Core Insights - Nathan's Famous, Inc. (NATH) has seen a 0.4% stock gain over the past three months, outperforming the industry decline of 2.8% but underperforming the S&P 500's gains of 9.6% [1][2] - The company reported strong top-line growth in its first-quarter fiscal 2026 results, although bottom-line performance was disappointing [2][3] - Management highlighted strengths in the Branded Product Program and franchise operations, while noting challenges from weather-related issues at company-owned restaurants [3][8] Financial Performance - The Branded Product Program showed notable sales growth due to higher average selling prices and volumes, despite rising beef costs [9][10] - Franchise restaurant sales increased year-over-year, with eight new franchised locations opened, contributing to asset-light revenue streams [11] - Nathan's Famous maintains stable profitability with consistent EBITDA performance, allowing for investment in growth despite cost pressures [12] Challenges - The company faces concentration risk due to its reliance on Smithfield Foods for supply and licensing revenues [13] - Inflationary pressures and volatility in commodity costs, along with rising labor expenses, present ongoing margin risks [13] Valuation - Nathan's Famous has a trailing 12-month EV/Sales ratio of 2.9X, lower than the industry average of 4.6X but higher than its five-year median of 2.7X [14][16] - Comparatively, peers Ark Restaurants and Flanigan's Enterprises have trailing EV/Sales ratios of 0.1X and 0.3X, respectively [16] Investment Outlook - The company exhibits strong core business strength and financial stability, making it an attractive option for both existing and new investors [17][18] - The current valuation suggests potential for growth if performance aligns more closely with the overall market [18]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements.](index=3&type=section&id=Item%201.%20Financial%20Statements.) This section presents the unaudited condensed consolidated financial statements for Nathan's Famous, Inc. and its subsidiaries, including the Balance Sheets, Statements of Earnings, Statements of Changes in Stockholders' Deficit, and Statements of Cash Flows, along with detailed notes explaining the basis of presentation, significant accounting policies, revenue disaggregation, and other financial details for the thirteen weeks ended June 29, 2025, and comparable prior periods [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) | Metric | March 30, 2025 (Unaudited) (in thousands) | June 29, 2025 (Unaudited) (in thousands) | Change (in thousands) | | :--------------------------------- | :------------------------- | :------------------------ | :------- | | Total Assets | $53,476 | $63,436 | +$9,960 | | Total Liabilities | $69,989 | $72,778 | +$2,789 | | Total Stockholders' Deficit | $(16,513) | $(9,342) | +$7,171 | | Cash and cash equivalents | $27,802 | $26,867 | -$935 | | Accounts and other receivables, net | $14,064 | $26,274 | +$12,210 | [Condensed Consolidated Statements of Earnings](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Earnings) | Metric | Thirteen weeks ended June 29, 2025 (in thousands) | Thirteen weeks ended June 30, 2024 (in thousands) | Change (YoY) (in thousands) | | :--------------------------------- | :--------------------------------- | :--------------------------------- | :----------- | | Total Revenues | $46,998 | $44,767 | +$2,231 (+5.0%) | | Branded Products Revenue | $29,075 | $26,146 | +$2,929 (+11.2%) | | Company-owned restaurants Revenue | $3,986 | $4,199 | -$213 (-5.1%) | | License royalties Revenue | $12,381 | $12,921 | -$540 (-4.2%) | | Total Costs and Expenses | $34,207 | $31,022 | +$3,185 (+10.3%) | | Income from operations | $12,791 | $13,745 | -$954 (-6.9%) | | Net Income | $8,928 | $9,277 | -$349 (-3.8%) | | Diluted EPS | $2.16 | $2.27 | -$0.11 (-4.8%) | [Condensed Consolidated Statements of Changes in Stockholders' Deficit](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Deficit) | Metric | March 30, 2025 (in thousands) | June 29, 2025 (in thousands) | Change (in thousands) | | :--------------------------------- | :------------- | :------------ | :------- | | Total Stockholders' Deficit | $(16,513) | $(9,342) | +$7,171 | | Net Income | - | $8,928 | +$8,928 | | Dividends on common stock | - | $(2,045) | $(2,045) | | Share-based compensation | - | $288 | +$288 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) | Metric | Thirteen weeks ended June 29, 2025 (in thousands) | Thirteen weeks ended June 30, 2024 (in thousands) | Change (YoY) (in thousands) | | :--------------------------------- | :--------------------------------- | :--------------------------------- | :----------- | | Net cash (used in) provided by operating activities | $(220) | $4,993 | -$5,213 | | Net cash used in investing activities | $(115) | $(41) | -$74 | | Net cash used in financing activities | $(600) | $- | -$600 | | Net (decrease) increase in cash and cash equivalents | $(935) | $4,952 | -$5,887 | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [NOTE A - BASIS OF PRESENTATION](index=8&type=section&id=NOTE%20A%20-%20BASIS%20OF%20PRESENTATION) - The company's fiscal year ends on the Sunday closest to March 31, with fiscal year 2026 ending March 29, 2026, and containing 52 weeks[21](index=21&type=chunk) - Interim results are seasonal and not necessarily indicative of full fiscal year performance[20](index=20&type=chunk) [NOTE B – NEW ACCOUNTING STANDARDS NOT YET ADOPTED](index=8&type=section&id=NOTE%20B%20%E2%80%93%20NEW%20ACCOUNTING%20STANDARDS%20NOT%20YET%20ADOPTED) - ASU 2023-09 (Income Tax Disclosures) is effective for fiscal year 2026 (beginning March 31, 2025) and is expected to impact disclosures only[25](index=25&type=chunk) - ASU 2024-03/2025-01 (Expense Disaggregation) is effective for fiscal year 2028 (beginning March 29, 2027) for annual reporting, and the company is evaluating its impact[26](index=26&type=chunk) [NOTE C – REVENUES](index=9&type=section&id=NOTE%20C%20%E2%80%93%20REVENUES) | Revenue Source | Thirteen weeks ended June 29, 2025 (in thousands) | Thirteen weeks ended June 30, 2024 (in thousands) | Change (YoY) (in thousands) | | :-------------------------- | :--------------------------------- | :--------------------------------- | :----------- | | Branded Products | $29,075 | $26,146 | +$2,929 (+11.2%) | | Company-owned restaurants | $3,986 | $4,199 | -$213 (-5.1%) | | License royalties | $12,381 | $12,921 | -$540 (-4.2%) | | Franchise royalties | $1,001 | $981 | +$20 (+2.0%) | | Franchise fees | $128 | $92 | +$36 (+39.1%) | | Total revenues | $46,998 | $44,767 | +$2,231 (+5.0%) | | Geographical Market | Thirteen weeks ended June 29, 2025 (in thousands) | Thirteen weeks ended June 30, 2024 (in thousands) | | :------------------ | :--------------------------------- | :--------------------------------- | | United States | $46,039 | $43,296 | | International | $959 | $1,471 | | Total revenues | $46,998 | $44,767 | [NOTE D – INCOME PER SHARE](index=10&type=section&id=NOTE%20D%20%E2%80%93%20INCOME%20PER%20SHARE) | Metric | June 29, 2025 | June 30, 2024 | Change (YoY) | | :--------------------------------- | :------------ | :------------ | :----------- | | Net income (in thousands) | $8,928 | $9,277 | -$349 | | Weighted average basic shares outstanding | 4,089,000 | 4,085,000 | +4,000 | | Weighted average diluted shares outstanding | 4,124,000 | 4,089,000 | +35,000 | | Basic Net income per share | $2.18 | $2.27 | -$0.09 | | Diluted Net income per share | $2.16 | $2.27 | -$0.11 | [NOTE E – CASH AND CASH EQUIVALENTS](index=10&type=section&id=NOTE%20E%20%E2%80%93%20CASH%20AND%20CASH%20EQUIVALENTS) | Metric | June 29, 2025 (in thousands) | March 30, 2025 (in thousands) | Change (in thousands) | | :-------------------------- | :------------ | :------------- | :------- | | Cash and cash equivalents | $26,867 | $27,802 | -$935 | | Cash equivalents | $18,885 | $19,400 | -$515 | - Substantially all cash balances exceed FDIC insurance limits, but the company has not experienced losses[37](index=37&type=chunk) [NOTE F – FAIR VALUE MEASUREMENTS](index=11&type=section&id=NOTE%20F%20%E2%80%93%20FAIR%20VALUE%20MEASUREMENTS) - Carrying amounts of cash, accounts receivable, accounts payable, and long-term debt approximate fair value[38](index=38&type=chunk)[39](index=39&type=chunk) - No material fair value adjustments were required for non-financial assets or liabilities as of June 29, 2025[40](index=40&type=chunk) [NOTE G – ACCOUNTS AND OTHER RECEIVABLES, NET](index=11&type=section&id=NOTE%20G%20%E2%80%93%20ACCOUNTS%20AND%20OTHER%20RECEIVABLES,%20NET) | Metric | June 29, 2025 (in thousands) | March 30, 2025 (in thousands) | Change (in thousands) | | :--------------------------------- | :------------ | :------------- | :------- | | Branded product sales receivables | $15,158 | $10,534 | +$4,624 | | Franchise and license royalties receivables | $10,822 | $3,902 | +$6,920 | | Total Accounts and other receivables, net | $26,274 | $14,064 | +$12,210 | | Allowance for credit losses | $705 | $642 | +$63 | [NOTE H – PREPAID EXPENSES AND OTHER CURRENT ASSETS](index=12&type=section&id=NOTE%20H%20%E2%80%93%20PREPAID%20EXPENSES%20AND%20OTHER%20CURRENT%20ASSETS) | Metric | June 29, 2025 (in thousands) | March 30, 2025 (in thousands) | Change (in thousands) | | :--------------------------------- | :------------ | :------------- | :------- | | Total prepaid expenses and other current assets | $1,472 | $2,048 | -$576 | | Prepaid income taxes | $- | $493 | -$493 | | Marketing prepaid expenses | $602 | $798 | -$196 | [NOTE I - INTANGIBLE ASSET](index=12&type=section&id=NOTE%20I%20-%20INTANGIBLE%20ASSET) - The definite-lived intangible asset (Arthur Treacher's co-branding) has a remaining useful life of **three years**, concluding in fiscal year 2028[47](index=47&type=chunk) - No impairment was indicated for the intangible asset as of June 29, 2025[48](index=48&type=chunk) [NOTE J - LONG LIVED ASSETS](index=12&type=section&id=NOTE%20J%20-%20LONG%20LIVED%20ASSETS) - Long-lived assets are reviewed for impairment at the individual restaurant level, with operating losses being a primary indicator[49](index=49&type=chunk)[50](index=50&type=chunk) - No impairment was indicated for long-lived assets as of June 29, 2025[52](index=52&type=chunk) [NOTE K – ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES](index=14&type=section&id=NOTE%20K%20%E2%80%93%20ACCUMULATED%20EXPENSES%20AND%20OTHER%20CURRENT%20LIABILITIES) | Metric | June 29, 2025 (in thousands) | March 30, 2025 (in thousands) | Change (in thousands) | | :--------------------------------- | :------------ | :------------- | :------- | | Total accrued expenses and other current liabilities | $8,541 | $5,969 | +$2,572 | | Corporate income taxes | $2,697 | $- | +$2,697 | | Dividend payable | $2,045 | $- | +$2,045 | | Payroll and other benefits | $1,417 | $3,269 | -$1,852 | [NOTE L – INCOME TAXES](index=14&type=section&id=NOTE%20L%20%E2%80%93%20INCOME%20TAXES) | Metric | Thirteen weeks ended June 29, 2025 | Thirteen weeks ended June 30, 2024 | | :--------------------------------- | :--------------------------------- | :--------------------------------- | | Effective income tax rate | 27.2% | 27.4% | | Income tax expense (in thousands) | $3,329 | $3,507 | | Pre-tax income (in thousands) | $12,257 | $12,784 | - The company is evaluating the impact of the One Big Beautiful Bill Act (OBBBA), enacted July 4, 2025, on its financial statements, with effects to be reflected in the Q2 2026 10-Q[56](index=56&type=chunk) [NOTE M – SEGMENT INFORMATION](index=14&type=section&id=NOTE%20M%20%E2%80%93%20SEGMENT%20INFORMATION) - Nathan's operates in three segments: Branded Product Program, Product Licensing, and Restaurant Operations[57](index=57&type=chunk) - The Branded Product Program and Product Licensing segments are the largest contributors to the company's revenues and profits[99](index=99&type=chunk) | Segment (Thirteen weeks ended June 29, 2025) | Revenues (in thousands) | Income from operations (in thousands) | | :------------------------------------------- | :------- | :--------------------- | | Branded Product Program | $29,075 | $2,276 | | Product Licensing | $12,381 | $12,335 | | Restaurant Operations | $5,115 | $1,068 | | Corporate | $427 | $(2,888) | | **Total** | **$46,998** | **$12,791** | | Segment (Thirteen weeks ended June 30, 2024) | Revenues (in thousands) | Income from operations (in thousands) | | :------------------------------------------- | :------- | :--------------------- | | Branded Product Program | $26,146 | $2,500 | | Product Licensing | $12,921 | $12,875 | | Restaurant Operations | $5,272 | $1,046 | | Corporate | $428 | $(2,676) | | **Total** | **$44,767** | **$13,745** | [NOTE N – SHARE-BASED COMPENSATION](index=18&type=section&id=NOTE%20N%20%E2%80%93%20SHARE-BASED%20COMPENSATION) | Share-based Compensation | Thirteen weeks ended June 29, 2025 (in thousands) | Thirteen weeks ended June 30, 2024 (in thousands) | Change (YoY) (in thousands) | | :----------------------- | :--------------------------------- | :--------------------------------- | :----------- | | Restricted stock units | $169 | $19 | +$150 | | Stock options | $119 | $169 | -$50 | | **Total compensation cost** | **$288** | **$188** | **+$100** | - As of June 29, 2025, there was **$2,993 thousand** of unamortized compensation expense related to share-based awards, expected to be recognized over approximately **33 months**[65](index=65&type=chunk) [NOTE O – STOCKHOLDERS' EQUITY](index=19&type=section&id=NOTE%20O%20%E2%80%93%20STOCKHOLDERS'%20EQUITY) - The Board declared a quarterly cash dividend of **$0.50 per share** for fiscal 2026, paid on July 1, 2025, and a second dividend of **$0.50 per share** payable on September 5, 2025[70](index=70&type=chunk)[71](index=71&type=chunk) - As of June 29, 2025, **98,116 shares** remained to be repurchased under the sixth stock repurchase plan, which has no set expiration date[73](index=73&type=chunk) [NOTE P – LONG-TERM DEBT](index=19&type=section&id=NOTE%20P%20%E2%80%93%20LONG-TERM%20DEBT) | Metric | June 29, 2025 (in thousands) | March 30, 2025 (in thousands) | Change (in thousands) | | :--------------------------------- | :------------ | :------------- | :------- | | SOFR Term Loan Borrowings | $50,200 | $50,800 | -$600 | | Long-term debt, net | $47,492 | $48,073 | -$581 | - The company entered into a new five-year unsecured Credit Agreement on July 10, 2024, including a **$60,000 thousand Term Loan** and a **$10,000 thousand Revolving Loan**, maturing July 10, 2029[75](index=75&type=chunk)[76](index=76&type=chunk) - The Term Loan borrowings bear interest at Term SOFR plus an Applicable Rate of **1.40%**, with an effective interest rate of **5.812%** at June 29, 2025[78](index=78&type=chunk) - The