Ark Restaurants Stock Earnings Reports

Key points for investors: Cash and liquidity — Ark ended the quarter with $11.1 million in cash and reduced debt to $4.3 million. Management is finalizing a replacement credit facility with the current lender that should provide $15–$20 million of capacity and will term out the current $4.3 million over three years. One-time/noncash charges — the company recorded a $3.4 million goodwill impairment and placed a $4.8 million valuation allowance on deferred tax assets, which produced a large reported tax charge; both are noncash and may be reversible in future periods if fundamentals or the stock price improve. Operating performance — EBITDA was negatively impacted by about $650,000 of consulting and legal fees related to the Bryant Park lease dispute; excluding those costs management says EBITDA would have improved year-over-year. Business trends — steady performance in Alabama, improving results in Las Vegas with materially better cash flows (management says they are running roughly $2.0 million ahead of the bank cash-flow projection), improvements in Florida and New York, and early signs of progress in Washington, D.C. Strategic/legal risk — the company is a holdover tenant at Bryant Park, has filed suit alleging a flawed RFP process, expects a possible eviction action that will likely be stayed while the court case proceeds, and anticipates the dispute could take ~1–1.5 years to resolve. Opportunity — management remains active in pursuing acquisitions/deals and notes potential upside related to the Meadowlands casino licensing environment once New York state issues its casino allocations later this year.