Core Insights - Nathan's Famous, Inc. (NATH) and Ark Restaurants Corp. (ARKR) represent two distinct operating models in the consumer-facing food sector, with NATH focusing on brand marketing and multi-channel distribution, while ARKR emphasizes direct restaurant ownership and operations [1][2] Company Overview - Nathan's Famous operates through a scalable brand platform that includes branded product sales, licensing, and a franchise network, which allows for broader distribution and reduced reliance on any single growth channel [6][8] - Ark Restaurants operates a portfolio of destination-oriented restaurants and bars, leveraging seasonal demand and tourism, which can lead to significant benefits during peak periods [9] Stock Performance & Valuation - Over the past three months, NATH's stock has decreased by 13.6%, while ARKR's has declined by 10.2%. However, in the past year, NATH's stock has increased by 18.1%, contrasting with ARKR's loss of 54.6% [3] - NATH is trading at a trailing 12-month enterprise value-to-sales (EV/S) ratio of 2.5X, slightly below its five-year median of 2.6X, while ARKR's EV/S ratio is at 0.1X, below its median of 0.3X [4] Factors Driving Nathan's Famous Stock - The multi-channel structure of Nathan's Famous supports broad distribution across various platforms, enhancing brand visibility and reducing dependence on restaurant traffic [6][8] - The high-margin licensing platform of Nathan's Famous, supported by long-term agreements, generates recurring royalty income and extends brand presence beyond restaurants [7] - Continued expansion in the Branded Product Program contributes to sales growth through foodservice distributors and large customer accounts, while the company manages inflation-related pressures effectively [8] Factors Driving Ark Restaurants Stock - Ark Restaurants benefits from high-visibility locations that attract seasonal demand and tourism, which can lead to improved performance during peak times [9] - The Bryant Park situation presents a potential catalyst for Ark Restaurants, as resolution of lease or legal issues could enhance business visibility and investor confidence [10] - Ark Restaurants has long-term growth potential through its interest in New Meadowlands Racetrack, which could provide opportunities for a future casino license [11] Investment Outlook - Nathan's Famous is currently viewed as better positioned than Ark Restaurants due to its diversified, brand-led model that allows for scalable and predictable earnings [12][14] - Despite NATH's recent underperformance, its stronger one-year rally and reasonable valuation relative to historical norms suggest a more attractive investment opportunity compared to ARKR, which faces ongoing uncertainty [15]

Core Viewpoint - Restaurant operators are facing mixed consumer spending, higher costs, and the need for concept refreshment, with Ark Restaurants Corp. (ARKR) and Flanigan's Enterprises, Inc. (BDL) as notable niche players with distinct models [1][2] Company Overview Ark Restaurants Corp. (ARKR) - Operates a portfolio of destination, high-traffic restaurants and food concepts in major tourist and urban markets, benefiting from premium locations and event-driven demand [2][10] - The business model is sensitive to site-specific risks, with significant revenue concentration in a few flagship venues, notably Bryant Park Grill & Café and The Porch at Bryant Park [12][13] - Historically grown through acquisitions and concept expansions, diversifying across various dining formats while leveraging operational expertise [11] Flanigan's Enterprises, Inc. (BDL) - Focuses on standardized neighborhood casual dining and high-volume liquor retail, providing a diversified revenue base and steadier local demand [2][7] - Operates through a partnership-based structure, allowing for operational control and recurring economics through management fees and royalties [8] - Revenue growth is supported by menu price increases and strong performance across both restaurant and liquor store segments [9] Stock Performance & Valuation - Over the past three months, BDL has outperformed ARKR, with BDL down 7.2% and ARKR down 10.5% [3] - In the past year, BDL has increased by 16.1%, while ARKR has seen a loss of 43.1% [3] - BDL's trailing 12-month enterprise value-to-sales (EV/S) ratio is 0.26X, while ARKR's forward sales multiple is 0.08X, both below the Retail-Wholesale sector average of 1.82X [5] Investment Considerations - Flanigan's offers a more stable operating model with diversified demand drivers, making it appealing for investors seeking consistency [15] - Ark Restaurants is better suited for those comfortable with higher site-level concentration risk, given its reliance on key flagship venues [15]