company was in compliance with all covenants of the Credit Agreement at June 29, 2025[79](index=79&type=chunk) [NOTE Q – LEASES](index=20&type=section&id=NOTE%20Q%20%E2%80%93%20LEASES) | Metric | Thirteen weeks ended June 29, 2025 (in thousands) | Thirteen weeks ended June 30, 2024 (in thousands) | | :----------------- | :--------------------------------- | :--------------------------------- | | Operating lease cost | $438 | $441 | | Variable lease cost | $464 | $460 | | Sublease income, net | $(21) | $(21) | | **Total net lease cost** | **$881** | **$880** | | Lease Metric | Value | | :--------------------------------- | :---- | | Weighted average remaining lease term | **3.3 years** | | Weighted average discount rate | **8.479%** | | Fiscal Year | Net Lease Commitments (in thousands) | | :---------- | :--------------------------------- | | 2026 | $1,169 | | 2027 | $1,650 | | 2028 | $1,652 | | 2029 | $434 | | 2030 | $171 | | Thereafter | $- | | **Total** | **$5,076** | [NOTE R - COMMITMENTS AND CONTINGENCIES](index=23&type=section&id=NOTE%20R%20-%20COMMITMENTS%20AND%20CONTINGENCIES) - Management believes that the ultimate outcome of current legal proceedings will not have a material adverse effect on the company's financial position, cash flows, or results of operations[88](index=88&type=chunk) [NOTE S – SUPPLEMENTAL CASH FLOW INFORMATION](index=23&type=section&id=NOTE%20S%20%E2%80%93%20SUPPLEMENTAL%20CASH%20FLOW%20INFORMATION) - Accruals for purchases of property and equipment of **$52 thousand** were included in Accrued expenses and other current liabilities[89](index=89&type=chunk) - Dividends declared but not yet paid of **$2,045 thousand** were included in Accrued expenses and other current liabilities[90](index=90&type=chunk) [NOTE T – SUBSEQUENT EVENTS](index=23&type=section&id=NOTE%20T%20%E2%80%93%20SUBSEQUENT%20EVENTS) - No subsequent events requiring recognition or disclosure were identified through the date the financial statements were issued and filed[91](index=91&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.](index=24&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) This section provides management's perspective on the company's financial condition and results of operations for the thirteen weeks ended June 29, 2025, covering revenue and expense trends, liquidity, capital resources, and the impact of macroeconomic factors like inflation [Forward-Looking Statements](index=24&type=section&id=Forward-Looking%20Statements) - Forward-looking statements are subject to known and unknown risks and uncertainties, including the impact of disease epidemics, increased food and paper costs, debt obligations, economic conditions, weather, and changes in beef prices[93](index=93&type=chunk) - The company does not undertake any obligation to update forward-looking statements to reflect events or circumstances after the report date[93](index=93&type=chunk) [Introduction](index=24&type=section&id=Introduction) - Nathan's Famous, Inc. markets its brand and sells products through Company-owned and franchised restaurants, a product licensing program for retail, and a Branded Product Program for foodservice[95](index=95&type=chunk) - The company's primary focus is to expand the market penetration of the Nathan's Famous brand across all business platforms[99](index=99&type=chunk) - As of June 29, 2025, the restaurant system (excluding virtual kitchens) consisted of **225 locations**, including **115 Branded Menu Program locations** and **four Company-owned restaurants**[98](index=98&type=chunk) [Recent events](index=26&type=section&id=Recent%20events) - Inflationary pressures on commodity prices (e.g., beef and beef trimmings) and labor costs impacted Q1 fiscal 2026 results[102](index=102&type=chunk) - The company has offset some cost increases through price adjustments and sales agreements correlated to beef costs, but anticipates continued inflationary pressures and volatility[102](index=102&type=chunk) [Critical Accounting Policies and Estimates](index=27&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - Critical accounting estimates include impairment of intangible assets, long-lived assets, current expected credit losses, customer rebates, and income taxes[104](index=104&type=chunk) - No changes to critical accounting estimates occurred during the thirteen weeks ended June 29, 2025[104](index=104&type=chunk) [New Accounting Standards Not Yet Adopted](index=27&type=section&id=New%20Accounting%20Standards%20Not%20Yet%20Adopted) - Refer to Note B for details on new accounting standards not yet adopted, which are expected to primarily impact disclosures[105](index=105&type=chunk) [EBITDA and Adjusted EBITDA](index=27&type=section&id=EBITDA%20and%20Adjusted%20EBITDA) - EBITDA and Adjusted EBITDA are non-GAAP measures used to assess operating performance and underlying business trends[106](index=106&type=chunk) [Reconciliation of GAAP and Non-GAAP Measures](index=27&type=section&id=Reconciliation%20of%20GAAP%20and%20Non-GAAP%20Measures) | Metric | Thirteen weeks ended June 29, 2025 (in thousands) | Thirteen weeks ended June 30, 2024 (in thousands) | Change (YoY) (in thousands) | | :--------------------------------- | :--------------------------------- | :--------------------------------- | :----------- | | Net income | $8,928 | $9,277 | -$349 | | Interest expense | $758 | $1,060 | -$302 | | Provision for income taxes | $3,329 | $3,507 | -$178 | | Depreciation and amortization | $228 | $249 | -$21 | | **EBITDA** | **$13,243** | **$14,093** | **-$850** | | Share-based compensation | $288 | $188 | +$100 | | **Adjusted EBITDA** | **$13,531** | **$14,281** | **-$750** | [Seasonality](index=27&type=section&id=Seasonality) - Sales and earnings are historically highest during the first two fiscal quarters, with the fourth quarter being the slowest[111](index=111&type=chunk) - Seasonality and inflationary pressures mean interim results are not indicative of a full fiscal year[112](index=112&type=chunk) [Results of Operations](index=29&type=section&id=Results%20of%20Operations) [Revenues](index=29&type=section&id=Revenues) | Revenue Source | June 29, 2025 (in thousands) | June 30, 2024 (in thousands) | Change (YoY) (in thousands) | | :--------------------------------- | :------------ | :------------ | :----------- | | Total revenues | $46,998 | $44,767 | +$2,231 (+5%) | | Branded Product Program sales | $29,075 | $26,146 | +$2,929 (+11%) | | Company-owned restaurant sales | $3,986 | $4,199 | -$213 (-5%) | | License royalties | $12,381 | $12,921 | -$540 (-4%) | | Franchise fees and royalties | $1,129 | $1,073 | +$56 (+5.2%) | - Branded Product Program hot dog volume was comparable year-over-year, but average selling price increased by approximately **8%**[114](index=114&type=chunk) - License royalties decreased due to a **15% decrease in retail volume**, partially offset by a **12% increase in net selling price**[116](index=116&type=chunk) - The number of franchised locations decreased from **231 to 225** year-over-year[118](index=118&type=chunk) [Costs and Expenses](index=30&type=section&id=Costs%20and%20Expenses) | Expense Category | June 29, 2025 (in thousands) | June 30, 2024 (in thousands) | Change (YoY) (in thousands) | | :--------------------------------- | :------------ | :------------ | :----------- | | Total costs and expenses | $34,207 | $31,022 | +$3,185 (+10.3%) | | Cost of