ | :-------------------------------- | :--------------------------------------- | :-------------------------- | | Total Ark Restaurants Corp. Shareholders' Equity | $44,137 | $(9,548) | $21 | $60 | $— | $34,670 | | Non-controlling Interests | $(496) | $2,284 | $— | $— | $(2,269) | $(481) | | Total Equity | $43,641 | $(7,264) | $21 | $60 | $(2,269) | $34,189 | - Total Ark Restaurants Corp. shareholders' equity decreased from **$44,137 thousand** at September 28, 2024, to **$34,670 thousand** at June 28, 2025, primarily due to the net loss incurred[19](index=19&type=chunk) - For the 39 weeks ended June 29, 2024, dividends paid amounted to **$2,028 thousand**, and distributions to non-controlling interests were **$1,158 thousand**[21](index=21&type=chunk) [Consolidated Condensed Statements of Cash Flows](index=9&type=section&id=Consolidated%20Condensed%20Statements%20of%20Cash%20Flows) This section summarizes cash flows from operating, investing, and financing activities over specific periods Consolidated Condensed Statements of Cash Flows (In Thousands, Unaudited) | Item | 39 Weeks Ended June 28, 2025 | 39 Weeks Ended June 29, 2024 | | :------------------------------------------ | :-------------------------- | :-------------------------- | | Net cash provided by operating activities | $1,119 | $3,926 | | Net cash provided by (used in) investing activities | $4,662 | $(1,204) | | Net cash used in financing activities | $(3,729) | $(4,670) | | Net increase (decrease) in cash and cash equivalents | $2,052 | $(1,948) | | Cash and cash equivalents, End of period | $12,325 | $11,467 | - Net cash provided by operating activities decreased significantly from **$3,926 thousand** in 2024 to **$1,119 thousand** in 2025[22](index=22&type=chunk) - Net cash provided by investing activities saw a substantial increase to **$4,662 thousand** in 2025, primarily due to a **$5,500 thousand** payment from the termination of the Tampa Food Court lease and **$829 thousand** from condominium sales[22](index=22&type=chunk) [Notes to Consolidated Condensed Financial Statements](index=10&type=section&id=NOTES%20TO%20CONSOLIDATED%20CONDENSED%20FINANCIAL%20STATEMENTS) This section provides detailed explanations and additional information supporting the consolidated financial statements [1. Basis of Presentation and Significant Accounting Policies](index=10&type=section&id=1.%20BASIS%20OF%20PRESENTATION%20AND%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines accounting principles, presentation methods, and key factors influencing financial reporting - The financial statements are prepared in accordance with GAAP for interim financial information and SEC rules, condensing or omitting certain disclosures[23](index=23&type=chunk) - Operating results in fiscal 2025 continued to be impacted by supply chain challenges and increased commodity and wage inflation, which could lead to further shifts in consumer behavior, staffing challenges, and potential asset impairments[24](index=24&type=chunk) - The Company's business is highly seasonal, with the second fiscal quarter (January-March) typically being the poorest performing, partially offset by Florida locations; best results are generally achieved in warmer weather due to outdoor dining, but these can be affected by adverse weather[28](index=28&type=chunk) - As of June 28, 2025, the Company operates **16 restaurants and bars**, **12 fast food concepts**, and catering operations, aggregated into a single operating segment[44](index=44&type=chunk) [2. Recent Restaurant Expansion and Other Developments](index=13&type=section&id=2.%20RECENT%20RESTAURANT%20EXPANSION%20AND%20OTHER%20DEVELOPMENTS) This note details recent lease extensions, renovation commitments, and new concept openings impacting the portfolio - The Company extended its lease for America at the New York-New York Hotel and Casino in Las Vegas, NV, through December 31, 2033, with a commitment to spend a minimum of **$4,000,000** on premises refresh by December 31, 2025; approximately **$400,000** has been spent to date, with completion expected by February 28, 2026[51](index=51&type=chunk) - Leases for Village Eateries, Broadway Burger Bar and Grill, and Gonzalez y Gonzalez in Las Vegas were extended through December 31, 2034 (or 2033 for the latter two), with a **$3,500,000** refresh commitment by December 31, 2025; a new concept, Lucky Pig, opened in November 2024 at a cost of **$700,000**, and an additional **$750,000** has been spent on other refreshes[52](index=52&type=chunk) [3. Recent Restaurant Dispositions and Other Developments](index=13&type=section&id=3.%20RECENT%20RESTAURANT%20DISPOSITIONS%20AND%20OTHER%20DEVELOPMENTS) This note describes recent restaurant closures, lease terminations, and asset sales, including associated gains - El Rio Grande closed permanently on January 3, 2025; the Company recognized a gain of **$178,000** for the 13 weeks ended June 28, 2025, and **$173,000** for the 39 weeks ended June 28, 2025, due to refinements of estimates related to its closure[53](index=53&type=chunk) - The lease for the food court at The Hard Rock Hotel and Casino in Tampa, FL, was terminated on November 26, 2024; the Company received a termination payment of **$5,500,000** and recorded a net gain of **$5,235,000** during the 13 weeks ended December 28, 2024[54](index=54&type=chunk) - The Company sold two condominium units at Island Beach Resort in Jensen Beach, FL, for net proceeds of **$829,000**, recording a gain of **$391,000** during the 13 weeks ended June 28, 2025; the Company plans to sell all remaining units[55](index=55&type=chunk) [4. Investment in and Receivable from New Meadowlands Racetrack](index=14&type=section&id=4.%20INVESTMENT%20IN%20AND%20RECEIVABLE%20FROM%20NEW%20MEADOWLANDS%20RACETRACK) This note details the company's investment and loan to New Meadowlands Racetrack, including ownership and rights - The Company's total investment in New Meadowlands Racetrack LLC (NMR) reached **$5,256,000** as of May 13, 2025, with an additional **$148,000** investment made during the period[56](index=56&type=chunk) - The Company holds an effective ownership interest of **7.4%** in NMR and has the exclusive right to operate food and beverage concessions in the gaming facility if casino gaming is approved[59](index=59&type=chunk) - A loan of **$1,500,000** to Meadowlands Newmark, LLC, with **3%** compounded monthly interest, is due June 30, 2029; the principal and accrued interest totaled **$1,476,000** as of June 28, 2025[62](index=62&type=chunk) [5. Accrued Expenses and Other Current Liabilities](index=15&type=section&id=5.%20ACCRUED%20EXPENSES%20AND%20OTHER%20CURRENT%20LIABILITIES) This note provides a breakdown of short-term financial obligations, including sales tax, wages, and customer deposits Accrued Expenses and Other Current Liabilities (In Thousands) | Item | June 28, 2025 | September 28, 2024 | | :-------------------------------- | :------------ | :----------------- | | Sales tax payable | $820 | $761 | | Accrued wages and payroll related costs | $3,605 | $4,548 | | Customer advance deposits | $2,736 | $4,382 | | Accrued occupancy and other operating expenses | $3,074 | $2,354 | | Total | $10,235 | $12,045 | - Total accrued expenses and other current liabilities decreased by **$1,810 thousand** from September 28, 2024, to June 28, 2025, primarily due to decreases in accrued wages and customer advance deposits[63](index=63&type=chunk) [6. Leases](index=15&type=section&id=6.%20LEASES) This note details the company's lease agreements, including lease expenses, weighted average terms, and discount rates - The Company leases restaurant locations and its corporate office under non-cancelable real estate lease agreements expiring through **2046**, all classified as operating leases[64](index=64&type=chunk)[65](index=65&type=chunk) Components of Lease Expense (In Thousands) | Item | 13 Weeks Ended June 28, 2025 | 13 Weeks Ended June 29, 2024 | 39 Weeks Ended June 28, 2025 | 39 Weeks Ended June 29, 2024 | | :------------------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Operating lease expense - occupancy expenses | $3,289 | $3,471 | $9,964 | $10,394 | | Variable lease expense - occupancy expenses | $775 | $994 | $2,730 | $3,118 | | Total lease expense | $4,185 | $4,584 | $13,057 | $13,875 | Weighted Average Lease Terms and Discount Rates | Item | June 28, 2025 | September 28, 2024 | | :-------------------------------- | :------------ | :----------------- | | Weighted average remaining lease term | 11.1 years | 11.5 years | | Weighted average discount rate | 6.3 % | 6.3 % | [7. Notes Payable](index=16&type=section&id=7.%20NOTES%20PAYABLE) This note outlines the company's promissory notes and the terms of its credit agreement with Bank Hapoalim B.M Notes Payable (In Thousands) | Item | June 28, 2025 | September 28, 2024 | | :------------------------------------------ | :------------ | :----------------- | | Promissory Note - Rustic Inn purchase | $2,403 | $2,617 | | Promissory Note - JB's on the Beach purchase | $1,000 | $1,750 | | Promissory Note - Sequoia renovation | $456 | $800 | | Promissory Note - Blue Moon Fish Company | $— | $68 | | Total | $3,859 | $5,235 | | Less: Current maturities | $(1,742) | $(5,193) | | Long-term portion | $2,015 | $— | - The Company's Credit Agreement with Bank Hapoalim B.M. (BHBM) was extended to **June 1, 2028**, and the maximum permitted obligations were reduced from **$30,000,000** to **$20,000,000**; the minimum tangible net worth covenant increased from **$22,000,000** to **$28,000,000**, and the annual net income covenant was removed[70](index=70&type=chunk) - As of June 28, 2025, no advances were outstanding under the Credit Agreement, and the weighted average interest on outstanding BHBM indebtedness was approximately **8.0%**[70](index=70&type=chunk) [8. Commitments and Contingencies](index=17&type=section&id=8.%20COMMITMENTS%20AND%20CONTINGENCIES) This note discusses ongoing legal disputes, particularly concerning Bryant Park leases, and other potential obligations - The Company is involved in a legal dispute regarding the leases for Bryant Park Grill & Cafe and The Porch at Bryant Park, which expired on **April 30, 2025**, and **March 31, 2025**, respectively; the Landlord selected a new operator, but the Company filed a lawsuit alleging a defective bid process and age discrimination[78](index=78&type=chunk)[79](index=79&type=chunk) - The Bryant Park locations collectively accounted for **$19.7 million** (**15.4%**) and **$23.3 million** (**16.7%**) of total revenues for the 39 weeks ended June 28, 2025, and June 29, 2024, respectively; the inability to extend these leases could have a material adverse effect on the Company's business[81](index=81&type=chunk) - Management believes that the ultimate resolution of various lawsuits (accidents, workers' compensation, employment discrimination) will not have a material adverse effect on the Company's financial position[77](index=77&type=chunk) [9. Stock Options](index=18&type=section&id=9.