Q2 2025 Ark Restaurants Corp Earnings Call

Greetings and welcome to the Ark Restaurants Second Quarter 2025 Results Conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation.

If anyone should require operating assistance during the conference, please press star zero on your telephone key back. It is now my pleasure to introduce your host, Chris Love or Secretary. Thank you and you may begin.

Thank you, operator. Good morning and thank you for joining us on our conference call for the second quarter ended March 29th, 2025. My name is Christopher Love and I am the Secretary of our restaurant.

Speaker Change: with me on the call today's Michael Weinstein, our chairman and CEO .

and Anthony Sirica.

Speaker Change: CFO . For those of you who have not yet obtained a copy of our press release, it was issued over the news wires yesterday and is available on our website.

Speaker Change: To review the full text of that press release, along with the associated financial tables.

Speaker Change: Before we begin, however, I'd like to read the safe carburetor statement. I need to remind everyone that part of our discussion this morning will include forward-looking statements and that these statements are not guarantees of future performance and therefore undue reliance should not be placed on them.

Speaker Change: We refer everyone to our filings with the Securities and Exchange Commission for a more detailed discussion of the risks that may have a direct bearing on our operating results, performance and financial conditions.

I'll now turn the call over to Michael

Michael Weinstein: Hi, everybody. I'm going to turn it over to Anthony to try to explain a little bit better the financial

Hello.

Data that we've...

Put forth in the press release, but it...

He'll uncomplicated for you. Sure, there's a couple of things in here that require explanation. At the end of the quarter, our cash balance was 11.1 million. That was up actually approximately 900,000 from your end.

Michael Weinstein: Our debt was down to $4.3 million as a result of the principal payments made during the quarter. As we discussed on previous calls, our credit agreement expires on June 1st.

Michael Weinstein: We are working with the bank and we are in the process of finalizing a new facility with our current lender which will provide some way between 15 to 20 million of total capacity. The current 4.3 will be turned out.

Over a three-year period.

Michael Weinstein: As you saw in the press release, there are two significant non-cash items in the current

The first of which is a goodwill impairment?

Michael Weinstein: As you are aware, we look at our goodwill on an annual basis, but we are also required to see if there are any triggering events in an interim period based on the client and our stock price at the end of the quarter.

Michael Weinstein: We went through the analysis and we had to write off the balance of our goodwill and the amount of 3.4 million unfortunately that is a point in time test.

Michael Weinstein: And, you know, if the stock goes up, you know, you can't put it back on the books. It's a non-cage item, but, you know, it's unfortunate as far as on the timing. We also have the uncertainty surrounding the Bryant Park leases, which we'll discuss. Obviously it length, which factored into the analysis.

Michael Weinstein: In booking that right off, it then caused us to be in a cumulative loss position for purposes of analyzing on the fur tax assets.

So, based on that analysis, we then had to-

Impair, I'm sorry, put a full valuation allowance on art deferred tax assets.

of 4.8 million.

Michael Weinstein: That will continue to be looked at every quarter as things improve.

Michael Weinstein: So it's, you know, possible that that evaluation allowance could be released.

Michael Weinstein: in future quarters or years, but right now we had to put a full valuation allowance on that.

So that caused the-

Michael Weinstein: with that. I'll turn it over to Mike. Thank you. So I want to save the discussion for Brian Park and Metallands for the latter part of my discussion.

Michael Weinstein: Primarily, what you should know is the EBDA, this quarter, the March quarter.

Michael Weinstein: was negatively affected by some $650,000 of consultancy fees and legal fees in conjunction with our fight to retain the brine park lease.

Michael Weinstein: So, if that had not been the case, the EBDOT was shown an improvement over the comparable quarter last year. First, I'd like to go through the various venues. Alabama continues to be...

You know, just very steady. We're doing well there.

Michael Weinstein: The New York Restaurants, Robert is doing well. The Florida Restaurants seem to have picked up some comparable periods last year in terms of revenue.

Michael Weinstein: on a whole, is the Washington D.C. restaurant. We have new management.

Weekly Are Improving Dramatically [inaudible]

Michael Weinstein: We did a cash flow analysis for the bank in conjunction with our new credit facility. We did that not on a physical or a calendar year, but they wanted it as of April 1st of this year through March 30th of next year.

Michael Weinstein: We did that, I guess, in February and March. I would tell you that we're probably running $2 million ahead of that projection in terms of our operating cash flows. So things are improving.

We're still looking at deals. We hope.

Michael Weinstein: You know, that will be able to close on a couple of things we're looking at in the next few months.

Michael Weinstein: But the important thing here is the Bryan Park situation. So, as you know, our leases expired on April 30th.

Michael Weinstein: We are a hold over tenant. We have filed the claim in New York Supreme Court which is a lower court in New York.

Making allegations that basically the request for proposal process was corrupted. The basis of the claim is that they've chosen.

Michael Weinstein: A tenant, at least the Brian Park Corporation has chosen a tenant.

Michael Weinstein: which has not yet been approved by the Parks Department of New York City Library whose approval is needed, but they chose a tenant whose initial bid in the RFP.

Michael Weinstein: 4 points lower than ours, that they intend to close the restaurant for over a year, that they're asking for free rent of 18 months, and that they're asking for a tenant improvement that my wife's from the park.

of all of this.

I just speak some process.

Michael Weinstein: that no other landlord would allow to replace a tenant paying substantially more who's been in business for 30 years and running one of the largest grossing restaurants in the United States.

Michael Weinstein: There is no reason for this to have occurred other than a conflict of interest on the part of the Brian Paul Corporation executives.

Michael Weinstein: So, we have a case filed in Supreme Court, it will take probably a year or a year and a half to make its way through. In the meantime, we plan one, two.

Michael Weinstein: Start an eviction proceeding which will probably be subsumed by the Supreme Court until our case is fully heard.

Michael Weinstein: So we think we're definitely there for next year, year and a half. We hope at some point to be a political settlement to the situation, but right now we're operating and we're not going anywhere.

Possibility of getting a casino license

Casino licenses. Those have not been issued yet.

Oh, we...

Michael Weinstein: Want to go to Yonkers, for sure, want to go to the Aqueduct for sure, where the 31 goes is still up for grabs.

But once that happens, we think the York State will

Recognize that they'll be sending...

Michael Weinstein: New York State residents from the northern part of the state, which has very well-to-do demographics to New York City to gamble, and they're not going to want that to happen, and the metal lines is in the best position.

Michael Weinstein: of any location to satisfy the demands for casino gaming and Northern New Jersey.

Michael Weinstein: So those are the two big issues with us. The rest of the business seems to be doing fine and I would say to you that we think it's going to continue to improve.

Michael Weinstein: and we're out there hunting for deals so that's the plan. I'll take questions at this point.

Speaker Change: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone. We will be there.

Speaker Change: A confirmation tone will indicate your line is in the question queue

Michael Weinstein: You may press star tools to remove yourself from the queue, for participants using speaker equipment and may be necessary to pick up the handset before pressing these star keys.

Michael Weinstein: Again, another reminder, if you have a question like to ask, you can simply press star 1 on the full flow deep head.

Speaker Change: And there are no questions at this time. Therefore, I would like to turn the floor back to CEO Michael Weinstein for his remarks.

Michael Weinstein: Okay. Thank you, everybody. Speak to you next quarter. Thank you.

Michael Weinstein: Thank you. This doesn't lose today's conference and you may disconnect your lives at this time. Thank you for your participation.