What changed in this filing

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Item 1. Financial Statements

2022-11-03 compared with 2022-08-05 · 229 added, 181 removed, 438 unchanged (48% of the section changed)

4 unchanged sentences

CONSOLIDATED BALANCE SHEETS

June 26, 2022 and March 27, 2022

September 25, 2022 and March 27, 2022

(in thousands, except share and per share amounts)

June 26, 2022

September 25, 2022

March 27, 2022

(Unaudited)  

ASSETS  

36 unchanged sentences

133,504  

COMMITMENTS AND CONTINGENCIES (Note S)

COMMITMENTS AND CONTINGENCIES (Note R)

STOCKHOLDERS’

2 unchanged sentences

9,369,235 shares issued;

and 4,094,784 and 4,115,154 shares outstanding at June 26, 2022 and March 27, 2022, respectively

and 4,079,720 and 4,115,154 shares outstanding at September 25, 2022 and March 27, 2022, respectively

Additional paid-in capital

7 unchanged sentences

29,782  

Treasury stock, at cost, 5,274,451 and 5,254,081 shares at June 26, 2022 and March 27, 2022, respectively

Treasury stock, at cost, 5,289,515 and 5,254,081 shares at September 25, 2022 and March 27, 2022

( 86,662 )  

9 unchanged sentences

CONSOLIDATED STATEMENTS OF EARNINGS

Thirteen weeks ended June 26, 2022 and June 27, 2021

Thirteen and Twenty-six weeks ended September 25, 2022 and September 26, 2021

(in thousands, except per share amounts)

June 26, 2022

June 27, 2021

$ 26,894  

$ 19,325  

Thirteen weeks ended

Twenty-six weeks ended

September 25,

September 26,

September 25,

September 26,

License royalties

11,314  

10,682  

Franchise fees and royalties

1 unchanged sentence

Total revenues

39,720  

31,319  

COSTS AND EXPENSES

Cost of sales

22,667  

15,365  

Restaurant operating expenses

3 unchanged sentences

Total costs and expenses

27,940  

20,617  

Income from operations

11,780  

10,702  

Interest expense

( 1,944 )  

Interest income

2 unchanged sentences

Provision for income taxes

$ 7,137  

$ 5,763  

PER SHARE INFORMATION

1 unchanged sentence

Income per share:

$ 1.74  

$ 1.40  

$ 1.74  

$ 1.40  

Dividends declared per share

4 unchanged sentences

CONSOLIDATED STATEMENTS OF STOCKHOLDERS ’

Thirteen weeks ended June 26, 2022 and June 27, 2021

(in thousands, except share and per share amounts)

Thirteen weeks ended September 25, 2022 and September 26, 2021

(in thousands, except share amounts)

Treasury Stock, at Cost

Stockholders’

Balance, March 27, 2022

9,369,235  

$ 62,307  

$ ( 32,619 )  

5,254,081  

$ ( 84,770 )  

Balance, June 26, 2022

Repurchase of common stock

20,370  

( 1,070 )  

Dividends on common stock

( 1,852 )  

Share-based compensation

Balance, September 25, 2022

Treasury Stock, at Cost

Stockholders’

Balance, June 27, 2021

9,369,235  

$ 62,315  

$ ( 27,334 )  

5,274,451  

$ ( 85,840 )  

Shares issued in connection with share-based compensation plans

Withholding tax on net share settlement of share-based compensation plans

Dividends on common stock

Share-based compensation

Balance, September 26, 2021

The accompanying notes are an integral part of these consolidated financial statements.

Nathan ’

s Famous, Inc.

and Subsidiaries

CONSOLIDATED STATEMENTS OF STOCKHOLDERS ’

Twenty-six weeks ended September 25, 2022 and September 26, 2021

(in thousands, except share amounts)

Treasury Stock, at Cost

1 unchanged sentence

Balance, March 27, 2022

9,369,015  

$ 62,240  

$ ( 40,042 )  

5,254,081  

$ ( 84,770 )  

Repurchase of common stock

Dividends on common stock

( 1,440 )  

Share-based compensation

Balance, June 27, 2021

9,369,015  

$ 62,269  

$ ( 35,719 )  

5,254,081  

$ ( 84,770 )  

Balance, September 25, 2022

Treasury Stock, at Cost

Stockholders’

Balance, March 28, 2021

Shares issued in connection with share-based compensation plans

Withholding tax on net share settlement of share-based compensation plans

Dividends on common stock

Share-based compensation

Balance, September 26, 2021

The accompanying notes are an integral part of these consolidated financial statements.

