For the thirteen-week period ended
- Revenues were
$30,518,000 , as compared to$30,168,000 during the thirteen weeks endedJune 24, 2018 ; - Income from operations was
$9,448,000 , as compared to$9,087,000 during the thirteen weeks endedJune 24, 2018 ; - Adjusted EBITDA1 , a non-GAAP financial measure, was
$10,173,000 as compared to$9,595,000 for the thirteen weeks endedJune 24, 2018 ; - Income before provision for income taxes was
$7,185,000 , as compared to$6,519,000 during the thirteen weeks endedJune 24, 2018 ; - Net income was
$5,369,000 , as compared to$4,795,000 for the thirteen weeks endedJune 24, 2018 ; and - Earnings per diluted share was
$1.28 per share, as compared to$1.13 per share for the thirteen weeks endedJune 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 endedJune 24, 2018 . During the first quarter fiscal 2020, royalties earned under the retail agreement, including the foodservice program, fromJohn Morrell & Co. , increased 8.2% to$8,157,000 , as compared to$7,538,000 of royalties earned during the thirteen weeks endedJune 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 endedJune 30, 2019 , as compared to$2,531,000 for the thirteen weeks endedJune 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 endedJune 30, 2019 compared to$4,026,000 during the thirteen weeks endedJune 24, 2018 . Sales were positively affected, especially at our twoConey 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 endedJune 30, 2019 , compared to$1,104,000 during the thirteen weeks endedJune 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 endedJune 30, 2019 compared to$107,000 during the thirteen weeks endedJune 24, 2018 . Four new domestic franchised outlets opened during the thirteen weeks endedJune 30, 2019 . - During the thirteen weeks ended
June 30, 2019 , we recordedAdvertising Fund revenue and expense in the amount of$482,000 as compared to$495,000 during the thirteen weeks endedJune 24, 2018 . - On
June 28, 2019 , we paid the$0.35 per share quarterly cash dividend that was declared by the Board of Directors onJune 14, 2019 to shareholders of record at the close of business onJune 24, 2019 .
- Effective
August 9, 2019 , the Board of Directors declared its quarterly cash dividend of$0.35 per share payable onSeptember 6, 2019 to shareholders of record at the close of business onAugust 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 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
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
(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)
(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