Nathan's Famous, Inc. Reports First Quarter 2017 Results

Nathan's Famous, Inc. (NASDAQ: NATH) today reported results for its first quarter of its 2018 fiscal year that ended June 25, 2017.

For the fiscal quarter ended June 25, 2017:

• Revenues were $30,918,000, as compared to $29,416,000 during the thirteen weeks ended June 26, 2016; 
• Income from operations was $8,450,000, as compared to $8,824,000 during the thirteen weeks ended June 26, 2016; 
• Adjusted EBITDA, as subsequently defined, was$8,973,000 as compared to $9,366,000 for the thirteen weeks ended June 26, 2016; 
• Net income was $2,922,000, as compared to $3,550,000 for the thirteen weeks ended June 26, 2016; 
• Earnings per diluted share was $0.69 per share, as compared to $0.85 per share for the thirteen weeks ended June 26, 2016; and 
• Excluding the tax benefits of stock compensation as described below, net income and earnings per diluted share, would have been $2,844,000 or $0.67 per share, as compared to $2,929,000 or $0.70 per share for the thirteen weeks ended June 26, 2016. 

The Company reported the following:                                     

• License royalties increased to $7,401,000 during the thirteen weeks ended June 25, 2017, as compared to $6,824,000 during the thirteen weeks ended June 26, 2016. During the thirteen weeks ended June 25, 2017, total royalties earned under the John Morrell & Co., agreement increased 8.2% to $6,885,000, as compared to $6,362,000 of royalties earned during the thirteen weeks ended June 26, 2016.  
• In the Branded Product Program, which features the sale of Nathan's hot dogs to the foodservice industry, sales increased by 10.4% to $17,937,000 during the thirteen weeks ended June 25, 2017, compared to sales of $16,254,000 during the thirteen weeks ended June 26, 2016. During the period, the volume of hot dogs sold increased 8.3% and our average selling price increased by approximately 1.3%. Income from operations from the Branded Product Program declined by approximately $681,000 for the fiscal 2018 period as compared to the fiscal 2017 period, as a result of a significant increase in the cost of beef during May and June 2017. 
• Sales from Company-operated restaurants were $4,408,000 during the thirteen weeks ended June 25, 2017compared to $4,843,000 during the thirteen weeks ended June 26, 2016. Sales were impacted by unfavorable weather in June, especially at our two locations in Coney Island that depend on beach traffic. 
• Revenues from franchise operations were $1,172,000 during the thirteen weeks ended June 25, 2017, compared to $1,330,000 during the thirteen weeks ended June 26, 2016. Total royalties were $1,112,000 in the fiscal 2018 period as compared to $1,152,000 in the fiscal 2017 period. Total franchise fee income was $60,000 during the thirteen weeks ended June 25, 2017 compared to $178,000 during the thirteen weeks ended June 26, 2016. Ten new franchised outlets opened during the thirteen weeks ended June 25, 2017, including two international locations, and seven Branded Menu Program outlets. 
• Nathan's recognized excess tax benefits of $78,000 and $621,000 during the fiscal 2018 and fiscal 2017 periods, respectively, as a result of the tax benefits associated with the stock compensation guidance that the Company adopted in the fiscal 2017 period. The impact of the tax benefits reduced Nathan's tax rate by 1.6% and 12.0%, respectively, and increased earnings per diluted share by $0.02 and $0.15, during the fiscal 2018 and fiscal 2017 periods, respectively. 
• Nathan's has purchased 5,127,373 shares of common stock at a cost of approximately $77,303,000 through June 25, 2017 pursuant to share repurchase programs authorized by the Board of Directors. As of June 25, 2017, an aggregate 260,258 shares were available for purchase under Nathan's stock buy-back program. 
• The Company has also entered into a 10b5-1 plan with Mutual Securities, Inc. ("MSI") pursuant to which MSI has been authorized on the Company's behalf to purchase shares of the Company's common stock.  

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 thirteen 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.