Ark Restaurants(US:ARKR)2025-12-18 21:06Business Operations - As of September 27, 2025, the company owned and operated 16 restaurants and bars, 12 fast food concepts, and catering operations exclusively in the United States[94]. - The company continues to operate its properties while pursuing lease extensions and protecting its rights amid ongoing disputes with the landlord[100]. - The Company extended its lease for America at the New York-New York Hotel and Casino in Las Vegas through December 31, 2033, agreeing to spend a minimum of $4,000,000 on a refresh by March 31, 2026[144]. Financial Performance - For the year ended September 27, 2025, total revenues decreased by 9.7% to $165.8 million compared to $183.5 million for the year ended September 28, 2024[107]. - Same-store food and beverage sales decreased by 4.2% for the year ended September 27, 2025, with notable declines in New York (-10.8%) and Washington, D.C. (-14.9%)[109]. - The operating loss for the year ended September 27, 2025, was $4.1 million, a 5.4% improvement from an operating loss of $4.3 million for the year ended September 28, 2024[106]. - Total costs and expenses for the year ended September 27, 2025 were $169,815,000, a decrease of $18,024,000 or 9.6% compared to $187,839,000 in 2024[112]. - Net cash provided by operating activities decreased to $1,752,000 in 2025 from $4,654,000 in 2024, primarily due to lower operating income[132]. Revenue Sources - The Bryant Park Grill and The Porch at Bryant Park collectively accounted for $25.5 million and $31.1 million of total revenues for the years ended September 27, 2025, and September 28, 2024, respectively, representing approximately 15.4% and 17.4% of total revenue[101]. - Bryant Park Grill & Café and The Porch at Bryant Park collectively accounted for $25.5 million and $31.1 million of total revenues for the years ended September 27, 2025, and September 28, 2024, representing approximately 15.4% and 17.4% of total revenue for those periods, respectively[138]. Investment and Impairment - The company has made a total investment of $5.3 million in the New Meadowlands Racetrack LLC since March 12, 2013[103]. - The company anticipates potential impairment of its investment in New Meadowlands Racetrack if a proposed referendum for casino licenses does not pass[105]. - The carrying value of the investment in New Meadowlands Racetrack is assessed each reporting period for potential impairment based on various factors including the probability of gambling being approved in northern New Jersey[164]. - The company recognized a non-cash impairment charge of $3,440,000 for goodwill in the year ended September 27, 2025, due to a decline in stock price and lease uncertainties[171]. - Goodwill impairment charge for the year ended September 27, 2025 was $3,440,000, compared to $4,000,000 in the previous year, indicating a decline in the company's equity value[122]. Cost Management - Food and beverage cost of sales decreased by $3,092,000 to $46,427,000, representing 28.0% of total revenues, up from 27.0% in the previous year[112]. - Payroll expenses decreased by $5,498,000 to $60,346,000, accounting for 36.4% of total revenues, slightly up from 35.9%[113]. - Occupancy expenses decreased by $2,095,000 to $22,527,000, making up 13.6% of total revenues, compared to 13.4% in the prior year[114]. - General and administrative expenses decreased by $262,000 to $12,001,000, which is 7.2% of total revenues, up from 6.7%[116]. Lease and Termination - The company recognized a gain of $5.2 million on the termination of the Tampa Food Court lease, contributing to the overall operating results[106]. - A subsidiary received a termination payment of $5,500,000 for vacating the food court at The Hard Rock Hotel and Casino, resulting in a recognized gain of $5,235,000 during the year ended September 27, 2025[151]. - The Company recognized a loss of $876,000 from the termination of the El Rio Grande lease and a gain of $173,000 from refinements of estimates during the year ended September 27, 2025[150]. Debt and Financing - The Credit Agreement was amended to extend the maturity date to June 1, 2028, reduce maximum obligations from $30,000,000 to $20,000,000, and increase the minimum tangible net worth covenant from $22,000,000 to $28,000,000[153]. Accounting and Valuation - The company assesses goodwill and trademarks for impairment annually and whenever events indicate that carrying values may not be recoverable[169]. - The company provides a deferred income tax valuation allowance due to uncertainty about the realization of deferred tax amounts[168]. - Recent accounting standards adopted in fiscal 2025 are discussed in Note 1 of the consolidated financial statements[174].