%20STOCK%20OPTIONS) This note provides details on stock option grants, activity, and associated compensation costs for reporting periods - On December 2, 2024, options to purchase **10,000 shares** of common stock were granted at an exercise price of **$9.99 per share**, with a grant date fair value of **$2.94 per share**, totaling approximately **$29,000**[83](index=83&type=chunk) Stock Option Activity (2025) | Item | Shares | Weighted Average Exercise Price | | :-------------------------------- | :----- | :------------------------------ | | Outstanding, beginning of period | 415,750 | $17.89 | | Granted | 10,000 | $9.99 | | Exercised | (2,000) | $10.65 | | Canceled or expired | (17,000) | $18.84 | | Outstanding and expected to vest, end of period | 406,750 | $17.45 | | Exercisable, end of period | 319,875 | $18.52 | | Shares available for future grant | 360,000 | | - Compensation cost for stock-based programs was approximately **$32,000** for the 13 weeks ended June 28, 2025 (down from **$51,000** in 2024), and **$114,000** for the 39 weeks ended June 28, 2025 (down from **$196,000** in 2024)[86](index=86&type=chunk) [10. Income Taxes](index=19&type=section&id=10.%20INCOME%20TAXES) This note explains the company's income tax provision, effective tax rates, and factors influencing tax liabilities - The provision for income taxes for the 13 weeks ended June 28, 2025, was **$81,000**, with an effective tax rate of **2.6%**, differing from the federal statutory rate of **21%** due to no tax benefit on current year pre-tax operating losses[89](index=89&type=chunk) - For the 39 weeks ended June 28, 2025, the provision for income taxes was **$5,019,000**, with an effective tax rate of **223.6%**, primarily due to a discrete tax provision of **$4,799,000** as net deferred tax assets were deemed no longer realizable[89](index=89&type=chunk) - The income tax benefit for the 39 weeks ended June 29, 2024, was **($202,000)**, with an effective tax rate of **18.6%**, influenced by FICA tax credits, non-controlling interest income, and PPP Loan forgiveness[90](index=90&type=chunk) [11. Income Per Share of Common Stock](index=20&type=section&id=11.%20INCOME%20PER%20SHARE%20OF%20COMMON%20STOCK) This note reconciles shares used in calculating basic and diluted earnings per share, including dilutive securities Reconciliation of Shares Used in Calculating EPS (In Thousands) | Item | 13 Weeks Ended June 28, 2025 | 13 Weeks Ended June 29, 2024 | 39 Weeks Ended June 28, 2025 | 39 Weeks Ended March 30, 2024 | | :-------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Basic | 3,605 | 3,604 | 3,605 | 3,604 | | Effect of dilutive securities: Stock options | — | 23 | — | 24 | | Diluted | 3,605 | 3,627 | 3,605 | 3,628 | - For the 13- and 39-week periods ended June 28, 2025, the dilutive effect of **396,750 options** was not included in diluted EPS calculations as their impact would be anti-dilutive[94](index=94&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial condition and results, analyzing performance drivers, recent developments, and inflation impact [Recent Developments](index=22&type=section&id=Recent%20Developments) This section highlights key events, including the Bryant Park lease dispute and its potential financial implications - The Company is actively litigating to extend its leases for Bryant Park Grill & Cafe and The Porch at Bryant Park, which expired in **April** and **March 2025**, respectively; the Landlord selected a new operator, but the Company alleges a defective bid process and age discrimination[98](index=98&type=chunk)[99](index=99&type=chunk) - The Bryant Park locations generated **$19.7 million** (**15.4%** of total revenues) for the 39 weeks ended June 28, 2025, and **$23.3 million** (**16.7%** of total revenues) for the 39 weeks ended June 29, 2024; loss of these leases could materially impact the Company's financial results[101](index=101&type=chunk)[102](index=102&type=chunk) [Inflation and Other Matters](index=23&type=section&id=Inflation%20and%20Other%20Matters) This section addresses macroeconomic events like inflation, their impact on operations, and potential mitigation - Operating results continue to be impacted by geopolitical and macroeconomic events, leading to increased commodity prices, wage inflation, and other costs[103](index=103&type=chunk) - Potential future impacts include shifts in consumer behavior, staffing challenges, supply chain disruptions, and delays in restaurant openings/acquisitions; mitigation actions, such as dividend suspension or increased borrowings, may be necessary and could lead to asset impairments[103](index=103&type=chunk) [Overview](index=23&type=section&id=Overview) This section provides a brief description of the company's business, including its restaurant portfolio and operating segment - As of June 28, 2025, the Company owned and operated **16 restaurants and bars**, **12 fast food concepts**, and catering operations exclusively in the United States, all aggregated into a single operating segment[104](index=104&type=chunk) [Accounting Period](index=23&type=section&id=Accounting%20Period) This section explains the company's fiscal year-end and its 52/53-week accounting format for consistent comparisons - The Company's fiscal year ends on the Saturday nearest September 30, using a 52/53-week format to improve year-to-year comparisons[105](index=105&type=chunk) [Seasonality](index=23&type=section&id=Seasonality) This section describes the seasonal nature of the company's business, with varying performance across fiscal quarters - The business is highly seasonal with substantial fixed costs; the second fiscal quarter (January-March) is typically the poorest, while warmer weather months, especially at outdoor dining locations like Bryant Park and Sequoia, yield the best results[106](index=106&type=chunk) [Results of Operations](index=23&type=section&id=Results%20of%20Operations) This section summarizes the company's financial performance, highlighting operating income or loss and key variances - Operating loss for the 13 weeks ended June 28, 2025, was **$(3,415) thousand**, a **514.4% decrease** from operating income of **$824 thousand** in the prior year, primarily due to increased impairment charges[107](index=107&type=chunk)[109](index=109&type=chunk) - For the 39 weeks ended June 28, 2025, operating loss was **$(2,342) thousand**, a **291.2% decrease** from operating income of **$1,225 thousand** in the prior year, driven by significant impairment charges and a goodwill impairment[108](index=108&type=chunk)[109](index=109&type=chunk) Operating Results Summary (In Thousands) | Item | 13 Weeks Ended June 28, 2025 | 13 Weeks Ended June 29, 2024 | Variance ($) | Variance (%) | 39 Weeks Ended June 28, 2025 | 39 Weeks Ended June 29, 2024 | Variance ($) | Variance (%) | | :------------------------------------------ | :-------------------------- | :-------------------------- | :----------- | :----------- | :-------------------------- | :-------------------------- | :----------- | :----------- | | Total revenues | $43,715 | $50,396 | $(6,681) | -13.3 % | $128,428 | $140,139 | $(11,711) | -8.4 % | | Total costs and expenses | $47,130 | $49,572 | $(2,442) | -4.9 % | $130,770 | $138,914 | $(8,144) | -5.9 % | | OPERATING INCOME (LOSS) | $(3,415) | $824 | $(4,239) | -514.4 % | $(2,342) | $1,225 | $(3,567) | -291.2 % | [Revenues](index=24&type=section&id=Revenues) This section analyzes the drivers behind changes in total revenues, including same-store sales and restaurant closures - Total revenues decreased by **13.3%** for the 13 weeks ended June 28, 2025, and by **8.4%** for the 39 weeks ended June 28, 2025, primarily due to decreases in same-store sales and the closures of El Rio Grande and the Tampa Food Court[110](index=110&type=chunk) [Food and Beverage Same-Store Sales](index=24&type=section&id=Food%20and%20Beverage%20Same-Store%20Sales) This section provides a detailed breakdown of same-store sales performance across different geographic locations Company-wide Same-Store Sales Variance (13 Weeks Ended June 28, 2025 vs. June 29, 2024) | Location | Sales (2025) | Sales (2024) | Variance ($) | Variance (%) | | :--------------- | :----------- | :----------- | :----------- | :----------- | | Las Vegas | $13,225 | $13,532 | $(307) | -2.3 % | | New York | $8,273 | $10,455 | $(2,182) | -20.9 % | | Washington, D.C. | $2,515 | $3,178 | $(663) | -20.9 % | | Atlantic City, NJ | $595 | $734 | $(139) | -18.9 % | | Alabama | $5,333 | $5,690 | $(357) | -6.3 % | | Florida | $12,801 | $12,575 | $226 | 1.8 % | | **Same-store sales** | **$42,742** | **$46,164** | **$(3,422)** | **-7.4 %** | - Same-store sales in New York decreased **20.9%** due to reduced catering and a la carte revenue at Bryant Park Grill, attributed to negative publicity from the landlord dispute[112](index=112&type=chunk) - Washington, D.C. same-store sales decreased **20.9%** due to lower headcounts from hybrid work schedules, government layoffs, and elevated crime rates[112](index=112&type=chunk) Company-wide Same-Store Sales Variance (39 Weeks Ended June 28, 2025 vs. June 29, 2024) | Location | Sales (2025) | Sales (2024) | Variance ($) | Variance (%) | | :--------------- | :----------- | :----------- | :----------- | :----------- | | Las Vegas | $41,479 | $42,175 | $(696) | -1.7 % | | New York | $23,474 | $26,188 | $(2,714) | -10.4 % | | Washington, D.C. | $5,907 | $7,079 | $(1,172) | -16.6 % | | Atlantic City, NJ | $1,825 | $2,052 | $(227) | -11.1 % | | Alabama | $12,076 | $12,334 | $(258) | -2.1 % | | Florida | $39,141 | $38,355 | $786 | 2.0 % | | **Same-store sales** | **$123,902** | **$128,183** | **$(4,281)** | **-3.3 %** | [Costs and Expenses](index=28&type=section&id=Costs%20and%20Expenses) This section analyzes cost categories as a percentage of total revenues, including food, payroll, and impairment losses Costs and Expenses as % of Total Revenues (13 & 39 Weeks Ended June 28, 2025 vs. June 29, 2024) | Expense Category | 13 Weeks 2025 (% of Rev) | 13 Weeks 2024 (% of Rev) | 39 Weeks 2025 (% of Rev) | 39 Weeks 2024 (% of Rev) | | :------------------------------------------ | :----------------------- | :----------------------- | :----------------------- | :----------------------- | | Food and beverage cost of sales | 27.6 % | 26.4 % | 27.8 % | 26.8 % | | Payroll expenses | 35.0 % | 34.7 % | 35.9 % | 35.7 % | | Occupancy expenses | 12.5 % | 12.4 % | 13.3 % | 13.1 % | | Other operating costs and expenses | 13.8 % | 12.5 % | 13.6 % | 13.0 % | | General and administrative expenses | 6.5 % | 5.3 % | 7.2 % | 6.5 % | | Depreciation and amortization | 2.2 % | 2.0 % | 1.9 % | 2.3 % | | Impairment losses on right-of-use and long-lived assets | 10.8 % | 5.0 % | 3.7 % | 1.8 % | | Goodwill impairment | — % | — % | 2.7 % | — % | - Food and beverage costs as a percentage of total revenues increased due to higher commodity prices and weaker event business in New York City and Washington, D.C[114](index=114&type=chunk) - Impairment losses on right-of-use and long-lived assets at the Sequoia property totaled **$4,700,000** for the 39 weeks ended June 28, 2025, an increase from **$2,500,000** in the prior year, due to lower than expected operating results[123](index=123&type=chunk) - A non-cash goodwill impairment charge of **$3,440,000** was recognized for the 39 weeks ended June 28, 2025, triggered by a decline in stock price and uncertainty regarding the Bryant Park leases[125](index=125&type=chunk) [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the company's ability to meet financial obligations, including cash position and credit facilities - Cash and cash equivalents stood at **$12,325,000** as of June 28, 2025; the working capital deficit decreased from **$10,659,000** at June 29, 2024, to **$2,767,000** at June 28, 2025, driven by the Tampa Food Court lease termination payment, amended notes payable due dates, and condominium sales proceeds[128](index=128&type=chunk) - Net cash provided by operating activities decreased to **$1,119,000** for the 39 weeks ended June 28, 2025, from **$3,926,000** in the prior year, primarily due to a decrease in operating income excluding specific gains and impairments[131](index=131&type=chunk) - The Credit Agreement with Bank Hapoalim B.M. was extended to **June 1, 2028**, with the maximum permitted obligations reduced to **$20,000,000** and the minimum tangible net worth covenant increased to **$28,000,000**[134](index=134&type=chunk) - A valuation allowance of **$4,799,000** was recorded against net deferred tax assets as of March 29, 2025, due to the Company being in a cumulative loss position, primarily from the goodwill impairment[137](index=137&type=chunk) - Management believes existing cash, internal cash generation, current banking facilities, and ability to secure additional financing are sufficient for capital expenditures, debt maturities, and operating activities for at least the next **12 months**, excluding the potential material impact of losing the Bryant Park leases[142](index=142&type=chunk) [Critical Accounting Estimates](index=32&type=section&id=Critical%20Accounting%20Estimates) This section identifies key accounting judgments and assumptions that significantly impact the financial statements - Critical accounting estimates include projected cash flows for fixed asset impairments, allowances for bad debts, discount rates for lease accounting, useful lives and recoverability of long-lived assets, fair values of financial instruments, and the realizable value of tax assets[143](index=143&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section states that there are no applicable quantitative and qualitative disclosures about market risk for the Company - Not Applicable[145](index=145&type=chunk) [Item 4. Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of disclosure controls and procedures, with no material changes in internal control - Management, including the principal executive officer and principal financial officer, concluded that the Company's disclosure controls and procedures were effective as of **June 28, 2025**[146](index=146&type=chunk) - There have been no material changes in internal control over financial reporting during the third quarter of fiscal **2025**[147](index=147&type=chunk) - A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that objectives are met due to inherent limitations[148](index=148&type=chunk) [Part II. Other Information](index=34&type=section&id=PART%20II%20OTHER%20INFORMATION) This part covers miscellaneous disclosures not included in the financial statements, such as legal proceedings and exhibits [Item 1. Legal Proceedings](index=34&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 8 for information regarding legal proceedings, primarily the Bryant Park leases dispute - Information regarding legal proceedings is incorporated by reference from Note 8 - Commitments and Contingencies to the Consolidated Condensed Financial Statements[151](index=151&type=chunk) [Item 1A. Risk Factors](index=34&type=section&id=Item%201A.%20Risk%20Factors) This section indicates that there are no new or updated risk factors to report for this quarterly period - Not Applicable[152](index=152&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=34&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section states that there were no unregistered sales of equity securities or use of proceeds to report - None[153](index=153&type=chunk) [Item 3. Defaults upon Senior Securities](index=34&type=section&id=Item%203.%20Defaults%20upon%20Senior%20Securities) This section indicates that there were no defaults upon senior securities to report - None[154](index=154&type=chunk) [Item 4. Mine Safety Disclosures](index=34&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that mine safety disclosures are not applicable to the Company - Not Applicable[155](index=155&type=chunk) [Item 5. Other Information](index=34&type=section&id=Item%205.%20Other%20Information) This section provides information on insider trading arrangements, noting no new Rule 10b5-1 plans in Q3 2025 - During the third quarter of **2025**, none of the Company's directors or executive officers adopted or terminated Rule 10b5-1 trading plans or non-Rule 10b5-1 trading arrangements[156](index=156&type=chunk) [Item 6. Exhibits](index=34&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including credit agreement amendments and certifications - Key exhibits include the Omnibus Amendment (**10.1**), CEO and CFO certifications (**31.1**, **31.2**, **32**), and various XBRL documents (**101.INS**, **101.SCH**, **101.CAL**, **101.DEF**, **101.LAB**, **101.PRE**, **104**)[158](index=158&type=chunk) [Signatures](index=35&type=section&id=SIGNATURES) This section contains the required signatures for the Form 10-Q, confirming its submission by executive officers - The report was signed on **August 12, 2025**, by Michael Weinstein, Chairman of the Board and Chief Executive Officer, and Anthony J. Sirica, President, Chief Financial Officer and Director[160](index=160&type=chunk)[161](index=161&type=chunk)

Financial Data and Key Metrics Changes - The company reported cash of $12 million at the end of the quarter and debt of $3.9 million, with an extended credit agreement providing $20 million of capacity [5] - An additional impairment of $4.7 million was recorded for Sequoia's leasehold improvements and right of use assets due to cash flow analysis [6] Business Line Data and Key Metrics Changes - Individual restaurants are performing well, particularly in Las Vegas and New York, with cash flow remaining strong despite a slowdown in visitors to the Las Vegas Strip [8] - Sequoia and Bryant Park are underperforming due to external factors, with Sequoia facing a decline in event business and Bryant Park involved in litigation [10][11] Market Data and Key Metrics Changes - The overall demand in various operational areas is down, with reports indicating a 15% to 20% decline in Florida, although this figure may be exaggerated [9] Company Strategy and Development Direction - The company is focused on maintaining operations at Bryant Park despite ongoing litigation and believes in the justification of their claims [11] - There is optimism regarding the potential for a casino license in the Meadowlands, contingent on developments in New York State's casino licensing [12] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenging environment but believes the company is performing well under the circumstances [9] - The company is positioned to capitalize on potential gaming opportunities in New Jersey as the legislative landscape evolves [12] Other Important Information - The company has extended the payment terms on balloon notes, with two set to run off in four to five quarters and another balloon payment due in June 2028 [6] Q&A Session Summary Question: Are there any questions from participants? - There were no questions from participants during the Q&A session [15]

[Executive Summary & Company Overview](index=1&type=section&id=Executive%20Summary%20%26%20Company%20Overview) Ark Restaurants experienced a Q3 2025 decline in EBITDA and a net loss, primarily due to litigation and asset impairment, despite strong performance from other restaurant locations [Third Quarter 2025 Highlights](index=1&type=section&id=Third%20Quarter%202025%20Highlights) Q3 2025 saw a decline in EBITDA and a net loss, driven by Bryant Park litigation and Sequoia asset impairment, though other restaurant operations performed well - **EBITDA** for the quarter was **$1,791,000**, a decrease from the prior year, largely due to over **$800,000** in litigation expenses for Bryant Park operations[3](index=3&type=chunk) - Net income (loss) was negatively impacted by a non-cash impairment of assets at the Sequoia restaurant in Washington D.C., where future cash flow no longer supports the book value[3](index=3&type=chunk) - Operations at the New York-New York Hotel and Casino in Las Vegas, Rustic Inn in Florida, and Robert in NYC increased cash flow or performed better than last year, with the rest of the portfolio meeting expectations[3](index=3&type=chunk) - The Company's Balance Sheet remains strong, supporting future growth[3](index=3&type=chunk) [About Ark Restaurants Corp.](index=4&type=section&id=About%20Ark%20Restaurants%20Corp.) Ark Restaurants Corp. operates a diverse portfolio of 16 restaurants and bars, 12 fast food concepts, and catering services across key US markets - Ark Restaurants owns and operates **16 restaurants and bars**, **12 fast food concepts**, and catering operations[25](index=25&type=chunk) - Primary operating locations include New York City, Florida, Washington, DC, Las Vegas, Nevada, and the Gulf Coast of Alabama[25](index=25&type=chunk) - Las Vegas operations include four restaurants within the New York-New York Hotel & Casino Resort, room service, banquet facilities, employee dining room, six food court concepts, and one restaurant within the Planet Hollywood Resort and Casino[25](index=25&type=chunk) [Financial Performance Analysis](index=1&type=section&id=Financial%20Performance%20Analysis) The company reported a significant decline in revenues and profitability for both the 13-week and 39-week periods, impacted by divested properties, same-store