Core Insights - The article highlights the performance and outlook of several companies, including Applied Materials, Linde, Abbott Laboratories, and Flanigan's Enterprises, as featured in the Zacks Analyst Blog [1][2]. Applied Materials - Applied Materials' shares have outperformed the Zacks Electronics - Semiconductors industry over the past six months, with a gain of 80.2% compared to the industry's 19.5% [4]. - The company is benefiting from a rebound in the semiconductor industry, particularly in the foundry and logic sectors, along with consistent progress in its services and strength in its diversified portfolio [5]. - However, increasing U.S.-China tensions and export restrictions on semiconductor manufacturing equipment may undermine its near-term growth prospects [6]. Linde - Linde's shares have outperformed the Zacks Chemical - Specialty industry over the past year, with a gain of 2.2% compared to the industry's decline of 0.2% [7]. - The company has a record-high order book of $10 billion, supported by fixed-fee contracts and a strong execution track record [7]. - Despite maintaining industry-leading operating margins, Linde is cautious about the European economy, expecting demand to shrink, particularly in the industrial sector, and facing falling prices for helium and other rare gases due to oversupply [9]. Abbott Laboratories - Abbott's shares have underperformed the Zacks Medical - Products industry over the past year, with a decline of 16.1% compared to the industry's 14.4% [10]. - The company's nutrition business is transitioning, with expectations for growth in the second half of 2026, supported by a strong product pipeline and the Medical Devices segment, particularly the FreeStyle Libre CGM franchise [11]. - Demand in Diagnostics is improving outside of COVID, with momentum in Core Laboratory and Point of Care segments [12]. Flanigan's Enterprises - Flanigan's shares have outperformed the Zacks Retail - Restaurants industry over the past year, with a gain of 35.4% compared to the industry's decline of 5.1% [13]. - The company reported a 9.6% revenue increase in fiscal 2025, driven by pricing discipline and strong performance in its package store segment [14]. - Risks include structural cost pressures, labor inflation, and high fixed costs, which may limit margin scalability and organic growth [15].

Core Viewpoint - Restaurant operators are facing challenges due to uneven consumer spending, high labor and food costs, and the need for concept refreshment, with Ark Restaurants Corp. (ARKR) and Flanigan's Enterprises, Inc. (BDL) representing two distinct strategies within the industry [1][3]. Company Overview - Ark Restaurants operates destination-oriented restaurants and bars in high-traffic urban and tourist markets, while Flanigan's focuses on casual dining in Florida and includes package liquor stores in its portfolio [1][2]. - BDL's business model benefits from a diversified revenue base, including high-volume liquor retail, which provides consistent demand despite economic fluctuations [7][16]. Stock Performance & Valuation - Over the past three months, BDL's stock has decreased by 1%, outperforming ARKR, which has seen a decline of 7.7%. In the past year, BDL has increased by 23.5%, while ARKR has lost 50.4% [4]. - BDL's trailing enterprise value-to-sales (EV/S) ratio is 0.28X, above its five-year median of 0.26X, while ARKR's ratio is 0.09X, below its median of 0.27X. Both companies are considered inexpensive compared to the Retail-Wholesale sector average of 1.90X [5]. Factors Driving Flanigan's Stock - Flanigan's dual-revenue structure allows it to capture both on-premise dining and off-premise alcohol sales, enhancing revenue stability [7]. - The company has effectively managed inflationary pressures through strategic price increases and centralized purchasing, leading to improved profitability despite rising operating costs [8]. - Flanigan's controlled expansion strategy through limited partnerships helps maintain operational oversight and reduces capital risk while enhancing cash flow visibility [9]. Factors Driving Ark Restaurants Stock - Ark Restaurants' portfolio is centered around large, destination restaurants in urban and tourist locations, benefiting from event-driven demand and seasonal traffic [10]. - The company is actively reshaping its portfolio by exiting underperforming assets and reallocating capital to higher-return opportunities, which supports long-term operational stability [11]. - Ark's minority investment in New Meadowlands Racetrack offers potential long-term revenue opportunities tied to a possible casino development, adding an element of optionality for investors [12]. Comparative Analysis - The differing operational models of ARKR and BDL present contrasting risk-reward profiles, with BDL's stability and diversified revenue mix providing more consistent demand visibility compared to ARKR's event-sensitive structure [15][16]. - BDL's stock performance and operational structure suggest it is a more compelling choice for investors seeking stability, while ARKR remains a higher-risk option due to its concentrated asset risk [17].

Restaurant operators are navigating a mixed consumer spending backdrop, higher labor and input costs and the ongoing need to refresh concepts to sustain traffic. In this environment, Ark Restaurants Corp. (ARKR) and Flanigan’s Enterprises, Inc. (BDL) stand out as two niche players with distinct operating models. ARKR runs a portfolio of destination, high-traffic restaurants and food concepts across major tourist and urban markets, while BDL operates and franchises a long-established Florida-focused casual d ...