Core Viewpoint - Ark Restaurants Corp. (ARKR) has experienced a decline in stock performance following its earnings report, underperforming compared to the S&P 500 Index, with a notable drop in revenues and increased net losses for both the quarter and the full fiscal year [1][2][3]. Financial Performance - For Q4 fiscal 2025, total revenues were $37.3 million, a decrease of 14% year-over-year from $43.4 million, with comparable revenues also showing weakness [2] - The company reported a net loss of $1.9 million, or $0.53 per share, an improvement from a net loss of $4.5 million, or $1.24 per share in the prior year [2] - For the full fiscal year, revenues declined 9.7% to $165.8 million from $183.5 million, with the net loss widening to $11.5 million, or $3.18 per share, from $3.9 million, or $1.08 per share in fiscal 2024 [3] - Adjusted EBITDA for the full year fell 77% to $1.4 million from $6.1 million in fiscal 2024, reflecting the impact of litigation costs and lower demand [5] Same-Store Sales and Operational Challenges - Same-store sales trends were weak, with a decline of 10.1% for the 13-week period and 4.2% for the full fiscal year, attributed to lower catering and à la carte revenues at key locations [4] - Management highlighted operational divergence across the portfolio, with litigation expenses related to the Bryant Park Grill significantly impacting performance [6][7] Balance Sheet and Liquidity - At the end of the quarter, Ark Restaurants had cash and cash equivalents of $11.3 million and total debt of $3.6 million, with management describing liquidity as stable compared to the prior year [5] Management Commentary and Future Outlook - Management expressed cautious optimism about near-term operating trends, noting that December-quarter performance was tracking ahead of the prior year, although challenges remain in certain markets [10] - The company did not provide formal financial guidance but indicated that efficiency initiatives were beginning to yield results in some areas [10] Notable Actions and Developments - During fiscal 2025, Ark Restaurants permanently closed El Rio Grande, recognizing a modest gain, and terminated the Tampa Food Court lease, receiving a $5.5 million termination payment [11] - The company continues to highlight its minority investment in New Meadowlands Racetrack LLC, with potential upside contingent on a New Jersey casino referendum [12]

Business Operations - As of September 27, 2025, the company owned and operated 16 restaurants and bars, 12 fast food concepts, and catering operations exclusively in the United States[94]. - The company continues to operate its properties while pursuing lease extensions and protecting its rights amid ongoing disputes with the landlord[100]. - The Company extended its lease for America at the New York-New York Hotel and Casino in Las Vegas through December 31, 2033, agreeing to spend a minimum of $4,000,000 on a refresh by March 31, 2026[144]. Financial Performance - For the year ended September 27, 2025, total revenues decreased by 9.7% to $165.8 million compared to $183.5 million for the year ended September 28, 2024[107]. - Same-store food and beverage sales decreased by 4.2% for the year ended September 27, 2025, with notable declines in New York (-10.8%) and Washington, D.C. (-14.9%)[109]. - The operating loss for the year ended September 27, 2025, was $4.1 million, a 5.4% improvement from an operating loss of $4.3 million for the year ended September 28, 2024[106]. - Total costs and expenses for the year ended September 27, 2025 were $169,815,000, a decrease of $18,024,000 or 9.6% compared to $187,839,000 in 2024[112]. - Net cash provided by operating activities decreased to $1,752,000 in 2025 from $4,654,000 in 2024, primarily due to lower operating income[132]. Revenue Sources - The Bryant Park Grill and The Porch at Bryant Park collectively accounted for $25.5 million and $31.1 million of total revenues for the years ended September 27, 2025, and September 28, 2024, respectively, representing approximately 15.4% and 17.4% of total revenue[101]. - Bryant Park Grill & Café and The Porch at Bryant Park collectively accounted for $25.5 million and $31.1 million of total revenues for the years ended September 27, 2025, and September 28, 2024, representing approximately 15.4% and 17.4% of total revenue for those periods, respectively[138]. Investment and Impairment - The company has made a total investment of $5.3 million in the New Meadowlands Racetrack LLC since March 12, 2013[103]. - The company anticipates potential impairment of its investment in New Meadowlands Racetrack if a proposed referendum for casino licenses does not pass[105]. - The carrying value of the investment in New Meadowlands Racetrack is assessed each reporting period for potential impairment based on various factors including the probability of gambling being approved in northern New Jersey[164]. - The company recognized a non-cash impairment charge of $3,440,000 for goodwill in the year ended September 27, 2025, due to a decline in stock price and lease uncertainties[171]. - Goodwill impairment charge for the year ended September 27, 2025 was $3,440,000, compared to $4,000,000 in the previous year, indicating a decline in the company's equity value[122]. Cost Management - Food and beverage cost of sales decreased by $3,092,000 to $46,427,000, representing 28.0% of total revenues, up from 27.0% in the previous year[112]. - Payroll expenses decreased by $5,498,000 to $60,346,000, accounting for 36.4% of total revenues, slightly up from 35.9%[113]. - Occupancy expenses decreased by $2,095,000 to $22,527,000, making up 13.6% of total revenues, compared to 13.4% in the prior year[114]. - General and administrative expenses decreased by $262,000 to $12,001,000, which is 7.2% of total revenues, up from 6.7%[116]. Lease and Termination - The company recognized a gain of $5.2 million on the termination of the Tampa Food Court lease, contributing to the overall operating results[106]. - A subsidiary received a termination payment of $5,500,000 for vacating the food court at The Hard Rock Hotel and Casino, resulting in a recognized gain of $5,235,000 during the year ended September 27, 2025[151]. - The Company recognized a loss of $876,000 from the termination of the El Rio Grande lease and a gain of $173,000 from refinements of estimates during the year ended September 27, 2025[150]. Debt and Financing - The Credit Agreement was amended to extend the maturity date to June 1, 2028, reduce maximum obligations from $30,000,000 to $20,000,000, and increase the minimum tangible net worth covenant from $22,000,000 to $28,000,000[153]. Accounting and Valuation - The company assesses goodwill and trademarks for impairment annually and whenever events indicate that carrying values may not be recoverable[169]. - The company provides a deferred income tax valuation allowance due to uncertainty about the realization of deferred tax amounts[168]. - Recent accounting standards adopted in fiscal 2025 are discussed in Note 1 of the consolidated financial statements[174].

Core Insights - Ark Restaurants Corp. (ARKR) has experienced a significant decline in stock value, losing 31.8% over the past six months, compared to a 5.1% decline in the industry and gains of 6% and 16.3% in the sector and S&P 500, respectively [1][2][7] Financial Performance - The company reported weaker top-line performance and continued losses for the fourth quarter of fiscal 2025, attributed to softer traffic at flagship locations and disruptions from ongoing litigation at Bryant Park [2][3] - Despite some properties showing improved cash flow, particularly in Las Vegas and select New York and Florida restaurants, these positives were overshadowed by lower catering and a la carte sales, as well as revenue losses from closed locations [2][3] Operational Challenges - Management cited elevated legal costs and uncertainty surrounding the Bryant Park Grill and The Porch as significant factors affecting earnings, leading to reduced event bookings and overall revenue visibility [3][10] - Mixed performance across the restaurant portfolio was noted, with weaker trends in Washington, D.C., and parts of Florida, which offset stronger results in Las Vegas and New York [11] Cost Pressures - Persistent cost inflation remains a challenge, with higher labor, insurance, and operating expenses constraining margins despite targeted pricing actions [12] - Management acknowledged that while pricing and efficiency initiatives have helped, inflationary pressures continue to impact profitability and investor sentiment [12] Long-term Opportunities - Two fundamental factors driving the stock include potential long-term optionality tied to the Meadowlands Racetrack investment, which could provide exclusive food-and-beverage rights if casino gaming is approved, and improving operational efficiency at select core properties [13] - The trailing 12-month EV/Sales ratio for ARKR stands at 0.08X, significantly lower than the industry's average of 4.17X and its five-year median of 0.28X, indicating potential undervaluation [14] Market Position - ARKR's stock continues to face pressure from ongoing uncertainty related to its Bryant Park operations, which management described as a significant drag on performance [10][17] - The company has not issued formal guidance but has shared a cautious qualitative outlook, noting improved operating trends entering the December quarter [8]

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Financial Data and Key Metrics Changes - The company's cash position is $11.3 million, slightly up from $10.2 million last year [4] - Total debt stands at $3.6 million [4] - Adjusted EBITDA for the full year decreased to $1.4 million from $6.1 million last year, primarily due to increased legal fees and impacts on the catering business related to Bryant Park [4] - For the current quarter, EBITDA was -$1 million compared to $500,000 in the same quarter last year, again attributed to Bryant Park [5] Business Line Data and Key Metrics Changes - The company has seen improved cash flows in Las Vegas and Alabama, while Florida properties are experiencing revenue declines of 5% to 7% [6][7] - The catering business in Washington, D.C. has been negatively impacted, affecting overall performance [8] Market Data and Key Metrics Changes - The company is facing challenges in Florida, with revenue deterioration noted across full-service restaurants [6][7] - The Meadowlands Racetrack may benefit from new casino licenses issued in downstate New York, which could enhance the company's position if a casino is established [9][10] Company Strategy and Development Direction - The company is optimistic about the Meadowlands despite increased competition from new casinos in New York [20][22] - Management is actively seeking new properties and has two letters of intent out for potential acquisitions [25][26] - The focus remains on improving operational efficiency and managing rising costs in labor and materials [23][24] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the difficulties in the current operating environment but remains hopeful about the future, particularly regarding the Meadowlands and ongoing litigation at Bryant Park [30][31] - There is a belief that the company has a strong position in the Bryant Park litigation, which could positively influence future operations [30][31] Other Important Information - The company is experiencing a challenging environment for acquisitions, with many potential deals deteriorating during the due diligence process [26] - Management emphasizes the importance of not relying on press narratives regarding the Bryant Park situation [30][32] Q&A Session Summary Question: What is the strategy going forward to turn the core business around? - Management expressed optimism about the Meadowlands and stated that they are actively looking for new partners and properties [20][22] Question: Why not leverage successful management from Vegas to improve other properties? - Management acknowledged the success in Vegas and indicated they are looking for ways to replicate that success across other locations [24][28] Question: Concerns about the litigation at Bryant Park and its impact on the business? - Management believes they have a strong position in the litigation and that it has not negatively impacted their ability to operate [30][31] Question: Why is there no insider buying at current stock prices? - Management stated that insider decisions on buying stock are personal and not necessarily indicative of the company's value [39][41]

Financial Data and Key Metrics Changes - Cash balance increased to $11.3 million from $10.2 million year-over-year [4] - Adjusted EBITDA for the full year decreased to $1.4 million from $6.1 million, primarily due to issues at Bryant Park and increased legal fees [4] - Current quarter EBITDA was negative $1 million compared to positive $500,000 in the same quarter last year [5] Business Line Data and Key Metrics Changes - The catering business has been significantly impacted, costing nearly $2 million [4] - Performance in Las Vegas has improved, with better cash flows reported [6] - Revenue deterioration observed in Florida properties, down 5-7% [7] Market Data and Key Metrics Changes - Southern Florida continues to show negative revenue trends, affecting overall performance [7] - The event business in Washington, D.C. has been adversely affected, impacting catering revenues [8] Company Strategy and Development Direction - The company is focusing on the Meadowlands and Bryant Park, with optimism about potential casino developments [9][10] - There is an ongoing litigation at Bryant Park, which has created uncertainty but is expected to stabilize operations [11][12] - The company is actively seeking new properties and has two letters of intent out for potential acquisitions [23][24] Management's Comments on Operating Environment and Future Outlook - Management acknowledges challenges in the operating environment, including rising input costs and labor expenses [22] - There is a belief that the Meadowlands opportunity is not a "Hail Mary" and that new partnerships can be formed [21] - Management is working on improving efficiency and has seen positive developments in Las Vegas [23] Other Important Information - The company has faced difficulties in concluding acquisition deals due to deteriorating financials of targets [24] - Management emphasizes the importance of not relying on press narratives regarding litigation outcomes [28] Q&A Session Summary Question: What is the strategy going forward to turn the core business around? - Management expressed optimism about Meadowlands and stated they are looking for new properties despite challenges [19][21] Question: Why not leverage successful management from Vegas to improve other properties? - Management acknowledged the need for better management across properties and is exploring options [26] Question: Concerns about the litigation at Bryant Park and its impact on the business? - Management believes they have a strong position in the litigation and that it will not disrupt operations significantly [28][30] Question: Why is there no insider buying at current stock prices? - Management indicated that insider decisions on buying stock are personal and not necessarily reflective of company value [36][38]

Financial Data and Key Metrics Changes - Cash increased to $11.3 million from $10.2 million year-over-year, while debt remained at $3.6 million [4] - Adjusted EBITDA for the full year decreased to $1.4 million from $6.1 million, primarily due to increased legal fees and impacts on the catering business related to Bryant Park [4] - For the current quarter, EBITDA was negative $1 million compared to positive $500,000 in the same quarter last year, again attributed to Bryant Park [5] Business Line Data and Key Metrics Changes - The performance of restaurants in Las Vegas and Alabama improved, while Florida properties experienced revenue declines of 5-7% [6] - The catering business in Washington, D.C. faced challenges, impacting overall performance [7] Market Data and Key Metrics Changes - The issuance of casino licenses in downstate New York may affect the competitive landscape for the