sales decreases, and asset impairments [Consolidated Financial Results Overview](index=1&type=section&id=Consolidated%20Financial%20Results%20Overview) Consolidated results show a substantial decline in revenues and profitability for both periods, influenced by divested properties, same-store sales, and asset impairments - Total revenues decreased for both the 13-week and 39-week periods, with a portion of the decline attributable to the exclusion of revenues from El Rio Grande and the Tampa Food Court[5](index=5&type=chunk)[6](index=6&type=chunk) - Company-wide same store sales, excluding divested properties, decreased by **7.4%** for the 13 weeks and **3.3%** for the 39 weeks, mainly due to reduced catering and a la carte revenue at Bryant Park Grill[7](index=7&type=chunk) - Adjusted EBITDA saw a substantial decline, and the company reported a net loss attributable to Ark Restaurants Corp. for both periods, contrasting with net income in the prior year[8](index=8&type=chunk)[9](index=9&type=chunk)[10](index=10&type=chunk) [Revenue Performance](index=1&type=section&id=Revenue%20Performance) Total revenues decreased for both the 13-week and 39-week periods, primarily due to the exclusion of divested properties Total Revenues (in thousands) | Period | June 28, 2025 | June 29, 2024 | YoY Change | | :--------------------------------------- | :-------------- | :-------------- | :--------- | | 13 Weeks Ended | $43,715 | $50,396 | -13.26% | | 13 Weeks Ended (Excl. El Rio Grande & Tampa Food Court) | N/A | $48,105 | N/A | | 39 Weeks Ended | $128,428 | $140,139 | -8.36% | | 39 Weeks Ended (Excl. El Rio Grande & Tampa Food Court) | $127,454 | $133,763 | -4.72% | - No revenues for El Rio Grande and the Tampa Food Court are included in the 13 weeks ended June 28, 2025. The prior year's comparable period included **$1,026,000** and **$1,265,000**, respectively, from these locations[5](index=5&type=chunk) - For the 39 weeks ended June 28, 2025, no revenues for El Rio Grande are included, and Tampa Food Court revenues were **$974,000**. The prior year included **$2,373,000** (El Rio Grande) and **$4,003,000** (Tampa Food Court)[6](index=6&type=chunk) [Profitability Metrics](index=1&type=section&id=Profitability%20Metrics) Key profitability metrics, including adjusted EBITDA and net income, experienced significant declines for both reporting periods Profitability Metrics (in thousands, except per share amounts) | Metric | 13 Weeks Ended June 28, 2025 | 13 Weeks Ended June 29, 2024 | 39 Weeks Ended June 28, 2025 | 39 Weeks Ended June 29, 2024 | | :--------------------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | EBITDA, as adjusted | $1,791 | $3,375 | $2,479 | $5,625 | | Net Income (Loss) Attributable to Ark Restaurants Corp. | $(3,454) | $640 | $(9,548) | $561 | | Basic EPS | $(0.96) | $0.18 | $(2.65) | $0.16 | | Diluted EPS | $(0.96) | $0.18 | $(2.65) | $0.15 | - The 39 weeks ended June 28, 2025, net income (loss) includes a full valuation allowance related to deferred tax assets in the amount of **$4,799,000**[10](index=10&type=chunk) [Balance Sheet Snapshot](index=1&type=section&id=Balance%20Sheet%20Snapshot) The balance sheet provides a snapshot of the company's cash and debt positions as of June 28, 2025 Balance Sheet Snapshot (as of June 28, 2025) | Metric | Amount | | :---------------------- | :------------- | | Cash and cash equivalents | $12,325,000 | | Total outstanding debt | $3,859,000 | [Same Store Sales](index=1&type=section&id=Same%20Store%20Sales) Company-wide same-store sales decreased, primarily attributed to declines at Bryant Park Grill due to a landlord dispute - Excluding revenues related to El Rio Grande and the Tampa Food Court, Company-wide same store sales decreased **7.4%** for the 13 weeks ended June 28, 2025, compared to the prior year[7](index=7&type=chunk) - Excluding revenues related to El Rio Grande and the Tampa Food Court, Company-wide same store sales decreased **3.3%** for the 39 weeks ended June 28, 2025, compared to the prior year[7](index=7&type=chunk) - These decreases were primarily attributable to declines in both catering and a la carte revenue at the Bryant Park Grill due to negative publicity from the landlord dispute[7](index=7&type=chunk) [Non-GAAP Financial Information](index=4&type=section&id=Non-GAAP%20Financial%20Information) The company utilizes EBITDA as a non-GAAP financial measure to provide additional insight into its financial performance and liquidity, aligning with industry practices - EBITDA is a non-GAAP financial measure used to enhance the overall understanding of the Company's past financial performance and liquidity[27](index=27&type=chunk) - The use of EBITDA is common in the restaurant sector as a measure of both performance and liquidity[27](index=27&type=chunk) - Investors should not consider EBITDA in isolation or as a substitute for GAAP measures such as net income (loss), operating income (loss), or cash flows from operating activities[27](index=27&type=chunk) [Key Operational and Strategic Developments](index=2&type=section&id=Key%20Operational%20and%20Strategic%20Developments) This section details significant operational and strategic events, including a major lease dispute, credit facility amendments, and asset impairments [Bryant Park Lease Dispute](index=2&type=section&id=Bryant%20Park%20Lease%20Dispute) Ark Restaurants is engaged in ongoing litigation over the non-renewal of leases for its Bryant Park properties, posing a material adverse effect risk - Leases for Bryant Park Grill & Cafe and The Porch at Bryant Park expired on April 30, 2025, and March 31, 2025, respectively[12](index=12&type=chunk) - The Company filed a complaint in New York State Supreme Court on March 28, 2025, alleging a defective bid process, award to a lower bidder, and violation of its right of first lease[13](index=13&type=chunk) - A motion for a preliminary injunction to enjoin eviction was denied on April 24, 2025, and the Company has filed a notice of appeal[13](index=13&type=chunk) - The Bryant Park Grill & Cafe and The Porch at Bryant Park collectively accounted for **$19.7 million (15.4%)** and **$23.3 million (16.7%)** of total revenues for the 39 weeks ended June 28, 2025, and June 29, 2024, respectively[15](index=15&type=chunk) - Failure to prevail in these actions or renew leases on favorable terms could have a material adverse effect on the Company's business, financial condition, and results of operations[16](index=16&type=chunk) [Credit Facility Amendment](index=3&type=section&id=Credit%20Facility%20Amendment) Ark Restaurants amended its Credit Agreement, extending the maturity date to June 1, 2028, and adjusting key financial covenants - The Second Amended and Restated Credit Agreement with Bank Hapoalim B.M. was amended on May 29, 2025[17](index=17&type=chunk) - The maturity date of the Credit Agreement was extended to June 1, 2028[17](index=17&type=chunk) - The maximum permitted obligations outstanding under the Credit Agreement were reduced from **$30,000,000** to **$20,000,000**[17](index=17&type=chunk) - The minimum tangible net worth covenant was increased from **$22,000,000** to **$28,000,000**, and the annual net income covenant was removed[17](index=17&type=chunk) [Asset Impairments](index=3&type=section&id=Asset%20Impairments) The company recognized significant impairment charges for ROU and long-lived assets at Sequoia, alongside a goodwill impairment triggered by stock price decline and lease uncertainty - Additional impairment charges of **$2,940,000** (ROU assets) and **$1,760,000** (long-lived assets) were recognized for the Sequoia property during the 13 weeks ended June 28, 2025, due to lower-than-expected operating results[18](index=18&type=chunk) - Previously, impairment charges of **$1,561,000** (ROU) and **$939,000** (long-lived assets) were recognized for Sequoia during the 13 weeks ended June 29, 2024[18](index=18&type=chunk) - A non-cash goodwill impairment charge of **$3,440,000** was recognized during the 39 weeks ended June 28, 2025[21](index=21&type=chunk) - The goodwill impairment was triggered by a decline in the Company's stock price and continued uncertainty related to the Bryant Park Grill & Cafe and The Porch at Bryant Park leases[21](index=21&type=chunk) [Lease Terminations and Closures](index=3&type=section&id=Lease%20Terminations%20and%20Closures) Ark Restaurants successfully terminated its Tampa Food Court lease, resulting in a significant gain, and permanently closed its El Rio Grande property with an associated loss - The Company agreed to terminate its lease for the food court at The Hard Rock Hotel and Casino in Tampa, FL, on November 26, 2024, vacating the premises on December 15, 2024[19](index=19&type=chunk) - In connection with the Tampa Food Court lease termination, the Company received a termination payment of **$5,500,000** and recorded a gain, net of expenses, of **$5,235,000**[19](index=19&type=chunk) - The El Rio Grande property closed permanently on January 3, 2025, after the Company advised the landlord of lease termination in October 2024[22](index=22&type=chunk) - A loss of **$876,000** related to the closure of El Rio Grande was recorded during the year ended September 28, 2024[22](index=22&type=chunk) [Supplemental Information](index=4&type=section&id=Supplemental%20Information) This section provides details on the upcoming conference call and important legal disclaimers regarding forward-looking statements and non-GAAP measures [Conference Call & Webcast Information](index=4&type=section&id=Conference%20Call%20%26%20Webcast%20Information) Ark Restaurants will host a conference call and webcast on August 12, 2025, to discuss its third-quarter financial results, with replay options available - Ark Restaurants will host a conference call on August 12, 2025, at 11:00 a.m. Eastern Time to review results and discuss other topics[23](index=23&type=chunk) - The call can be accessed via toll-free dial-in (1-877-407-4018) or a live webcast[23](index=23&type=chunk)[24](index=24&type=chunk) - A replay will be available approximately three hours after the call until Tuesday, August 19, 2025[24](index=24&type=chunk) [Legal Disclaimers](index=4&type=section&id=Legal%20Disclaimers) The report includes standard cautionary statements regarding forward-looking information and clarifies the use and limitations of non-GAAP financial measures - The news release contains forward-looking statements subject to unknown risks and uncertainties that may cause actual results to differ materially[26](index=26&type=chunk) - The Company disclaims any intention or obligation to update or revise any forward-looking statements[26](index=26&type=chunk) - EBITDA is a non-GAAP financial measure, and investors should not consider