Ark Restaurants Q4 2025 Earnings Call - Bryant Park Litigation Dampens Profits Amid Casino Expansion Hopes

Operator: Greetings and welcome to Ark Restaurants’ fourth quarter and year-end 2025 results 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 operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the call over to your host, Christopher Love, Secretary for Ark Restaurants. Thank you. You may begin.

Christopher Love, Secretary, Ark Restaurants: Thank you, Operator. Good morning and thank you for joining us on our conference call for the fourth quarter and year-end date September 27th, 2025. My name is Christopher Love and I am the Secretary of Ark Restaurants. With me on the call today is Michael Weinstein, our Chairman and CEO, and Anthony Sirica, our President and 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. To review the full text of that press release along with the associated financial tables, please go to our homepage at www.arkrestaurants.com. Before we begin, however, I’d like to read the Safe Harbor 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. 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 condition. I’ll now turn the call over to Anthony.

Anthony Sirica, President and CFO, Ark Restaurants: Good morning, everyone. A couple of items on our balance sheet. Our cash is $11.3 million, which has been holding relatively steady every quarter compared to last year, which was $10.2 million, so we’re up a little. Our debt is $3.6 million. Expected P&Ls, go to the release. For the full year, our adjusted EBITDA was $1.4 million compared to $6.1 million last year. That is basically primarily due to Bryant Park. The increased legal fees of approximately $2 million, as well as the impact on our mostly the catering business, has cost us almost another $2 million. So the entire decrease is attributable to Bryant Park. For the full year, we have a provision for taxes, even though we have a loss, a pre-tax loss. That was, again, a result from the third quarter where we had to write off our deferred tax assets in the prior quarter.

For the current quarter, quarter over quarter, our EBITDA was negative $1 million compared to $500,000 in the same quarter last year. Again, that was the result of Bryant Park’s situation. The only other item of note in the current quarter is we have a tax provision, even though we have a pre-tax loss. That is the result of we have these naked tax credits that relate to indefinite-lived intangibles. And because we have a full valuation allowance on our deferred taxes, we have to recognize tax expense on those credits because they’re not expected to reverse in the near future. Other than that, there’s really nothing unusual in the current quarter P&L. Let’s turn it over to Michael.

Michael Weinstein, Chairman and CEO, Ark Restaurants: Hi, everybody. First of all, I want to concentrate mostly today on the Meadowlands and Bryant Park. But in an overall view, this December quarter, as compared to last December quarter, we are nicely ahead. The restaurants are running on a more efficient basis. Cash flows have improved, especially in Vegas. In Robert, in New York, the properties in Alabama are doing nicely. We’re still seeing some deterioration in revenue in our Florida properties. That seems to be a problem that everybody’s having in Southern Florida. But we’re down anywhere from 5, 6, 7%, depending on which full-service restaurant. Up until recently, we were running ahead at the food court and the Hollywood Casino. That’s sort of now flat to down slightly. So Florida has been a constant negative in terms of revenues and cash flow.

But the business is solid in Las Vegas, solid in Alabama, solid at Robert in New York. We’ll get to Bryant Park in a second. And Sequoia has had a bad year, primarily, we think, due to what’s going on in Washington, D.C. in general, and what’s going on there affects our catering business dramatically. So our event business has not been beneficial to the company in Washington, D.C. But overall, we’re looking at a December which is going to be, I think, significantly better than last year’s December quarter. Meadowlands. The issuance of casino licenses in downstate New York, three licenses were issued in early December. That has always been, and I think if you look back at our previous calls, we’ve always said we didn’t think New Jersey would move on issuing casino licenses away from Atlantic City until there was some activity in downstate New York.

There has been a bill passed in the New Jersey legislature suggesting from the bill that there will be a referendum on the next ballot, which is this November, for approval of the casino, and if you look at the bill, it says the Meadowlands Racetrack and Monmouth Park Racetrack. We don’t know what the referendum will wind up being, whether it combines Monmouth Park Racetrack and the Meadowlands Racetracks as one referendum or separates them. We don’t know if the pinpointing of a casino at the Meadowlands Racetrack just doesn’t become the Meadowlands instead of the Meadowlands Racetrack. The Meadowlands has a distinct advantage to any other location, including Monmouth Park Racetrack, because there is no residential around it, and all the environmental permits were issued.

