Ark Restaurants Q3 2025 Earnings Call Transcript

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Provided by Quartr
August 12, 2025

Key Takeaways

  • Positive Sentiment: We ended Q3 with $12 million in cash and just $3.9 million in debt, while extending our credit agreement through June 2028 with a $20 million borrowing capacity.
  • Negative Sentiment: We recorded a $4.7 million impairment on Sequoia’s leasehold improvements and right-of-use assets after our cash flow analysis.
  • Positive Sentiment: Flagship locations—Las Vegas, New York’s Robert, and Rustic in Fort Lauderdale—are outperforming expectations despite broader traffic declines.
  • Negative Sentiment: Sequoia in Washington DC is underperforming due to weak foot traffic and event cancellations, and Bryant Park remains tied up in litigation expected to last 2–3 years.
  • Positive Sentiment: We believe we’re in the best position to secure a Meadowlands casino license once New York awards its downstate gaming licenses.
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Earnings Conference Call
Ark Restaurants Q3 2025
00:00 / 00:00

There are 4 speakers on the call.

Operator

Greetings and welcome to the Arc Restaurants third quarter twenty twenty May call. At this time, all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Christopher Love, Secretary.

Operator

Thank you. You may begin.

Speaker 1

Thank you, operator. Good morning and thank you for joining us on our conference call for the third quarter ended 06/28/2025. My name is Christopher Love, and I am the secretary of Arc 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 newswires yesterday and is available on our website.

Speaker 1

To review the full text of that press release, along with the associated financial tables, please go to our homepage at www.arcrestaurants.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.

Speaker 1

Thank you.

Speaker 2

Good morning, everyone. Before Michael gets into the results of operations, I wanted to highlight a few things on the balance sheet. Our cash is 12,000,000 at quarter end. Our debt was 3,900,000.0. We did extend our credit agreement during the quarter through sixonetwenty twenty eight with 20,000,000 of capacity.

Speaker 2

With that, the balloon notes on the three notes that we had outstanding were extended on the same payment terms that we were paying. So two of those will run off in about four or five more quarterly payments. And the third one, there'll be another balloon payment in June 2028. The other big item of note on the balance sheet, which you saw in the release was we had an additional impairment of Sequoia's leasehold improvements in right of use assets in the amount of $4,700,000 as stated in the release as a result of the cash flow analysis. Other than that, the balance sheet remains strong.

Speaker 2

So I'll hand it over to Michael.

Speaker 3

Hi, everybody. I tried to address where we were in the opening paragraph of our earnings release. The individual restaurants are, for the most part, doing very, very well. Las Vegas has been strong in terms of its cash flow despite a remarkable slowdown in the visitors to New York Las Vegas Strip. Robert in New York continues to do above our expectations, as does Rustic in Fort Lauderdale.

Speaker 3

The rest of the restaurants are performing as we expect it to perform, this despite what we consider in various areas of the country where we operate, dominion nation of demand in line with what a lot of restaurants are seeing. Florida, we're told by purveyors and other restaurateurs, they were all off 15 to 20%. That's maybe a number which is exaggerated. But without a question, head counts and visitorships to these restaurants are down. So I think under the environment that we're in, I think we're doing quite well with restaurants.

Speaker 3

Obviously, we're not doing well with Sequoia or Bryant Park for two different reasons. Sequoia in Washington DC, we're in Washington Harbor, the complex known as Washington Harbor. All the restaurants in Washington Harbor. And I think most of the restaurants in Washington DC are suffering from an environment that's just people don't want to be out. Also the event business in Sequoia, which is a large facility, has 1,100 seats, that business has dried up considerably, I think, given the environment in Washington DC.

Speaker 3

In terms of Bryant Park, we're in a litigation. We're at the very beginning of it. We're just starting discovery. And this is probably a two or three year process to see the litigation through. We're very committed to the belief that we should be the operator there.

Speaker 3

And we're going to stay the course because we think our claims are justified. With that, the only other thing going on, which is the casino license possibilities for Meadowlands, we think we're getting closer for a referendum by New Jersey legislature to permit gaming in the northern part of the state. We think the trigger for that will be when New York State announces the three licenses that they're going to be obligated to give to downstate casinos in New York. Yonkers, Aqueduct will probably be two, and there will be a third selected. And we believe that that will be the linchpin for New Jersey to move aggressively toward countering that within a casino in the North.

Speaker 3

And we think we're in the best position to get a casino license. With that, questions?

Operator

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press 2 if you would like to remove your question from the queue.

Operator

For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions.

Speaker 3

No questions.

Operator

There are no questions at this time. I'd like to turn the floor back over to Michael Weinstein for closing comments.

Speaker 3

Thank you all for honing in, and we'll see you next quarter.

Speaker 2

Thank you.

Operator

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

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