JERICHO, N.Y., Nov. 2, 2018 /PRNewswire/ -- Nathan's
Famous, Inc. (NASDAQ: NATH) today reported results for the second
quarter of its 2019 fiscal year that ended September 23, 2018.
For the fiscal quarter ended September
23, 2018:
- Revenues were $29,330,000, as
compared to $31,471,000 during the
thirteen weeks ended September 24,
2017;
- Adjusted EBITDA, as subsequently defined, was $9,476,000, as compared to $9,257,000 for the thirteen weeks ended
September 24, 2017;
- Income before provision for income taxes was $6,463,000, as compared to $5,127,000 for the thirteen weeks ended
September 24, 2017;
- Net income was $4,484,000, as
compared to $3,120,000 for the
thirteen weeks ended September 24,
2017; and
- Earnings per diluted share was $1.06 per share, as compared to $0.74 per share for the thirteen weeks ended
September 24, 2017.
For the twenty-six weeks ended September
23, 2018:
- Revenues were $59,498,000, as
compared to $62,274,000 during the
twenty-six weeks ended September 24,
2017;
- Adjusted EBITDA, as subsequently defined, was $19,071,000, as compared to $18,230,000 for the twenty-six weeks ended
September 24, 2017;
- Income before provision for income taxes was $12,982,000, as compared to $9,970,000 for the twenty-six weeks ended
September 24, 2017;
- Net income was $9,279,000, as
compared to $6,042,000 for the
twenty-six weeks ended September 24,
2017; and
- Earnings per diluted share was $2.19 per share, as compared to $1.43 per share for the twenty-six weeks ended
September 24, 2017.
The Company also reported the following:
- License royalties increased to $13,844,000 during the twenty-six weeks ended
September 23, 2018, as compared to
$13,165,000 during the twenty-six
weeks ended September 24, 2018.
During the twenty-six weeks ended September
23, 2018, total royalties earned under the John Morrell
& Co., agreement increased 5.1% to $12,795,000, as compared to $12,173,000 of royalties earned during the
twenty-six weeks ended September 24,
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 $297,000 to $5,261,000 for the twenty-six weeks ended
September 23, 2018, as compared to
$4,964,000 for the twenty-six weeks
ended September 24, 2017. Sales were
$31,855,000 in the current period,
compared to sales of $36,067,000
during the prior-year period, while the volume of hot dogs sold by
the Company decreased 6.3%. However, the sales and volume
declines were mostly related to the use of a new re-distributor to
temporarily service certain of our regular distributor customers.
Excluding the effects of the re-distributors' purchases in both
years, we estimate that customer shipments, increased by
approximately 2.8% during the fiscal 2019 period. Our average
selling price, which is partially correlated to the beef markets,
decreased by approximately 7.2% compared to the year-earlier
period.
- Sales from Company-operated restaurants were $10,189,000 during the twenty-six weeks ended
September 23, 2018, as compared to
$10,555,000 during the twenty-six
weeks ended September 24, 2017. Sales
were negatively affected, especially at our two Coney Island
locations, by exceptionally unfavorable weather conditions in the
Northeastern United States, during
April and August 2018.
- Revenues from franchise operations were $2,343,000 during the twenty-six weeks ended
September 23, 2018, as compared to
$2,487,000 during the twenty-six
weeks ended September 24, 2017. Total
royalties were $2,101,000 in the
fiscal 2019 period as compared to $2,330,000 in the fiscal 2018 period. Total
franchise fee income was $242,000
during the twenty-six weeks ended September
23, 2018, as compared to $157,000 during the twenty-six weeks ended
September 24, 2017. Nine new
franchised outlets opened during the twenty-six weeks ended
September 23, 2018, including two
international locations, and four Branded Menu Program
outlets.
- During the twenty-six weeks ended September 23, 2018, we recorded Advertising Fund
revenue and expense in the amount of $1,267,000 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 $2,025,000 during the
twenty-six weeks ended September 23,
2018 as compared to the twenty-six weeks ended September 24, 2017.
- On September 21, 2018, we paid
the $0.25 per share regular cash
dividend that was declared by the Board of Directors effective
August 3, 2018 to shareholders of
record at the close of business on September
10, 2018.