Core Viewpoint - Flanigan's Enterprises, Inc. reported strong financial performance for fiscal 2025, with significant increases in sales and net income, despite facing inflationary pressures and rising operating costs [2][3][11]. Financial Performance - For the fourth quarter of fiscal 2025, sales rose to $49.2 million from $46 million, and net income increased to $0.9 million from $0.2 million, resulting in diluted EPS of $0.48 compared to $0.11 a year ago [2]. - Total revenues for fiscal 2025 increased by 9.6% to $205.2 million from $187.2 million, while net income attributable to stockholders surged by 49.9% to $5 million ($2.71 per share) from $3.4 million ($1.81 per share) in fiscal 2024 [3]. Segment Performance - Restaurant food sales grew by 8.5% to $124.5 million, and restaurant bar sales increased by 5.8% to $31.8 million. Package store sales advanced by 16% to $46.9 million, driven by higher customer traffic [4]. - Restaurant gross margin improved to 66.6% from 65.6%, while package store gross margin fell to 25.1% from 26.6%, indicating differing profitability trends across segments [7]. Cost Management - Total costs and expenses rose by 8.3% to $196.5 million, which was slower than revenue growth, leading to a 49.7% increase in income from operations to $8.7 million from $5.8 million [5]. - Payroll and related costs increased by 7.3% to $63.7 million, but payroll as a percentage of revenue improved to 31.04% from 31.70%, suggesting effective cost management [6]. Liquidity and Cash Flow - Cash and cash equivalents at the end of fiscal 2025 were $20.1 million, down from $21.4 million, primarily due to a land acquisition. Operating cash flow improved to $10.5 million from $6.6 million [8]. Management Insights - Management highlighted that revenue growth was driven by higher menu prices and increased sales, particularly from the Hollywood, FL location operating for the full year [9]. - To maintain margins amid inflation, the company implemented multiple price increases throughout fiscal 2025 [10]. Future Outlook - While Flanigan's did not provide formal numeric guidance for fiscal 2026, management expects continued growth in restaurant and package store sales, but also anticipates rising operating costs and a potential decline in package liquor store gross margin [12]. - The company plans to construct a new restaurant in Cutler Bay, FL, and has committed to purchasing $9.2 million of baby back ribs for calendar year 2026, reflecting increased market pricing [13][14].

Business Operations - As of September 27, 2025, Flanigan's Enterprises operates a total of 32 units, including 11 restaurants and 11 package liquor stores, all under the service marks "Flanigan's Seafood Bar and Grill" and "Big Daddy's Liquors"[19][31][26]. - The company owns and operates 11 package liquor stores, with two of them jointly operated with restaurants[26]. - Flanigan's has 5 franchised units, including 4 restaurants and 3 package liquor stores, with no new franchise arrangements anticipated in the foreseeable future[19][32][27]. - The company has invested in 11 limited partnerships that own and operate restaurants, with management fees based on cash available for distribution[35][37]. - The company has maintained operational control over its units through a combination of ownership and management agreements with limited partnerships[23][24]. Sales and Revenue - Food sales account for approximately 79.67% of total restaurant sales, while bar sales represent about 20.33%[21]. - The company reported a franchise revenue of approximately $4.5 million for the quarter, reflecting a growth of 20% year-over-year[184]. - Total revenue for fiscal year 2025 increased by $18,032,000 or 9.63% to $205,248,000 from $187,216,000 in fiscal year 2024, primarily due to increased package liquor store and restaurant sales[208]. - Restaurant food sales reached $124,501,000, accounting for 61.25% of total sales in fiscal year 2025, compared to $114,795,000 or 61.95% in fiscal year 2024[207]. - Package store sales increased to $46,988,000, representing 23.12% of total sales in fiscal year 2025, up from $40,497,000 or 21.85% in fiscal year 2024[207]. Costs and Expenses - The company paid approximately $4.01 million in premiums for various insurance policies for the policy year commencing December 30, 2024, which includes coverage for franchises totaling approximately $911,000[87]. - Total costs and expenses for fiscal year 2025 rose to $196,503,000, an increase of 8.34% from $181,375,000 in fiscal year 2024[212]. - Payroll and related costs for fiscal year 2025 were $63,701,000, reflecting a 7.33% increase from $59,349,000 in fiscal year 2024[216]. - Operating expenses for fiscal year 2025 increased to $27,438,000, an 11.08% rise from $24,701,000 in fiscal year 2024[217]. Labor and Employment - The company employs 2,033 persons as of the fiscal year end 2025, with 773 full-time and 1,260 part-time