JERICHO, N.Y., June 8, 2018 /PRNewswire/ -- Nathan's
Famous, Inc. (NASDAQ:NATH) today reported results for its fiscal
year and fourth quarter ended March 25,
2018.
For the fifty-two weeks ended March 25,
2018:
- Revenues increased by 8.3% to $104,201,000, as compared to $96,256,000 during the fifty-two weeks ended
March 26, 2017;
- Income from operations increased to $27,100,000, as compared to $26,280,000 during the fifty-two weeks ended
March 26, 2017;
- Adjusted EBITDA, as subsequently defined, increased
to $29,115,000 as
compared to $28,348,000 for the
fifty-two weeks ended March 26,
2017;
- Excluding the loss on debt extinguishment, impairment charge on
long-lived assets and revaluation of deferred tax liabilities as
described below, net income and earnings per diluted share, would
have been $8,601,000 or $2.04 per share, as compared to $7,485,000 or $1.78
per share, for the fifty-two weeks ended March 26, 2017;
- In connection with our refinancing of the 10.000% Senior
Secured Notes due 2020, we recorded a loss on debt extinguishment
of $8,872,000, or $5,266,000, net of tax, or $1.25 per diluted share. We expect the 6.6250%
Senior Secured Notes due 2025 will lower our interest payments by
$3,562,500 per annum;
- Provision for income taxes was reduced by $245,000 or $0.06
per diluted share resulting from the revaluation of its deferred
tax liabilities resulting from the effects of tax reform;
- Net income was $2,630,000, as
compared to $7,485,000 for the
fifty-two weeks ended March 26, 2017;
and
- Earnings per diluted share, was $0.62 per share, as compared to $1.78 per share for the fifty-two weeks ended
March 26, 2017.
For the thirteen weeks ended March 25,
2018:
- Revenues increased to $19,906,000, as compared to $19,232,000 during the thirteen weeks ended
March 26, 2017;
- Income from operations was $4,546,000, as compared to $4,671,000 during the thirteen weeks ended
March 26, 2017;
- Adjusted EBITDA, as subsequently defined,
was $5,030,000 as
compared to $5,117,000 for the
thirteen weeks ended March 26,
2017;
- Excluding the impairment charge on long-lived assets, net
income and earnings per diluted share, would have been $1,175,000 or $.28
per share, as compared to $729,000 or
$0.17 per share, for the thirteen
weeks ended March 26, 2017;
- Net income was $367,000, as
compared to $729,000 for the thirteen
weeks ended March 26, 2017; and
- Earnings per diluted share, was $0.09 per share, as compared to $0.17 per share for the thirteen weeks ended
March 26, 2017.
The Company reported the following:
- License royalties increased to $23,020,000 during the fifty-two weeks ended
March 25, 2018, as compared to
$20,368,000 during the fifty-two
weeks ended March 26, 2017. During
the fifty-two weeks ended March 25,
2018, total royalties earned under the John Morrell &
Co., agreement from the sale of hot dogs, increased 13.1% to
$20,833,000, as compared to
$18,424,000 during the fifty-two
weeks ended March 26, 2017.
- In the Branded Product Program, featuring the sale of Nathan's
hot dogs to the foodservice industry, sales increased by 11.9% to
$62,623,000 during the fifty-two
weeks ended March 25, 2018, as
compared to sales of $55,960,000
during the fifty-two weeks ended March 26,
2017. During the period, the volume of hot dogs sold
increased 9.4% and our average selling price increased by
approximately 1.8%. Income from operations from the Branded Product
Program declined by approximately $788,000 for the fiscal 2018 period as compared
to the fiscal 2017 period, primarily as a result of a significant
increase in the cost of beef during May, June and July 2017.
- Sales from Company-operated restaurants were $14,085,000 during the fifty-two weeks ended
March 25, 2018, compared to
$14,646,000 during the fifty-two
weeks ended March 26, 2017. Sales
were impacted by unfavorable summer weather conditions during the
fiscal 2018 period, especially at our main location in Coney
Island that depends on beach traffic.