sales (Branded Product Program) | $26,233 | $22,972 | +$3,261 (+14%) | | Cost of sales (Company-owned restaurants) | $2,190 (55% of sales) | $2,269 (54% of sales) | -$79 | | Restaurant operating expenses | $1,179 | $1,129 | +$50 | | General and administrative expenses | $3,950 | $3,975 | -$25 (-1%) | - Average cost per pound of hot dogs in the Branded Product Program increased by approximately **12%** due to shrinking cattle supply, high input costs, and inflationary pressures[121](index=121&type=chunk) - Labor and related expenses as a percentage of Company-owned restaurant sales increased from **29% to 31%** due to legislative increases in the New York State minimum wage[121](index=121&type=chunk) [Other Items](index=30&type=section&id=Other%20Items) | Metric | June 29, 2025 (in thousands) | June 30, 2024 (in thousands) | Change (YoY) (in thousands) | | :--------------------------------- | :------------ | :------------ | :----------- | | Interest expense | $758 | $1,060 | -$302 | | Interest and dividend income | $203 | $78 | +$125 | [Provision for Income Taxes](index=31&type=section&id=Provision%20for%20Income%20Taxes) | Metric | June 29, 2025 | June 30, 2024 | | :--------------------------------- | :------------ | :------------ | | Effective income tax rate | 27.2% | 27.4% | | Income tax expense (in thousands) | $3,329 | $3,507 | | Pre-tax income (in thousands) | $12,257 | $12,784 | - The effective tax rates are higher than U.S. Federal statutory rates primarily due to state and local taxes and non-deductible compensation[130](index=130&type=chunk) - The company is assessing the impact of the One Big Beautiful Bill Act (OBBBA), enacted July 4, 2025, on its financial statements[132](index=132&type=chunk) [Off-Balance Sheet Arrangements](index=31&type=section&id=Off-Balance%20Sheet%20Arrangements) - The company had no open purchase commitments for hot dogs as of June 29, 2025, and June 30, 2024[135](index=135&type=chunk) [Liquidity and Capital Resources](index=31&type=section&id=Liquidity%20and%20Capital%20Resources) [Sources and uses of cash](index=31&type=section&id=Sources%20and%20uses%20of%20cash) - Primary liquidity sources are cash flows from operations and cash and cash equivalents[137](index=137&type=chunk) - Primary cash requirements include quarterly dividends, debt service, capital expenditures, lease obligations, working capital, and general corporate needs[137](index=137&type=chunk) | Metric | June 29, 2025 (in thousands) | March 30, 2025 (in thousands) | Change (in thousands) | | :--------------------------------- | :------------ | :------------- | :------- | | Cash and cash equivalents | $26,867 | $27,802 | -$935 | | Net working capital | $34,939 | $28,371 | +$6,568 | [Summary of Cash Flows](index=31&type=section&id=Summary%20of%20Cash%20Flows) | Cash Flow Activity | Thirteen weeks ended June 29, 2025 (in thousands) | Thirteen weeks ended June 30, 2024 (in thousands) | Change (YoY) (in thousands) | | :--------------------------------- | :--------------------------------- | :--------------------------------- | :----------- | | Net cash (used in) provided by operating activities | $(220) | $4,993 | -$5,213 | | Net cash used in investing activities | $(115) | $(41) | -$74 | | Net cash used in financing activities | $(600) | $- | -$600 | | Net (decrease) increase in cash and cash equivalents | $(935) | $4,952 | -$5,887 | [Operating activities](index=32&type=section&id=Operating%20activities) - Cash used in operations was **$220 thousand**, primarily due to a **$12,273 thousand increase** in accounts and other receivables[141](index=141&type=chunk) - Accounts and other receivables increased due to higher Branded Product Program receivables (**$4,624 thousand**) and higher franchise and license royalties receivable (**$6,920 thousand**)[141](index=141&type=chunk) - Accrued corporate taxes increased by **$2,697 thousand** due to the timing of estimated tax payments[141](index=141&type=chunk) [Investing activities](index=32&type=section&id=Investing%20activities) - Cash used in investing activities was **$115 thousand**, primarily for capital expenditures in the Branded Product Program and Coney Island restaurants[142](index=142&type=chunk) [Financing activities](index=32&type=section&id=Financing%20activities) - The company made **$600 thousand** in mandatory principal repayments on its Term Loan borrowings during fiscal 2026[143](index=143&type=chunk) [Credit Agreement](index=32&type=section&id=Credit%20Agreement) - A five-year unsecured Credit Agreement was entered into on July 10, 2024, providing a **$60 million Term Loan** and a **$10 million Revolving Loan**, maturing July 10, 2029[144](index=144&type=chunk)[145](index=145&type=chunk) - The Term Loan refinanced outstanding **6.625% Senior Secured Notes due 2025**[146](index=146&type=chunk) - No outstanding borrowings under the Revolving Loan as of June 29, 2025[146](index=146&type=chunk) [Share Repurchases](index=32&type=section&id=Share%20Repurchases) - **98,116 shares** remained available for repurchase under the sixth stock repurchase plan as of June 29, 2025[147](index=147&type=chunk) - No stock repurchases were made during the fiscal 2026 period[147](index=147&type=chunk) [Common Stock Dividends](index=32&type=section&id=Common%20Stock%20Dividends) - The company paid its first quarterly cash dividend of fiscal 2026 (**$2,045 thousand**) on July 1, 2025[148](index=148&type=chunk) - A second quarterly dividend of **$0.50 per common share** for fiscal 2026 was declared, payable on September 5, 2025[149](index=149&type=chunk) - Estimated total cash requirement for dividends for fiscal 2026 is approximately **$8,179 thousand**[150](index=150&type=chunk) [Cash Flow Outlook](index=33&type=section&id=Cash%20Flow%20Outlook) - Future investments, debt obligations, and dividend programs are expected to be funded from operating cash flow[152](index=152&type=chunk) - Management believes available cash and cash equivalents and cash generated from operations will provide sufficient capital for at least the next 12 months[154](index=154&type=chunk) [Contractual Obligations](index=33&type=section&id=Contractual%20Obligations) - Contractual obligations primarily include Term Loan borrowings, interest payments, operating leases, and employment agreements[156](index=156&type=chunk) - The company remains contingently liable for costs associated with one sublet property[155](index=155&type=chunk) [Inflationary Pressures](index=33&type=section&id=Inflationary%20Pressures) - Inflationary pressures on labor and commodity prices, particularly beef and beef trimmings, significantly impacted Q1 fiscal 2026 results and are expected to continue[157](index=157&type=chunk) - The average cost of hot dogs increased by approximately **12%** during the fiscal 2026 period compared to the fiscal 2025 period[157](index=157&type=chunk) - Minimum wage increases in New York State (e.g., from **$16.00 to $16.50** in NYC, Long Island, and Westchester on January 1, 2025) have increased labor costs[158](index=158&type=chunk) - The company attempts to manage inflationary pressures through price increases, but competitive pressures and consumer spending levels may limit this ability[161](index=161&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk.](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) This section details the company's exposure to market risks, including