Assuming that this referendum passes and the Race Track is the beneficiary of a casino license, we would literally be able to be in business with a casino in the present facility before any significant expansion by the first quarter of 2027, so this could be a very exciting year in terms of our ownership of the minority ownership, I must emphasize, of Meadowlands LLC, which controls the Race Track. But we also have an exclusive on all food and beverage if a casino is built in the casino, so this is a big deal for us if this were to go forward. Again, there are obstacles. There’s no assurances, but we’ve been waiting for New York to issue these casino licenses for quite a while now. As far as Bryant Park goes, we have a litigation going.

Nothing has been done in the court to disturb the merit of that litigation. We are operating. The effect on our business until recently has been significant because we weren’t able to do events because people were concerned whether we would be there. Certainly, we do not book social events because social events are generally a year to 18 months lead time. And the uncertainty of the litigation in the minds of those people booking those social events is that they can’t take the chance. However, corporate events are starting to flow in. We’re seeing nice activity there, not where it used to be, but starting to build. And there is positive cash flow coming out of Bryant Park that essentially covers the cost of our litigation and our consultants. And so it’s sort of paying for itself.

How the litigation resolves itself, or whether there’s a political settlement with the new mayor, I have no opinion about. But the longer we’re there, I think the better our position is. And right now, I don’t see anything on the immediate horizon that will disturb our ability to operate the Bryant Park facility. So that’s all I have. Please open up for questions.

Operator: Thank you. If you’d like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you’d like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull for questions.

Michael Weinstein, Chairman and CEO, Ark Restaurants: Do I have a question? I five all around.

Operator: Once again, it’s star one if you’d like to ask a question at this time. Thank you. Our first question comes from the line of Jeffrey Kaminsky with JJK Consultants. Please proceed with your question.

Jeffrey Kaminsky, Analyst, JJK Consultants: Hi, good morning. I’m going to ask a question that I’ve asked.

Good morning.

I’m going to ask a question that I’ve asked a number of times on this call. I’ve not really gotten a satisfactory answer. Last time, I pointed out that ARK stock had hit another new low. Today, it’s under $6 on big volume. The question that I have asked in the past has been, what is the strategy going forward to turn the core business around? We’re still waiting on the Meadowlands. It may or may not happen. I think the Meadowlands situation is much more precarious than in the past. You’ve now got approval of three New York casinos that are going to be 30 miles away from the Meadowlands. And our interest in the Meadowlands was initially to be partnered with Hard Rock, and Hard Rock is now in bed with the Queens casino that got approval with Steve Cohen.

So you now have much deeper competition in Meadowlands, should it ever pass. And the partner that Ark was supposed to be partnering with is not even involved any longer. So let’s put that aside. I appreciate, Michael, that you wanted to talk about the Meadowlands, but that’s just a Hail Mary at this point. What’s not a Hail Mary is the basic business of Ark Restaurants. I’ve always asked what the strategy is going forward to turn things around, okay? And I always get back where we’re always looking for properties. We’re looking to acquire the right properties. At the same time, you bemoan the fact that input costs are higher, labor, food, insurance, and yet you still want to acquire properties. While you’re saying that, a couple of years ago, you closed sites, you sold off the lease in Tampa, and you closed a Rio Grande.

So the footprint is shrinking. Business is not really good. And again, as a shareholder who’s getting crushed while your competition may not have had banner years, but nobody’s at all-time lows when you look at hospitality restaurant indexes. So my question simply, again, is, what is the strategy going forward to turn Ark around?

Michael Weinstein, Chairman and CEO, Ark Restaurants: So the answer to that, unfortunately, is maybe not what you want to hear. I don’t think I agree with you on the Meadowlands being a Hail Mary. Quite the opposite. I’m very optimistic about it.

Jeffrey Kaminsky, Analyst, JJK Consultants: Michael, with all due respect. If you lose Hard Rock, which you did, someone’s going to need to raise capital, which is going to dilute Ark’s ownership. By losing.

Michael Weinstein, Chairman and CEO, Ark Restaurants: Jeffrey, Jeffrey, I don’t interrupt you. I’ll give you your answers, okay? Number one, I don’t think we have a problem acquiring a new partner, and perhaps on better terms than we had with Hard Rock. The reason for that is that the demographics of Northern New Jersey are very compelling for a casino. When we were first searching many years ago for a partner, and the referendum that was issued that did not pass some seven years ago required a partner that owned a casino in Atlantic City. Hard Rock, at the time when the referendum was first formed, did not. They went out and bought a casino, the Taj Mahal, primarily not that I guess they thought it was a good deal to own the Taj Mahal as well, but Atlantic City has been a deteriorating market forever now.

