Nathan's Famous, Inc. Reports Year End and Fourth Quarter Results
Nathan's Famous, Inc. (NASDAQ:NATH) reported fiscal 2021 results with revenues of $75.8 million, a significant drop from $103.3 million in fiscal 2020. Net income decreased to $11.1 million, down from $13.4 million a year prior, while earnings per diluted share fell to $2.69 from $3.19. Despite challenges from the COVID-19 pandemic, license royalties rose to $31.4 million. The company announced a quarterly cash dividend of $0.35 per share, payable on June 25, 2021. The decrease in revenues is attributed to lower customer traffic and operational impacts from the pandemic.
- License royalties increased to $31,368,000 in fiscal 2021, up from $25,859,000 in fiscal 2020.
- Seven new franchised outlets and 130 ghost kitchens opened during fiscal 2021.
- Announced a quarterly cash dividend of $0.35 per share.
- Total revenues decreased to $75,839,000 in fiscal 2021 from $103,325,000 in fiscal 2020.
- Net income fell to $11,075,000 in fiscal 2021, down from $13,435,000 in fiscal 2020.
- Earnings per diluted share dropped to $2.69 from $3.19 year-over-year.
- Sales from company-operated restaurants dropped to $7,709,000 from $12,973,000 due to reduced customer traffic.
- Franchise revenues decreased to $1,601,000 in fiscal 2021 from $4,572,000 in fiscal 2020.
And Declares Quarterly Cash Dividend Of
JERICHO, N.Y., June 11, 2021 (GLOBE NEWSWIRE) -- Nathan's Famous, Inc. (NASDAQ:NATH) today reported results for its fiscal year and fourth quarter ended March 28, 2021.
Effective June 11, 2021, the Board of Directors declared its first quarterly cash dividend for fiscal 2022 of
For the fiscal year ended March 28, 2021:
- Revenues were
$75,839,000 for the fifty-two weeks ended March 28, 2021 (“fiscal 2021”), as compared to$103,325,000 for the fifty-two weeks ended March 29, 2020 (“fiscal 2020”); - Income from operations was
$25,515,000 for fiscal 2021, as compared to$27,172,000 for fiscal 2020; - Adjusted EBITDA1 for fiscal 2021, a non-GAAP financial measure, was
$27,225,000 , as compared to$29,964,000 for fiscal 2020; - Income before provision for income taxes was
$15,325,000 for fiscal 2021, as compared to$18,014,000 for fiscal 2020; - Net income was
$11,075,000 for fiscal 2021, as compared to$13,435,000 for fiscal 2020; and - Earnings per diluted share was
$2.69 per share for fiscal 2021, as compared to$3.19 per share for fiscal 2020.
For the thirteen weeks ended March 28, 2021:
- Revenues were
$18,284,000 for the thirteen weeks ended March 28, 2021 (“fourth quarter fiscal 2021”), as compared to$21,705,000 for the thirteen weeks ended March 29, 2020 (“fourth quarter fiscal 2020”); - Income from operations was
$5,434,000 for the fourth quarter fiscal 2021, as compared to$6,495,000 for the fourth quarter fiscal 2020; - Adjusted EBITDA1 for the fourth quarter fiscal 2021, a non-GAAP financial measure, was
$5,817,000 , as compared to$7,124,000 for the fourth quarter fiscal 2020; - Income before provision for income taxes was
$2,855,000 for the fourth quarter fiscal 2021, as compared to$4,153,000 for the fourth quarter fiscal 2020; - Net income was
$2,061,000 for the fourth quarter fiscal 2021, as compared to$3,195,000 for the fourth quarter fiscal 2020; and - Earnings per diluted share was
$0.50 per share for the fourth quarter fiscal 2021, as compared to$0.76 per share for the fourth quarter fiscal 2020.
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1 EBITDA and Adjusted EBITDA are non-GAAP financial measures. Please see the definitions of EBITDA and Adjusted EBITDA on page 3 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
$31,368,000 during fiscal 2021, as compared to$25,859,000 during fiscal 2020. During fiscal 2021, royalties earned under the retail agreement, including the foodservice program, from John Morrell & Co., increased21% to$28,694,000 , as compared to$23,680,000 of royalties earned during fiscal 2020. As consumers sheltered at home as a result of the COVID-19 pandemic, our licensing business exhibited 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
$3,053,000 t o$4,635,000 during fiscal 2021, as compared to$7,688,000 during fiscal 2020. Sales were$33,617,000 during fiscal 2021, compared to sales of$57,586,000 during fiscal 2020, while the volume of hot dogs sold by the Company decreased41% . As a result of the COVID-19 pandemic, sales and income from operations for the Branded Product Program were negatively impacted as many of our customers operate in venues that were closed or slow to re-open, such as movie theaters, or venues operating at reduced capacity, such as professional sports arenas, amusement parks, and shopping malls. - Sales from Company-operated restaurants were
$7,709,000 during fiscal 2021 as compared to$12,973,000 during fiscal 2020. The decrease was primarily due to a decline in customer traffic related to the impact of the COVID-19 pandemic. Additionally, as stipulated under government orders, our Company-operated restaurants with dining rooms were operating at reduced capacity and maintaining social distancing protocols. - Revenues from franchise operations were
$1,601,000 during fiscal 2021, compared to$4,572,000 during fiscal 2020. Total royalties were$1,317,000 during fiscal 2021 as compared to$3,327,000 during fiscal 2020. Total franchise fee income, including cancellation fees, was$284,000 during fiscal 2021 as compared to$1,245,000 during the fiscal 2020. As a result of the COVID-19 pandemic, a number of our franchised locations have been temporarily closed due to their locations being in venues which are closed, such as movie theaters, or venues operating at reduced traffic, such as airports, shopping malls, and highway travel plazas. Despite the challenging environment, 7 new franchised outlets and 130 ghost kitchens opened during fiscal 2021. - Advertising revenue was
$1,544,000 during fiscal 2021 and$2,335,000 during fiscal 2020. - On March 5, 2021, the Company paid the
$0.35 per share regular cash dividend that was declared by the Board of Directors effective February 5, 2021 to shareholders of record at the close of business of February 22, 2021.
