Ark Restaurants Corp. (NASDAQ: ARKR) has announced its financial results for the first fiscal quarter, which ended on December 28, 2024. The company provided a comprehensive overview of its financial performance, including revenue figures, net income, EBITDA adjustments, and other significant corporate developments. The report also included updates on property closures, lease terminations, and ongoing lease negotiations.
Financial Results Overview
For the 13-week period ending on December 28, 2024, Ark Restaurants recorded total revenues of $44,988,000. This figure represents a decline compared to the same period in the previous year when the company reported total revenues of $47,487,000. It is important to note that revenues for the quarter ended December 30, 2023, included $764,000 in earnings from El Rio Grande, a property that is no longer contributing to revenue in the latest quarter.
When adjusting for revenues related to El Rio Grande and the Tampa Food Court, company-wide same-store sales saw a 2.3% decrease compared to the previous year. This drop suggests a slight decline in overall sales performance, which the company attributes to various operational factors and market conditions.
Ark Restaurants reported net income attributable to the corporation of $3,164,000 for the first quarter of 2025, translating to earnings of $0.88 per basic and diluted share. This marks a substantial improvement from the $1,370,000 in net income recorded for the first quarter of 2024, where earnings per basic and diluted share were $0.38.
The company’s Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA), as adjusted, amounted to $1,378,000 for the quarter ended December 28, 2024. This figure is lower than the $2,572,000 reported in the same period of the prior year. Adjusted EBITDA excludes specific financial items, including:
- A loss of $146,000 related to the closure of El Rio Grande during the quarter ended December 28, 2024.
- A gain from the closure of the Tampa Food Court, net of non-controlling interests, totaling $3,365,000.
- Additional adjustments detailed in the financial disclosures provided at the end of the company’s release.
As of December 28, 2024, Ark Restaurants had $13,101,000 in cash and cash equivalents. The company also reported total outstanding debt of $4,702,000, indicating a stable financial position.
Property Closures and Related Financial Impacts
El Rio Grande Closure
In October 2024, Ark Restaurants formally notified the landlord of its intent to terminate the lease and permanently close El Rio Grande. As a result of this decision, the company recorded a total loss of $876,000 in the fiscal year ending September 28, 2024. The restaurant officially ceased operations on January 3, 2025, and additional losses amounting to $146,000 were incurred during the first quarter of 2025. The closure reflects Ark Restaurants’ strategic efforts to optimize its portfolio and focus on more profitable locations.
Ark Restaurants Reports First Quarter 2025 Financial Results
Tampa Food Court Lease Termination
On November 26, 2024, Ark Restaurants reached an agreement to terminate its lease at the Hard Rock Hotel and Casino in Tampa, Florida. As a result, the company vacated the premises on December 15, 2024. The termination agreement included a compensation payment of $5,500,000 to Ark Hollywood/Tampa Investment LLC, a subsidiary in which Ark Restaurants holds a 65% ownership stake.
Following lease termination, all obligations under the lease ceased, and Ark Restaurants recorded a net gain of $5,235,000 during the 13 weeks ended December 28, 2024. The company has also announced that approximately 35% of the net proceeds, after expenses, will be distributed to other equity holders of Ark Hollywood/Tampa Investment LLC in the second fiscal quarter of 2025.
Bryant Park Grill & Cafe and The Porch at Bryant Park Lease Updates
Ark Restaurants operates two key establishments in Bryant Park: Bryant Park Grill & Cafe and The Porch at Bryant Park. Both properties are leased from the Bryant Park Corporation, a private nonprofit entity managing the park under agreements with the New York City Department of Parks & Recreation.
The current lease agreements for these locations are set to expire on April 30, 2025. In response to this approaching deadline, Ark Restaurants participated in a request for proposals (RFP) process initiated by the Bryant Park Corporation. The company submitted proposals on October 26, 2023, for new 10-year agreements that include a five-year renewal option.
However, on January 27, 2025, during a public community board meeting, the Bryant Park Corporation announced its decision to select a new operator for both locations. Despite this announcement, no formal agreements have been signed, and the approval process involves further review by the New York City Department of Parks & Recreation and the New York Public Library.
Ark Restaurants management is actively working with external advisors to assess the fairness and transparency of the RFP process. The company remains committed to pursuing all available options to protect its business interests in these locations.
Conference Call and Webcast Information
To provide further insights into its financial results and discuss recent developments, Ark Restaurants will host a conference call on February 11, 2025, at 11:00 a.m. Eastern Time. The call will include a review of financial performance and other business-related topics.