employees[77]. - The company has a favorable labor relations environment with no employees represented by collective bargaining organizations[77]. - The minimum wage in Florida is currently $14.00 per hour, increasing by $1.00 per hour annually until it reaches $15.00 per hour in 2026, which will significantly impact the company's labor costs[102]. - The company faces significant labor cost inflation, which could materially adversely affect its financial performance if not offset by price increases or other measures[100]. - The company has experienced challenges in hiring and retaining qualified personnel, which could adversely affect its ability to operate and grow[99]. Market Competition - The company competes with well-established competitors that have greater financial resources, which may provide advantages in marketing and purchasing[91]. - The restaurant and package liquor store industry is highly competitive, impacting revenue and profitability due to established competitors with greater resources[111]. - Comparable restaurant sales growth is critical for profit growth, and any decline could significantly impact profitability due to the loss of positive profit margins[106]. Technology and Cybersecurity - The company maintains cybersecurity measures, including encryption and tokenization for credit card transactions, to protect sensitive information[61]. - The company has a comprehensive cybersecurity risk management program to safeguard its information systems and mitigate risks[173]. - Significant failures or interruptions in key information technology systems could adversely impact business operations and customer experience[143]. - The company is exposed to interest rate fluctuations on its borrowings and uses interest rate swap agreements to manage these risks[167]. Strategic Initiatives - The company is exploring potential acquisitions to enhance its product offerings and expand its geographic footprint[184]. - A new marketing strategy has been implemented, aiming for a 25% increase in brand awareness over the next six months[184]. - The company is investing in new technology development, allocating $C million towards R&D to enhance product offerings and improve user experience[5]. - The company plans to implement a new loyalty program, projected to increase repeat customer visits by 15%[185]. Future Outlook - The company provided an optimistic outlook for the next quarter, projecting revenue growth of A% and an increase in user engagement metrics[3]. - The company anticipates an increase in restaurant food and bar sales for fiscal year 2026 due to increased restaurant traffic[209][210]. - The company provided guidance for the next quarter, expecting revenue to be between $220 million and $240 million, indicating a potential growth of 10% to 20%[186]. - Overall, the company remains optimistic about maintaining a strong growth trajectory in the upcoming fiscal year[185].

Core Viewpoint - Flanigan's Enterprises, Inc. (BDL) has shown strong short-term stock performance, gaining 11.8% over the past three months, significantly outperforming the industry and sector averages [1][6]. Financial Performance - For the 13 weeks ended June 28, 2025, BDL reported strong revenue and profit growth, driven by increased restaurant food and bar sales, higher package store sales, and modest franchise revenue growth [2]. - Menu price increases implemented over the past year have helped mitigate rising costs in food, liquor, and wages, with expectations for continued sales growth through fiscal 2025 [3][9]. Market Position - BDL operates 32 establishments, including restaurants and liquor stores, and franchises five units, indicating robust growth potential in the South Florida market [7]. - The company has outperformed competitors like Ark Restaurants Corp. and Nathan's Famous, which experienced stock declines of 2% and 13.3%, respectively, over the same period [6]. Business Model - BDL's diversified operations across restaurants and liquor stores provide resilience and multiple revenue streams, stabilizing performance across consumer cycles [10]. - The company benefits from durable cash flows through franchise agreements and real estate ownership, which support long-term asset value [11]. Challenges - BDL faces inflation and wage pressures that are increasing operating expenses, which may limit pricing power and margin protection [12]. - Intense competition in the South Florida market poses challenges for pricing and staff retention, potentially impacting profitability [12]. Valuation - BDL's trailing 12-month EV/Sales ratio of 0.28X is lower than the industry average of 4.11X but higher than its five-year median of 0.26X, indicating potential for growth [13][15]. Investment Outlook - The company's strong core business, earnings potential, and financial stability suggest favorable growth prospects, making it an attractive option for both existing and new investors [16][17].

