For the thirteen-week period ended
- Revenues were
$17,686,000 , as compared to$30,518,000 during the thirteen weeks endedJune 30, 2019 ; - Income from operations was
$8,094,000 , as compared to$9,448,000 during the thirteen weeks endedJune 30, 2019 ; - Adjusted EBITDA1, a non-GAAP financial measure, was
$8,550,000 as compared to$10,173,000 during the thirteen weeks endedJune 30, 2019 ; - Income before provision for income taxes was
$5,561,000 , as compared to$7,185,000 during the thirteen weeks endedJune 30, 2019 ; - Net income was
$4,000,000 , as compared to$5,369,000 during the thirteen weeks endedJune 30, 2019 ; and - Earnings per diluted share was
$0.97 per share, as compared to$1.28 per share during the thirteen weeks endedJune 30, 2019 .
_____________________________
1 EBITDA and Adjusted EDITDA are non-GAAP financial measures. Please see the definitions of EBITDA and Adjusted EBITDA on page 2 of this release and the reconciliation of EBITDA and Adjusted EBITDA to net income in the table at the end of this release.
The Company also reported the following:
- License royalties increased to
$10,523,000 during the first quarter fiscal 2021, as compared to$8,722,000 during the thirteen weeks endedJune 30, 2019 . During the first quarter fiscal 2021, royalties earned under the retail agreement, including the foodservice program, withJohn Morrell & Co. , increased 19.5% to$9,744,000 , as compared to$8,157,000 of royalties earned during the thirteen weeks endedJune 30, 2019 . As consumers shelter at home, our licensing business continues to show strong consumer demand. - In the Branded Product Program, which features the sale of Nathan’s hot dogs to the foodservice industry, income from operations declined by approximately
$1,931,000 to$272,000 during the first quarter fiscal 2021, as compared to$2,203,000 for the thirteen weeks endedJune 30, 2019 . Sales were$4,749,000 in the first quarter fiscal 2021, compared to sales of$16,113,000 during the prior-year period, while the volume of hot dogs sold by the Company decreased 71%. As a result of the COVID-19 pandemic, sales and income from operations for the Branded Product Program have been impacted as many of our customers operated in venues that are currently closed and may be slow to reopen, such as professional sports venues, amusement parks, shopping malls and movie theaters. Our average selling price, which is partially correlated to the beef markets, increased by approximately 7.0% compared to the prior-year period.
- Sales from Company-operated restaurants were
$1,934,000 during the first quarter fiscal 2021 compared to$4,124,000 during the thirteen weeks endedJune 30, 2019 . The decrease was primarily due to a decline in customer traffic related to the impact of the COVID-19 pandemic. Due to governmental restrictions, our Company-operated restaurants were only offering food through take-out and delivery services. - Revenues from franchise operations were
$191,000 during the first quarter fiscal 2021, compared to$1,077,000 during the thirteen weeks endedJune 30, 2019 . Total royalties were$110,000 in the first quarter fiscal 2021 period as compared to$980,000 during the thirteen weeks endedJune 30, 2019 . Total franchise fee income was$81,000 during the first quarter fiscal 2021 compared to$97,000 during the thirteen weeks endedJune 30, 2019 . As a result of the COVID-19 pandemic, a number of our franchised locations have been temporarily closed due to their locations in venues being closed (such as shopping malls and movie theaters) or venues operating at reduced traffic (such as airport and highway travel plazas). Despite the challenging operating environment, two new franchised outlets opened during the first quarter fiscal 2021. - During the first quarter fiscal 2021, we recorded
Advertising Fund revenue and expense in the amount of$289,000 as compared to$482,000 during the thirteen weeks endedJune 30, 2019 . - On
June 26, 2020 , we paid the$0.35 per share regular cash dividend that was declared by the Board of Directors onJune 12, 2020 to shareholders of record at the close of business onJune 22, 2020 .
- Effective
August 7, 2020 , the Board of Directors declared its quarterly cash dividend of$0.35 per share payable onSeptember 4, 2020 to shareholders of record at the close of business onAugust 24, 2020 .
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 impact of the COVID-19 pandemic; the status of our licensing and supply agreements, including the impact of our supply agreement for hot dogs with
(unaudited)
Thirteen weeks ended | ||||||||||
Financial Highlights | ||||||||||
Total revenues | $ | 17,686,000 | $ | 30,518,000 | ||||||
Income from operations (a) | $ | 8,094,000 | $ | 9,448,000 | ||||||
Income before provision for income taxes | $ | 5,561,000 | $ | 7,185,000 | ||||||
Net income | $ | 4,000,000 | $ | 5,369,000 | ||||||
Income per share: | ||||||||||
Basic | $ | 0.97 | $ | 1.28 | ||||||
Diluted | $ | 0.97 | $ | 1.28 | ||||||
Weighted-average shares used in | ||||||||||
computing income per share: | ||||||||||
Basic | 4,120,000 | 4,206,000 | ||||||||
Diluted | 4,120,000 | 4,206,000 | ||||||||
Select Segment Information
Revenues | |||||||
Branded product program | $ | 4,749,000 | $ | 16,113,000 | |||
Product licensing | 10,523,000 | 8,722,000 | |||||
Restaurant operations | 2,125,000 | 5,201,000 | |||||
Corporate (b) | 289,000 | 482,000 | |||||
Revenues | $ | 17,686,000 | $ | 30,518,000 | |||
Income from operations (c) | |||||||
Branded product program | $ | 272,000 | $ | 2,203,000 | |||
Product licensing | 10,477,000 | 8,676,000 | |||||
Restaurant operations | (893,000 | ) | 750,000 | ||||
Corporate (d) | (1,762,000 | ) | (2,181,000 | ) | |||
Income from operations (c) | $ | 8,094,000 | $ | 9,448,000 |
(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 |
Reconciliation of Net Income to EBITDA and Adjusted EBITDA
(unaudited)
Thirteen weeks ended | |||||||||||
June 30, 2019 | |||||||||||
EBITDA | |||||||||||
Net Income | $ | 4,000,000 | $ | 5,369,000 | |||||||
Interest Expense | 2,650,000 | 2,650,000 | |||||||||
Provision for income taxes | 1,561,000 | 1,816,000 | |||||||||
Depreciation and amortization | 310,000 | 310,000 | |||||||||
EBITDA | $ | 8,521,000 | $ | 10,145,000 | |||||||
Adjusted EBITDA | |||||||||||
EBITDA | $ | 8,521,000 | $ | 10,145,000 | |||||||
Stock-based compensation | 29,000 | 28,000 | |||||||||
Adjusted EBITDA | $ | 8,550,000 | $ | 10,173,000 | |||||||
COMPANY
CONTACT: (516) 338-8500 ext. 229
Source: Nathan's Famous Inc