Meadowlands, with three licenses issued in early December [8][9] - The company is optimistic about the potential for a casino at the Meadowlands Racetrack, which could significantly enhance business operations if the referendum passes [10] Company Strategy and Development Direction - The company is focusing on improving operational efficiency and cash flows, particularly in Las Vegas, while exploring new property acquisitions [6][24] - Management is actively seeking new partnerships and acquisitions, with two letters of intent currently out and negotiations ongoing for a brand [26][27] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in the operating environment, including rising input costs and competition, but expressed optimism about the Meadowlands project and ongoing business improvements [20][24] - The litigation at Bryant Park is seen as a distraction, but management believes they have a strong position in the case [31][32] Other Important Information - The company has faced difficulties in finding suitable acquisition targets due to deteriorating financials of potential properties [25] - Management emphasized the importance of not relying on press narratives regarding the Bryant Park litigation and encouraged stakeholders to focus on factual court decisions [46] Q&A Session Summary Question: What is the strategy going forward to turn the core business around? - Management expressed optimism about the Meadowlands project and stated they are actively looking for new properties and partnerships [20][22] Question: Why not leverage successful management from Las Vegas to improve other properties? - Management acknowledged the need for better management across properties and is exploring options to enhance operational efficiency [24] Question: Concerns about the litigation at Bryant Park and its impact on business? - Management believes they have a strong position in the litigation and that it has not significantly hindered operations [31][32] Question: Why is there no insider buying at current stock prices? - Management indicated that insider buying decisions are personal and not necessarily reflective of the company's value [40][41]

Financial Performance - Total revenues for the 13 weeks ended September 27, 2025 were $37,323,000, a decrease of 14% compared to $43,406,000 for the same period in 2024[5] - Total revenues for the year ended September 27, 2025 were $165,751,000, down 9.7% from $183,545,000 in 2024[6] - The consolidated net loss attributable to Ark Restaurants Corp. for the 52 weeks ended September 27, 2025, was $11.466 million, compared to a loss of $3.896 million for the prior year, representing an increase in loss of 194.5%[34] - The Company recorded a gain of $5,235,000 from the termination of the lease for the Tampa Food Court during the year ended September 27, 2025[23] EBITDA and Operating Loss - EBITDA, as adjusted, for the 13 weeks ended September 27, 2025 was $(1,071,000), down from $503,000 in the same quarter last year[3][8] - EBITDA for the 13 weeks ended September 27, 2025, was $(823) thousand, an improvement from $(4.610) million for the same period in 2024[34] - The company reported a total operating loss of $1.722 million for the 13 weeks ended September 27, 2025, compared to a loss of $5.519 million for the same period in 2024[34] Impairment and Expenses - The Company recognized a non-cash goodwill impairment charge of $3,440,000 for the year ended September 27, 2025 due to a decline in stock price and uncertainty regarding lease renewals[27] - The company incurred impairment losses on right-of-use and long-lived assets amounting to $4.700 million for the 52 weeks ended September 27, 2025[34] - The ongoing litigation related to the Bryant Park operations has negatively impacted revenue and cash flow, with litigation expenses exceeding $400,000 in the current quarter[3] Sales and Revenue Sources - Company-wide same store sales decreased by 10.1% and 4.2% for the 13 and 52 weeks ended September 27, 2025, primarily due to lower catering and a la carte revenue at the Bryant Park Grill[7] - The Bryant Park Grill & Cafe and The Porch at Bryant Park accounted for $25.5 million and $31.1 million of total revenues for the years ended September 27, 2025 and September 28, 2024, representing approximately 15.4% and 17.4% of total revenue, respectively[16] Cash and Debt Position - The Company had cash and cash equivalents of $11,324,000 and total outstanding debt of $3,609,000 as of September 27, 2025[4] Operational Strategy - The company operates 16 restaurants and bars, 12 fast food concepts, and catering operations primarily in New York City, Florida, Washington, DC, Las Vegas, and Alabama[31] - The company plans to operate Bryant Park Grill & Café and The Porch at Bryant Park until lease extensions are awarded or they are ordered to vacate, indicating ongoing strategic management of restaurant locations[32] - The company expressed uncertainty regarding its ability to open new restaurants in existing and new markets due to challenges in site selection and lease negotiations[32] Payroll and Employment - Payroll expenses for the 13 weeks ended September 27, 2025, were $14.242 million, down from $15.875 million in the same period in 2024, reflecting a decrease of 10.3%[34]