Core Insights - Flanigan's Enterprises, Inc. has seen a 39% increase in stock price over the past six months, significantly outperforming the industry and major indices [1][7] - The company reported strong financial results for the 13 weeks ending June 28, 2025, with growth in revenue and earnings driven by increased sales across its restaurant and retail liquor operations [2][10] - Management has implemented pricing adjustments to counteract rising costs, although inflation remains a significant challenge [3][11] Financial Performance - Revenue and earnings growth were attributed to higher sales in restaurant food, bar sales, package store sales, and franchise-related income, while rental income remained stable [2][10] - The trailing 12-month EV/Sales ratio for Flanigan's is 0.30X, lower than the industry average of 4.50X but higher than its five-year median of 0.26X [14] Business Model and Strategy - Flanigan's operates 32 establishments, including restaurants and liquor stores, and has a franchise network that supports growth potential [8][12] - The dual business model combining restaurant and retail liquor operations has proven resilient, with both segments contributing to revenue gains [9][10] - Strategic pricing initiatives have helped maintain margins despite inflationary pressures, showcasing effective cost management [11] Market Position and Competitors - Flanigan's stock has outperformed peers like Ark Restaurants Corp. and Nathan's Famous, indicating strong market momentum despite industry challenges [1][7] - The company's focus on maintaining brand standards and performance across franchise units enhances long-term growth visibility [12] Challenges - Flanigan's faces margin pressure from rising wages, staffing shortages, and inflation-related increases in operational costs [13] - Persistent inflation and supply chain disruptions pose risks to cost stability and operational efficiency [13]

Core Viewpoint - Flanigan's Enterprises, Inc. has shown strong stock performance with a 37.7% increase over the past six months, significantly outperforming the industry and major indices despite challenges in the restaurant sector [1][7]. Financial Performance - For the 13 weeks ended June 28, 2025, Flanigan's reported robust improvements in both revenue and net income, with notable strength in restaurant food and bar sales, package store sales, and franchise-related revenues [2]. - The company has successfully offset higher food and liquor costs and rising labor expenses through pricing actions taken over the past year, with expectations for continued benefits in food and bar sales through fiscal 2025 [3]. Market Position and Strategy - Flanigan's operates 32 establishments, including restaurants and liquor stores, and franchises five units, indicating strong growth potential [8]. - The dual business model of restaurants and liquor stores provides steady revenue streams and enhances brand recognition, which supports resilience during economic downturns [10]. - The company has a long-standing presence in South Florida, leveraging community ties and brand loyalty to maintain a competitive edge [11]. Cost Management - Flanigan's employs strategic procurement practices, such as locking in key food supply agreements, to mitigate cost volatility and maintain stable margins despite inflationary pressures [12]. Challenges - The company faces rising labor costs and staffing shortages, which could pressure margins if not managed effectively [13]. - Intense competition from national restaurant chains and discount liquor superstores poses a threat to market share and pricing power [13]. Valuation - Flanigan's trailing 12-month EV/Sales ratio is 0.29X, lower than the industry average of 4.45X but higher than its five-year median of 0.25X, indicating potential for growth [16]. - Compared to peers like Ark Restaurants and Nathan's Famous, Flanigan's valuation suggests superior performance expectations [18]. Investment Outlook - The company's strong core business strength and financial footing present a compelling case for both existing and new investors to consider holding or adding shares [19][20].

Core Viewpoint - Flanigan's Enterprises, Inc. reported a mixed performance in its latest earnings, with revenue growth but a decline in stock price compared to the S&P 500 Index, indicating potential challenges ahead for the company [1]. Financial Performance - For the quarter ended June 28, 2025, Flanigan's generated total revenues of $52.2 million, a 6.2% increase from $49.1 million in the prior-year quarter [2]. - Net income attributable to the company rose 24.2% to $1.4 million, or $0.75 per share, compared to $1.1 million, or $0.60 per share, in the same period last year [2]. - On a nine-month basis, revenues grew 9.7% to $156.1 million from $142.3 million, and net income attributable to shareholders advanced 30.4% to $4.1 million, or $2.23 per share [3]. Segment Performance - Restaurant food and bar sales increased 4.8% to $39.9 million from $38 million, while package store sales rose 11.9% to $11.5 million from $10.3 million [3][4]. - Comparable weekly restaurant food and bar sales rose 4.7% and 4.6%, driven by recent menu price increases [4]. Key Business Metrics - Gross profit margin on restaurant food and bar sales improved to 67.5% from 65.6% a year ago, while package store gross margins slipped to 23.8% from 25.2% [5]. - Payroll and related costs rose 5.3% to $16.1 million, reflecting minimum wage increases, and operating expenses climbed 12.1% amid inflationary pressures [5]. Management Commentary - Management noted that pricing actions taken over the past year helped offset higher food and liquor costs as well as rising labor expenses [8]. - The company expects food and bar sales to continue benefiting from these increases through the remainder of fiscal 2025, but cautioned that inflation remains a significant headwind [8]. Strategic Developments - Flanigan's acquired a vacant property in Cutler Bay, FL, for $2.2 million for a planned new restaurant and purchased interests in several partnerships to consolidate ownership [13]. - The board declared a $0.55 per share dividend, up from $0.50 per share in the same period last year [14].