They did that, I think, primarily to qualify to operate a casino in the northern part of the state with us. So that was what was compelling to Hard Rock. That same idea of the demographics in Northern New Jersey will be compelling to other operators. So I don’t think we have a problem finding another operator. And those negotiations have just started. So that’s my answer to you on the Meadowlands. I don’t think it’s a Hail Mary by any means, all right? In terms of our regular business, what we’ve been doing is trying to be more efficient here under circumstances which are very, very difficult. Our insurance premiums are up dramatically. Labor’s up dramatically. We just started to feel comfortable raising some prices.

I probably waited too long to do so to make up for the additional expense of the product that we buy to serve our customers. So we’ve been working hard on our business. The most dramatic turnaround has been Vegas. We have a great manager there who we hired latter part of last year. The cash flows from there have improved dramatically despite the fact that Vegas is down and headcount’s probably 10% or 11%, depending on who you believe. Bryant Park has certainly been a big distraction. I spent an enormous number of hours with consultants and litigators and tried to maneuver ourselves in a position where we can retain this operation. But in the meantime, we are looking at other properties. We have two letters of intent out right now. We’re in the due diligence process. We have another negotiation going on for a brand.

The problem with acquisitions for us has been either the numbers deteriorate for the targeted acquisition. They show us numbers. We like the deal. There’s a period of due diligence. And we’ve been looking primarily in the South. And the South has not been good in terms of comparative revenues with prior years in general. So the deals we look at, we’re paying based upon last year’s numbers, but by the time we do the due diligence, those numbers have generally been deteriorating for the targets, all right? If it’s not that, it’s a landlord who wants to use the acquisition as a means of getting new benefits in the lease. So we’ve just had a difficult time the last 18-24 months of concluding deals that we thought were good deals when we entered into them, but as I said, we have two letters of intent out now.

We’re looking at another acquisition, which is a brand. We’re not just sitting here trying to be neutral. We’re being very aggressive about trying to find stuff. We just haven’t found the right stuff. So I apologize for that. But our plan has always been.

Jeffrey Kaminsky, Analyst, JJK Consultants: Jeffrey.

Go ahead.

In turning Vegas around, which you have spoken highly of, which is a good thing with the headcount down, but the numbers are better, you hired a new manager, apparently. So doesn’t that indicate that with better management at your properties, you can actually do better business? Vegas just proved that. So what about finding managers to turn other properties around or take this guy in Vegas who did such a good job and give him an expanded role in Ark? And one last point, Michael. One last point. In looking at your board of directors, you have outside board members who get paid as board of directors, two or three of which have restaurant and hospitality backgrounds, which is why they sit on your board. What do they say? Where is the strategy that they’re bringing to the table? That’s why they’re on the board, right?

Three senior people in the restaurant industry. You guys don’t have a quarterly meeting and talk about how we’re going to turn business around other than finding another restaurant to buy? I’m just puzzled by the fact that you are in the restaurant business and we’re talking about a casino that may or may not happen, and if it does, terrific. But you’re not in the casino business, okay? We’re going to talk about litigation at Bryant Park, which is also puzzling to me. I understand you’re dug in, but I also understand they don’t want you there. It was also my understanding that whatever the case is that Ark is making about an unfair practice or an unfair procedure in losing the lease, it’s my understanding that Ark didn’t even come in second. That Ark came in third.

So even if you prove that Jean-Georges won the lease and did so in a failed process, you guys didn’t even come in second place. You came in third. So you spent $2 million on Bryant Park, and the register is still ringing. And again, that’s litigation. The casino’s a casino, but as far as I know, and the reason I was a shareholder in Ark is because you’re in the restaurant business. And I’m asking for some answers of how you expect to turn your restaurant business around. Why not give the guy in Vegas a bigger role? Let him turn the other businesses around.

Michael Weinstein, Chairman and CEO, Ark Restaurants: So Jeffrey, I know you’re frustrated. We’re frustrated, all right? I wish you would not read the PR or the articles related to Bryant Park. They’re not necessarily accurate. I can tell you we think our position is a good position. We may not win it, but we did not go into this thing thinking that we just want to be a holdover tenant and disturb things because we were angry. We went into the litigation because we really thought we had a good position. And we continue to think we have a good position. And the recent decisions of December 11th by the judge in the case where Bryant Park Corporation made certain claims against us and those claims were dismissed indicate that we have a judge that will look at this fairly.