interest rate risk on cash and borrowings, commodity price risk for key ingredients like beef, and foreign currency risk, outlining the potential financial impact of these risks and mitigation strategies [Cash and Cash Equivalents](index=34&type=section&id=Cash%20and%20Cash%20Equivalents) - A **0.25%** change in interest rates would increase or decrease annual earnings on cash and cash equivalents by approximately **$67 thousand**[163](index=163&type=chunk) [Borrowings](index=34&type=section&id=Borrowings) - A hypothetical **100 bps increase** in the interest rate on **$50,200 thousand** of outstanding Term Loan borrowings would increase cash interest costs by approximately **$502 thousand** over the next twelve months[164](index=164&type=chunk) - The company does not currently anticipate entering into interest rate swaps or other financial instruments to hedge its borrowings[164](index=164&type=chunk) [Commodity Costs](index=34&type=section&id=Commodity%20Costs) - The company is exposed to market price fluctuations in commodities, most notably beef and beef trimmings, which significantly impacted Q1 fiscal 2026 results[165](index=165&type=chunk) - The average cost of hot dogs increased by approximately **12%** during the fiscal 2026 period[165](index=165&type=chunk) - A short-term increase or decrease of **10%** in the cost of food and paper products would impact cost of sales by approximately **$2,649 thousand**[167](index=167&type=chunk) - The company has not hedged commodity prices but uses correlated sales agreements and price increases to mitigate market volatility[167](index=167&type=chunk) [Foreign Currencies](index=35&type=section&id=Foreign%20Currencies) - Foreign franchisees generally conduct business and make payments in United States dollars, reducing foreign currency risk[168](index=168&type=chunk) - The company does not hedge against foreign currency fluctuations and does not believe they would have a material impact on financial results[168](index=168&type=chunk) [Item 4. Controls and Procedures.](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures.) This section confirms that management, including the CEO and CFO, evaluated the effectiveness of the company's disclosure controls and procedures, concluding they were effective as of June 29, 2025, and states that there were no material changes in internal controls over financial reporting during the quarter [Evaluation of Disclosure Controls and Procedures](index=35&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) - Management concluded that disclosure controls and procedures were effective as of June 29, 2025[169](index=169&type=chunk) [Changes in Internal Controls](index=35&type=section&id=Changes%20in%20Internal%20Controls) - No material changes in internal controls over financial reporting occurred during the quarter ended June 29, 2025[170](index=170&type=chunk) [Limitations on the Effectiveness of Controls](index=35&type=section&id=Limitations%20on%20the%20Effectiveness%20of%20Controls) - No control system can provide absolute assurance, but the company's controls are designed for reasonable assurance and were deemed effective at that level[171](index=171&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings.](index=36&type=section&id=Item%201.%20Legal%20Proceedings.) This section states that the company is not currently involved in any material legal proceedings - The company is not currently involved in any material legal proceedings[172](index=172&type=chunk) [Item 1A. Risk Factors.](index=36&type=section&id=Item%201A.%20Risk%20Factors.) This section directs readers to the Annual Report on Form 10-K for a comprehensive discussion of risk factors and advises considering additional unknown or immaterial risks that could adversely affect the business - Investors should carefully consider the risk factors discussed in the Annual Report on Form 10-K for the fiscal year ended March 30, 2025[173](index=173&type=chunk) - Additional unknown or currently immaterial risks may also adversely affect the business[173](index=173&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.](index=36&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) This section reports that there were no unregistered sales of equity securities or use of proceeds to disclose during the period - No unregistered sales of equity securities or use of proceeds to report[174](index=174&type=chunk) [Item 3. Defaults Upon Senior Securities.](index=36&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities.) This section indicates that there were no defaults upon senior securities to report during the period - No defaults upon senior securities to report[175](index=175&type=chunk) [Item 4. Mine Safety Disclosures.](index=36&type=section&id=Item%204.%20Mine%20Safety%20Disclosures.) This section confirms that there were no mine safety disclosures required for the period - No mine safety disclosures to report[176](index=176&type=chunk) [Item 5. Other Information.](index=36&type=section&id=Item%205.%20Other%20Information.) This section reports the declaration of a quarterly cash dividend of $0.50 per share and confirms that no directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter - The Board declared a quarterly cash dividend of **$0.50 per share** payable on September 5, 2025[177](index=177&type=chunk) - No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter[178](index=178&type=chunk) [Item 6. Exhibits.](index=37&type=section&id=Item%206.%20Exhibits.) This section lists all exhibits filed with the Form 10-Q, including various certifications (CEO, CFO), the condensed consolidated financial statements in iXBRL format, and the interactive data file - Exhibits include certifications (CEO, CFO), financial statements in iXBRL format, and the Cover Page Interactive Data File[183](index=183&type=chunk) [SIGNATURES](index=38&type=section&id=SIGNATURES) This section contains the signatures of the company's Chief Executive Officer, Eric Gatoff, and Vice President – Finance and Chief Financial Officer, Robert Steinberg, certifying the report on August 8, 2025 - The report was signed by Eric Gatoff (CEO) and Robert Steinberg (CFO) on August 8, 2025[186](index=186&type=chunk)

[Press Release Overview](index=1&type=section&id=Press%20Release%20Overview) This section provides an overview of Nathan's Famous, Inc.'s first fiscal quarter 2026 financial results, key business segment performance, and dividend declarations [Company Information & Reporting Period](index=1&type=section&id=Company%20Information%20%26%20Reporting%20Period) Nathan's Famous, Inc. reported its financial results for the first fiscal quarter ended June 29, 2025, on August 8, 2025 - Nathan's Famous, Inc. reported results for its first fiscal quarter ended June 29, 2025 (first quarter fiscal 2026)[2](index=2&type=chunk)[3](index=3&type=chunk) - The report was released on August 8, 2025[2](index=2&type=chunk) [First Quarter Fiscal 2026 Financial Highlights](index=1&type=section&id=First%20Quarter%20Fiscal%202026%20Financial%20Highlights) For the first quarter of fiscal 2026, Nathan's Famous, Inc. reported an increase in revenues but declines across key income metrics, including income from operations, net income, and diluted EPS, compared to the prior year period First Quarter Fiscal 2026 Key Financial Highlights | Metric | Q1 FY26 (June 29, 2025) ($) | Q1 FY25 (June 30, 2024) ($) | Change ($) | | :-------------------------- | :---------------------- | :---------------------- | :----- | | Revenues | 46,998,000 | 44,767,000 | +2,231,000 | | Income from operations | 12,791,000 | 13,745,000 | -954,000 | | Adjusted EBITDA | 13,531,000 | 14,281,000 | -750,000 | | Income before income taxes | 12,257,000 | 12,784,000 | -527,000 | | Net income | 8,928,000 | 9,277,000 | -349,000 | | Diluted EPS | 2.16 | 2.27 | -0.11 | [Key Business Segment Performance](index=1&type=section&id=Key%20Business%20Segment%20Performance) Segment performance varied, with Branded Product Program sales up but income down, licensing royalties declining, and company-owned restaurant sales decreasing, while franchise operations grew - License royalties decreased to **$12,381,000** in Q1 FY26 from **$12,921,000** in Q1 FY25, with royalties from Smithfield Foods, Inc. decreasing by **4.5%** to **$11,464,000**[4](index=4&type=chunk) - Branded Product Program sales increased by **$2,929,000** to **$29,075,000**, with an approximate **8% increase in average selling price**, but income from operations decreased by **$224,000** to **$2,276,000** due to higher beef costs[4](index=4&type=chunk) - Company-owned restaurant sales decreased to **$3,986,000**, primarily due to reduced customer traffic and unfavorable weather conditions at Coney Island locations, while franchise operations revenues increased to **$1,129,000**, with total royalties rising to **$1,001,000**, franchise restaurant sales growing by **$791,000** to **$18,444,000**, and **eight new franchised locations opened**[4](index=4&type=chunk)[9](index=9&type=chunk) [Dividend Declaration](index=2&type=section&id=Dividend%20Declaration) Nathan's Famous, Inc. declared and paid a quarterly cash dividend of $0.50 per share on July 1, 2025, and subsequently declared another $0.50 per share dividend payable on September 5, 2025 - The Company paid a **$0.50 per share** regular cash dividend on July 1, 2025[9](index=9&type=chunk) - The Board of Directors declared a second quarterly cash dividend of **$0.50 per share**, payable on September 5, 2025[9](index=9&type=chunk) [Non-GAAP Financial Measures](index=2&type=section&id=Non-GAAP%20Financial%20Measures) This section defines and explains the rationale for using non-GAAP financial measures, along with important disclaimers regarding their use [Definitions and Rationale](index=2&type=section&id=Definitions%20and%20Rationale) Nathan's Famous, Inc. utilizes non-GAAP financial measures, EBITDA and Adjusted EBITDA, to offer investors a clearer understanding of its operational performance and underlying business trends, as these metrics are used internally by management and widely by external stakeholders - EBITDA is defined as net income, excluding interest expense, provision for income taxes, and depreciation and amortization expense[6](index=6&type=chunk) - Adjusted EBITDA is defined as EBITDA, excluding share-based compensation[6](index=6&type=chunk) - These non-GAAP measures are considered useful for investors to assess operating performance and underlying trends, as they are used by management and frequently by securities analysts, investors, and other interested parties[7](index=7&type=chunk) [Disclaimer](index=3&type=section&id=Disclaimer) The company explicitly states that EBITDA and Adjusted EBITDA are non-GAAP terms and should not be viewed as substitutes for US GAAP measures of financial performance or liquidity, and their definitions may vary compared to other companies - 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[10](index=10&type=chunk) - The Company's definitions of EBITDA and Adjusted EBITDA may differ from other companies[10](index=10&type=chunk) - Analysis on a non-US GAAP basis should be used as a complement to, and in conjunction with, data presented in accordance with US GAAP[10](index=10&type=chunk) [Company Profile & Forward-Looking Statements](index=3&type=section&id=Company%20Profile%20%26%20Forward-Looking%20Statements) This section provides an overview of Nathan's Famous, Inc.'s business operations and outlines the various risks and uncertainties associated with its forward-looking statements [About Nathan's Famous](index=3&type=section&id=About%20Nathan's%20Famous) Nathan's Famous is a Russell 2000 Company that distributes its products across 50 states, US territories, and twenty foreign countries through its restaurant system, foodservice sales programs, and product licensing activities - Nathan's is a Russell 2000 Company[11](index=11&type=chunk) - The company distributes products in **50 states**, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, and **twenty foreign countries**[11](index=11&type=chunk) - Distribution channels include its restaurant system, foodservice sales programs, and product licensing activities[11](index=11&type=chunk) [Forward-Looking Statements & Risk Factors](index=3&type=section&id=Forward-Looking%20Statements%20%26%20Risk%20Factors) Forward-looking statements are subject to various risks, including disease epidemics, rising costs, customer traffic impacts, licensing dependencies, debt, economic conditions, and regulatory changes - The news release contains forward-looking statements that involve risks and uncertainties[12](index=12&type=chunk) - Key risk factors include the impact of disease epidemics (e.g., COVID-19), increases in the cost of food and paper products (especially beef and beef trimmings), the impact of price increases on customer visits, and the status of licensing and supply agreements (particularly with Smithfield Foods, Inc.)[12](index=12&type=chunk) - Other risks include the impact of debt service, economic conditions (inflationary pressures), weather conditions affecting restaurant sales, the ability to pass on cost increases, legislative and business conditions, changes in consumer tastes, and the impact of minimum wage legislation or other labor law changes[12](index=12&type=chunk) [Condensed Consolidated Financial Information (Unaudited)](index=4&type=section&id=Condensed%20Consolidated%20Financial%20Information%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements, including highlights, segment information, and reconciliation of non-GAAP measures [Financial Highlights](index=4&type=section&id=Financial%20Highlights) This section presents the unaudited condensed consolidated financial highlights for the first fiscal quarter, detailing total revenues, income from operations, income before taxes, net income, and earnings per share for both the current and prior year periods Financial Highlights (Unaudited) | Financial Highlight | Thirteen weeks ended June 29, 2025 ($) | Thirteen weeks ended June 30, 2024 ($) | | :------------------------------------ | :--------------------------------- | :--------------------------------- | | Total revenues | 46,998,000 | 44,767,000 | | Income from operations | 12,791,000 | 13,745,000 | | Income before provision for income taxes | 12,257,000 | 12,784,000 | | Net income | 8,928,000 | 9,277,000 | | Net income per share: Basic | 2.18 | 2.27 | | Net income per share: Diluted | 2.16 | 2.27 | | Weighted-average shares: Basic | 4,089,000 | 4,085,000 | | Weighted-average shares: Diluted | 4,124,000 | 4,089,000 | [Select Segment Information](index=4&type=section&id=Select%20Segment%20Information) This section details segment revenues and income from operations for Branded Product Program, Product