Nathan's Famous, Inc. Reports First Quarter Results

 

 

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

JERICHO, N.Y., Aug. 3, 2018 /PRNewswire/ -- Nathan's Famous, Inc. (NASDAQ:NATH) today reported results for its first quarter, of its 2019 fiscal year, that ended June 24, 2018.

For the fiscal quarter ended June 24, 2018:

  • Revenues were $30,168,000, as compared to $30,803,000 during the thirteen weeks ended June 25, 2017;
  • Income from operations was $9,087,000, as compared to $8,450,000 during the thirteen weeks ended June 25, 2017;
  • Adjusted EBITDA, as subsequently defined, was $9,595,000 as compared to $8,973,000 for the thirteen weeks ended June 25, 2017;
  • Net income was $4,795,000, as compared to $2,922,000 for the thirteen weeks ended June 25, 2017;
  • Earnings per diluted share was $1.13 per share, as compared to $0.69 per share for the thirteen weeks ended June 25, 2017; and

The Company reported the following:                                    

  • License royalties increased to $8,098,000 during the thirteen weeks ended June 24, 2018, as compared to $7,401,000 during the thirteen weeks ended June 25, 2017. During the thirteen weeks ended June 24, 2018, royalties earned under the retail agreement with John Morrell & Co., increased 12.2% to $7,298,000, as compared to $6,502,000 of royalties earned during the thirteen weeks ended June 25, 2017.
  • In the Branded Product Program, which features the sale of Nathan's hot dogs to the foodservice industry, income from operations increased by approximately $259,000 to $2,531,000 for the thirteen weeks ended June 24, 2018, as compared to $2,272,000 for the thirteen weeks ended June 25, 2017. Sales were $16,445,000 in the current period, compared to sales of $17,937,000 during the prior-year period, while the volume of hot dogs sold by the Company decreased 4.1%. However, the sales and volume declines were entirely related to the use of a new re-distributor to service certain of our regular distributor customers. We estimate that excluding the effects of the re-distributors' purchases in both years, our sales volume to our normal distributors, increased by approximately 8% during the quarter. Our average selling price, which is partially correlated to the beef markets, decreased by approximately 5.0% compared to the year-earlier period.
  • Sales from Company-operated restaurants were $4,026,000 during the thirteen weeks ended June 24, 2018 compared to $4,293,000 during the thirteen weeks ended June 25, 2017. Sales were negatively affected, especially at our two Coney Island locations, by exceptionally unfavorable weather conditions in the Northeastern United States, during April 2018.
  • Revenues from franchise operations were $1,104,000 during the thirteen weeks ended June 24, 2018, compared to $1,172,000 during the thirteen weeks ended June 25, 2017. Total royalties were $997,000 in the fiscal 2019 period as compared to $1,112,000 in the fiscal 2018 period. Total franchise fee income was $107,000 during the thirteen weeks ended June 24, 2018 compared to $60,000 during the thirteen weeks ended June 25, 2017. Four new franchised outlets opened during the thirteen weeks ended June 24, 2018, including two international locations, and one Branded Menu Program outlet.
  • During the thirteen weeks ended June 24, 2018, we recorded Advertising Fund revenue and expense in the amount of $495,000 in connection with the adoption of ASC 606.
  • In November 2017, Nathan's refinanced its then-outstanding $135.0 million 10.000% Senior Secured Notes due 2020 by issuing $150.0 million 6.625% Senior Secured Notes due 2025. Nathan's lowered its interest expense by approximately $1,013,000 during the thirteen weeks ended June 24, 2018 as compared to the thirteen weeks ended June 25, 2017.
  • On June 22, 2018, we paid the $0.25 per share regular cash dividend that was declared by the Board of Directors on May 31, 2018 to shareholders of record at the close of business on June 18, 2018.
  • Effective August 3, 2018, the Board of Directors declared its quarterly cash dividend of $0.25 per share payable on September 21, 2018 to shareholders of record at the close of business on September 10, 2018.

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 has provided EBITDA excluding (i) interest expense; (ii) provision for income taxes and (iii) depreciation and amortization expense. The Company has also provided Adjusted EBITDA excluding 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.

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.