3 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

Thirteen weeks ended June 26, 2022 and June 27, 2021

(in thousands, except per share amounts)

June 26, 2022

June 27, 2021

Twenty-six weeks ended September 25, 2022 and September 26, 2021

(in thousands)

September 25,

September 26,

Cash flows from operating activities:

$ 7,137  

$ 5,763  

Adjustments to reconcile net income to net cash provided by operating activities

Depreciation and amortization

Gain on disposal of property and equipment

Amortization of debt issuance costs

3 unchanged sentences

Other non-cash items

( 62 )  

Changes in operating assets and liabilities:

Accounts and other receivables, net

( 7,558 )  

( 367 )  

Prepaid expenses and other current assets

1 unchanged sentence

Deferred franchise fees

( 134 )  

Other liabilities

1 unchanged sentence

Cash flows from investing activities:

Insurance proceeds for property and equipment

Purchase of property and equipment

( 244 )  

Net cash used in investing activities

( 244 )  

Cash flows from financing activities:

Dividends paid to stockholders

( 1,852 )  

Payments of withholding tax on net share settlement of share-based compensation plans

Repurchase of treasury stock

( 1,070 )  

Net cash used in financing activities

( 2,922 )  

Net decrease in cash and cash equivalents

( 2,395 )  

Net increase in cash and cash equivalents

Cash and cash equivalents, beginning of period

50,063  

81,064  

Cash and cash equivalents, end of period

$ 47,668  

$ 79,526  

Cash paid during the period for:

$ 3,644  

$ 4,969  

Noncash financing activity:

Non-cash financing activity:

Dividends declared per share

See Note R for information on Supplemental Cash Flow Information.

The accompanying notes are an integral part of these consolidated financial statements.

2 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 26, 2022

September 25, 2022

NOTE A - BASIS OF PRESENTATION

4 unchanged sentences

“us”

or “our”) as of and for the thirteen week periods ended June 26, 2022 and June 27, 2021 have been prepared in accordance with accounting principles generally accepted in the United States of America.

or “our”) as of and for the thirteen and twenty-six week periods ended September 25, 2022 and September 26, 2021 have been prepared in accordance with accounting principles generally accepted in the United States of America.

The unaudited financial statements include all adjustments (consisting of normal recurring adjustments) which, in the opinion of management, are necessary for a fair presentation of financial condition, results of operations and cash flows for the periods presented.

However, our results of operations are seasonal in nature, and the results of any interim period are not necessarily indicative of results for any other interim period or the full fiscal year.

Certain information and footnote disclosures normally included in financial statements in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to the requirements of the U.S.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to the requirements of the U.S.

Securities and Exchange Commission (“SEC”).

Management believes that the disclosures included in the accompanying consolidated interim financial statements and footnotes are adequate to make the information not misleading, but should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in Nathan’s Annual Report on Form 10 -K for the fiscal year ended March 27, 2022 as filed with the SEC on June 10, 2022.

Our significant interim accounting policies include the recognition of advertising fund expense in proportion to advertising funds revenue.

Our significant interim accounting policies include the recognition of advertising fund expense in proportion to advertising funds revenue, and the recognition of income taxes using an estimated annual effective tax rate.

A summary of the Company’s significant accounting policies is identified in Note B of the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10 -K for the fiscal year ended March 27, 2022.

2 unchanged sentences

The COVID- 19 pandemic has had and may continue to have a significant impact on our business and results of operations.

During fiscal 2022, we experienced pandemic related pressures, most notably within our Restaurant Operations and Branded Products Program segments.