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 is disclosing EBITDA, a non-GAAP financial measure which is defined as net income, excluding (i) interest expense; (ii) provision for income taxes and (iii) depreciation and amortization expense. The Company is also disclosing Adjusted EBITDA, a non-GAAP financial measure which is defined as EBITDA, excluding 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 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 District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, and 17 foreign countries through its restaurant system, foodservice sales programs and product licensing activities. For additional information about Nathan’s Famous, please visit our website at www.nathansfamous.com.
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 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; 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.
| Thirteen weeks ended | Fiscal year ended | ||||||||||||||
| Mar. 28, 2021 | Mar. 29, 2020 | Mar. 28, 2021 | Mar. 29, 2020 | ||||||||||||
| Financial Highlights | |||||||||||||||
| Total revenues | $ | 18,284,000 | $ | 21,705,000 | $ | 75,839,000 | $ | 103,325,000 | |||||||
| Income from operations (a) | $ | 5,434,000 | $ | 6,495,000 | $ | 25,515,000 | $ | 27,172,000 | |||||||
| Net income | $ | 2,061,000 | $ | 3,195,000 | $ | 11,075,000 | $ | 13,435,000 | |||||||
| Income per share: | |||||||||||||||
| Basic | $ | 0.50 | $ | 0.76 | $ | 2.69 | $ | 3.19 | |||||||
| Diluted | $ | 0.50 | $ | 0.76 | $ | 2.69 | $ | 3.19 | |||||||
| Weighted-average shares used in computing income per share: | |||||||||||||||
| Basic | 4,115,000 | 4,204,000 | 4,116,000 | 4,216,000 | |||||||||||
| Diluted | 4,115,000 | 4,204,000 | 4,116,000 | 4,216,000 | |||||||||||
| Select Segment Information | |||||||||||||||
| Revenues | |||||||||||||||
| Branded product program | $ | 9,167,000 | $ | 11,597,000 | $ | 33,617,000 | $ | 57,586,000 | |||||||
| Product licensing | 6,679,000 | 7,300,000 | 31,368,000 | 25,859,000 | |||||||||||
| Restaurant operations | 1,976,000 | 2,225,000 | 9,310,000 | 17,545,000 | |||||||||||
| Corporate (b) | 462,000 | 583,000 | 1,544,000 | 2,335,000 | |||||||||||
| Total Revenues | $ | 18,284,000 | $ | 21,705,000 | $ | 75,839,000 | $ | 103,325,000 | |||||||
| Income from operations (c) | |||||||||||||||
| Branded product program | $ | 1,561,000 | $ | 1,444,000 | $ | 4,635,000 | $ | 7,688,000 | |||||||
| Product licensing | 6,634,000 | 7,254,000 | 31,186,000 | 25,677,000 | |||||||||||
| Restaurant operations | (663,000 | ) | (617,000 | ) | (2,856,000 | ) | 1,637,000 | ||||||||
| Corporate (d) | (2,098,000 | ) | (1,586,000 | ) | (7,450,000 | ) | (7,830,000 | ) | |||||||
| Income from operations (c) | $ | 5,434,000 | $ | 6,495,000 | $ | 25,515,000 | $ | 27,172,000 | |||||||
(a) Excludes interest expense, interest income, and other income, net.
(b) Represents Advertising Fund revenue.
(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, compliance costs, and the operating results of the advertising fund.
Nathan's Famous, Inc. and Subsidiaries
Reconciliation of Net Income to EBITDA and Adjusted EBITDA
| Thirteen weeks ended | Fiscal year ended | |||||||||||
| Mar. 28, 2021 | Mar. 29, 2020 | Mar. 28, 2021 | Mar. 29, 2020 | |||||||||
| EBITDA | ||||||||||||
| Net Income | $ | 2,061,000 | $ | 3,195,000 | $ | 11,075,000 | $ | 13,435,000 | ||||
| Interest Expense | 2,650,000 | 2,650,000 | 10,601,000 | 10,601,000 | ||||||||
| Provision for income taxes | 794,000 | 958,000 | 4,250,000 | 4,579,000 | ||||||||
| Depreciation and amortization | 283,000 | 292,000 | 1,183,000 | 1,233,000 | ||||||||
| EBITDA | $ | 5,788,000 | $ | 7,095,000 | $ | 27,109,000 | $ | 29,848,000 | ||||
| Adjusted EBITDA | ||||||||||||
| EBITDA | $ | 5,788,000 | $ | 7,095,000 | $ | 27,109,000 | $ | 29,848,000 | ||||
| Share-based compensation | 29,000 | 29,000 | 116,000 | 116,000 | ||||||||
| Adjusted EBITDA | $ | 5,817,000 | $ | 7,124,000 | $ | 27,225,000 | $ | 29,964,000 | ||||
| COMPANY CONTACT: | Robert Steinberg, Vice President - Finance and CFO (516) 338-8500 ext. 229 | |
FAQ
What were Nathan's Famous revenue figures for fiscal 2021?
How much is the quarterly cash dividend declared by Nathan's Famous on June 11, 2021?
What were the earnings per diluted share for Nathan's Famous in fiscal 2021?
How did the COVID-19 pandemic affect Nathan's Famous business in fiscal 2021?
How many new franchised outlets did Nathan's Famous open in fiscal 2021?