Licensing, Restaurant Operations, and Corporate activities Segment Revenues (Unaudited) | Segment Revenues | Thirteen weeks ended June 29, 2025 ($) | Thirteen weeks ended June 30, 2024 ($) | | :----------------------- | :--------------------------------- | :--------------------------------- | | Branded product program | 29,075,000 | 26,146,000 | | Product licensing | 12,381,000 | 12,921,000 | | Restaurant operations | 5,115,000 | 5,272,000 | | Corporate (Advertising Fund) | 427,000 | 428,000 | | **Total Revenues** | **46,998,000** | **44,767,000** | Segment Income from Operations (Unaudited) | Segment Income from Operations | Thirteen weeks ended June 29, 2025 ($) | Thirteen weeks ended June 30, 2024 ($) | | :--------------------------------- | :--------------------------------- | :--------------------------------- | | Branded product program | 2,276,000 | 2,500,000 | | Product licensing | 12,335,000 | 12,875,000 | | Restaurant operations | 1,068,000 | 1,046,000 | | Corporate | (2,888,000) | (2,676,000) | | **Total Income from operations** | **12,791,000** | **13,745,000** | [Reconciliation of Net Income to EBITDA and Adjusted EBITDA](index=5&type=section&id=Reconciliation%20of%20Net%20Income%20to%20EBITDA%20and%20Adjusted%20EBITDA) This section provides a reconciliation of the company's net income to its non-GAAP measures, EBITDA and Adjusted EBITDA, detailing the adjustments for interest expense, income taxes, depreciation and amortization, and share-based compensation Reconciliation of Net Income to EBITDA and Adjusted EBITDA (Unaudited) | Metric | Thirteen weeks ended June 29, 2025 ($) | Thirteen weeks ended June 30, 2024 ($) | | :-------------------------- | :--------------------------------- | :--------------------------------- | | Net Income | 8,928,000 | 9,277,000 | | Interest Expense | 758,000 | 1,060,000 | | Provision for income taxes | 3,329,000 | 3,507,000 | | Depreciation and amortization | 228,000 | 249,000 | | **EBITDA** | **13,243,000** | **14,093,000** | | Share-based compensation | 288,000 | 188,000 | | **Adjusted EBITDA** | **13,531,000** | **14,281,000** |

Core Viewpoint - Nathan's Famous, Inc. reported its financial results for the first fiscal quarter ended June 29, 2025, showing a mixed performance with revenue growth but declines in net income and operating income compared to the previous year [1][2]. Financial Performance - Total revenues increased to $46,998,000 from $44,767,000 in the same period last year, reflecting a growth of approximately 5.5% [2][9]. - Income from operations decreased to $12,791,000 from $13,745,000, a decline of about 6.9% [2][9]. - Adjusted EBITDA was reported at $13,531,000, down from $14,281,000, representing a decrease of approximately 5.2% [2][12]. - Net income fell to $8,928,000 compared to $9,277,000, a decrease of about 3.8% [2][9]. - Earnings per diluted share decreased to $2.16 from $2.27, a decline of approximately 4.8% [2][9]. Segment Performance - License royalties decreased to $12,381,000 from $12,921,000, a decline of about 4.2% [2][10]. - Sales in the Branded Product Program increased by $2,929,000 to $29,075,000, a growth of approximately 11.2% [2][10]. - Sales from Company-owned restaurants decreased to $3,986,000 from $4,199,000, a decline of about 5.1% [2][10]. - Franchise restaurant sales increased by $791,000 to $18,444,000, a growth of approximately 4.5% [2][10]. Dividend Information - The Company paid a regular cash dividend of $0.50 per share on July 1, 2025, and declared a second quarterly cash dividend of $0.50 per share effective August 8, 2025, payable on September 5, 2025 [2][5]. Non-GAAP Financial Measures - The Company disclosed EBITDA and Adjusted EBITDA as non-GAAP financial measures to provide investors with insights into its operating performance and underlying business trends [3][4]. - EBITDA for the first quarter was $13,243,000, down from $14,093,000, while Adjusted EBITDA was $13,531,000 compared to $14,281,000 in the prior year [12].

Brand Turns the New York Subway Map into a Clever Tribute to the Birthplace of the Iconic Hot Dog Nathan's MTA 3 Nathan's MTA 2 Nathan's MTA 1 Nathan's Famous partners with New York Metropolitan Transit Authority to unveil hot dog image where the N, F and Q subway lines – the trains that lead directly to Coney Island – come together. Caption: Nathan's Famous partners with New York Metropolitan Transit Authority to Running July 14 through Aug. 10, this campaign builds on the brand's "100% Beef, 100% New York ...

Core Viewpoint - Nathan's Famous, Inc. has demonstrated strong financial performance for fiscal year 2025, with significant increases in revenue and net income, leading to a positive stock performance compared to the S&P 500 index [1][2]. Financial Performance - For the fiscal year ended March 30, 2025, Nathan's Famous reported revenues of $148.2 million, a 6.9% increase from $138.6 million in fiscal 2024 [2]. - Net income rose 22.5% to $24 million from $19.6 million in the prior year [2]. - Earnings per diluted share (EPS) grew 22.3% to $5.87 from $4.80 a year ago [2]. - Adjusted EBITDA improved 12.5% to $39.2 million from $34.8 million in fiscal 2024 [2]. - For the fourth quarter of fiscal 2025, revenue grew 6.2% to $30.8 million from $28.9 million [2]. - Net income for the quarter was $4.2 million, an 8.3% year-over-year increase from $3.9 million [2]. Segment Performance - Branded Product Program revenues climbed 6.2% to $91.8 million in fiscal 2025 from $86.5 million in fiscal 2024, driven by a 1.2% increase in volume of hot dogs sold and a 5% increase in average selling price [3]. - Product Licensing revenue grew 11.4% to $37.4 million from $33.6 million, with Smithfield Foods contributing significantly [4]. - Restaurant Operations revenue saw a 2.4% increase to $16.9 million from $16.5 million, with segment income from operations rising 46.4% to $2.4 million from $1.7 million [5]. Key Business Metrics - Franchise Operations posted revenues of $4.1 million in fiscal 2025, down 4.8% from $4.4 million a year earlier [7]. - Advertising fund revenue remained stable at around $2.07 million in fiscal 2025 compared with $2.08 million in fiscal 2024 [8]. Management Commentary - Management emphasized the strength of its multi-channel business model, particularly the stable, high-margin licensing streams and the adaptability of the Branded Product Program [9]. - Strategic pricing and disciplined cost control helped mitigate the impact of ongoing beef cost inflation [10]. Dividend Declaration - In light of strong fiscal 2025 performance, Nathan's Famous' board of directors declared a quarterly dividend of $0.50 per share effective June 10, 2025, signaling continued confidence in the company's cash flow and future earnings stability [11]. Influencing Factors - Nathan's Famous faced headwinds in commodity costs, especially from beef, with prices rising 7% in fiscal 2025 [12]. - Labor inflation persisted, notably in New York, where the minimum wage rose from $16.00 to $16.50 per hour as of January 1, 2025 [13]. Future Outlook - Nathan's Famous did not provide formal financial guidance for fiscal 2026 but expressed confidence in continued growth across its licensing and branded product channels [14]. - The company reaffirmed its long-term manufacturing and distribution agreements, including the pivotal licensing partnership with Smithfield Foods, contracted through March 2032 [15].

