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)

Core Viewpoint - Flanigan's Enterprises, Inc. has experienced significant stock appreciation following its latest quarterly results, outperforming the S&P 500 Index during the same period [1] Financial Performance - For the quarter ended March 29, 2025, Flanigan's reported total revenues of $53.6 million, an 11.6% increase from $48.1 million a year ago [2] - Net income attributable to BDL stockholders rose 38.5% to $2.7 million from $1.9 million, translating to earnings of $1.45 per diluted share, up 39.4% from $1.04 in the prior-year quarter [2] - Restaurant food and bar sales increased to $40.8 million, a 9.9% rise from $37.1 million, while package store sales surged 18.8% to $12.1 million from $10.1 million [2] Profitability and Margins - Gross profit from restaurant and bar operations increased 10.2% to $27.4 million, while package store gross profit rose 27.7% to $3.4 million [3] - The gross profit margin for restaurant food and bar sales increased to 67.23% from 67.09% year over year, and for package store sales, it rose to 28.06% from 26.11% [3] Pricing Strategy - Flanigan's implemented targeted menu price increases in late 2024 and early 2025 to counter inflationary pressures, with bar prices raised by approximately 5.63% in August 2024 and food prices by 4.14% in November 2024 [4] Operational Insights - The restaurant operations generated $4.7 million in operating income, up 18.6% from $4 million a year earlier, while the package store segment posted $1.3 million, up 67.1% from $0.8 million [5] - A new company-owned restaurant opened in Hollywood, FL in March 2024 contributed to revenue growth [6] Comparable Sales Growth - Comparable weekly restaurant food sales rose 5.9%, with company-owned restaurants seeing an 8.1% increase [7] - Weekly average same-store package liquor store sales increased 18.9% year over year [7] Future Outlook - Flanigan's anticipates continued revenue growth throughout fiscal 2025, driven by the full-year impact of price adjustments and stable demand [8] Cost Management - Payroll costs increased 8.1% to $16.2 million, but as a percentage of revenue, they declined to 30.2% from 31.1% year over year, indicating improved labor efficiency [10] - Overall costs as a percentage of total revenues decreased from 94.4% to 93.2% due to cost containment strategies [11] Capital Expenditures and Liquidity - Flanigan's invested $1.73 million in capital expenditures during the 26 weeks ended March 29, 2025, and entered a purchase agreement for baby back ribs valued at approximately $7.8 million for 2025 [13] - The company reported a healthy liquidity position with $22.9 million in cash as of March 29, 2025, up from $21.4 million as of September 28, 2024 [14]

Revenue Growth - Total revenue for the thirteen weeks ended March 29, 2025, increased by $5,563,000 or 11.57% to $53,632,000 compared to $48,069,000 for the same period in 2024[74]. - Total revenue for the twenty-six weeks ended March 29, 2025, increased by $10,685,000 or 11.46% to $103,894,000, driven by increased package liquor store and restaurant sales[90]. Sales Performance - Restaurant food sales reached $32,586,000 for the thirteen weeks ended March 29, 2025, up from $29,356,000 in the prior year, driven by recent price increases and new restaurant openings[75]. - Restaurant food sales totaled $61,712,000 for the twenty-six weeks ended March 29, 2025, compared to $55,711,000 for the same period in 2024, reflecting an increase due to recent price increases[91]. - Restaurant bar sales increased to $8,194,000 for the thirteen weeks ended March 29, 2025, compared to $7,740,000 for the same period in 2024, attributed to recent price increases[76]. - Package store sales totaled $12,051,000 for the thirteen weeks ended March 29, 2025, an increase of $1,911,000 from $10,140,000 in the prior year, primarily due to increased store traffic[77]. - Package store sales revenue increased to $24,486,000 for the twenty-six weeks ended March 29, 2025, up from $20,742,000, with same-store sales increasing by 18.05%[93]. - The average weekly sales for same-store package liquor stores increased by 18.85%, from $780,000 to $927,000 