And Bryant Park Corporation has tried to get a summary dismissal of the case, and they failed in that. Not that they’re going to not try again, not that they may not, not that they can’t get that. But so far, there has been nothing going on in the litigation that seems to disturb our position and give us negative feelings about our case.

Jeffrey Kaminsky, Analyst, JJK Consultants: Okay. Thanks for your time. Last point. As we speak.

Michael Weinstein, Chairman and CEO, Ark Restaurants: Let me finish. Let me finish, please. So I tell my employees, not one of whom has left since the beginning of this, "Don’t listen to the press. Just be calm. We think our position is a good position. And please, I would urge you to look at it the same way as my employees look at it.

Jeffrey Kaminsky, Analyst, JJK Consultants: Okay.

Michael Weinstein, Chairman and CEO, Ark Restaurants: Look, I agree with you that we have not been successful in finding a path beyond the restaurants we run. We sold Tampa because Hard Rock asked us. They wanted us out of Tampa because they were expanding their casino floor, and they didn’t want to move us because they basically had a feeling that the fast food, they would run on the second floor, which was a terrible location, and we cooperated with them. We tried to cooperate with landlords, and we didn’t hold them up. We got a fair price, and yes, we’re missing that EBITDA, but we got a fair price for it, but all along, I agree with you. We have not found the right path forward. I think we may be closer in the deals we’re looking at now, but it has been difficult, and it’s a difficult environment to work in.

But not to try to be an analyst because I’m not, but right now, the stock is trading. If you look at the restaurant EBITDA and the cash, it’s trading at a little times one times that value, one and a half times that value. It’s ridiculous.

Jeffrey Kaminsky, Analyst, JJK Consultants: So where is the insider buying, Michael? Where are you and your insiders not buying stock? Traded at $5.75, $5.75 for Ark stock. Markets have a way of being efficient, Michael. There’s a reason the stock is where it is. You could tell us not to pay attention to the.

Michael Weinstein, Chairman and CEO, Ark Restaurants: I could have that discussion with you at any time. Our stock is very illiquid. Anybody goes to sell it will knock it down substantially. Anybody that goes to buy it will probably knock it up. But the company at five whatever or $6, in my opinion, that doesn’t represent the value of what we have here, even without the Meadowlands or without.

Jeffrey Kaminsky, Analyst, JJK Consultants: So insiders should be buying. Your boards of directors should be buying. You have three people on the board who are in the restaurant business. They don’t see value at $5.75? What about the C-suite? Why isn’t there insider buying here?

Michael Weinstein, Chairman and CEO, Ark Restaurants: That’s a question that’s not appropriate, but.

Jeffrey Kaminsky, Analyst, JJK Consultants: Okay. Very good.

Michael Weinstein, Chairman and CEO, Ark Restaurants: Everybody makes their own decisions.

Jeffrey Kaminsky, Analyst, JJK Consultants: Okay. So I shouldn’t pay attention to the press release. I shouldn’t pay attention to the noise coming out of the litigation at Bryant Park, and the stock price is also not.

Michael Weinstein, Chairman and CEO, Ark Restaurants: What I said to you is you should not pay attention to the press. Read the decisions that are public decisions, and they’ll be informative. But the press has not.

Jeffrey Kaminsky, Analyst, JJK Consultants: Okay. That’s fair.

Michael Weinstein, Chairman and CEO, Ark Restaurants: The press has not gotten this right.

Jeffrey Kaminsky, Analyst, JJK Consultants: Okay, well, the market has gotten it right, Mike. The market has gotten it right, and when it was traded down from 14 to 12 to 10, you had impairment charges because you didn’t want to do a buyback, etc., etc. The stock sits at $5.75. All right. I’ve taken up too much of everybody’s time. I hope there were some other people who have something to say because somehow I often only are the only one who wants to say anything, so anyway, good luck. Thank you.

Operator: Thank you. That concludes our question and answer session. I’ll turn the floor back to Mr. Weinstein for any final comments.

Michael Weinstein, Chairman and CEO, Ark Restaurants: All right. Thank you all. Have a good holiday, and we’ll speak to you on the next conference call.

Jeffrey Kaminsky, Analyst, JJK Consultants: Thank you.

Operator: Thank you. This concludes today’s conference call. You may disconnect your lines at this time. Thank you for your participation.