it in isolation or as a substitute for GAAP measures[27](index=27&type=chunk) [Financial Statements](index=5&type=section&id=Financial%20Statements) This section presents the company's detailed consolidated financial statements, including statements of operations and EBITDA reconciliation [Consolidated Condensed Statements of Operations](index=5&type=section&id=Consolidated%20Condensed%20Statements%20of%20Operations) Detailed consolidated condensed statements of operations are presented for the 13- and 39-week periods, outlining revenues, expenses, and net income (loss) Consolidated Condensed Statements of Operations (in thousands, except per share amounts) | | | 13 Weeks Ended | | 13 Weeks Ended | | 39 Weeks Ended | | 39 Weeks Ended | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | June 28, 2025 | | June 29, 2024 | | June 28, 2025 | | June 29, 2024 | | TOTAL REVENUES | $ | 43,715 | $ | 50,396 | $ | 128,428 | $ | 140,139 | | COSTS AND EXPENSES: | | | | | | | | | | Food and beverage cost of sales | | 12,060 | | 13,304 | | 35,650 | | 37,512 | | Payroll expenses | | 15,280 | | 17,479 | | 46,103 | | 49,969 | | Occupancy expenses | | 5,444 | | 6,261 | | 17,128 | | 18,368 | | Other operating costs and expenses | | 6,038 | | 6,305 | | 17,422 | | 18,233 | | General and administrative expenses | | 2,822 | | 2,690 | | 9,292 | | 9,151 | | Depreciation and amortization | | 964 | | 1,033 | | 2,443 | | 3,181 | | Gain on closure of El Rio Grande | | (178) | | — | | (173) | | — | | Gain on termination of Tampa Food Court lease | | — | | — | | (5,235) | | — | | Impairment losses on right-of-use and long-lived assets | | 4,700 | | 2,500 | | 4,700 | | 2,500 | | Goodwill impairment | | — | | — | | 3,440 | | — | | Total costs and expenses | | 47,130 | | 49,572 | | 130,770 | | 138,914 | | OPERATING INCOME (LOSS) | | (3,415) | | 824 | | (2,342) | | 1,225 | | OTHER (INCOME) EXPENSE: | | | | | | | | | | Interest expense, net | | 90 | | 138 | | 294 | | 448 | | Other income | | — | | — | | — | | (26) | | Gain on sale of condominiums | | (391) | | — | | (391) | | — | | Gain on forgiveness of PPP Loans | | — | | — | | — | | (285) | | Total other (income) expense, net | | (301) | | 138 | | (97) | | 137 | | INCOME (LOSS) BEFORE PROVISION (BENEFIT) FOR INCOME TAXES | | (3,114) | | 686 | | (2,245) | | 1,088 | | Provision (benefit) for income taxes | | 81 | | (213) | | 5,019 | | (202) | | CONSOLIDATED NET INCOME (LOSS) | | (3,195) | | 899 | | (7,264) | | 1,290 | | Net income attributable to non-controlling interests | | (259) | | (259) | | (2,284) | | (729) | | NET INCOME (LOSS) ATTRIBUTABLE TO ARK RESTAURANTS CORP. | $ | (3,454) | $ | 640 | $ | (9,548) | $ | 561 | | NET INCOME (LOSS) ATTRIBUTABLE TO ARK RESTAURANTS CORP. PER COMMON SHARE: | | | | | | | | | | Basic | $ | (0.96) | $ | 0.18 | $ | (2.65) | $ | 0.16 | | Diluted | $ | (0.96) | $ | 0.18 | $ | (2.65) | $ | 0.15 | | WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING: | | | | | | | | | | Basic | | 3,605 | | 3,604 | | 3,605 | | 3,604 | | Diluted | | 3,605 | | 3,627 | | 3,605 | | 3,628 | [EBITDA Reconciliation](index=5&type=section&id=EBITDA%20Reconciliation) This section provides a reconciliation of income (loss) before provision (benefit) for income taxes to EBITDA and adjusted EBITDA, detailing specific adjustments for non-cash items, gains, and impairment losses EBITDA Reconciliation (in thousands) | EBITDA Reconciliation: | | | | | | | | | :--------------------------------------- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | | June 28, 2025 | | June 29, 2024 | | June 28, 2025 | | June 29, 2024 | | Income (loss) before provision (benefit) for income taxes | $ (3,114) | $ 686 | $ (2,245) | $ 1,088 | | Depreciation and amortization | 964 | 1,033 | 2,443 | 3,181 | | Interest expense, net | 90 | 138 | 294 | 448 | | EBITDA | $ (2,060) | $ 1,857 | $ 492 | $ 4,717 | | EBITDA, adjusted: | | | | | | | | | EBITDA (as defined) | $ (2,060) | $ 1,857 | $ 492 | $ 4,717 | | Non-cash stock-based compensation activity | (21) | (723) | 60 | (578) | | Gain on closure of El Rio Grande | (178) | — | (173) | — | | Gain on termination of Tampa Food Court lease, net of non controlling interests | — | — | (3,365) | — | | Impairment losses on right-of-use and long-lived assets | 4,700 | 2,500 | 4,700 | 2,500 | | Goodwill impairment | — | — | 3,440 | — | | Gain on sale of condominiums | (391) | — | (391) | — | | Gain on forgiveness of PPP Loans | — | — | — | (285) | | Net income attributable to non-controlling interests | (259) | (259) | (2,284) | (729) | | EBITDA, as adjusted | $ 1,791 | $ 3,375 | $ 2,479 | $ 5,625 |

Core Viewpoint - Ark Restaurants Corp. reported a net loss of $9.3 million for the second quarter of fiscal 2025, significantly impacted by non-cash items such as goodwill impairment and deferred tax asset valuation allowance, despite a modest improvement in same-store sales [3][7]. Financial Performance - Total revenues for the second quarter were $39.7 million, down 5.9% from $42.3 million in the same period last year. Excluding revenues from closed locations, the decline was only 1.1% [2]. - The company reported a net loss of $9.3 million, or $(2.57) per share, compared to a net loss of $1.4 million, or $(0.40) per share, in the prior year [3]. - Adjusted EBITDA was a loss of $0.7 million, worsening from a loss of $0.3 million in the previous year [3]. Cost Management - Food and beverage costs decreased by 5.4% to $11.5 million, while payroll expenses fell by 7.1% to $14.4 million. However, general and administrative expenses rose by 5.8% to $3.3 million [4]. - Operating loss increased to $4.6 million from a $1.2 million loss in the prior-year quarter, primarily due to impairments and legal costs [4]. Balance Sheet - As of March 29, 2025, the company reported $11.1 million in cash and $4.3 million in total debt, with plans to refinance the debt under a new facility with increased capacity of $15–$20 million [5]. Segment Performance - Las Vegas operations showed marked improvement, with better weekly cash flows. Florida restaurants reported revenue gains, while Alabama operations remained stable [6]. - The Washington, D.C. location showed signs of improvement following management changes [6]. Management Insights - The CFO attributed the significant losses to non-operational headwinds, including a $3.4 million goodwill impairment and a $4.8 million valuation allowance on deferred tax assets [7]. - Legal and consultancy fees related to lease disputes amounted to approximately $650,000, which negatively impacted EBITDA [8]. Revenue Challenges - The absence of revenues from El Rio Grande and the Tampa Food Court contributed to the overall revenue decline [9][10]. - The company is facing uncertainty regarding its Bryant Park properties, which accounted for approximately 15% of total revenues for the six-month period [11]. Future Developments - No new acquisitions or divestitures were announced, but management is evaluating new opportunities and expressed optimism about potential deals in the coming months [12].

[Part I. Financial Information](index=5&type=section&id=Part%20I.%20Financial%20Information) [Item 1. Consolidated Condensed Financial Statements](index=5&type=section&id=Item%201.%20Consolidated%20Condensed%20Financial%20Statements) This section presents the Company's unaudited consolidated condensed financial statements, including balance sheets, statements of operations, changes in equity, and cash flows, along with detailed notes explaining the basis of presentation, significant accounting policies, recent developments, and specific financial line items for the periods ended March 29, 2025, and March 30, 2024 [Consolidated Condensed Balance Sheets](index=5&type=section&id=Consolidated%20Condensed%20Balance%20Sheets) | ASSETS | | | :--- | :--- | | **CURRENT ASSETS:** | | | Cash and cash equivalents | $11,124 | | Accounts receivable | $3,226 | | Employee receivables | $176 | | Inventories | $2,073 | | Prepaid and refundable income taxes | $292 | | Prepaid expenses and other current assets | $1,607 | | **Total current assets** | **$18,498** | | FIXED ASSETS - Net | $30,918 | | OPERATING LEASE RIGHT-OF-USE ASSETS - Net | $79,456 | | GOODWILL | $— | | TRADEMARKS | $4,220 | | INTANGIBLE ASSETS - Net | $56 | | DEFERRED INCOME TAXES | $— | | INVESTMENT IN AND RECEIVABLE FROM NEW MEADOWLANDS RACETRACK | $6,573 | | OTHER ASSETS | $2,170 | | **TOTAL ASSETS** | **$141,891** | | **LIABILITIES AND EQUITY** | | | **CURRENT LIABILITIES:** | | | Accounts payable - trade | $4,663 | | Accrued expenses and other current liabilities | $10,086 | | Current portion of operating lease liabilities | $6,256 | | Notes payable | $4,280 | | **Total current liabilities** | **$25,285** | | OPERATING LEASE LIABILITIES, LESS CURRENT PORTION | $79,055 | | **TOTAL LIABILITIES** | **$104,340** | | **EQUITY:** | | | Common stock, par value $0.01 per share | $36 | | Additional paid-in capital | $14,036 | | Retained earnings | $24,073 | | **Total Ark Restaurants Corp. shareholders' equity** | **$38,145** | | NON-CONTROLLING INTERESTS | $(594) | | **TOTAL EQUITY** | **$37,551** | | **TOTAL LIABILITIES AND EQUITY** | **$141,891** | [Consolidated Condensed Statements of Operations](index=6&type=section&id=Consolidated%20Condensed%20Statements%20of%20Operations) | REVENUES (In Thousands) | 13 Weeks Ended March 29, 2025 | 13 Weeks Ended March 30, 2024 | 26 Weeks Ended March 29, 2025 | 26 Weeks Ended March 30, 2024 | | :-------------------------------- | :---------------------------- | :---------------------------- | :---------------------------- | :---------------------------- | | Food and beverage sales | $39,123 | $41,188 | $83,566 | $87,818 | | Other revenue | $602 | $1,069 | $1,148 | $1,925 | | **Total revenues** | **$39,725** | **$42,257** | **$84,714** | **$89,743** | | **COSTS AND EXPENSES:** | | | | | | Food and beverage cost of sales | $11,484 | $12,138 | $23,591 | $24,209 | | Payroll expenses | $14,415 | $15,512 | $30,823 | $32,488 | | Occupancy expenses | $5,536 | $5,775 | $11,684 | $12,107 | | Other operating costs and expenses | $5,584 | $5,836 | $11,384 | $11,928 | | General and administrative expenses | $3,322 | $3,141 | $6,470 | $6,461 | | Depreciation and amortization | $701 | $1,057 | $1,479 | $2,149 | | (Gain) loss on closure of El Rio Grande | $(140) | $— | $5 | $— | | Gain on termination of Tampa Food Court lease | $— | $— | $(5,235) | $— | | Goodwill impairment | $3,440 | $— | $3,440 | $— | | **Total costs and expenses** | **$44,342** | **$43,459** | **$83,641** | **$89,342** | | **OPERATING INCOME (LOSS)** | **$(4,617)** | **$(1,202)** | **$1,073** | **$401** | | **CONSOLIDATED NET INCOME (LOSS)** | **$(9,144)** | **$(1,205)** | **$(4,069)** | **$391** | | **NET LOSS ATTRIBUTABLE TO ARK RESTAURANTS CORP.