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)](index=3&type=section&id=ITEM%201.%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS%20(UNAUDITED)) Presents Flanigan's unaudited condensed consolidated financial statements, covering income, balance sheets, equity, cash flows, and accounting policies [UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME](index=4&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20INCOME) | Metric (in thousands) | 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 | $52,164 | $49,102 | $156,058 | $142,311 | | Income from Operations| $2,974 | $2,287 | $7,467 | $5,764 | | Net Income | $2,489 | $1,802 | $6,467 | $4,920 | | Net Income Attributable to Flanigan's Enterprises Inc. Stockholders | $1,392 | $1,121 | $4,137 | $3,172 | | Basic and Diluted EPS | $0.75 | $0.60 | $2.23 | $1.71 | [UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME](index=5&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20INCOME) | Metric (in thousands) | 13 Weeks Ended June 28, 2025 | 13 Weeks Ended June 29, 2024 | 39 Weeks Ended June 28, 2025 | 39 Weeks Ended June 29, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net Income | $2,489 | $1,802 | $6,467 | $4,920 | | Total Comprehensive Income | $2,489 | $1,833 | $6,467 | $4,736 | [CONDENSED CONSOLIDATED BALANCE SHEETS](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS%20AS%20OF%20JUNE%2028%2C%202025%20(UNAUDITED)%20AND%20SEPTEMBER%2028%2C%202024) | Metric (in thousands) | June 28, 2025 | September 28, 2024 | | :-------------------- | :------------ | :----------------- | | Total current assets | $30,288 | $31,529 | | Total assets | $140,694 | $142,082 | | Total current liabilities | $18,291 | $19,924 | | Total liabilities | $62,428 | $66,672 | | Total stockholders' equity | $78,266 | $75,410 | [UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY](index=8&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20STOCKHOLDERS%27%20EQUITY) - Total stockholders' equity increased from **$75,410 thousand** as of September 28, 2024, to **$78,266 thousand** as of June 28, 2025, driven by net income and other comprehensive income, partially offset by distributions to noncontrolling interests and dividends paid[25](index=25&type=chunk) [UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS](index=9&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) | Cash Flow Activity (in thousands) | 39 Weeks Ended June 28, 2025 | 39 Weeks Ended June 29, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | | Net cash provided by operating activities | $7,150 | $5,219 | | Net cash used in investing activities | $(5,677) | $(4,068) | | Net cash used in financing activities | $(4,665) | $(4,560) | | Net Decrease in Cash and Cash Equivalents | $(3,192) | $(3,409) | | Cash and Cash Equivalents - End of Period | $18,210 | $22,123 | [NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS](index=11&type=section&id=NOTES%20TO%20UNAUDITED%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) - The company early adopted ASU 2023-07, "Segment Reporting," in **Q3 FY2024**, which impacted the expense presentation in the income statements and business segments footnote[37](index=37&type=chunk) - During **Q3 FY2025**, the company purchased vacant real property for **$2.2 million** cash to construct a new "Flanigan's" restaurant, which will be leased to a limited partnership where the company is the sole general partner[41](index=41&type=chunk) - The company purchased **5.25%** limited partnership interests in seven limited partnerships for an aggregate of **$377,400** during **Q3 FY2025**[42](index=42&type=chunk) - Total annual insurance premiums for the policy year beginning December 30, 2024, amounted to approximately **$4,010,000**, covering general liability, auto, property, excess liability, and terrorism, including coverage for franchises[46](index=46&type=chunk)[47](index=47&type=chunk) - The company entered into a new **one-year** Master Services Agreement with its major vendor, committing to purchase no less than **80%** of overall product needs, and exercised the first **one-year** renewal option effective **January 1, 2026**[48](index=48&type=chunk)[123](index=123&type=chunk) - A **five-year** agreement with Oracle for NetSuite ERP solution was implemented as the company's general ledger effective June 29, 2025, with implementation services costing approximately **$237,000** paid in full by **Q3 FY2025**[49](index=49&type=chunk)[50](index=50&type=chunk) | Lease Metric | June 28, 2025 | September 28, 2024 | | :----------- | :------------ | :----------------- | | Operating lease assets | $25,106 (in thousands) | $26,828 (in thousands) | | Operating lease current liabilities | $2,594 (in thousands) | $2,467 (in thousands) | | Operating lease non-current liabilities | $24,157 (in thousands) | $25,847 (in thousands) | | Weighted Average Remaining Lease Term | 9.67 Years | 10.17 Years | | Weighted Average Discount Rate | 5.12% | 5.02% | - The company operates in **two reportable segments**: package stores (retail liquor sales) and restaurants (food and bar sales), with a Corporate entity functioning as a cost center[57](index=57&type=chunk) | Segment (in thousands) | Identifiable Assets (June 28, 2025) | Identifiable Assets (September 28, 2024) | | :--------------------- | :---------------------------------- | :--------------------------------------- | | Restaurants | $78,186 | $77,613 | | Package stores | $23,237 | $23,084 | | Corporate | $39,271 | $41,385 | | Consolidated Totals | $140,694 | $142,082 | [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=27&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Analyzes Flanigan's financial condition and operational results, covering revenue, costs, liquidity, capital, and critical accounting policies [Overview](index=27&type=section&id=OVERVIEW) - As of June 28, 2025, Flanigan's operates **32 units** (restaurants, package liquor stores, combination units, sports bar) and franchises an additional **5 units**[74](index=74&type=chunk) | Unit Type | June 28, 2025 | September 28, 2024 | | :-------- | :------------ | :----------------- | | Company Owned: Combination package liquor store and restaurant | 2 | 2 | | Company Owned: Restaurant only, including sports bar | 9 | 9 | | Company Owned: Package liquor store only | 9 | 9 | | Company Managed Restaurants Only: Limited partnerships | 10 | 10 | | Company Managed Restaurants Only: Franchise | 1 | 1 | | Company Managed Restaurants Only: Unrelated Third Party | 1 | 1 | | Total Company Owned/Operated Units | 32 | 32 | | Franchised Units | 5 | 5 | - The company receives a royalty of **1%** of gross package store sales and **3%** of gross restaurant sales from franchisees, plus advertising expenditures. For limited partnerships, the company receives a management fee (initially after investor return, then **50%** of available cash) and a **3%** gross sales fee for service mark use[76](index=76&type=chunk)[78](index=78&type=chunk) [Results of Operations](index=29&type=section&id=RESULTS%20OF%20OPERATIONS) | Revenue Category (in thousands) | 13 Weeks Ended June 28, 2025 | 13 Weeks Ended June 29, 2024 | 39 Weeks Ended June 28, 2025 | 39 Weeks Ended June 29, 2024 | | :------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Restaurant food sales | $31,933 | $30,471 | $93,645 | $86,182 | | Restaurant bar sales | $7,931 | $7,577 | $24,087 | $22,780 | | Package store sales | $11,522 | $10,292 | $36,008 | $31,034 | | Total Sales | $51,386 | $48,340 | $153,740 | $139,996 | | Total Revenue | $52,164 | $49,102 | $156,058 | $142,311 | [Thirteen Weeks Ended June 28, 2025 vs. June 29, 2024](index=29&type=section&id=Comparison%20of%20Thirteen%20Weeks%20Ended%20June%2028%2C%202025%20and%20June%2029%2C%202024) - Total revenue increased by **$3,062,000** (**6.24%**) to **$52,164,000**, primarily due to increased package liquor store and restaurant sales, and recent menu price increases[80](index=80&type=chunk) - Restaurant food sales increased by **4.69%** in comparable weekly sales, driven by price increases. Restaurant bar sales increased by **4.63%** in comparable weekly sales, also due to price increases. Package store sales increased by **11.87%** in weekly average same-store sales due to increased traffic[81](index=81&type=chunk)[82](index=82&type=chunk)[83](index=83&type=chunk) - Costs and expenses increased by **$2,375,000** (**5.07%**) to **$49,190,000**, mainly due to higher payroll and operating expenses, but decreased as a percentage of total revenue from **95.34%** to **94.30%**[84](index=84&type=chunk) | Expense Category (in thousands) | 13 Weeks Ended June 28, 2025 | 13 Weeks Ended June 29, 2024 | Change ($) | Change (%) | | :------------------------------ | :--------------------------- | :--------------------------- | :--------- | :--------- | | Payroll and Related Costs | $16,106 | $15,301 | $805 | 5.26% | | Operating Expenses | $7,029 | $6,268 | $761 | 12.14% | | Occupancy Costs | $2,070 | $2,024 | $46 | 2.27% | | Selling, General & Administrative Expenses | $1,084 | $1,288 | $(204) | (15.84%) | | Depreciation and Amortization | $1,167 | $1,127 | $40 | 3.55% | - Net income increased by **38.12%** to **$2,489,000**, and net income attributable to stockholders increased by **24.17%** to **$1,392,000**, driven by price increases and lower food costs, partially offset by increased expenses[94](index=94&type=chunk)[95](index=95&type=chunk) [Thirty-Nine Weeks Ended June 28, 2025 vs. June 29, 2024](index=32&type=section&id=Comparison%20of%20Thirty-Nine%20Weeks%20Ended%20June%2028%2C%202025%20and%20June%2029%2C%202024) - Total revenue increased by **$13,747,000** (**9.66%**) to **$156,058,000**, primarily due to increased package liquor store and restaurant sales, recent menu price increases, and the opening of a new corporate-owned restaurant[96](index=96&type=chunk) - Restaurant food sales increased by **5.23%** in comparable weekly sales, and restaurant bar sales increased by **2.97%** in comparable weekly sales, both benefiting from price increases and the new restaurant. Package store sales increased by **15.95%** in weekly average same-store sales due to increased traffic[97](index=97&type=chunk)[98](index=98&type=chunk)[99](index=99&type=chunk) - Costs and expenses increased by **$12,044,000** (**8.82%**) to **$148,591,000**, mainly due to higher payroll, food costs, and expenses from the new restaurant, but decreased as a percentage of total revenue from **95.95%** to **95.22%**[100](index=100&type=chunk) | Expense Category (in thousands) | 39 Weeks Ended June 28, 2025 | 39 Weeks Ended June 29, 2024 | Change ($) | Change (%) | | :------------------------------ | :--------------------------- | :--------------------------- | :--------- | :--------- | | Payroll