Nathan's Famous, Inc. Reports Year End and Fourth Quarter Results
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Nathan's Famous, Inc. Reports Year End and Fourth Quarter Results

And Declares Quarterly Cash Dividend Of $0.35 Per Share

JERICHO, N.Y., June 11, 2021 // GLOBE NEWSWIRE // - Nathan's Famous, Inc. (NASDAQ:NATH) today reported results for its fiscal year and fourth quarter ended March 28, 2021.

Effective June 11, 2021, the Board of Directors declared its first quarterly cash dividend for fiscal 2022 of $0.35 per share, which is payable on June 25, 2021 to shareholders of record at the close of business on June 21, 2021.

For the fiscal year ended March 28, 2021:

  • Revenues were $75,839,000 for the fifty-two weeks ended March 28, 2021 (“fiscal 2021”), as compared to $103,325,000 for the fifty-two weeks ended March 29, 2020 (“fiscal 2020”);
  • Income from operations was $25,515,000 for fiscal 2021, as compared to $27,172,000 for fiscal 2020;
  • Adjusted EBITDA1 for fiscal 2021, a non-GAAP financial measure, was $27,225,000, as compared to $29,964,000 for fiscal 2020;
  • Income before provision for income taxes was $15,325,000 for fiscal 2021, as compared to $18,014,000 for fiscal 2020;
  • Net income was $11,075,000 for fiscal 2021, as compared to $13,435,000 for fiscal 2020; and
  • Earnings per diluted share was $2.69 per share for fiscal 2021, as compared to $3.19 per share for fiscal 2020.

For the thirteen weeks ended March 28, 2021:

  • Revenues were $18,284,000 for the thirteen weeks ended March 28, 2021 (“fourth quarter fiscal 2021”), as compared to $21,705,000 for the thirteen weeks ended March 29, 2020 (“fourth quarter fiscal 2020”);
  • Income from operations was $5,434,000 for the fourth quarter fiscal 2021, as compared to $6,495,000 for the fourth quarter fiscal 2020;
  • Adjusted EBITDA1 for the fourth quarter fiscal 2021, a non-GAAP financial measure, was $5,817,000, as compared to $7,124,000 for the fourth quarter fiscal 2020;
  • Income before provision for income taxes was $2,855,000 for the fourth quarter fiscal 2021, as compared to $4,153,000 for the fourth quarter fiscal 2020;
  • Net income was $2,061,000 for the fourth quarter fiscal 2021, as compared to $3,195,000 for the fourth quarter fiscal 2020; and
  • Earnings per diluted share was $0.50 per share for the fourth quarter fiscal 2021, as compared to $0.76 per share for the fourth quarter fiscal 2020.

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1EBITDA and Adjusted EBITDA are non-GAAP financial measures. Please see the definitions of EBITDA and Adjusted EBITDA on page 3 of this release and the reconciliation of EBITDA and Adjusted EBITDA to net income in the table at the end of this release.

The Company also reported the following:

  • License royalties increased to $31,368,000 during fiscal 2021, as compared to $25,859,000 during fiscal 2020. During fiscal 2021, royalties earned under the retail agreement, including the foodservice program, from John Morrell & Co., increased 21% to $28,694,000, as compared to $23,680,000 of royalties earned during fiscal 2020. As consumers sheltered at home as a result of the COVID-19 pandemic, our licensing business exhibited strong consumer demand.
  • In the Branded Product Program, which features the sale of Nathan’s hot dogs to the foodservice industry, income from operations declined by approximately $3,053,000 to $4,635,000 during fiscal 2021, as compared to $7,688,000 during fiscal 2020.  Sales were $33,617,000 during fiscal 2021, compared to sales of $57,586,000 during fiscal 2020, while the volume of hot dogs sold by the Company decreased 41%.  As a result of the COVID-19 pandemic, sales and income from operations for the Branded Product Program were negatively impacted as many of our customers operate in venues that were closed or slow to re-open, such as movie theaters, or venues operating at reduced capacity, such as professional sports arenas, amusement parks, and shopping malls.
  • Sales from Company-operated restaurants were $7,709,000 during fiscal 2021 as compared to $12,973,000 during fiscal 2020. The decrease was primarily due to a decline in customer traffic related to the impact of the COVID-19 pandemic. Additionally, as stipulated under government orders, our Company-operated restaurants with dining rooms were operating at reduced capacity and maintaining social distancing protocols.
  • Revenues from franchise operations were $1,601,000 during fiscal 2021, compared to $4,572,000 during fiscal 2020. Total royalties were $1,317,000 during fiscal 2021 as compared to $3,327,000 during fiscal 2020. Total franchise fee income, including cancellation fees, was $284,000 during fiscal 2021 as compared to $1,245,000 during the fiscal 2020. As a result of the COVID-19 pandemic, a number of our franchised locations have been temporarily closed due to their locations being in venues which are closed, such as movie theaters, or venues operating at reduced traffic, such as airports, shopping malls, and highway travel plazas. Despite the challenging environment, 7 new franchised outlets and 130 ghost kitchens opened during fiscal 2021.
  • Advertising revenue was $1,544,000 during fiscal 2021 and $2,335,000 during fiscal 2020.
  • On March 5, 2021, the Company paid the $0.35 per share regular cash dividend that was declared by the Board of Directors effective February 5, 2021 to shareholders of record at the close of business of February 22, 2021.