During fiscal 2022, we experienced pandemic and inflationary pressures, most notably within our Restaurant Operations and Branded Products Program segments.

We experienced macroeconomic impacts arising from the long-term duration of the pandemic, including rising labor costs, increasing commodity prices, higher packaging costs and fuel prices, which contributed to a decline in consumer confidence and spending.

We expect this trend to continue for the remainder of fiscal 2023.

Our average cost of hot dogs for the thirteen week period ended June 26, 2022 was approximately 21 % higher than during the thirteen week period ended June 27, 2021.

Our average cost of hot dogs for the twenty-six week period ended September 25, 2022 was approximately 8 % higher than during the twenty-six week period ended September 26, 2021.

The Company’s franchisees and Branded Menu Program operators also have experienced some disruptions and challenges as a result of the pandemic including workforce absences, as well as changes in the availability and cost of labor, including higher wages and overtime costs.

18 unchanged sentences

NOTE C –

The Company’s disaggregated revenues for the thirteen weeks ended June 26, 2022 and June 27, 2021 are as follows (in thousands):

The Company’s disaggregated revenues for the thirteen and twenty-six weeks ended September 25, 2022 and September 26, 2021 are as follows (in thousands):

Thirteen weeks ended  

June 26, 2022

June 27, 2021

Twenty-six weeks ended  

September 25,

September 26,

September 25,

September 26,

Branded Products

1 unchanged sentence

$ 19,063  

$ 45,201  

$ 35,059  

Company-owned restaurants

1 unchanged sentence

23,500  

54,195  

42,825  

License royalties

1 unchanged sentence

18,340  

Franchise royalties

Franchise fees

4 unchanged sentences

$ 32,878  

$ 77,217  

$ 64,197  

The following table disaggregates revenues by primary geographical market (in thousands):

Thirteen weeks ended  

June 26, 2022

June 27, 2021

Thirteen weeks ended

Twenty-six weeks ended

September 25,

September 26,

September 25,

September 26,

United States

1 unchanged sentence

$ 31,878  

$ 74,012  

$ 62,479  

International

2 unchanged sentences

$ 32,878  

$ 77,217  

$ 64,197  

Contract balances

The following table provides information about receivables and contract liabilities (deferred franchise fees) from contracts with customers (in thousands):

June 26, 2022

March 27, 2022

The following table provides information about contract receivables and liabilities (deferred franchise fees) from contracts with customers (in thousands):

September 25,

Receivables, which are included in “Accounts and other receivables, net”

4 unchanged sentences

Deferred franchise fees of $ 352 and $ 1,486  

as of June 26, 2022 and $ 349 and $ 1,748 as of March 27, 2022 are included in Deferred franchise fees – current and long term, respectively.

as of September 25, 2022 and $ 349 and $ 1,748 as of March 27, 2022 are included in Deferred franchise fees – current and long term, respectively.

Significant changes in deferred franchise fees are as follows (in thousands):

Thirteen weeks ended

June 26, 2022

June 27, 2021

Twenty-six weeks ended

September 25,

September 26,

Deferred franchise fees at beginning of period

$ 2,097  

$ 1,773  

New deferrals due to cash received and other

9 unchanged sentences

Represents franchise fees expected to be recognized for the remainder of the 2023 fiscal year, which includes international development fees expected to be recognized over the duration of one year or less.

Amount does not include $ 192 of franchise fee revenue recognized for the thirteen weeks ended June 26, 2022.

Amount does not include $ 336 of franchise fee revenue recognized for the twenty-six weeks ended September 25, 2022.

We have applied the optional exemption, as provided for under ASC Topic 606, Revenues from Contracts with Customers , which allows us to not disclose the transaction price allocated to unsatisfied performance obligations when the transaction price is a sales-based royalty.

NOTE D –

3 unchanged sentences

Dilutive common shares used in the computation of diluted income per common share result from the assumed exercise of stock options and warrants, as determined using the treasury stock method.

The following chart provides a reconciliation of information used in calculating the per-share amounts for the thirteen week periods ended June 26, 2022 and June 27, 2021, respectively.