** | **$(9,258)** | **$(1,449)** | **$(6,094)** | **$(79)** | | **NET LOSS ATTRIBUTABLE TO ARK RESTAURANTS CORP. PER COMMON SHARE:** | | | | | | Basic | $(2.57) | $(0.40) | $(1.69) | $(0.02) | | Diluted | $(2.57) | $(0.40) | $(1.69) | $(0.02) | [Consolidated Condensed Statements of Changes in Equity](index=7&type=section&id=Consolidated%20Condensed%20Statements%20of%20Changes%20in%20Equity) For the 26 weeks ended March 29, 2025 (In Thousands): | Category | Common Stock (Shares) | Common Stock (Amount) | Additional Paid-In Capital | Retained Earnings | Total Ark Restaurants Corp. Shareholders' Equity | Non controlling Interests | Total Equity | | :-------------------------------- | :-------------------- | :-------------------- | :------------------------- | :---------------- | :--------------------------------------------- | :------------------------ | :----------- | | BALANCE - September 28, 2024 | 3,604 | $36 | $13,934 | $30,167 | $44,137 | $(496) | $43,641 | | Net income (loss) | — | — | — | $(6,094) | $(6,094) | $2,025 | $(4,069) | | Exercise of stock options | 2 | — | $21 | — | $21 | — | $21 | | Stock-based compensation activity | — | — | $81 | — | $81 | — | $81 | | Distributions to non-controlling interests | — | — | — | — | — | $(2,123) | $(2,123) | | BALANCE - March 29, 2025 | 3,606 | $36 | $14,036 | $24,073 | $38,145 | $(594) | $37,551 | For the 26 weeks ended March 30, 2024 (In Thousands): | Category | Common Stock (Shares) | Common Stock (Amount) | Additional Paid-In Capital | Retained Earnings | Total Ark Restaurants Corp. Shareholders' Equity | Non controlling Interests | Total Equity | | :-------------------------------- | :-------------------- | :-------------------- | :------------------------- | :---------------- | :--------------------------------------------- | :------------------------ | :----------- | | BALANCE - September 30, 2023 | 3,604 | $36 | $14,161 | $36,091 | $50,288 | $1,434 | $51,722 | | Net income (loss) | — | — | — | $(79) | $(79) | $470 | $391 | | Elimination of non-controlling interest upon dissolution of subsidiary | — | — | $692 | — | $692 | $(692) | — | | Stock-based compensation activity | — | — | $145 | — | $145 | — | $145 | | Distributions to non-controlling interests | — | — | — | — | — | $(840) | $(840) | | Dividends paid - $0.3750 per share | — | — | — | $(1,352) | $(1,352) | — | $(1,352) | | BALANCE - March 30, 2024 | 3,604 | $36 | $14,998 | $34,660 | $49,694 | $372 | $50,066 | [Consolidated Condensed Statements of Cash Flows](index=9&type=section&id=Consolidated%20Condensed%20Statements%20of%20Cash%20Flows) | CASH FLOWS (In Thousands) | 26 Weeks Ended March 29, 2025 | 26 Weeks Ended March 30, 2024 | | :-------------------------------- | :---------------------------- | :---------------------------- | | Consolidated net income (loss) | $(4,069) | $391 | | Net cash provided by (used in) operating activities | $(734) | $766 | | Net cash provided by (used in) investing activities | $4,626 | $(596) | | Net cash used in financing activities | $(3,041) | $(3,173) | | NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | $851 | $(3,003) | | CASH AND CASH EQUIVALENTS, Beginning of period | $10,273 | $13,415 | | CASH AND CASH EQUIVALENTS, End of period | $11,124 | $10,412 | | Cash paid for interest | $203 | $303 | | Cash paid for income taxes | $136 | $191 | [Notes to Consolidated Condensed Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Condensed%20Financial%20Statements) [BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES](index=10&type=section&id=BASIS%20OF%20PRESENTATION%20AND%20SIGNIFICANT%20ACCOUNTING%20POLICIES) - Operating results were impacted by geopolitical and macroeconomic events, causing supply chain challenges and increased commodity and wage inflation. These factors could lead to further shifts in consumer behavior, staffing challenges, and cost inflation in fiscal **2025**[24](index=24&type=chunk) - The Company recognized a non-cash goodwill impairment charge of **$3.44 million** for the 13 and 26 weeks ended March 29, 2025, primarily due to a decline in stock price and uncertainty regarding the Bryant Park leases[35](index=35&type=chunk) - The Company operates **16** restaurants and bars, **12** fast food concepts, and catering operations, all aggregated into a single operating segment[43](index=43&type=chunk) [RECENT RESTAURANT EXPANSION AND OTHER DEVELOPMENTS](index=13&type=section&id=RECENT%20RESTAURANT%20EXPANSION%20AND%20OTHER%20DEVELOPMENTS) - Extended lease for America at New York-New York Hotel and Casino through December 31, 2033, with a minimum **$4 million** refresh commitment by December 31, 2025[50](index=50&type=chunk) - Extended leases for Village Eateries, Broadway Burger Bar and Grill, and Gonzalez y Gonzalez through December 31, 2034/2033, with a minimum **$3.5 million** refresh commitment by December 31, 2025[51](index=51&type=chunk) - Opened a new concept, Lucky Pig, in the Village Eateries at a cost of approximately **$700,000**[51](index=51&type=chunk) [RECENT RESTAURANT DISPOSITIONS AND OTHER DEVELOPMENTS](index=13&type=section&id=RECENT%20RESTAURANT%20DISPOSITIONS%20AND%20OTHER%20DEVELOPMENTS) - Terminated the lease for El Rio Grande, which closed permanently on January 3, 2025. The Company recognized a gain of **$140,000** for the 13 weeks ended March 29, 2025, due to refinements in estimates related to landlord negotiations[53](index=53&type=chunk) - Terminated the lease for the food court at The Hard Rock Hotel and Casino in Tampa, FL, on November 26, 2024. Received a **$5.5 million** termination payment, resulting in a net gain of **$5.235 million**[54](index=54&type=chunk) [INVESTMENT IN AND RECEIVABLE FROM NEW MEADOWLANDS RACETRACK](index=14&type=section&id=INVESTMENT%20IN%20AND%20RECEIVABLE%20FROM%20NEW%20MEADOWLANDS%20RACETRACK) - Total investment in New Meadowlands Racetrack (NMR) is **$5.108 million**, representing an effective ownership interest of **7.4%**[55](index=55&type=chunk) - No distributions were received from NMR during the 13 and 26 weeks ended March 29, 2025[56](index=56&type=chunk) - The Company holds the exclusive right to operate food and beverage concessions in the gaming facility if casino gaming is approved at the Meadowlands[58](index=58&type=chunk) [ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES](index=15&type=section&id=ACCRUED%20EXPENSES%20AND%20OTHER%20CURRENT%20LIABILITIES) | Category | March 29, 2025 (In thousands) | September 28, 2024 (In thousands) | | :-------------------------------- | :------------------------------ | :-------------------------------- | | Sales tax payable | $874 | $761 | | Accrued wages and payroll related costs | $3,125 | $4,548 | | Customer advance deposits | $3,310 | $4,382 | | Accrued occupancy and other operating expenses | $2,777 | $2,354 | | **Total** | **$10,086** | **$12,045** | [LEASES](index=15&type=section&id=LEASES) - All real estate leases are classified as operating leases, with no finance leases as of March 29, 2025[65](index=65&type=chunk) | Lease Expense (In thousands) | 13 Weeks Ended March 29, 2025 | 13 Weeks Ended March 30, 2024 | 26 Weeks Ended March 29, 2025 | 26 Weeks Ended March 30, 2024 | | :-------------------------------- | :---------------------------- | :---------------------------- | :---------------------------- | :---------------------------- | | Operating lease expense - occupancy expenses | $3,293 | $3,469 | $6,675 | $6,923 | | Occupancy lease expense - general and administrative expenses | $121 | $122 | $242 | $244 | | Variable lease expense - occupancy expenses | $703 | $747 | $1,955 | $2,124 | | **Total lease expense** | **$4,117** | **$4,338** | **$8,872** | **$9,291** | - Weighted average remaining lease term for operating leases is **11.3 years**, with a weighted average discount rate of **6.3%** as of March 29, 2025[68](index=68&type=chunk) [NOTES PAYABLE](index=16&type=section&id=NOTES%20PAYABLE) | Notes Payable (In thousands) | March 29, 2025 | September 28, 2024 | | :-------------------------------- | :------------- | :----------------- | | Promissory Note - Rustic Inn purchase | $2,474 | $2,617 | | Promissory Note - JB's on the Beach purchase | $1,250 | $1,750 | | Promissory Note - Sequoia renovation | $571 | $800 | | Promissory Note - Blue Moon Fish Company | $— | $68 | | **Total** | **$4,295** | **$5,235** | | Less: Current maturities | $(4,280) | $(5,193) | | Less: Unamortized deferred financing costs | $(15) | $(42) | | **Long-term portion** | **$—** | **$—** | - The Company has a **$10 million** revolving credit facility with Bank Hapoalim B.M. (BHBM) maturing on June 1, 2025. No advances were outstanding as of March 29, 2025, and the weighted average interest on outstanding BHBM indebtedness was approximately **8.0%**[70](index=70&type=chunk)[71](index=71&type=chunk) [COMMITMENTS AND CONTINGENCIES](index=17&type=section&id=COMMITMENTS%20AND%20CONTINGENCIES) - The leases for Bryant Park Grill & Cafe and The Porch at Bryant Park expired on April 30, 2025, and March 31, 2025, respectively. The Company is operating as a holdover tenant and has filed a lawsuit challenging the landlord's bid process[79](index=79&type=chunk)[80](index=80&type=chunk)[81](index=81&type=chunk) - These Bryant Park locations collectively accounted for **$12.7 million** (**15.0%**) of total revenues for the 26 weeks ended March 29, 2025, and their non-renewal could materially adversely affect the Company's financial condition[82](index=82&type=chunk) [STOCK OPTIONS](index=18&type=section&id=STOCK%20OPTIONS) - On December 2, 2024, **10,000 options** were granted under the 2022 Stock Option Plan at an exercise price of **$9.99** per share, with a grant date fair value of **$2.94** per share[84](index=84&type=chunk) | Stock Option Activity (2025) | Shares | | :-------------------------------- | :----- | | Outstanding, beginning of period | 415,750 | | Granted | 10,000 | | Exercised | (2,000) | | Canceled or expired | — | | Outstanding and expected to vest, end of period | 423,750 | | Exercisable, end of period | 336,875 | | Shares available for future grant | 336,875 | - As of March 29, 2025, there was approximately **$411,000** of unrecognized compensation cost related to unvested stock options, expected to be recognized over **3.7 years**[88](index=88&type=chunk) [INCOME TAXES](index=19&type=section&id=INCOME%20TAXES) - The provision for income taxes for the 26-week period ended March 29, 2025, was **$4.938 million**, with an effective tax rate of **94%**[90](index=90&type=chunk) - A discrete tax provision of **$4.799 million** was recorded due to a valuation allowance on net deferred tax assets, as the Company is now in a cumulative loss position following the goodwill impairment[90](index=90&type=chunk) [INCOME PER SHARE OF COMMON