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Ark Restaurants(ARKR) - 2025 Q1 - Quarterly Report
ARKRArk Restaurants(ARKR)2025-02-11 21:06
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Financial Performance - The Company's operating income for the 13 weeks ended December 28, 2024, increased by 254.9% to 5,689,000,primarilyduetoagainontheterminationoftheTampaFoodCourtlease[101].−Totalrevenuesforthesameperioddecreasedby5.35,689,000, primarily due to a gain on the termination of the Tampa Food Court lease[101]. - Total revenues for the same period decreased by 5.3% to 44,988,000, attributed to declines in same-store sales and closures of El Rio Grande and the Tampa Food Court[103]. - Same-store sales decreased by 2.3% company-wide, with notable declines of 18.2% in Washington, D.C., and 3.8% in Las Vegas[105]. - The loss on the closure of El Rio Grande was recorded at 146,000duringthe13weeksendedDecember28,2024[101].−TheCompanyexperiencedadecreaseingeneralandadministrativeexpenses,primarilyduetolowerbonusaccruals[108].CostStructure−Foodandbeveragecostsasapercentageoftotalrevenuesincreasedto26.9146,000 during the 13 weeks ended December 28, 2024[101]. - The Company experienced a decrease in general and administrative expenses, primarily due to lower bonus accruals[108]. Cost Structure - Food and beverage costs as a percentage of total revenues increased to 26.9% due to rising commodity prices and a weaker event business in New York City[106]. - Payroll expenses accounted for 36.5% of total revenues, reflecting increasing minimum wages in operating states[107]. - The company is facing multi-decade high inflation, impacting costs for food, labor, and other supplies, with no material disruptions in the supply chain reported[114]. - The company has been able to offset inflation through targeted menu price increases, but future pricing flexibility may be limited by competitive conditions[115]. Cash Flow and Financing - As of December 28, 2024, the company had cash and cash equivalents of 13,101,000 and a working capital deficit reduced to 4,264,000from4,264,000 from 10,659,000 a year earlier[113]. - Net cash used in operating activities for the 13 weeks ended December 28, 2024 was 1,346,000,adecreasefromnetcashprovidedof1,346,000, a decrease from net cash provided of 558,000 in the same period last year[117]. - Net cash provided by investing activities increased to 4,895,000forthe13weeksendedDecember28,2024,comparedtocashusedof4,895,000 for the 13 weeks ended December 28, 2024, compared to cash used of 254,000 in the prior year[118]. - The company entered into a new revolving credit facility of $10,000,000, with a maturity date of June 1, 2025, and no advances were outstanding as of December 28, 2024[120]. - The weighted average interest on the outstanding indebtedness under the credit agreement was approximately 8.2% as of December 28, 2024[120]. - The company believes its existing cash balances and internal cash-generating capabilities are sufficient to finance capital expenditures and operating activities for at least the next 12 months[123]. Business Operations - The Company owned and operated 16 restaurants and bars, 12 fast food concepts, and catering operations exclusively in the United States as of December 28, 2024[97]. - The Company is pursuing new 10-year agreements for its Bryant Park locations, with proposals submitted in October 2023[96]. - The agreements for the Bryant Park Grill & Cafe and The Porch at Bryant Park are set to expire on April 30, 2025, with new proposals submitted for 10-year agreements[122].