The following chart provides a reconciliation of information used in calculating the per-share amounts for the thirteen and twenty-six week periods ended September 25, 2022 and September 26, 2021, respectively.

Thirteen weeks

5 unchanged sentences

$ 3,545  

Effect of dilutive employee stock options

$ 1.46  

$ 0.86  

Effect of dilutive employee stock options

Diluted calculation

1 unchanged sentence

$ 3,545  

Options to purchase 20,000 shares of common stock in the thirteen week period ended June 26, 2022 were not included in the computation of diluted EPS because the exercise price exceeded the average market price of common shares during the period.

Options to purchase 10,000 shares of common stock in the thirteen week period ended June 27, 2021 were not included in the computation of diluted EPS because the exercise price exceeded the average market price of common shares during the period.

$ 1.46  

$ 0.86  

Twenty-six weeks

Number of Shares

(in thousands)

Basic calculation

$ 13,095  

$ 9,308  

$ 3.20  

$ 2.26  

Effect of dilutive employee stock options

Diluted calculation

$ 13,095  

$ 9,308  

$ 3.20  

$ 2.26  

Options to purchase 20,000 shares of common stock in the thirteen and twenty-six week periods ended September 25, 2022 and September 26, 2021 were not included in the computation of diluted EPS because the exercise price exceeded the average market price of common shares during the period.

NOTE E –

1 unchanged sentence

The Company considers all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents.

The Company’s cash and cash equivalents principally consist of cash in bank and money market accounts.

The Company did not have any cash equivalents at June 26, 2022 and March 27, 2022.

At June 26, 2022 and March 27, 2022, substantially all of the Company’s cash balances are in excess of Federal government insurance limits.

The Company did not have any cash equivalents at September 25, 2022 and March 27, 2022.

The Company’s cash balances principally consist of cash in bank and money market accounts.

At September 25, 2022 and March 27, 2022, substantially all of the Company’s cash balances are in excess of Federal government insurance limits.

The Company has not experienced any losses in such accounts.

6 unchanged sentences

The three levels are defined as follows:

Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for an identical asset or liability in an active market

Level 2 - inputs to the valuation methodology include quoted prices for a similar asset or liability in an active market or model-derived valuations in which all significant inputs are observable for substantially the full term of the asset or liability

Level 3 - inputs to the valuation methodology are unobservable and significant to the fair value measurement of the asset or liability

The face value and fair value of long-term debt as of June 26, 2022 and March 27, 2022 were as follows (in thousands):

June 26, 2022

●    Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for an identical asset or liability in an active market

●    Level 2 - inputs to the valuation methodology include quoted prices for a similar asset or liability in an active market or model-derived valuations in which all significant inputs are observable for substantially the full term of the asset or liability

●    Level 3 - inputs to the valuation methodology are unobservable and significant to the fair value measurement of the asset or liability

The face value and fair value of long-term debt as of September 25, 2022 and March 27, 2022 were as follows (in thousands):

September 25, 2022

March 27, 2022

9 unchanged sentences

that is, the assets and liabilities are not measured at fair value on an ongoing basis, but are subject to fair value adjustments in certain circumstances, such as when evidence of impairment exists.

At June 26, 2022, no fair value adjustment or material fair value measurements were required for non-financial assets or liabilities.

At September 25, 2022, no fair value adjustment or material fair value measurements were required for non-financial assets or liabilities.

NOTE G –

1 unchanged sentence

Accounts and other receivables, net, consist of the following (in thousands):

September 25,

Branded product sales

8 unchanged sentences

$ 13,374  

Accounts receivable are due within 30 days and are stated at amounts due from franchisees, including virtual kitchens, retail licensees and Branded Product Program customers, net of an allowance for doubtful accounts.

Accounts receivable are generally due within 30 days and are stated at amounts due from franchisees, including virtual kitchens, retail licensees and Branded Product Program customers, net of an allowance for doubtful accounts.

Accounts that are outstanding longer than the contractual payment terms are generally considered past due.