- Revenues from franchise operations were $4,473,000 during the fifty-two weeks ended
March 25, 2018, compared to
$5,068,000 during the fifty-two weeks
ended March 26, 2017. Total royalties
were $4,138,000 in the fiscal 2018
period compared to $4,290,000 in the
fiscal 2017 period. Total franchise fee income was $335,000 during the fifty-two weeks ended
March 25, 2018 compared to
$778,000 during the fifty-two weeks
ended March 26, 2017. Forty new
franchised outlets opened during the fifty-two weeks ended
March 25, 2018, including 16
international locations, and 19 Branded Menu Program outlets.
- Nathan's recognized excess tax benefits of $173,000 and $659,000 during the fiscal 2018 and fiscal 2017
periods, respectively, as a result of the tax benefits associated
with stock compensation. The impact of the tax benefits reduced
Nathan's tax rate by 4.2% and 5.6%, respectively, and increased
earnings per diluted share by $0.04
and $0.16, during the fiscal 2018 and
fiscal 2017 periods, respectively.
- On November 1, 2017, Nathan's
issued $150.0 million 6.625% Senior
Secured Notes due 2025 to fund the November
16, 2017 redemption of its $135.0
million 10.000% Senior Secured Notes due 2020. Nathan's
incurred a loss on debt extinguishment associated with the
refinancing of $8,872,000. The
Company also incurred additional interest expense of approximately
$562,500 from the time the 2025 Notes
closed until the time the 2020 Notes were redeemed. The Company
expects to reduce its future cash annual interest expense by
$3,562,500 per annum.
- On January 4, 2018, we paid the
$5.00 per share special cash dividend
that was declared by the Board of Directors on November 1, 2017 to shareholders of record at the
close of business on December 22,
2017.
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 (benefit) for income taxes and (iii)
depreciation and amortization expense. The Company has also
provided Adjusted EBITDA excluding (i) loss on debt extinguishment,
(ii) impairment charge long-lived assets and (iii) share-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 (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 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 the impact of our supply
agreement for hot dogs 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.
FOR: NATHAN'S FAMOUS, INC.
COMPANY: Ronald G.
DeVos, Vice President - Finance and CFO
CONTACT: (516) 338-8500 ext. 229
Nathan's Famous,
Inc.
|
Financial
Highlights
|
|
|
|
Thirteen weeks
ended
|
Fifty-two weeks
ended
|
|
Mar. 25,
2018
|
|
Mar. 26,
2017
|
|
Mar. 25,
2018
|
|
Mar. 26,
2017
|
|
|
|
|
|
|
|
|
Total
revenues
|
$
19,906,000
|
|
$
19,232,000
|
|
$
104,201,000
|
|
$
96,256,000
|
|
|
|
|
|
|
|
|
Income from
operations (a)
|
$
4,546,000
|
|
$
4,671,000
|
|
$
27,100,000
|
|
$
26,280,000
|
|
|
|
|
|
|
|
|
Income before
provision for income taxes
|
$
1,228,000
|
|
$
1,062,000
|
|
$
4,112,000
|
|
$
11,804,000
|
|
|
|
|
|
|
|
|
Net income
|
$
367,000
|
|
$
729,000
|
|
$
2,630,000
|
|
$
7,485,000
|
|
|
|
|
|
|
|
|
Income per
share:
|
|
|
|
|
|
|
|
Basic
|
$
0.09
|
|
$
0.17
|
|
$
0.63
|
|
$
1.79
