Nathan's Famous, Inc. Reports First Quarter Results
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Nathan's Famous, Inc. Reports First Quarter Results

And Declares Quarterly Cash Dividend of $0.35 Per Share

JERICHO, N.Y., Aug. 06, 2021 // GLOBE NEWSWIRE // - Nathan's Famous, Inc. (“Nathan’s”, the “Company”, “we”, “us” or “our”) (NASDAQ:NATH) today reported results for its first fiscal quarter ended June 27, 2021.

For the thirteen-week period ended June 27, 2021 (“first quarter fiscal 2022”):

  • Revenues were $31,319,000, as compared to $17,686,000 during the thirteen weeks ended June 28, 2020;
  • Income from operations was $10,702,000, as compared to $8,094,000 during the thirteen weeks ended June 28, 2020;
  • Adjusted EBITDA1, a non-GAAP financial measure, was $11,061,000 as compared to $8,550,000 during the thirteen weeks ended June 28, 2020;
  • Income before provision for income taxes was $8,104,000, as compared to $5,561,000 during the thirteen weeks ended June 28, 2020;
  • Net income was $5,763,000, as compared to $4,000,000 during the thirteen weeks ended June 28, 2020; and
  • Earnings per diluted share was $1.40 per share, as compared to $0.97 per share during the thirteen weeks ended June 28, 2020.

The Company also reported the following:

  • License royalties increased to $10,682,000 during the first quarter fiscal 2022, as compared to $10,523,000 during the thirteen weeks ended June 28, 2020. During the first quarter fiscal 2022, royalties earned under the retail agreement, including the foodservice program, with John Morrell & Co., increased 1.4% to $9,880,000, as compared to $9,744,000 of royalties earned during the thirteen weeks ended June 28, 2020.
  • In the Branded Product Program, which features the sale of Nathan’s hot dogs to the foodservice industry, income from operations increased by approximately $1,982,000 to $2,254,000 during the first quarter fiscal 2022, as compared to $272,000 for the thirteen weeks ended June 28, 2020.  Sales were $15,996,000 in the first quarter fiscal 2022, compared to sales of $4,749,000 during the prior-year period, while the volume of hot dogs sold by the Company increased 232%.  Sales and income from operations for the Branded Product Program have increased as certain government mandated restrictions associated with the COVID-19 pandemic have begun to ease with approved vaccines being more widely distributed and administered. As a result, many of our Branded Product Program customers have reopened adhering to state and local guidelines, such as professional sports venues, amusement parks, shopping malls and movie theaters. Our average selling price, which is partially correlated to the beef markets, decreased by approximately 4.5% compared to the prior year period.

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1 EBITDA and Adjusted EBITDA are non-GAAP financial measures.  Please see the definitions of EBITDA and Adjusted EBITDA on page 2 of this release and the reconciliation of EBITDA and Adjusted EBITDA to net income in the table at the end of this release.

  • Sales from Company-operated restaurants were $3,329,000 during the first quarter fiscal 2022 as compared to $1,934,000 during the thirteen weeks ended June 28, 2020. The increase was primarily due to an increase in customer traffic especially at our two Coney Island locations as a result of the easing of certain government mandated restrictions.
  • Revenues from franchise operations were $907,000 during the first quarter fiscal 2022 as compared to $191,000 during the thirteen weeks ended June 28, 2020. Total royalties were $800,000 in the first quarter fiscal 2022 period as compared to $110,000 during the thirteen weeks ended June 28, 2020. Total franchise fee income was $107,000 during the first quarter fiscal 2022 as compared to $81,000 during the thirteen weeks ended June 28, 2020. The increase in franchise fees and royalties during the first quarter fiscal 2022 was primarily due to an increase in franchise restaurant sales of $10,767,000 to $12,985,000 as compared to $2,218,000 for the thirteen weeks ended June 28, 2020 as we begin to lap the significant impact of COVID-19.2 One new franchised outlet and seven new branded menu program outlets opened during the thirteen weeks ended June 27, 2021.
  • During the first quarter fiscal 2022, we recorded Advertising Fund revenue and expense in the amount of $405,000 as compared to $289,000 during the thirteen weeks ended June 28, 2020.
  • On June 25, 2021, we paid the $0.35 per share regular cash dividend that was declared by the Board of Directors on June 11, 2021 to shareholders of record at the close of business on June 21, 2021.
  • Effective August 6, 2021, the Board of Directors declared its quarterly cash dividend of $0.35 per share payable on September 3, 2021 to shareholders of record at the close of business on August 23, 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 (i) stock-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.

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2 Franchise restaurant sales are not revenues of the Company and are not included in the Company’s Consolidated Financial Statements.

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. and Subsidiaries

(unaudited)

    Thirteen weeks ended 
  June 27, 2021   June 28, 2020
Financial Highlights      
Total revenues $ 31,319,000   $ 17,686,000
       
Income from operations (a) $   10,702,000   $ 8,094,000
       
Income before provision for income taxes $ 8,104,000   $ 5,561,000
       
Net income $ 5,763,000   $ 4,000,000
       
Income per share:      
Basic $ 1.40   $ 0.97
Diluted $ 1.40   $ 0.97
       
Weighted-average shares used in      
computing income per share:      
Basic 4,115,000   4,120,000
Diluted 4,115,000   4,120,000
       

Select Segment Information

Revenues      
Branded product program $ 15,996,000     $ 4,749,000  
Product licensing   10,682,000       10,523,000  
Restaurant operations   4,236,000       2,125,000  
Corporate (b)   405,000       289,000  
Revenues $ 31,319,000     $ 17,686,000  


Income from operations (c)
     
Branded product program $ 2,254,000     $ 272,000  
Product licensing   10,637,000       10,477,000  
Restaurant operations   (2,000 )     (893,000 )
Corporate (d)   (2,187,000 )     (1,762,000 )
Income from operations (c) $ 10,702,000     $ 8,094,000  
  1. Excludes interest expense, interest income, and other income, net.
  2. Represents Advertising Fund revenue.
  3. 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.
  4. 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 and compliance costs and Advertising Fund expense.

 

Nathan's Famous, Inc. and Subsidiaries

Reconciliation of Net Income to EBITDA and Adjusted EBITDA
(unaudited)        

   Thirteen weeks ended 
  June 27, 2021   June 28, 2020
       
EBITDA      
Net Income $ 5,763,000   $ 4,000,000
       
Interest Expense 2,650,000   2,650,000
       
Provision for income taxes 2,341,000   1,561,000
       
Depreciation and amortization 278,000   310,000
       
EBITDA $ 11,032,000   $ 8,521,000
       
       
Adjusted EBITDA      
EBITDA $ 11,032,000   $ 8,521,000
       
Stock-based compensation 29,000   29,000
       
Adjusted EBITDA $ 11,061,000   $ 8,550,000
       


SOURCE Nathan’s Famous      

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