ARK Restaurants Corp. (ARKR) - 10-K Summary
Business Context and Reporting Period
Company: ARK Restaurants Corp.
Filing Type: Form 10-K (Annual Report)
Period Ended: September 27, 2025
Business Overview: The Company owns and operates 16 restaurants and bars, 12 fast food concepts, and catering operations across the U.S., with significant concentrations in New York City, Las Vegas, Washington D.C., Florida, and Alabama. The Company operates as a single reporting segment.
Key Financial Metrics
| Metric (in thousands) | Fiscal 2025 | Fiscal 2024 | Variance |
|---|---|---|---|
| Total Revenues | $165,751 | $183,545 | -9.7% |
| Operating Loss | $(4,064) | $(4,294) | -5.4% |
| Net Loss (Consolidated) | $(9,163) | $(3,745) | N/A |
| Net Loss Attributable to ARKR | $(11,466) | $(3,896) | N/A |
| Cash and Cash Equivalents | $11,324 | $10,273 | +$1,051 |
| Working Capital Deficit | $(5,377) | $(10,659) | Improved |
| Net Cash from Operating Activities | $1,752 | $4,654 | -62.4% |
| Total Debt (Notes Payable) | $3,609 | $5,235 | Reduced |
Margins: Food and beverage cost of sales increased to 28.0% of revenues (from 27.0%). Payroll expenses increased to 36.4% of revenues (from 35.9%).
Material Changes vs. Prior Period
- Revenue Decline: Total revenues decreased 9.7% primarily due to a 4.2% decline in same-store sales and the closure of El Rio Grande and the Tampa Food Court. New York same-store sales dropped 10.8% due to negative publicity surrounding the Bryant Park lease dispute.
- Impairment Charges: The Company recorded $4.7 million in impairment losses on right-of-use and long-lived assets (primarily Sequoia in D.C.) and a $3.44 million goodwill impairment charge, wiping out the remaining goodwill balance.
- One-Time Gains: A $5.235 million gain was recognized from the termination of the Tampa Food Court lease. A $594,000 gain was recorded from the sale of condominium units.
- Adjusted Performance: Excluding one-time items and impairments, the adjusted operating loss widened significantly to $1.331 million compared to operating income of $3.082 million in the prior year.
Guidance, Outlook, and Risks
Management Commentary: Management believes existing cash balances and financing capabilities are sufficient for operations for the next 12 months. However, the Company has suspended dividends since May 2024 due to operating performance.
Key Risks and Contingencies:
- Bryant Park Lease Dispute: Leases for Bryant Park Grill & Café and The Porch at Bryant Park expired in April and March 2025, respectively. The Landlord selected a new operator, but the Company is litigating to enforce its right of first lease. These locations represented 15.4% of total revenue in 2025. The outcome is uncertain and poses a material risk to future operations.
- New Meadowlands Racetrack (NMR) Investment: The Company holds a $5.256 million investment in NMR. A ballot referendum for casino gaming in New Jersey is proposed for November 2026. If the referendum fails or is not included, the investment may be subject to substantial impairment.
- Seasonality and Inflation: The business remains highly seasonal. Inflationary pressures on food and labor costs continue to impact margins, though menu price increases have partially offset these costs.
Investor Verification Checklist
- Bryant Park Litigation Status: Verify the current status of the lawsuit regarding the lease renewal and the likelihood of retaining these high-revenue locations.
- Sequoia Performance: Monitor the operating results of the Sequoia restaurant in Washington D.C., which has triggered significant asset impairments in consecutive years.
- NMR Investment Valuation: Assess the probability of the New Jersey casino referendum passing and the potential for further impairment of the $5.256 million investment.
- Liquidity and Covenants: Review the Company's ability to meet the increased minimum tangible net worth covenant ($28 million) under the amended credit facility.
- Dividend Policy: Confirm if the suspension of dividends is permanent or temporary based on future cash flow generation.