and Related Costs | $48,036 | $44,658 | $3,378 | 7.56% | | Operating Expenses | $20,640 | $18,565 | $2,075 | 11.18% | | Occupancy Costs | $6,127 | $6,118 | $9 | 0.15% | | Selling, General & Administrative Expenses | $4,036 | $3,867 | $169 | 4.37% | | Depreciation and Amortization | $3,474 | $3,119 | $355 | 11.38% | - Net income increased by **31.44%** to **$6,467,000**, and net income attributable to stockholders increased by **30.42%** to **$4,137,000**, driven by price increases and the new restaurant, offset by higher food costs and overall increased expenses[110](index=110&type=chunk)[111](index=111&type=chunk) [Menu Price Increases and Trends](index=34&type=section&id=Menu%20Price%20Increases%20and%20Trends) - The company implemented several menu price increases for bar offerings (**0.84%** annually effective Feb 23, 2025; **4.90%** annually effective Dec 4, 2024; **5.63%** annually effective Aug 25, 2024) and food offerings (**4.14%** annually effective Nov 17, 2024) to offset rising costs[112](index=112&type=chunk) [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) - Cash and cash equivalents decreased by **$3,192,000** to **$18,210,000** as of June 28, 2025, primarily due to a **$2.2 million** expenditure for undeveloped land for a future restaurant[113](index=113&type=chunk) - The company believes current cash and positive cash flow from operations will be sufficient to fund operations and planned capital expenditures for at least the **next twelve months**, despite inflationary pressures[114](index=114&type=chunk)[125](index=125&type=chunk) [Cash Flows](index=35&type=section&id=Cash%20Flows) | Cash Flow Activity (in thousands) | 39 Weeks Ended June 28, 2025 | 39 Weeks Ended June 29, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | | Net cash provided by operating activities | $7,150 | $5,219 | | Net cash used in investing activities | $(5,677) | $(4,068) | | Net cash used in financing activities | $(4,665) | $(4,560) | | Net Decrease in Cash and Cash Equivalents | $(3,192) | $(3,409) | - A cash dividend of **$0.55 per share** was declared for shareholders of record on June 12, 2025, compared to **$0.50 per share** in the prior year[116](index=116&type=chunk) [Capital Expenditures](index=35&type=section&id=Capital%20Expenditures) - Capital expenditures for property and equipment totaled **$4,956,000** for the thirty-nine weeks ended June 28, 2025, including **$2.2 million** for the Cutler Bay Property and **$285,000** for renovations to company-owned locations[117](index=117&type=chunk) - Anticipated refurbishment costs for fiscal year 2025 are approximately **$550,000**, with potential for significantly higher capital expenditures[118](index=118&type=chunk) [Long-Term Debt](index=36&type=section&id=Long-Term%20Debt) - Long-term debt (including current portion) decreased to **$20,926,000** as of June 28, 2025, from **$21,912,000** as of September 28, 2024. The company is in compliance with all loan covenants[119](index=119&type=chunk)[120](index=120&type=chunk) [Purchase Commitments](index=36&type=section&id=Purchase%20Commitments) - The company committed to purchase approximately **$7.8 million** of "2.5 & Down Baby Back Ribs" for calendar year 2025 from a new supplier at a competitive fixed cost[121](index=121&type=chunk) - The Master Services Agreement with the major vendor was renewed for one year, effective January 1, 2026, requiring the purchase of no less than **80%** of overall product needs[123](index=123&type=chunk) [Working Capital](index=36&type=section&id=Working%20Capital) | Item (in thousands) | June 28, 2025 | September 28, 2024 | | :------------------ | :------------ | :----------------- | | Current Assets | $30,288 | $31,529 | | Current Liabilities | $18,291 | $19,924 | | Working Capital | $11,997 | $11,605 | [Off-Balance Sheet Arrangements](index=36&type=section&id=Off-Balance%20Sheet%20Arrangements) - The Company does not have any off-balance sheet arrangements[126](index=126&type=chunk) [Critical Accounting Policies and Estimates](index=37&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - Key estimates include useful lives of tangible assets, deferred tax assets/liabilities, incremental borrowing rates for leases, lease terms, and estimates for loyalty reward programs and gift card breakage[34](index=34&type=chunk)[129](index=129&type=chunk)[130](index=130&type=chunk)[131](index=131&type=chunk)[132](index=132&type=chunk) - The company consolidates operations of **ten limited partnerships** where it acts as general partner, even without owning over **50%** equity, due to controlling interests[33](index=33&type=chunk)[133](index=133&type=chunk) - Inflation, particularly in food, beverage, fuel, and labor costs (due to minimum wage increases), is materially impacting operations, which the company attempts to offset through menu price increases[114](index=114&type=chunk)[135](index=135&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=38&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) Outlines Flanigan's market risk exposure, covering economic, legislative, regulatory, and interest rate fluctuations, and management strategies [Economic Risk](index=38&type=section&id=Economic%20Risk) - The company acknowledges potential impacts from changes in government trade policy (tariffs), immigration policies, and international relations, but cannot predict the timing or