3 unchanged sentences

After the Company has used reasonable collection efforts, it writes off accounts receivable through a charge to the allowance for doubtful accounts.

Changes in the Company’s allowance for doubtful accounts for the thirteen week period ended June 26, 2022 and the fiscal year ended March 27, 2022 are as follows (in thousands):

Changes in the Company’s allowance for doubtful accounts for the twenty-six week period ended September 25, 2022 and the fiscal year ended March 27, 2022 are as follows (in thousands):

September 25,

Beginning balance

1 unchanged sentence

Write offs and other

( 84 )  

Ending balance

2 unchanged sentences

Prepaid expenses and other current assets consist of the following (in thousands):

September 25,

Real estate taxes

1 unchanged sentence

$ 1,441  

NOTE I - INTANGIBLE ASSET

The Company’s definite-lived intangible asset consists of trademarks, tradenames and other intellectual property in connection with its Arthur Treacher’s co-branding agreements.

Based upon review of the current Arthur Treacher’s co-branding agreements, the Company determined that the remaining useful lives of these agreements is nine years, and the intangible asset is subject to annual amortization.

The Company’s definite-lived intangible asset consists of trademarks, and the trade name and other intellectual property in connection with its Arthur Treacher’s co-branding agreements.

Based upon review of the current Arthur Treacher’s co-branding agreements, the Company determined that the remaining useful lives of these agreements is six years concluding in fiscal year 2028, and the intangible asset is subject to annual amortization.

The Company performs an annual impairment test, or more frequently if events or changes in circumstances indicate that the intangible asset may be impaired.

2 unchanged sentences

Should the estimates and assumptions prove to be incorrect, the Company may be required to record an impairment charge in future periods and such impairment could be material.

There have been no significant events or changes in circumstances during the thirteen weeks ended June 26, 2022 that would indicate that the carrying amount of the Company’s intangible asset may be impaired as of June 26, 2022.

There have been no significant events or changes in circumstances during the thirteen and twenty-six week periods ended September 25, 2022 that would indicate that the carrying amount of the Company’s intangible asset may be impaired as of September 25, 2022.

NOTE J - LONG LIVED ASSETS

8 unchanged sentences

Should the estimates and assumptions prove to be incorrect, the Company may be required to record impairment charges in future periods and such impairments could be material.

There have been no significant events or changes in circumstances during the thirteen weeks ended June 26, 2022 that would indicate that the carrying amount of the Company’s long-lived assets may be impaired as of June 26, 2022.

There have been no significant events or changes in circumstances during the thirteen and twenty-six week periods ended September 25, 2022 that would indicate that the carrying amount of the Company’s long-lived assets may be impaired as of September 25, 2022.

NOTE K –

1 unchanged sentence

Accrued expenses and other current liabilities consist of the following (in thousands):         

September 25,

Payroll and other benefits

12 unchanged sentences

NOTE L –

The income tax provisions for the thirteen week periods ended June 26, 2022 and June 27, 2021 reflect effective tax rates of 27.8 % and 28.9 %, respectively.

The effective tax rates are higher than the statutory rates primarily due to state and local taxes.

The amount of unrecognized tax benefits included in Other Liabilities at June 26, 2022 and March 27, 2022 was $ 418 and $ 422 , respectively, all of which would impact the Company’s effective rate, if recognized.

As of June 26, 2022 and March 27, 2022, the Company had approximately $ 289 and $ 271 , respectively, accrued for the payment of interest and penalties in connection with unrecognized tax benefits.

The effective income tax rates for the thirteen weeks ended September 25, 2022 and September 26, 2021 were 26.3 % and 26.5 %, respectively.

The effective income tax rate for the thirteen weeks ended September 25, 2022 reflected $ 2,127 of income tax expense recorded on $ 8,085 of pre-tax income.

The effective income tax rate for the thirteen weeks ended September 26, 2021 reflected $ 1,276 of income tax expense recorded on $ 4,821 of pre-tax income.

The effective income tax rates for the twenty-six weeks ended September 25, 2022 and September 26, 2021 were 27.1 % and 28.0 %, respectively.

