NATH
$71.27
Nathan's Famous IN
($.59)
(.82%)
Earnings Details
Quarter June 2019
Friday, August 09, 2019 8:30:00 AM
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Summary

Nathan's Famous IN (NATH) Recent Earnings

Nathan's Famous IN (NATH) reported Quarter June 2019 earnings of $1.28 per share on revenue of $30.5 million.. Revenue grew 1.2% on a year-over-year basis.

Results
Reported Earnings
$1.28
Earnings Whisper
-
Consensus Estimate
Reported Revenue
$30.5 Mil
Revenue Estimate
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Nathan's Famous, Inc. Reports First Quarter Results

JERICHO, N.Y., Aug. 09, 2019 (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 30, 2019.

For the thirteen-week period ended June 30, 2019 (“first quarter fiscal 2020”):

  • Revenues were $30,518,000, as compared to $30,168,000 during the thirteen weeks ended June 24, 2018;
  • Income from operations was $9,448,000, as compared to $9,087,000 during the thirteen weeks ended June 24, 2018;
  • Adjusted EBITDA1 , a non-GAAP financial measure, was $10,173,000 as compared to $9,595,000 for the thirteen weeks ended June 24, 2018;
  • Income before provision for income taxes was $7,185,000, as compared to $6,519,000 during the thirteen weeks ended June 24, 2018;
  • Net income was $5,369,000, as compared to $4,795,000 for the thirteen weeks ended June 24, 2018; and
  • Earnings per diluted share was $1.28 per share, as compared to $1.13 per share for the thirteen weeks ended June 24, 2018.

The Company also reported the following:                             

  • License royalties increased to $8,722,000 during the first quarter fiscal 2020, as compared to $8,098,000 during the thirteen weeks ended June 24, 2018. During the first quarter fiscal 2020, royalties earned under the retail agreement, including the foodservice program, from John Morrell & Co., increased 8.2% to $8,157,000, as compared to $7,538,000 of royalties earned during the thirteen weeks ended June 24, 2018

  • In the Branded Product Program, which features the sale of Nathan’s hot dogs to the foodservice industry, income from operations declined by approximately $328,000 to $2,203,000 for the thirteen weeks ended June 30, 2019, as compared to $2,531,000 for the thirteen weeks ended June 24, 2018.  Sales were $16,113,000 in the current period, compared to sales of $16,445,000 during the prior-year period, while the volume of hot dogs sold by the Company decreased 0.9%.  However, the sales and volume declines were partially related to winding down the new re-distributor’s temporary service to certain of our regular distributor customers. Our average selling price, which is partially correlated to the beef markets, decreased by approximately 0.5% compared to the year-earlier period.
  • Sales from Company-operated restaurants were $4,124,000 during the thirteen weeks ended June 30, 2019 compared to $4,026,000 during the thirteen weeks ended June 24, 2018. Sales were positively affected, especially at our two Coney Island locations, by favorable weather conditions during the first quarter fiscal 2020. Excluding the effect of the restaurant that was sold, sales at the four comparable Company-owned restaurants increased by $506,000 or 14.0% during the first quarter fiscal 2020.

  • Revenues from franchise operations were $1,077,000 during the thirteen weeks ended June 30, 2019, compared to $1,104,000 during the thirteen weeks ended June 24, 2018. Total royalties were $980,000 in the first quarter fiscal 2020 period as compared to $997,000 in the fiscal 2019 period. Total franchise fee income was $97,000 during the thirteen weeks ended June 30, 2019 compared to $107,000 during the thirteen weeks ended June 24, 2018. Four new domestic franchised outlets opened during the thirteen weeks ended June 30, 2019.

  • During the thirteen weeks ended June 30, 2019, we recorded Advertising Fund revenue and expense in the amount of $482,000 as compared to $495,000 during the thirteen weeks ended June 24, 2018.

  • On June 28, 2019, we paid the $0.35 per share quarterly cash dividend that was declared by the Board of Directors on June 14, 2019 to shareholders of record at the close of business on June 24, 2019.
     
  • Effective August 9, 2019, the Board of Directors declared its quarterly cash dividend of $0.35 per share payable on September 6, 2019 to shareholders of record at the close of business on August 26, 2019.               

1 EBITDA and Adjusted EBITDA are non-GAAP financial measures.  Please see the definitions of EBITDA and Adjusted EBITDA on page 5 of this release and the reconciliation of EBITDA and Adjusted EBITDA to net income in the table at the end of this release.

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) 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.

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 sixteen foreign countries through its restaurant system, foodservice sales programs and product licensing activities. Last year, over 700 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 within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended 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 status of our licensing and supply agreements, including the impact of our supply agreement for hot dogs with John Morrell & Co.; 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 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 regulations 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; 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 30, 2019 June 24, 2018 
Financial Highlights    
Total revenues$  30,518,000 $  30,168,000 
     
Income from operations (a)$ 9,448,000
  $   9,087,000
 
     
Income before provision for income taxes$  7,185,000 $  6,519,000 
     
Net income$  5,369,000 $  4,795,000 
     
Income per share:    
  Basic$  1.28 $ 1.15 
  Diluted$  1.28 $  1.13 
     
Weighted-average shares used in    
  computing income per share:    
  Basic   4,206,000    4,185,000 
  Diluted   4,206,000    4,226,000 
     


Select Segment Information

Revenues   
Branded product program$  16,113,000  $  16,445,000 
Product licensing   8,722,000     8,098,000 
Restaurant operations   5,201,000     5,130,000 
Corporate (b)   482,000     495,000 
Revenues$  30,518,000  $  30,168,000 


Income from operations (c)
   
Branded product program$  2,203,000  $  2,531,000 
Product licensing   8,676,000     8,053,000 
Restaurant operations   750,000     750,000 
Corporate (d)   (2,181,000)    (2,247,000)
Income from operations (c)$  9,448,000  $  9,087,000 

(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 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 30, 2019 June 24, 2018 
     
EBITDA    
Net Income$  5,369,000 $  4,795,000 
     
Interest Expense   2,650,000    2,650,000 
     
Provision for income taxes   1,816,000    1,724,000 
     
Depreciation and amortization   310,000    345,000 
     
EBITDA$  10,145,000 $  9,514,000 
     
     
     
Adjusted EBITDA    
EBITDA$  10,145,000 $  9,514,000 
     
Share-based compensation   28,000    81,000 
     
Adjusted EBITDA$  10,173,000 $  9,595,000 
     


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


 

Source: Nathan's Famous Inc