extent of such effects[137](index=137&type=chunk) [Legislative and Regulatory Risk](index=38&type=section&id=Legislative%20and%20Regulatory%20Risk) - The company is evaluating the potential impact of the "One Big Beautiful Bill Act" (signed **July 4, 2025**), which includes tax incentives and regulatory changes for the food service and hospitality industries[138](index=138&type=chunk) [Interest Rate Risk](index=38&type=section&id=Interest%20Rate%20Risk) - The company uses interest rate swap agreements to convert variable rate debt obligations to fixed rates, specifically for an **$8.90 million** loan, which was refinanced and swapped to a fixed rate of **4.90%** in **November 2024**[139](index=139&type=chunk)[140](index=140&type=chunk)[141](index=141&type=chunk)[142](index=142&type=chunk) - The company holds approximately **$733,000** in **90-day** government guaranteed CDs (**4.20%-4.25%** fixed) and **$732,000** in **180-day** government guaranteed CDs (**4.05%-4.25%** fixed) as short-term investments[144](index=144&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=40&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Reports ineffective disclosure controls and procedures due to material weaknesses in IT general controls and deferred revenue, with no material misstatements [Evaluation of Disclosure Controls and Procedures](index=40&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) - Management concluded that the company's disclosure controls and procedures were **not effective** as of June 28, 2025[147](index=147&type=chunk) [Material Weaknesses in Internal Control Over Financial Reporting](index=40&type=section&id=Material%20Weaknesses%20in%20Internal%20Control%20Over%20Financial%20Reporting) - Identified material weaknesses include **ineffective IT general controls** (access restrictions, logging of database changes) and **inadequate controls** for timely and accurate recognition of deferred revenues from promotional gift cards[149](index=149&type=chunk)[150](index=150&type=chunk) - Despite the material weaknesses, **no material misstatements** occurred in financial statements or disclosures, and no changes to previously released financial results were necessary. Remediation efforts are ongoing[151](index=151&type=chunk) [Changes in Internal Control Over Financial Reporting](index=40&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) - **No additional material changes** to internal controls over financial reporting were made during the fiscal quarter ended June 28, 2025[152](index=152&type=chunk) [PART II. OTHER INFORMATION](index=41&type=section&id=PART%20II.%20OTHER%20INFORMATION) [ITEM 1. LEGAL PROCEEDINGS](index=41&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) Refers to Note 9 and prior 10-K for legal proceedings, including 'dram shop' statutes and other ordinary course claims - The company is subject to "dram shop" statutes and other claims (e.g., "slip and fall," employment-related), but management believes current matters are without merit or involve amounts **not materially adverse** to financial position, often covered by insurance[55](index=55&type=chunk)[56](index=56&type=chunk) [ITEM 1A. RISK FACTORS](index=29&type=section&id=ITEM%201A.%20RISK%20FACTORS) Marked 'Not Applicable,' indicating no new material risk factors are disclosed beyond those previously reported [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=41&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) No common stock shares purchased in the period; 65,414 shares remain authorized for purchase under discretionary plan - **No shares of common stock were purchased** during the thirty-nine weeks ended June 28, 2025, or June 29, 2024[155](index=155&type=chunk) - As of June 28, 2025, the company has remaining authority to purchase **65,414 shares** of common stock under a plan approved in May 2007[155](index=155&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=29&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) Marked 'Not Applicable,' indicating no senior securities defaults occurred in the current period [ITEM 4. MINE SAFETY DISCLOSURES](index=29&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) Marked 'Not Applicable,' indicating no mine safety disclosures are required [ITEM 5. OTHER INFORMATION](index=41&type=section&id=ITEM%205.%20OTHER%20INFORMATION) No Rule 10b5-1 or non-Rule 10b5-1 trading arrangements adopted or terminated by directors or officers in the period - **No Rule 10b5-1 or non-Rule 10b5-1 trading arrangements** were adopted or terminated by directors or officers during the thirty-nine weeks ended June 28, 2025[156](index=156&type=chunk) [ITEM 6. EXHIBITS](index=41&type=section&id=ITEM%206.%20EXHIBITS) Lists Form 10-Q exhibits, including CEO/CFO certifications and Inline XBRL documents - The report includes **certifications** from the Chief Executive Officer and Chief Financial Officer (Exhibits 31.1, 31.2, 32.1, 32.2) and **Inline XBRL documents** (Exhibits 101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE, 104)[157](index=157&type=chunk) [SIGNATURES](index=42&type=section&id=SIGNATURES) Report signed August 12, 2025, by James G. Flanigan (CEO/President) and Jeffrey D. Kastner (CFO/Secretary) - Report signed **August 12, 2025**, by James G. Flanigan (CEO and President) and Jeffrey D. Kastner (CFO and Secretary)[160](index=160&type=chunk)[161](index=161&type=chunk)