Nathan's(NATH) - 2026 Q1 - Quarterly Results

Press Release Overview 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 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][3] - The report was released on August 8, 2025[2] First Quarter Fiscal 2026 Financial Highlights 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 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] - 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] - 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][9] Dividend Declaration 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] - The Board of Directors declared a second quarterly cash dividend of $0.50 per share, payable on September 5, 2025[9] Non-GAAP Financial Measures This section defines and explains the rationale for using non-GAAP financial measures, along with important disclaimers regarding their use Definitions and Rationale 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] - Adjusted EBITDA is defined as EBITDA, excluding share-based compensation[6] - 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] 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] - The Company's definitions of EBITDA and Adjusted EBITDA may differ from other companies[10] - 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] Company Profile & Forward-Looking Statements 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 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] - The company distributes products in 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, and twenty foreign countries[11] - Distribution channels include its restaurant system, foodservice sales programs, and product licensing activities[11] Forward-Looking Statements & Risk Factors 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] - 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] - 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] Condensed Consolidated Financial Information (Unaudited) This section presents the unaudited condensed consolidated financial statements, including highlights, segment information, and reconciliation of non-GAAP measures Financial Highlights 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 ($) | | :------------------------------------ | :--------------------------------- | :--------------------------------- | | Total revenues | 46,998,000 | 44,767,000 | | Income from operations | 12,791,000 | 13,745,000 | | Income before provision for income taxes | 12,257,000 | 12,784,000 | | Net income | 8,928,000 | 9,277,000 | | Net income per share: Basic | 2.18 | 2.27 | | Net income per share: Diluted | 2.16 | 2.27 | | Weighted-average shares: Basic | 4,089,000 | 4,085,000 | | Weighted-average shares: Diluted | 4,124,000 | 4,089,000 | Select Segment Information This section details segment revenues and income from operations for Branded Product Program, Product Licensing, Restaurant Operations, and Corporate activities Segment Revenues (Unaudited) | Segment Revenues | Thirteen weeks ended June 29, 2025 ($) | 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 ($) | | :--------------------------------- | :--------------------------------- | :--------------------------------- | | Branded product program | 2,276,000 | 2,500,000 | | Product licensing | 12,335,000 | 12,875,000 | | Restaurant operations | 1,068,000 | 1,046,000 | | Corporate | (2,888,000) | (2,676,000) | | Total Income from operations | 12,791,000 | 13,745,000 | Reconciliation of Net Income to EBITDA and Adjusted EBITDA This section provides a reconciliation of the company's net income to its non-GAAP measures, EBITDA and Adjusted EBITDA, detailing the adjustments for interest expense, income taxes, depreciation and amortization, and share-based compensation Reconciliation of Net Income to EBITDA and Adjusted EBITDA (Unaudited) | Metric | Thirteen weeks ended June 29, 2025 ($) | 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 |