- Effective November 2, 2018, the
Board of Directors declared its quarterly cash dividend of
$0.25 per share payable on
December 14, 2018 to shareholders of
record at the close of business on December
3, 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 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; 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.
|
(unaudited)
|
|
|
|
Thirteen weeks
ended
|
|
|
|
Twenty-six weeks
ended
|
|
|
Sept. 23,
2018
|
|
Sept. 24,
2017
|
|
Sept. 23,
2018
|
|
Sept. 24,
2017
|
|
Financial
Highlights
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Total
revenues
|
$
29,330,000
|
|
$
31,471,000
|
|
$
59,498,000
|
|
$
62,274,000
|
|
|
|
|
|
|
|
|
|
|
Income from
operations (a)
|
$
8,480,000
|
|
$
8,734,000
|
|
$
17,567,000
|
|
$
17,184,000
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
4,484,000
|
|
$
3,120,000
|
|
$
9,279,000
|
|
$
6,042,000
|
|
|
|
|
|
|
|
|
|
|
Income per
share:
|
|
|
|
|
|
|
|
|
Basic
|
$
1.07
|
|
$
0.75
|
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$
2.22
|
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$
1.45
|
|
Diluted
|
$
1.06
|
|
$
0.74
|
|
$
2.19
|
|
$
1.43
|
|
|
|
|
|
|
|
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Weighted-average
shares used in
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|
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|
|
computing income per share:
|
|
|
|
|
|
|
|
|
Basic
|
4,188,000
|
|
4,179,000
|
|
4,187,000
|
|
4,178,000
|
|
Diluted
|
4,231,000
|
|
4,212,000
|
|
4,229,000
|
|
4,213,000
|
|
Select Segment
Information
Revenues
|
|
|
|
|
|
|
|
|
Branded product
program
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$15,410,000
|
|
$18,130,000
|
|
$31,855,000
|
|
$36,067,000
|
|
Product
licensing
|
5,746,000
|
|
5,764,000
|
|
13,844,000
|
|
13,165,000
|
|
Restaurant
operations
|
7,402,000
|
|
7,577,000
|
|
12,532,000
|
|
13,042,000
|
|
Corporate
|
772,000
|
|
-
|
|
1,267,000
|
|
-
|
|
Total
Revenues
|
$29,330,000
|
|
$31,471,000
|
|
$59,498,000
|
|
$62,274,000
|
|
Income from
operations (b)
Branded product
program
Product
licensing
Restaurant
operations
Corporate
(c)
Income
from operations (b)
|
$2,730,000
5,700,000
2,095,000
(2,045,000)
$8,480,000
|
|
$2,692,000
5,719,000
2,335,000
(2,012,000)
$8,734,000
|
|
$5,261,000
13,753,000
2,845,000
(4,292,000)
$17,567,000
|
|
$4,964,000
13,075,000
3,230,000
(4,085,000)
$17,184,000
|
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(a)
|
Excludes interest
expense, interest income, and other income, net.
|
(b)
|
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.
|
(c)
|
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.
|
Nathan's Famous,
Inc. and Subsidiaries
|
Reconciliation of
Net Income to EBITDA and Adjusted EBITDA
|
|
|
|
Thirteen weeks
ended
|
|
|
|
Twenty-six weeks
ended
|
|
|
Sept. 23,
2018
|
|
Sept. 24,
2017
|
|
Sept. 23,
2018
|
|
Sept. 24,
2017
|
|
|
|
(unaudited)
|
|
|
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(unaudited)
|
|
|
EBITDA
|
|
|
|
|
|
|
|
|
Net Income
|
$
4,484,000
|
|
$
3,120,000
|
|
$
9,279,000
|
|
$
6,042,000
|
|
|
|
|
|
|
|
|
|
|
Interest
Expense
|
2,651,000
|
|
3,663,000
|
|
5,301,000
|
|
7,326,000
|
|
|
|
|
|
|
|
|
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Provision for income
taxes
|
1,979,000
|
|
2,007,000
|
|
3,703,000
|
|
3,928,000
|
|
|
|
|
|
|
|
|
|
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Depreciation and
amortization
|
339,000
|
|
367,000
|
|
684,000
|
|
735,000
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
$
9,453,000
|
|
$
9,157,000
|
|
$
18,967,000
|
|
$
18,031,000
|
|
|
|
|
|
|
|
|
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|
|
|
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|
|
|
|
|
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|
|
|
|
|
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Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
EBITDA
|
$
9,453,000
|
|
$
9,157,000
|
|
$
18,967,000
|
|
$
18,031,000
|
|
|
|
|
|
|
|
|
|
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Stock-based
compensation
|
23,000
|
|
100,000
|
|
104,000
|
|
199,000
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
9,476,000
|
|
$
9,257,000
|
|
$
19,071,000
|
|
$
18,230,000
|
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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-second-quarter-results-300742655.html
SOURCE Nathan's Famous, Inc.