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or a ...

Core Insights - Nathan's Famous (NASDAQ: NATH) stock has experienced a significant increase, rising 51% over the past five months since mid-January [1] Company Performance - The stock price movement indicates a strong upward trend, suggesting positive market sentiment towards Nathan's Famous [1]

Revenue and Sales Performance - Total revenues increased by approximately 7% to $148,182,000 for fiscal 2025 compared to $138,610,000 for fiscal 2024[255] - Foodservice sales from the Branded Product Program increased by approximately 6% to $91,828,000 for fiscal 2025, with a 1.2% increase in the total volume of hot dogs sold[257] - Average selling prices in the Branded Product Program increased by approximately 5% compared to fiscal 2024[257] - Total Company-owned restaurant sales increased by approximately 5% to $12,714,000 during fiscal 2025 compared to $12,103,000 during fiscal 2024[258] - License royalties increased by approximately 11% to $37,418,000 in fiscal 2025 compared to $33,581,000 in fiscal 2024[259] - Royalties earned on sales of hot dogs from the license agreement with Smithfield Foods, Inc. increased to $33,589,000 for fiscal 2025, reflecting an 11% increase in retail volume[259] - Franchise restaurant sales declined to $66,905,000 in fiscal 2025 from $68,417,000 in fiscal 2024, with comparable domestic franchise sales at $51,250,000 in fiscal 2025 compared to $53,108,000 in fiscal 2024[260] Costs and Expenses - Overall cost of sales increased by approximately 8% to $89,707,000 in fiscal 2025 from $83,182,000 in fiscal 2024, with gross profit at $14,835,000 or 14% of sales in fiscal 2025 compared to $15,410,000 or 16% of sales in fiscal 2024[263] - Cost of sales in the Branded Product Program increased by 9% to $82,462,000 in fiscal 2025, primarily due to a 1.2% increase in hot dog sales volume and a 7% increase in average cost per pound[264] - General and administrative expenses decreased by $1,082,000 to $14,530,000 in fiscal 2025 from $15,612,000 in fiscal 2024, attributed to lower professional fees and a cash bonus payout in fiscal 2024[267] Net Income and Financial Position - Net income for fiscal 2025 was $24,026,000, an increase from $19,616,000 in fiscal 2024, with EBITDA rising to $37,824,000 from $33,941,000[283] - Cash and cash equivalents increased by $6,775,000 to $27,802,000 at March 30, 2025, compared to $21,027,000 at March 31, 2024[285] - The effective income tax rate for fiscal 2025 was 26.7%, down from 28.5% in fiscal 2024, reflecting income tax expense of $8,735,000 on $32,761,000 of pre-tax income[275] Debt and Financing - The Company entered into a five-year unsecured Credit Agreement and borrowed $60,000,000 to refinance its outstanding Senior Secured Notes due 2025[235] - During fiscal 2025, the company made a voluntary principal prepayment of $8,000,000 on its Term Loan borrowings under the Credit Agreement[271] - The Company borrowed $60,000,000 in Term Loan borrowings to refinance and redeem its 2025 Notes, incurring $431,000 in debt issuance costs[292] - During fiscal 2025, the Company made mandatory principal repayments of $1,200,000 and a voluntary principal repayment of $8,000,000 on its Term Loan[292] - A hypothetical 100 bps increase in the interest rate on the $50,800,000 of outstanding unsecured Term Loan borrowings would lead to an increase of approximately $508,000 in cash interest costs over the next twelve months[315] - The Company expects to make cash interest payments of approximately $2,895,000 on the Term Loan borrowings during the fiscal year ended March 29, 2026[302] Dividends and Share Repurchase - The Company declared and paid four quarterly dividends of $0.50 per share, totaling $8,172,000 during fiscal 2025[297] - As of March 30, 2025, the Company had cash and cash equivalents of $27,802,000, with potential future cash dividend requirements of approximately $8,179,000 for fiscal 2026[299] - The Company has repurchased 1,101,884 shares at a cost of approximately $39,000,000 under its stock repurchase plan, with 98,116 shares remaining to be repurchased[296] Market Conditions and Future Outlook - The Company anticipates continued inflationary pressures on commodity prices and labor during fiscal 2026, impacting future results[233] - Inflationary pressures and rising commodity prices, particularly for beef, are expected to continue impacting the Company's results into fiscal 2026[308] - The average cost of hot dogs during fiscal 2025 was approximately 7% higher than in fiscal 2024, reflecting inflationary pressures on commodity prices[308] - The Company has not entered into hedging arrangements for commodity price fluctuations, exposing it to market changes in commodity prices[318] - The primary focus is to expand market penetration of the Nathan's Famous brand across all business platforms, with growth driven by Licensing and Branded Product Programs[241]

Financial Performance - Revenues for fiscal 2025 were $148,182,000, an increase of 6% compared to $138,610,000 for fiscal 2024[5] - Net income for fiscal 2025 was $24,026,000, representing a 22.4% increase from $19,616,000 in fiscal 2024[5] - Adjusted EBITDA for fiscal 2025 was $39,206,000, up 12.7% from $34,843,000 in fiscal 2024[5] - Income from operations for fiscal 2025 was $36,497,000, an increase of 12.2% from $32,506,000 in fiscal 2024[5] Revenue Sources - License royalties increased to $37,418,000 in fiscal 2025, a rise of 11% from $33,581,000 in fiscal 2024[7] - Sales from the Branded Product Program rose by $5,339,000 to $91,828,000 in fiscal 2025, a 6.2% increase compared to fiscal 2024[7] Dividends and Shareholder Returns - The Company declared a quarterly cash dividend of $0.50 per share, payable on July 1, 2025[3] Market Expansion - Twenty-five franchised locations opened during fiscal 2025, contributing to market expansion efforts[7] Pricing Trends - Average selling price of hot dogs increased by approximately 5% compared to the prior year period[7] Franchise Income - Total franchise fee income was $381,000 in fiscal 2025, down from $470,000 in fiscal 2024[7]