STOCK](index=20&type=section&id=INCOME%20PER%20SHARE%20OF%20COMMON%20STOCK) | EPS (In Thousands) | 13 Weeks Ended March 29, 2025 | 13 Weeks Ended March 30, 2024 | 26 Weeks Ended March 29, 2025 | 26 Weeks Ended March 30, 2024 | | :-------------------------------- | :---------------------------- | :---------------------------- | :---------------------------- | :---------------------------- | | Basic EPS | $(2.57) | $(0.40) | $(1.69) | $(0.02) | | Diluted EPS | $(2.57) | $(0.40) | $(1.69) | $(0.02) | - The dilutive effect of **423,750 stock options** for the 26-week period ended March 29, 2025, was not included in diluted EPS calculation as their impact would be anti-dilutive[94](index=94&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial performance, condition, and future outlook for the periods ended March 29, 2025, and March 30, 2024. It highlights key factors such as the ongoing dispute over the Bryant Park leases, the impact of inflation on operating costs, and detailed analysis of revenues, expenses, and cash flows. The discussion also covers liquidity, capital resources, and critical accounting estimates [Recent Developments](index=22&type=section&id=Recent%20Developments) - The Company's leases for Bryant Park Grill & Cafe and The Porch at Bryant Park expired on April 30, 2025, and March 31, 2025, respectively. The Company is currently operating as a holdover tenant and has filed a lawsuit challenging the landlord's bid process[99](index=99&type=chunk)[100](index=100&type=chunk)[101](index=101&type=chunk) - These Bryant Park locations accounted for approximately **15.0%** (**$12.7 million**) of total revenues for the 26 weeks ended March 29, 2025, and the inability to extend or renew these leases could have a material adverse effect on the business[102](index=102&type=chunk) - Operating results continue to be impacted by increased commodity prices, wage inflation, and staffing challenges due to geopolitical and macroeconomic events[103](index=103&type=chunk) [Overview](index=23&type=section&id=Overview) - As of March 29, 2025, the Company owned and operated **16** restaurants and bars, **12** fast food concepts, and catering operations, all aggregated into a single operating segment[104](index=104&type=chunk) - The business is highly seasonal, with the second fiscal quarter (January, February, March) typically being the poorest performing, partially offset by increased results from Florida locations during winter months[106](index=106&type=chunk) [Results of Operations](index=23&type=section&id=Results%20of%20Operations) - Operating loss for the 13 weeks ended March 29, 2025, increased **284.1%** to **$(4.617) million**, including a **$3.44 million** goodwill impairment charge[107](index=107&type=chunk) - Operating income for the 26 weeks ended March 29, 2025, increased **167.6%** to **$1.073 million**, including a **$5.235 million** gain on Tampa Food Court lease termination and a **$3.44 million** goodwill impairment charge[108](index=108&type=chunk) | Metric (In thousands) | 13 Weeks Ended March 29, 2025 | 13 Weeks Ended March 30, 2024 | Variance ($) | Variance (%) | | :-------------------------------- | :---------------------------- | :---------------------------- | :----------- | :----------- | | Total revenues | $39,725 | $42,257 | $(2,532) | -6.0 % | | Food and beverage cost of sales | $11,484 | $12,138 | $(654) | -5.4 % | | Payroll expenses | $14,415 | $15,512 | $(1,097) | -7.1 % | | Occupancy expenses | $5,536 | $5,775 | $(239) | -4.1 % | | Other operating costs and expenses | $5,584 | $5,836 | $(252) | -4.3 % | | General and administrative expenses | $3,322 | $3,141 | $181 | 5.8 % | | Depreciation and amortization | $701 | $1,057 | $(356) | -33.7 % | | (Gain) Loss on closure of El Rio Grande | $(140) | $— | $(140) | N/A | | Gain on termination of Tampa Food Court lease | $— | $— | $— | N/A | | Goodwill impairment | $3,440 | $— | $3,440 | N/A | | **OPERATING INCOME (LOSS)** | **$(4,617)** | **$(1,202)** | **$(3,415)** | **284.1 %** | | Same-Store Sales (In thousands) | 13 Weeks Ended March 29, 2025 | 13 Weeks Ended March 30, 2024 | Variance ($) | Variance (%) | | :-------------------------------- | :---------------------------- | :---------------------------- | :----------- | :----------- | | Las Vegas | $13,975 | $13,799 | $176 | 1.3 % | | New York | $4,040 | $4,394 | $(354) | -8.1 % | | Washington, D.C. | $1,377 | $1,438 | $(61) | -4.2 % | | Atlantic City, NJ | $677 | $763 | $(86) | -11.3 % | | Alabama | $3,453 | $3,567 | $(114) | -3.2 % | | Florida | $15,512 | $14,936 | $576 | 3.9 % | | **Same-store sales** | **$39,034** | **$38,897** | **$137** | **0.4 %** | | Same-Store Sales (In thousands) | 26 Weeks Ended March 29, 2025 | 26 Weeks Ended March 30, 2024 | Variance ($) | Variance (%) | | :-------------------------------- | :---------------------------- | :---------------------------- | :----------- | :----------- | | Las Vegas | $28,254 | $28,643 | $(389) | -1.4 % | | New York | $15,201 | $15,733 | $(532) | -3.4 % | | Washington, D.C. | $3,392 | $3,901 | $(509) | -13.0 % | | Atlantic City, NJ | $1,230 | $1,318 | $(88) | -6.7 % | | Alabama | $6,743 | $6,644 | $99 | 1.5 % | | Florida | $26,340 | $25,780 | $560 | 2.2 % | | **Same-store sales** | **$81,160** | **$82,019** | **$(859)** | **-1.0 %** | - Goodwill impairment charge of **$3.44 million** was recognized for the 13 and 26 weeks ended March 29, 2025, due to a decline in stock price and uncertainty regarding the Bryant Park leases[123](index=123&type=chunk)[124](index=124&type=chunk) [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) - Cash and cash equivalents totaled **$11.124 million** as of March 29, 2025[126](index=126&type=chunk) - The working capital deficit decreased to **$6.787 million** at March 29, 2025, from **$10.659 million** at March 30, 2024, primarily due to the payment received from the Tampa Food Court lease termination[126](index=126&type=chunk) - Net cash used in operating activities for the 26 weeks ended March 29, 2025, was **$734,000**, a decrease from **$766,000** provided in the prior year, mainly due to a decrease in operating income (excluding specific gains/impairments)[129](index=129&type=chunk) - Net cash provided by investing activities for the 26 weeks ended March 29, 2025, was **$4.626 million**, an increase from **$596,000** used in the prior year, primarily due to the **$5.5 million** payment from the Tampa Food Court lease termination[130](index=130&type=chunk) - The Company's **$10 million** credit facility with Bank Hapoalim B.M. matures on June 1, 2025, and the Company is currently working with its lender on a new credit agreement[132](index=132&type=chunk)[133](index=133&type=chunk) - A discrete tax provision of **$4.799 million** was recorded for net deferred tax assets, as the Company concluded they were no longer realizable due to being in a cumulative loss position from the goodwill impairment[136](index=136&type=chunk) [Critical Accounting Estimates](index=30&type=section&id=Critical%20Accounting%20Estimates) - Critical accounting estimates include projected cash flows for fixed asset impairments, allowances for potential bad debts, assumptions for lease accounting discount rates, useful lives and recoverability of long-lived assets, fair values of financial instruments, and the realizable value of tax assets[142](index=142&type=chunk)[143](index=143&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=31&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section states that there are no material quantitative or qualitative disclosures about market risk applicable to the Company for the reporting period - This item is not applicable[145](index=145&type=chunk) [Item 4. Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the principal executive and financial officers, evaluated the effectiveness of the Company's disclosure controls and procedures, concluding they were effective as of March 29, 2025. No material changes in internal control over financial reporting occurred during the second quarter of fiscal 2025 - Disclosure controls and procedures were evaluated and deemed effective as of March 29, 2025[146](index=146&type=chunk) - No material changes in internal control over financial reporting occurred during the second quarter of fiscal 2025[147](index=147&type=chunk) [Part II. Other Information](index=32&type=section&id=Part%20II.%20Other%20Information) [Item 1. Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20Proceedings) This section incorporates by reference the information regarding legal proceedings from Note 8 – Commitments and Contingencies to the Consolidated Condensed Financial Statements - Information regarding legal proceedings is incorporated by reference from Note 8 - Commitments and Contingencies[150](index=150&type=chunk) [Item 1A. Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors) This section states that there are no new material risk factors to report for the current period - This item is not applicable[151](index=151&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=32&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports that there were no unregistered sales of equity securities or use of proceeds during the reporting period - None[152](index=152&type=chunk) [Item 3. Defaults upon Senior Securities](index=32&type=section&id=Item%203.%20Defaults%20upon%20Senior%20Securities) This section confirms that there were no defaults upon senior securities during the reporting period - None[153](index=153&type=chunk) [Item 4. Mine Safety Disclosures](index=32&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that mine safety disclosures are not applicable to the Company - This item is not applicable[154](index=154&type=chunk) [Item 5. Other Information](index=32&type=section&id=Item%205.%20Other%20Information) This section reports that no directors or executive officers adopted or terminated Rule 10b5-1 trading plans or non-Rule 10b5-1 trading arrangements during the second quarter of fiscal 2025 - No directors or executive officers adopted or terminated Rule 10b5-1 trading plans or non-Rule 10b5-1 trading arrangements during the second quarter of 2025[155](index=155&type=chunk) [Item 6. Exhibits](index=32&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications by the CEO and CFO, and XBRL interactive data files - Exhibits include certifications (31.1, 31.2, 32) and XBRL Instance Document (101.INS) and related taxonomy extension documents[157](index=157&type=chunk) [SIGNATURES](index=33&type=section&id=SIGNATURES) - The report is signed by Michael Weinstein, Chairman of the Board and Chief Executive Officer, and Anthony J. Sirica, President, Chief Financial Officer and Director[160](index=160&type=chunk)

