JERICHO, N.Y., Nov. 4, 2016 /PRNewswire/ -- Nathan's Famous,
Inc. (NASDAQ: NATH) today reported results for the second quarter
of its 2017 fiscal year that ended September
25, 2016.
For the fiscal quarter ended September
25, 2016:
- Income from operations was $8,031,000, as compared to $8,426,000 during the thirteen weeks ended
September 27, 2015;
- Adjusted EBITDA, as subsequently defined, was $8,610,000 as compared to $9,006,000 for the thirteen weeks ended
September 27, 2015;
- Net income was $2,507,000, as
compared to $2,847,000 for the
thirteen weeks ended September 27,
2015;
- Earnings per diluted share were $0.60 per share, as compared to $0.64 per share for the thirteen weeks ended
September 27, 2015; and
- Revenues were $28,013,000, as
compared to $30,619,000 during the
thirteen weeks ended September 27,
2015.
For the twenty-six weeks ended September
25, 2016:
- Income from operations increased by 5.1% to $16,855,000, as compared to $16,042,000 during the twenty-six weeks ended
September 27, 2015;
- Adjusted EBITDA, as subsequently defined, increased by
4.2% to $17,976,000, as compared
to $17,257,000 for the twenty-six
weeks ended September 27, 2015;
- Net income increased by 17.5% to $6,057,000, as compared to $5,157,000 for the twenty-six weeks ended
September 27, 2015;
- Earnings per diluted share were $1.44 per share, as compared to $1.14 per share for the twenty-six weeks ended
September 27, 2015; and
- Revenues were $57,429,000, as
compared to $61,273,000 during the
twenty-six weeks ended September 27,
2015.
The Company reported the following:
- License royalties were $11,612,000 during the twenty-six weeks ended
September 25, 2016, as compared to
$11,792,000 during the twenty-six
weeks ended September 27, 2015.
During the twenty-six weeks ended September
25, 2016, total royalties earned under the John Morrell
& Co., agreement were $10,714,000, as compared to $10,932,000 of royalties earned during the
twenty-six weeks ended September 27,
2015. During this period, the volume of products sold
increased by 6.9%; however, a more competitive promotional
environment this summer led to an 8.2% decrease in the average net
selling price on which our royalty is calculated.
- In the Branded Product Program, which features the sale of
Nathan's hot dogs to the foodservice industry, sales were
$31,481,000 during the twenty-six
weeks ended September 25, 2016, as
compared to sales of $33,595,000
during the twenty-six weeks ended September
27, 2015. Operating profits increased for the fiscal 2017
period by approximately $1.9 million
over the fiscal 2016 period. During the period, the volume of
products sold increased by 3.1% but our average selling price
declined by approximately 9.2% due to the impact of lower beef
markets on that portion of our business that is sold using formula
pricing.
- Sales from the Company-operated restaurants were $11,458,000 during the twenty-six weeks ended
September 25, 2016 as compared to
$12,842,000 during the twenty-six
weeks ended September 27, 2015 driven
primarily from lower sales at both Coney Island locations, due to
unfavorable weather conditions during the fiscal 2017 period
compared to the weather conditions during the fiscal 2016 period
when we achieved record sales at both of these locations.
- Revenues from franchise operations were $2,664,000 during the twenty-six weeks ended
September 25, 2016, as compared to
$2,617,000 during the twenty-six
weeks ended September 27, 2015. Total
franchise fee income was $262,000
during the twenty-six weeks ended September
25, 2016 as compared to $207,000 during the twenty-six weeks ended
September 27, 2015, primarily due to
higher international development fees. Twenty new
franchised outlets opened during the twenty-six weeks ended
September 25, 2016, including seven
international locations, and 11 Branded Menu Program outlets.
Twenty-three new franchised outlets opened, during the twenty-six
weeks ended September 27, 2015,
including seven international locations, and 11 Branded Menu
Program outlets.