About Nathan's Famous

Nathan's is a Russell 2000 Company that currently distributes its products in 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, and fourteen foreign countries through its restaurant system, foodservice sales programs and product licensing activities. Last year, over 600 million Nathan's Famous hot dogs were sold. Nathan's was ranked #22 on the Forbes 2014 list of the Best Small Companies in America and was listed as the Best Small Company in New York State in October 2013. For additional information about Nathan's please visit our website at www.nathansfamous.com.

Except for historical information contained in this news release, the matters discussed are forward looking statements that involve risks and uncertainties.  Words such as "anticipate", "believe", "estimate", "expect", "intend", and similar expressions identify forward-looking statements, which are based on the current belief of the Company's management, as well as assumptions made by and information currently available to the Company's management.  Among the factors that could cause actual results to differ materially include but are not limited to: the impact of our indebtedness, including the effect on our ability to fund working capital, operations and make new investments; economic; weather (including the impact on the supply of cattle and the impact on sales at our restaurants particularly during the summer months), and change in the price of beef trimmings; our ability to pass on the cost of any price increases in beef and beef trimmings; legislative and business conditions; the collectability of receivables; changes in consumer tastes; the status of our licensing and supply agreements, including our licensing revenue and overall profitability being substantially dependent on our agreement with John Morrell & Co.; the ability to attract franchisees; the impact of the minimum wage legislation on labor costs in New York State or other changes in labor laws, including court decisions which could render a franchisor as a "joint employee" or the impact of our new union contracts; our ability to attract competent restaurant and managerial personnel; the enforceability of international franchising agreements; and the future effects of any food borne illness; such as bovine spongiform encephalopathy, BSE and e coli; and the risk factors reported from time to time in the Company's SEC reports. The Company does not undertake any obligation to update such forward-looking statements.

 

 

Nathan's Famous, Inc. and Subsidiaries


(unaudited)







    Thirteen weeks ended






June 24, 2018


June 25, 2017

Financial Highlights








Total revenues





$   30,168,000


$   30,803,000









Income from operations (a)





$     9,087,000


$     8,450,000









Income before provision for income
taxes





$     6,519,000


$     4,843,000









Net income





$     4,795,000


$     2,922,000









Income per share:








   Basic





$              1.15


$              0.70

   Diluted





$              1.13


$              0.69









Weighted-average shares used in








   computing income per share:








   Basic





4,185,000


4,177,000

   Diluted





4,226,000


4,215,000










Select Segment Information


Revenues








Branded product program





$   16,445,000


$   17,937,000

Product licensing





8,098,000


7,401,000

Restaurant operations





5,130,000


5,465,000

Corporate (b)





495,000


                   -0-

Revenues





$   30,168,000


$  30,803,000

 

Income from operations (c)








Branded product program





$   2,531,000


$   2,272,000

Product licensing





8,053,000


7,356,000

Restaurant operations





750,000


895,000

Corporate (d)





(2,247,000)


(2,073,000)

Income from operations (c)





$   9,087,000


$   8,450,000













(a)

Excludes interest expense, interest income, and other income, net.

(b)

Represents Advertising Fund revenue in 2018.

(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 and compliance costs and Advertising fund expense of $495,000 in 2018.

 

 

Nathan's Famous, Inc. and Subsidiaries


Reconciliation of Net Income to EBITDA and Adjusted EBITDA

(unaudited) 







Thirteen weeks ended






June 24, 2018


June 25, 2017











EBITDA









Net Income





$   4,795,000


$   2,922,000











Interest Expense





2,650,000


3,663,000











Provision for income taxes





1,724,000


1,921,000











Depreciation and amortization





345,000


368,000











EBITDA





$   9,514,000


$   8,874,000





























Adjusted EBITDA









EBITDA





$   9,514,000


$   8,874,000











Stock-based compensation





81,000


99,000











Adjusted EBITDA





$   9,595,000


$   8,973,000











 

COMPANY    Ronald G. DeVos, Vice President - Finance and CFO
CONTACT:    (516) 338-8500 ext. 229

View original content:http://www.prnewswire.com/news-releases/nathans-famous-inc-reports-first-quarter-results-300691395.html

SOURCE Nathan's Famous, Inc.

This article was written by cool news network.

 

 

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