Financial Data and Key Metrics Changes - At the end of Q2 2025, the company's cash balance was $11.1 million, an increase of approximately $0.9 million from year-end [5] - Total debt decreased to $4.3 million due to principal payments made during the quarter [6] - A goodwill impairment of $3.4 million was recorded, leading to a cumulative loss position affecting deferred tax assets, which resulted in a full valuation allowance of $4.8 million [7][8] Business Line Data and Key Metrics Changes - EBITDA for the quarter was negatively impacted by $650,000 in consultancy and legal fees related to the Bryant Park lease situation [10] - Alabama restaurants showed steady performance, while New York and Florida restaurants reported revenue improvements compared to the previous year [10][11] - Las Vegas operations demonstrated significant efficiency improvements, with weekly cash flows improving dramatically [12] Market Data and Key Metrics Changes - The company is currently in a legal dispute regarding the Bryant Park lease, which has implications for its operations and financials [14][15] - The Meadowlands casino license situation is contingent on New Jersey's response to downstate New York casino licenses, with expectations for developments by the end of the year [16][17] Company Strategy and Development Direction - The company is actively seeking new deals and opportunities for growth while navigating the challenges posed by the Bryant Park lease and Meadowlands casino licensing [13][19] - Management is optimistic about continued improvement in overall business performance [18] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about the lease situation at Bryant Park, indicating a lengthy legal process ahead but confidence in maintaining operations during this period [15] - The company anticipates that the Meadowlands location is well-positioned to meet future demands for casino gaming in Northern New Jersey [17] Other Important Information - The company is in the process of finalizing a new credit facility with a total capacity of $15 to $20 million [6] Q&A Session Summary Question: What is the status of the Bryant Park lease situation? - Management detailed ongoing legal proceedings and expressed confidence in their position, indicating that they expect to remain operational during the legal process [14][15] Question: How is the Meadowlands casino license situation evolving? - Management noted that the issuance of downstate New York casino licenses will influence the Meadowlands' prospects, with expectations for developments by year-end [16][17]

Financial Data and Key Metrics Changes - At the end of the quarter, the company's cash balance was $11.1 million, an increase of approximately $0.9 million from year-end [4] - Total debt decreased to $4.3 million due to principal payments made during the quarter [5] - A goodwill impairment of $3.4 million was recorded, leading to a cumulative loss position affecting deferred tax assets, which resulted in a full valuation allowance of $4.8 million [6][7] Business Line Data and Key Metrics Changes - EBITDA for the quarter was negatively impacted by $650,000 in consultancy and legal fees related to the Bryant Park lease situation [10] - Alabama restaurants showed steady performance, while New York and Florida restaurants reported revenue improvements compared to the previous year [10][11] - Las Vegas operations demonstrated significant efficiency improvements, with weekly cash flows improving dramatically [12] Market Data and Key Metrics Changes - The company is currently in a legal dispute regarding the Bryant Park lease, which has implications for its operations and financials [14][15] - The Meadowlands casino license situation is contingent on New Jersey's response to Downstate New York City casino licenses, with expectations for developments by the end of the year [16][17] Company Strategy and Development Direction - The company is actively seeking new deals and opportunities for growth while navigating the challenges posed by the Bryant Park lease and Meadowlands casino licensing [13][18] - Management expressed optimism about continued improvement in business performance across various locations [18] Management's Comments on Operating Environment and Future Outlook - Management highlighted the ongoing legal challenges but remains confident in the company's position and future prospects [15][16] - The expectation is that the business will continue to improve, with a focus on securing new opportunities [18] Other Important Information - The company is in the process of finalizing a new credit facility with a capacity of $15 to $20 million [5] - The Bryant Park lease situation is expected to take a year or more to resolve, with potential for a political settlement [15] Q&A Session Summary Question: What is the status of the Bryant Park lease? - The company has filed a claim in New York Supreme Court regarding the lease, alleging a corrupted proposal process and is currently a holdover tenant [14][15] Question: What are the prospects for the Meadowlands casino license? - The company believes that the Meadowlands is well-positioned to satisfy casino gaming demands in Northern New Jersey, pending New Jersey's allocation of licenses [16][17]

Financial Performance - Total revenues for the 13 weeks ended March 29, 2025, were $39,725,000, a decrease of 5.4% compared to $42,257,000 for the same period in 2024[4] - Total revenues for the 26 weeks ended March 29, 2025, were $84,714,000, down from $89,743,000 for the same period in 2024[5] - Consolidated net loss attributable to Ark Restaurants Corp. for the 13 weeks ended March 29, 2025, was $(9,258,000), compared to a net loss of $(1,449,000) for the same period in 2024[20] - The net loss attributable to Ark Restaurants Corp. for the 26 weeks ended March 29, 2025, was $(6,094,000) or $(1.69) per share, compared to a net loss of $(79,000) or $(0.02) per share for the same period in 2024[7] - Basic and diluted net loss per common share for the 13 weeks ended March 29, 2025, was $(2.57), compared to $(0.40) for the same period in 2024[20] Operating Results - The Company's adjusted EBITDA for the 13 weeks ended March 29, 2025, was $(691,000), compared to $(321,000) for the same period in 2024[6] - EBITDA for the 13 weeks ended March 29, 2025, was $(3,916,000), compared to $(145,000) for the same period in 2024[20] - Operating loss for the 13 weeks ended March 29, 2025, was $(4,617,000), compared to an operating loss of $(1,202,000) for the same period in 2024[20] - Total costs and expenses for the 13 weeks ended March 29, 2025, were $44,342,000, an increase of 2.0% from $43,459,000 in the same period in 2024[20] Revenue Sources - The Bryant Park Grill & Cafe and The Porch at Bryant Park collectively accounted for $12.7 million and $13.6 million of total revenues for the 26 weeks ended March 28, 2025, and March 29, 2024, respectively, representing approximately 15.0% and 15.1% of total revenue[13] Legal and Financial Position - The Company is pursuing legal action regarding lease agreements for Bryant Park properties, which could materially affect its business and financial condition[11] - The Company had cash and cash equivalents of $11,124,000 and total outstanding debt of $4,280,000 as of March 29, 2025[3] Special Items - The Company recognized a gain of $5,235,000 from the termination of the Tampa Food Court lease during the 13 weeks ended December 28, 2024[9] - The company reported a gain on termination of the Tampa Food Court lease of $(5,235,000) for the 26 weeks ended March 29, 2025[20] - Goodwill impairment of $3,440,000 was recorded for the 13 weeks ended March 29, 2025[20] Sales Performance - Company-wide same store sales increased by 0.4% for the 13 weeks ended March 29, 2025, but decreased by 1.0% for the 26 weeks ended March 29, 2025, compared to the prior year[4] - Total revenues for the 13 weeks ended March 29, 2025, were $39,725,000, a decrease of 5.5% compared to $42,257,000 for the same period in 2024[20] - Net loss attributable to non-controlling interests for the 13 weeks ended March 29, 2025, was $(114,000), compared to $(244,000) for the same period in 2024[20] - Weighted average number of common shares outstanding for the 13 weeks ended March 29, 2025, was 3,605,000, unchanged from the same period in 2024[20]

Core Viewpoint - Ark Restaurants Corp. reported a decline in revenues for the first quarter of fiscal 2025, but managed to increase operating income due to a lease termination gain, while facing ongoing inflationary pressures in the restaurant industry [2][3][10]. Financial Performance - Total revenues for the first quarter were $44.9 million, down 5.3% from $47.5 million in the same period last year [2]. - Net income attributable to Ark Restaurants was $3.2 million, or $0.88 per share, compared to $1.4 million, or $0.38 per share, in the prior-year quarter [2]. - Operating income increased to $5.7 million from $1.6 million in the prior-year quarter, influenced by a $5.2 million gain from lease termination [3]. Cost Structure - Food and beverage costs rose 0.3% to $12.11 million, constituting 26.9% of total revenues compared to 25.4% the previous year [4]. - Payroll expenses decreased by 3.4% to $16.4 million but increased as a percentage of total revenue due to wage inflation [4]. - Occupancy expenses and general administrative costs declined by 2.9% and 5.2% year over year, respectively [5]. Management Commentary - CEO Michael Weinstein highlighted ongoing cost pressures, particularly in wages and insurance premiums, and noted the company's strategy to avoid raising menu prices [6][10]. - Efforts to improve operational efficiency include consolidating functions and reducing payroll expenses [6]. Demand Trends - Strong sales were reported in Alabama, with a 6.9% year-over-year increase, while Washington, D.C. experienced an 18.2% decline in same-store sales [7][9]. - Las Vegas sales fell 3.8% year over year, attributed to lower traffic at the New York-New York Hotel and Casino [9]. Factors Influencing Results - The revenue decline was primarily due to the closure of the El Rio Grande and Tampa Food Court locations, although a $5.5 million lease termination payment positively impacted net income [8]. Guidance and Outlook - Management did not provide formal revenue or earnings guidance but expressed confidence in improving efficiency and reducing costs [12]. - Future prospects are tied to lease negotiations for Bryant Park Grill & Café and The Porch at Bryant Park, with potential material impacts on future earnings if leases are lost [13]. Other Developments - Ark Restaurants is negotiating a new banking agreement as its current credit facility is set to expire on May 31, 2025, with $13.1 million in cash and $4.7 million in total outstanding debt [14].