Prepared remarks
Greetings and welcome to the Ark Restaurants First Quarter 2026 Results Conference Call. It is my pleasure to introduce your host, Ark's Secretary, Christopher Love. Thank you. You may begin.
Thank you, operator. Good morning, and thank you for joining us on our conference call for the First Quarter ended December 27, 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 Newswires 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 Michael.
Before I get going, let's have Anthony go over the balance sheet and anything that was significant. It was really a quiet quarter. So Anthony, go ahead.
Yes. Real quick. As you saw in the release, our adjusted EBITDA was about $150,000 better this year than it was last year. Our balance sheet, the cash was $9 million and change, and our debt is $3 million. Other than that, the balance sheet did not have any significant changes. Like Michael said, it was a very quiet quarter compared to the last several quarters with impairments and things like that. So it's really pretty consistent with the balance sheet. I'll turn it over to Michael.
Yes. On the operations side, I'll speak to that in a second. Just with regard to the cash balance, as we have indicated, we signed a new lease with MGM for New York, New York a couple of years ago. And part of the requirement of that new lease was doing some work within our restaurants. And the work is mostly done at this point. But the redo of America, which will be open in April, has taken a lot of cash in the last couple of months. Also, our litigation bills at Bryant Park have taken a lot of cash. So we expect once the build-out of America is completed, the cash position will start to improve. And in the March quarter, that's a low point for us in cash on an annual basis. So we'll see cash starting to improve in the next couple of months. On the income side, venue by venue, Las Vegas remains a high point for us. We're seeing better results there despite the strip being down 11%. Our operations are doing quite well. We're more efficient. Keith here, who runs those operations is doing a spectacular job for us. And we're starting to see hopefully some expansion opportunities in Vegas for what we do. Alabama is fine. The Florida restaurants have continued to be down 10%, 12%, 13% on the revenue side. So margins are squeezed, expenses although we think we're efficient, they're much higher than they were a couple of years ago, just inflation. We haven't raised some prices along the way, but revenues are soft. That's in our full-service restaurants. Our Hollywood fast food in the Hard Rock continues to do extremely well. Sequoia in Washington, we have new management there. I was down there last week. We're really excited about the opportunity the new management is affording us. Washington has been a difficult environment for everybody. The project we're in is not doing well as a whole, but we're starting to see a little perk up in Sequoia. New York, Bryant Park, again, we're still in this litigation mode. It has hurt us with events. It continues to hurt us with events. But the litigation, we think we're in good shape. And the beneficiary of us being operating the restaurants over the last 1.5 years despite the fact that everybody seems to know that there's litigation going on. More event business is starting to be signed up. So I think this year we'll be better on the revenue side in the event and corporate and social event side than it has been. So I think we'll pick up a little bit there. Robert continues to do very well. The other things, I guess, we should discuss is the Meadowlands. Right now, we are doing the owners of Meadowlands Racetrack, we're doing surveying to find out where the public will stand on a referendum to vote for a casino in the northern part of the state away from Atlantic City. So once that survey is complete, if it's positive, we think that the ammunition, the legislature needs to go forward and put a referendum on the ballot this November. We just started this process about a week ago. It will take 1 month, 1.5 months to complete. So hopefully, we'll see a positive result. So with that, any questions?
Questions and answers
Our first question comes from Roger Lipton from Lipton Financial.
It appears that your costs decreased in food, beverage, and payroll due to your line-by-line operations. It seems that your menu prices have been raised noticeably across the board. You noted this in Florida, but costs have declined from your fourth quarter to the first quarter. As you are aware, cost of sales is down 270 basis points, and payroll has decreased by over 300 basis points, specifically 349. That's quite significant. Has this affected traffic, which is the key question?
Too hard to answer the last question, has it affected traffic. There's so much that goes on, weather and other things. We're just trying to be more efficient. We have not raised prices significantly. I would disagree with that. I think we're just being more efficient. And...
Yes. I mean we've re-engineered some menu items. We're trying to be more efficient on payrolls, reduce overtime, things like that.
Well, that's good to hear. I mean it's preferable to improve margins without raising prices, obviously...
No, but we have raised them a little bit. Certain menu items have seen significant increases. For example, the King Crab Legs used to cost $99 before COVID and now they are $235. This is due to the skyrocketing cost per pound. However, aside from a couple of items affected by shortages and costs, the overall menu increases have been quite modest.
That's good to hear. How has the traffic trend been? We've experienced very cold weather in the Northeast, but most of your revenues are from Las Vegas, which has been stable. How has the weather been in Alabama and Florida this first quarter?
Alabama is fine. Florida has been a disaster. It got down to 45 degrees.
Last 2 weeks.
Yes, the last 2 weeks have been brutal. And not to try to be funny, but iguanas have fallen out of trees, if you read those articles. So that impacts us dramatically. I mean, last week, we were down 40% at some of our full-service restaurants in Florida. It has just been a disaster as well as in New York. I mean nobody was going out. The first 2 weeks were very, very tough.
So the good news is that the comparisons will be easy next year. It will not be any colder next year than this year.
Hope not.
Our next question comes from the line of Jeffrey Kaminsky with JJK Consultants.
Two questions, different directions, but 2 questions. Michael, you just said on the call that with respect to the litigation at Bryant Park, you feel that you guys are in pretty good shape. I was wondering, I know it's a legal issue and it's probably things you can and can't say. But what gives you the belief that you're in good shape? As I pointed out on this call 3 months ago, it's my understanding that when it came to winning the lease back, Ark actually came in third, not second. So should you be successful in this litigation, that doesn't necessarily mean that Ark gets the lease back because there was someone who came in second, not you. So that's one question, and I'll pivot and you can address them both. In the press release, you mentioned, as you have spoken in the past with respect to the Meadowlands that there's likely to be some dilution in terms of Ark's ownership. I understand that Ark owns about 8%, roughly. You can correct me if that's a wrong number. What do you expect the dilution impact to be on the ownership of the casino in the Meadowlands?
Regarding the Bryant Park situation, the discovery process has revealed aspects that we believe are advantageous for us. The duration of our possession, while the litigation and any appeals proceed, gives us a considerable amount of time to address the issues. I also encourage everyone to review the public documentation related to the court process in the city.
New York State Supreme Court website.
Yes. Regarding dilution at the Meadowlands, there are many variables involved. There is no dilution concerning our exclusivity on all food and beverage if a casino license is granted to the Meadowlands, separate from our ownership stake in the LLC, which is New Meadowlands Racetrack. From that perspective, our exclusivity remains intact. However, dilution may occur depending on the agreement made with an operator and the amount of funding that needs to be raised. If it's uncertain, I cannot predict our capacity to raise money if a casino license is issued in the North. This largely depends on our stock price and whether it would be sensible to conduct a secondary offering to minimize dilution, or if we choose to accept dilution or bring in a partner. There are too many factors at play, but I expect there will be some dilution. I hope that answers your question.
And we have reached the end of the question-and-answer session. I'd like to turn the floor back over to Michael Weinstein for closing remarks.
All right. Thank you for your participation, and we'll speak to you in 3 months.
Thank you.
Thank you. And this concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.