- Nathan's tax rate was reduced by 6.5 percentage points as a
result of early adopting the provisions of Financial Accounting
Standards Board ASU 2016-09, "Stock Compensation", which now
reduces the Company's tax provision for the excess tax benefits
associated with stock compensation instead of increasing Additional
paid-in-capital, as was past practice.
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 (i) stock-based compensation and (ii) amortization of
bond premium on the Company's available-for sale investments 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 (loss)
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 eleven foreign countries
through its restaurant system, foodservice sales programs and
product licensing activities. Last year, over 550 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 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 collectibility of
receivables; changes in consumer tastes; the status of our
licensing and supply agreements, including the impact of our supply
agreement for hot dogs with John Morrell & Co.; the ability to
attract franchisees; the impact of the new 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 contract; our ability to attract competent restaurant and
managerial personnel; the enforceability of international
franchising agreements; the impact of changes in the economic
relationship between the United
States and Russia; 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.
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Financial
Highlights
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Thirteen weeks
ended
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Twenty-six weeks
ended
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Sept. 25,
2016
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Sept. 27,
2015
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Sept. 25,
2016
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Sept. 27,
2015
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(unaudited)
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(unaudited)
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Total
revenues
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$
28,013,000
|
|
$
30,619,000
|
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$
57,429,000
|
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$
61,273,000
|
|
|
|
|
|
|
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Income from
operations (a)
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$
8,031,000
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$
8,426,000
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$
16,855,000
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$
16,042,000
|
|
|
|
|
|
|
|
|
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Net income
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$
2,507,000
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$
2,847,000
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$
6,057,000
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$
5,157,000
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|
|
|
|
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|
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Income per
share:
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Basic
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$
0.60
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$
0.64
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$
1.45
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$
1.14
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Diluted
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$
0.60
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$
0.64
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$
1.44
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$
1.14
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Weighted-average
shares used in
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computing income per share:
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Basic
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4,172,000
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4,432,000
|
|
4,169,000
|
|
4,508,000
|
|
Diluted
|
4,207,000
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|
4,449,000
|
|
4,199,000
|
|
4,535,000
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|
|
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|
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(a)
Excludes interest expense, interest income, and other income,
net.
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Nathan's Famous,
Inc. and Subsidiaries
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Reconciliation of
Net Income to EBITDA and Adjusted EBITDA
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Thirteen weeks
ended
|
|
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Twenty-six weeks
ended
|
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Sept. 25,
2016
|
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Sept. 27,
2015
|
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Sept. 25,
2016
|
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Sept. 27,
2015
|
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(unaudited)
|
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|
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(unaudited)
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EBITDA
|
|
|
|
|
|
|
|
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Net Income
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$
2,507,000
|
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$
2,847,000
|
|
$
6,057,000
|
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$
5,157,000
|
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Interest
Expense
|
3,663,000
|
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3,709,000
|
|
7,339,000
|
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7,418,000
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Provision for income
taxes
|
1,918,000
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1,942,000
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3,538,000
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3,570,000
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Depreciation and
amortization
|
349,000
|
|
333,000
|
|
696,000
|
|
672,000
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|
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EBITDA
|
$
8,437,000
|
|
$
8,831,000
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$
17,630,000
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$
16,817,000
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Adjusted
EBITDA
|
|
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|
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EBITDA
|
$
8,437,000
|
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$
8,831,000
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$
17,630,000
|
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$
16,817,000
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|
|
|
|
|
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Stock-based
compensation
|
173,000
|
|
173,000
|
|
346,000
|
|
376,000
|
|
|
|
|
|
|
|
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Amortization of bond
premium (b)
|
-
|
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2,000
|
|
-
|
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64,000
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|
|
|
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|
|
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Adjusted
EBITDA
|
$
8,610,000
|
|
$
9,006,000
|
|
$
17,976,000
|
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$
17,257,000
|
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(b)
Represents the premiums paid on our purchase of available-for-sale
securities.
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COMPANY Ronald G.
DeVos, Vice President - Finance and CFO
CONTACT: (516) 338-8500 ext. 229
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/nathans-famous-inc-reports-second-quarter-results-300357306.html
SOURCE Nathan's Famous, Inc.