|
Diluted
|
$
0.09
|
|
$
0.17
|
|
$
0.62
|
|
$
1.78
|
|
|
|
|
|
|
|
|
Weighted-average
shares used in
|
|
|
|
|
|
|
|
computing income per share:
|
|
|
|
|
|
|
|
Basic
|
4,185,000
|
|
4,176,000
|
|
4,181,000
|
|
4,172,000
|
Diluted
|
4,228,000
|
|
4,217,000
|
|
4,221,000
|
|
4,206,000
|
|
|
|
|
|
|
|
|
Select Segment
Information
Revenues
|
|
|
|
|
|
|
|
Branded product
program
|
$
11,882,000
|
|
$
11,610,000
|
|
$
62,623,000
|
|
$
56,174,000
|
Product
licensing
|
5,627,000
|
|
4,766,000
|
|
23,020,000
|
|
20,368,000
|
Restaurant
operations
|
2,397,000
|
|
2,856,000
|
|
18,558,000
|
|
19,714,000
|
Corporate
|
-0-
|
|
-0-
|
|
-0-
|
|
-0-
|
|
|
|
|
|
|
|
|
Revenues
|
$
19,906,000
|
|
$
19,232,000
|
|
$
104,201,000
|
|
$
96,256,000
|
Income from
operations (a) (c)
|
|
|
|
|
|
|
|
Branded product
program
|
$
1,581,000
|
|
$
1,921,000
|
|
$
9,469,000
|
|
$
10,257,000
|
Product
licensing
|
5,581,000
|
|
4,721,000
|
|
22,838,000
|
|
20,186,000
|
Restaurant
operations
|
(479,000)
|
|
18,000
|
|
2,730,000
|
|
4,101,000
|
Corporate
(b)
|
(2,137,000)
|
|
(1,989,000)
|
|
(7,937,000)
|
|
(8,264,000)
|
|
|
|
|
|
|
|
|
Income from
operations (a) (c)
|
$
4,546,000
|
|
$
4,671,000
|
|
$
27,100,000
|
|
$
26,280,000
|
(a)
|
Excludes interest
expense, loss on extinguishment of debt, impairment charge
long-lived assets, interest income, and other income,
net.
|
(b)
|
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.
|
(c)
|
Excludes interest
expense, loss on extinguishment of debt, interest income,
impairment charge – long-lived assets 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 CODM (Chief
Operating Decision Maker).
|
Nathan's Famous,
Inc. and Subsidiaries
Reconciliation of
Net Income to EBITDA and Adjusted EBITDA
|
|
|
|
|
|
|
|
Thirteen weeks
ended
|
|
Fifty-two weeks
ended
|
|
|
Mar. 25,
2018
|
|
Mar. 26,
2017
|
|
Mar. 25,
2018
|
|
Mar. 26,
2017
|
|
|
|
|
|
|
EBITDA
|
|
|
|
|
|
|
|
|
Net Income
|
$
367,000
|
|
$
729,000
|
|
$
2,630,000
|
|
$
7,485,000
|
|
|
|
|
|
|
|
|
|
|
Interest
Expense
|
2,615,000
|
|
3,663,000
|
|
13,591,000
|
|
14,665,000
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
861,000
|
|
333,000
|
|
1,482,000
|
|
4,319,000
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
297,000
|
|
292,000
|
|
1,352,000
|
|
1,297,000
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
$
4,140,000
|
|
$
5,017,000
|
|
$
19,055,000
|
|
$
27,766,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
EBITDA
|
$
4,140,000
|
|
$
5,017,000
|
|
$
19,055,000
|
|
$
27,766,000
|
|
|
|
|
|
|
|
|
|
|
Share-based
compensation
|
100,000
|
|
100,000
|
|
398,000
|
|
582,000
|
|
Loss on debt
extinguishment
|
-0-
|
|
-0-
|
|
8,872,000
|
|
-0-
|
|
|
|
|
|
|
|
|
|
|
Impairment charge
long-lived assets
|
790,000
|
|
-0-
|
|
790,000
|
|
-0-
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
5,030,000
|
|
$
5,117,000
|
|
$
29,115,000
|
|
$
28,348,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
View original
content:http://www.prnewswire.com/news-releases/nathans-famous-inc-reports-year-end-and-fourth-quarter-results-300661998.html
SOURCE Nathan's Famous, Inc.