Certain Non-GAAP Financial Information:

In addition to disclosing results that are determined in accordance with Generally Accepted Accounting Principles in the United States of America ("US GAAP"), the Company is disclosing EBITDA, a non-GAAP financial measure which is defined as net income, excluding (i) interest expense; (ii) provision for income taxes and (iii) depreciation and amortization expense. The Company is also disclosing Adjusted EBITDA, a non-GAAP financial measure which is defined as EBITDA, excluding share-based compensation that the Company believes will impact the comparability of its results of operations.

The Company believes that EBITDA and Adjusted EBITDA are useful to investors to assist in assessing and understanding the Company's operating performance and underlying trends in the Company's business because EBITDA and Adjusted EBITDA are (i) among the measures used by management in evaluating performance and (ii) are frequently used by securities analysts, investors and other interested parties as a common performance measure.

EBITDA and Adjusted EBITDA are not recognized terms under US GAAP and should not be viewed as alternatives to net income or other measures of financial performance or liquidity in conformity with US GAAP. Additionally, our definitions of EBITDA and Adjusted EBITDA may differ from other companies. Analysis of results and outlook on a non-US GAAP basis should be used as a complement to, and in conjunction with, data presented in accordance with US GAAP. Please see the table at the end of this press release for a reconciliation of EBITDA and Adjusted EBITDA to net income.

Nathan's Famous, Inc.

  Thirteen weeks ended   Fiscal year ended
  Mar. 28, 2021   Mar. 29, 2020   Mar. 28, 2021   Mar. 29, 2020
Financial Highlights                  
                       
Total revenues $ 18,284,000     $ 21,705,000     $ 75,839,000     $ 103,325,000  
                       
Income from operations (a) $ 5,434,000     $ 6,495,000     $ 25,515,000     $ 27,172,000  
                       
Net income $ 2,061,000     $ 3,195,000     $ 11,075,000     $ 13,435,000  
                       
Income per share:                      
Basic $ 0.50     $ 0.76     $ 2.69     $ 3.19  
Diluted $ 0.50     $ 0.76     $ 2.69     $ 3.19  
                       
Weighted-average shares used in computing income per share:                      
Basic 4,115,000     4,204,000     4,116,000     4,216,000  
Diluted 4,115,000     4,204,000     4,116,000     4,216,000  
                       
Select Segment Information                      
                       
Revenues                      
Branded product program $ 9,167,000     $ 11,597,000     $ 33,617,000     $ 57,586,000  
Product licensing 6,679,000     7,300,000     31,368,000     25,859,000  
Restaurant operations 1,976,000     2,225,000     9,310,000     17,545,000  
Corporate (b) 462,000     583,000     1,544,000     2,335,000  
Total Revenues $ 18,284,000     $ 21,705,000     $ 75,839,000     $ 103,325,000  
                       
Income from operations (c)                      
Branded product program $ 1,561,000     $ 1,444,000     $ 4,635,000     $ 7,688,000  
Product licensing 6,634,000     7,254,000     31,186,000     25,677,000  
Restaurant operations (663,000 )   (617,000 )   (2,856,000 )   1,637,000  
Corporate (d) (2,098,000 )   (1,586,000 )   (7,450,000 )   (7,830,000 )
Income from operations (c) $ 5,434,000     $ 6,495,000     $ 25,515,000     $ 27,172,000  
                       

(a) Excludes interest expense, interest income, and other income, net.
(b) Represents Advertising Fund revenue.
(c) Excludes interest expense, interest income, and other income, net which are managed centrally at the corporate level, and, accordingly, such items are not presented by segment since they are excluded from the measure of profitability reviewed by the Chief Operating Decision Maker.
(d) Consists principally of administrative expenses not allocated to the operating segments such as executive management, finance, information technology, legal, insurance, corporate office costs, incentive compensation, compliance costs, and the operating results of the advertising fund.

Nathan's Famous, Inc. and Subsidiaries

Reconciliation of Net Income to EBITDA and Adjusted EBITDA

  Thirteen weeks ended   Fiscal year ended
  Mar. 28, 2021   Mar. 29, 2020   Mar. 28, 2021   Mar. 29, 2020
           
EBITDA              
Net Income $ 2,061,000   $ 3,195,000   $ 11,075,000   $ 13,435,000
               
Interest Expense 2,650,000   2,650,000   10,601,000   10,601,000
               
Provision for income taxes 794,000   958,000   4,250,000   4,579,000
               
Depreciation and amortization 283,000   292,000   1,183,000   1,233,000
               
EBITDA $ 5,788,000   $ 7,095,000   $ 27,109,000   $ 29,848,000
               
               
               
Adjusted EBITDA              
EBITDA $ 5,788,000   $ 7,095,000   $ 27,109,000   $ 29,848,000
               
Share-based compensation 29,000   29,000   116,000   116,000
               
Adjusted EBITDA $ 5,817,000   $ 7,124,000   $ 27,225,000   $ 29,964,000
               

SOURCE Nathan’s Famous

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