for the thirteen weeks ended March 29, 2025[77]. Costs and Expenses - Costs and expenses rose by $4,613,000 or 10.16% to $49,997,000 for the thirteen weeks ended March 29, 2025, influenced by higher payroll and food costs[78]. - Costs and expenses for the twenty-six weeks ended March 29, 2025, increased by $9,669,000 or 10.78% to $99,401,000, but decreased as a percentage of total revenue to approximately 95.68%[94]. - Operating expenses increased by $674,000 or 10.56% to $7,057,000 for the thirteen weeks ended March 29, 2025, primarily due to inflation and the opening of a new restaurant[83]. - Selling, general and administrative expenses increased by $373,000 or 14.46% to $2,952,000 for the twenty-six weeks ended March 29, 2025, with expenses as a percentage of total revenue rising to 2.84%[101]. - Depreciation and amortization expense increased by $315,000 or 15.81% to $2,307,000 for the twenty-six weeks ended March 29, 2025, representing 2.22% of total revenue[102]. Profitability - Gross profit for food and bar sales increased to $27,415,000 for the thirteen weeks ended March 29, 2025, compared to $24,886,000 in the prior year, with a gross profit margin of 67.23%[80]. - Gross profit for package store sales increased to $3,382,000 for the thirteen weeks ended March 29, 2025, up from $2,648,000 for the same period in 2024, with a gross profit margin of 28.06%[81]. - Net income for the thirteen weeks ended March 29, 2025, increased by $822,000 or 32.57% to $3,346,000, with net income as a percentage of revenue at 6.24%[88]. - Net income for the twenty-six weeks ended March 29, 2025 increased by $860,000 or 27.58% to $3,978,000 from $3,118,000 for the same period in 2024, with a net income margin of 3.83% compared to 3.35% in 2024[104]. - Net income attributable to Flanigan's Enterprises, Inc. stockholders rose by $694,000 or 33.84% to $2,745,000 from $2,051,000 for the same period in 2024, with a margin of 2.64% compared to 2.20% in 2024[105]. Cash and Assets - Cash and cash equivalents as of March 29, 2025 were approximately $22,973,000, an increase of $1,571,000 from $21,402,000 as of September 28, 2024[107]. - Current assets increased to $34,192,000 as of March 29, 2025, from $31,529,000 as of September 28, 2024, resulting in working capital of $13,926,000[119]. - Net cash provided by operating activities for the twenty-six weeks ended March 29, 2025 was $5,729,000, compared to $2,133,000 for the same period in 2024[110]. Debt and Financing - Long-term debt as of March 29, 2025 was $21,247,000, a decrease from $21,912,000 as of September 28, 2024[113]. - The company terminated an $8.90M Term Loan Swap and entered into a new interest rate swap agreement for $8,015,601 at a fixed rate of 4.90% for 12 years and 10 months[134]. - For the twenty-six weeks ended March 29, 2025, the company recognized $290,000 of non-cash gains related to the interest rate swap agreement as interest and other income[134]. Future Outlook - The company anticipates continued increases in restaurant food and bar sales due to recent price adjustments[75][76]. - The company anticipates capital expenditures for refurbishment in fiscal year 2025 will be approximately $550,000, which may be significantly higher[112]. - Menu price increases targeted an annual revenue increase of approximately 0.84% for bar offerings effective February 23, 2025, and 4.90% for bar offerings effective December 4, 2024[106]. - Inflation is materially impacting operating results, particularly in food, beverage, and labor costs, prompting the company to increase menu prices[128]. Investments and Interest - The company held approximately $1,296,000 in 90-day government guaranteed certificates of deposit with fixed annual interest rates between 4.1% and 4.35%[135]. - The company also had approximately $244,000 in 180-day government guaranteed certificates of deposit at a fixed annual interest rate of 4.2%[135]. - Cash resources at March 29, 2025, offset bank charges, and excess cash earned interest at variable rates, affecting the return on these funds[135]. - There is no assurance that interest rates will increase or decrease over the next fiscal year, which could materially affect operations[136].