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
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(unaudited)
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Thirteen weeks ended
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June 24,
2018
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June 25,
2017
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Financial
Highlights
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Total
revenues
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$
30,168,000
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$
30,803,000
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Income from
operations (a)
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$
9,087,000
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$
8,450,000
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Income before
provision for income
taxes
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$
6,519,000
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$
4,843,000
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Net income
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$
4,795,000
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$
2,922,000
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Income per
share:
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Basic
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$
1.15
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$
0.70
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Diluted
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$
1.13
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$
0.69
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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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4,185,000
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4,177,000
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Diluted
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4,226,000
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4,215,000
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Select Segment
Information
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Revenues
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Branded product
program
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$
16,445,000
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$
17,937,000
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Product
licensing
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8,098,000
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7,401,000
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Restaurant
operations
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5,130,000
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5,465,000
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Corporate
(b)
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495,000
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-0-
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Revenues
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$
30,168,000
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$
30,803,000
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Income from
operations (c)
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Branded product
program
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$
2,531,000
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$
2,272,000
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Product
licensing
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8,053,000
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7,356,000
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Restaurant
operations
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750,000
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895,000
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Corporate
(d)
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(2,247,000)
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(2,073,000)
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Income from
operations (c)
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$
9,087,000
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$
8,450,000
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(a)
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Excludes interest
expense, interest income, and other income, net.
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(b)
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Represents
Advertising Fund revenue in 2018.
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(c)
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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.
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(d)
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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 $495,000 in
2018.
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Nathan's Famous,
Inc. and Subsidiaries
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Reconciliation of
Net Income to EBITDA and Adjusted EBITDA
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(unaudited)
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Thirteen weeks
ended
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June 24,
2018
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June 25,
2017
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EBITDA
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Net Income
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$
4,795,000
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$
2,922,000
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Interest
Expense
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2,650,000
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3,663,000
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Provision for income
taxes
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1,724,000
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1,921,000
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Depreciation and
amortization
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345,000
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368,000
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EBITDA
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$
9,514,000
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$
8,874,000
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Adjusted
EBITDA
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EBITDA
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$
9,514,000
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$
8,874,000
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Stock-based
compensation
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81,000
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99,000
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Adjusted
EBITDA
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$
9,595,000
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$
8,973,000
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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.