ARK Restaurants Corp. (ARKR) - 10-Q Summary
Business Context and Reporting Period
This Quarterly Report on Form 10-Q covers the 13-week and 39-week periods ended June 27, 2026. Ark Restaurants Corp. operates 16 restaurants and bars, 12 fast food concepts, and catering operations exclusively in the United States. The company is currently a non-accelerated filer and a smaller reporting company.
Key Financial Metrics
| Metric (in thousands) | 13 Weeks Ended June 27, 2026 |
39 Weeks Ended June 27, 2026 |
|---|---|---|
| Total Revenues | $40,881 | $118,214 |
| Operating Loss | $(141) | $(704) |
| Net Loss (Consolidated) | $(261) | $(852) |
| Net Loss Attributable to ARKR | $(347) | $(1,259) |
| Cash and Cash Equivalents | $9,492 | $9,492 |
| Total Debt (Notes Payable) | $7,117 | $7,117 |
| Working Capital Deficit | $(4,411) | $(4,411) |
| Net Cash Used in Operating Activities | N/A | $(872) |
Note: Operating margins are negative due to operating losses. Food and beverage cost of sales was 27.5% of revenue for the 13-week period and 27.3% for the 39-week period.
Material Changes vs. Prior Period
- Revenue Decline: Total revenues decreased 6.5% for the 13 weeks and 8.0% for the 39 weeks compared to the prior year. Same-store sales declined 6.6% (13 weeks) and 7.2% (39 weeks), driven by decreases in Las Vegas (renovations), New York (litigation impact), and Florida (competition).
- Improved Operating Loss: The operating loss narrowed significantly to $(141) thousand for the 13 weeks (down 95.9% from $(3,415) thousand) and $(704) thousand for the 39 weeks (down 69.9% from $(2,342) thousand). This improvement is largely due to the absence of significant impairment charges and lease termination gains recorded in the prior year.
- Cost Management: Payroll expenses remained relatively flat in the 13-week period but decreased 6.4% in the 39-week period. General and administrative expenses decreased 10.4% year-over-year for the 39-week period due to lower litigation-related consulting fees.
- Debt Structure: The company borrowed $5,000,000 under its revolving credit facility during the period, increasing total debt obligations. The credit facility maturity was extended to June 1, 2028.
Guidance, Outlook, Risks, and Contingencies
- Bryant Park Litigation (Critical Risk): The company is currently operating the Bryant Park Grill, Bryant Park Café, and The Porch at Bryant Park under a court-ordered stay of ejectment. The stay is expected to expire on or about October 16, 2026. Unless the appeal is successful or the stay is extended, the company must vacate these premises, which historically contributed approximately 14.5% of total revenues. Management believes this loss would materially and adversely affect financial condition and liquidity.
- Sequoia Lease Restructuring: Subsequent to the quarter end (July 15, 2026), the company amended its lease for the Sequoia restaurant in Washington, D.C., reducing cash rent obligations for a two-year restructure period.
- New Meadowlands Racetrack (NMR) Investment: The company holds a $6.7 million investment in NMR. A proposed constitutional amendment for casino gaming at the Meadowlands will not appear on the 2026 ballot. The company noted that if a future referendum is rejected, the investment value may be impaired.
- Liquidity: The company maintains a working capital deficit but believes existing cash, operating cash flows, and approximately $12.6 million in available borrowing capacity under its credit facility are sufficient to fund operations for the next 12 months, even if Bryant Park operations cease.
Key Facts for Investor Verification
- Stay Expiration Date: Verify the status of the court-ordered stay of ejectment for Bryant Park locations, currently set to expire October 16, 2026.
- Appeal Progress: Monitor the outcome of the appeal filed with the Appellate Division of the Supreme Court of the State of New York regarding the summary judgment on ejectment.
- Credit Covenant Compliance: Confirm continued compliance with the minimum tangible net worth ($25 million) and fixed charge coverage ratio covenants under the Credit Agreement, especially given the potential revenue loss from Bryant Park.
- Sequoia Performance: Assess the impact of the July 2026 lease amendment on the recoverability of assets at the Sequoia location, which previously triggered impairment charges.
- NMR Valuation: Track legislative developments in New Jersey regarding casino gaming at the Meadowlands, as a rejection could trigger a material impairment charge on the $6.7 million investment.