The effective income tax rate for the twenty-six weeks ended September 25, 2022 reflected $ 4,870 of income tax expense recorded on $ 17,965 of pre-tax income.

The effective income tax rate for the twenty-six weeks ended September 26, 2021 reflected $ 3,617 of income tax expense recorded on $ 12,925 of pre-tax income.

The effective income tax rates for the thirteen and twenty-six weeks ended September 25, 2022 and September 26, 2021 were higher than the United States statutory income tax rate primarily due to state and local taxes.

The amount of unrecognized tax benefits included in Other Liabilities at September 25, 2022 and March 27, 2022 was $ 430 and $ 422 , respectively, all of which would impact the Company’s effective tax rate, if recognized.

As of September 25, 2022 and March 27, 2022, the Company had approximately $ 305 and $ 271 , respectively, accrued for the payment of interest and penalties in connection with unrecognized tax benefits.

NOTE M –

14 unchanged sentences

Operating segment information is as follows (in thousands):

Thirteen weeks ended

June 26, 2022

June 27, 2021

Thirteen weeks ended  

Twenty-six weeks ended  

September 25,

September 26,

September 25,

September 26,

Branded Product Program

1 unchanged sentence

$ 19,063  

$ 45,201  

$ 35,059  

Product licensing

2 unchanged sentences

Restaurant operations

11,286  

Corporate (1)

2 unchanged sentences

$ 32,878  

$ 77,217  

$ 64,197  

Income from operations

2 unchanged sentences

$ 1,161  

$ 4,552  

$ 3,415  

Product licensing

3 unchanged sentences

( 2,414 )  

( 2,028 )  

( 4,611 )  

Income from operations

1 unchanged sentence

$ 7,439  

$ 21,694  

$ 18,141  

Interest expense

( 1,943 )  

( 2,651 )  

( 3,887 )  

Interest income

3 unchanged sentences

$ 4,821  

$ 17,965  

$ 12,925  

Represents advertising fund revenue

1 unchanged sentence

SHARE-BASED COMPENSATION

Total share-based compensation during the thirteen week periods ended June 26, 2022 and June 27, 2021 was $ 8 and $ 29 , respectively.

Total share-based compensation during the thirteen and twenty-six week periods ended September 25, 2022 and September 26, 2021 was $ 8 and $ 29 , and $ 16 and $ 58 , respectively.

Total share-based compensation is included in general and administrative expenses in our accompanying Consolidated Statements of Earnings.

As of June 26, 2022, there was $ 106 unamortized compensation expense related to share-based incentive awards.

We expect to recognize this expense over approximately nineteen months, which represents the weighted average remaining requisite service periods for such awards.

As of September 25, 2022, there was $ 98 of unamortized compensation expense related to share-based incentive awards.

We expect to recognize this expense over approximately seventeen months, which represents the weighted average remaining requisite service periods for such awards.

The Company recognizes compensation cost for unvested stock-based incentive awards on a straight-line basis over the requisite service period.

Compensation cost charged to expense under all stock-based incentive awards is as follows (in thousands):

Thirteen weeks ended  

June 26, 2022

June 27, 2021

Twenty-six weeks ended  

September 25,

September 26,

September 25,

September 26,

Stock options

2 unchanged sentences

Stock options:

There were no new share-based awards granted during the thirteen week period ended June 26, 2022.

Transactions with respect to stock options for the thirteen weeks ended June 26, 2022 are as follows:

There were no new share-based awards granted during the twenty-six week period ended September 25, 2022.

Transactions with respect to stock options for the twenty-six weeks ended September 25, 2022 are as follows :

Contractual Life

3 unchanged sentences

$ 79.20  

Options outstanding at June 26, 2022

Options outstanding at September 25, 2022

20,000  

$ 79.20  

Options exercisable at June 26, 2022

Options exercisable at September 25, 2022

12,500  

2 unchanged sentences

STOCKHOLDERS’

Effective June 10, 2022, the Company's Board of Directors (the "Board") declared its first quarterly cash dividend of $ 0.45 per share for fiscal 2023, which was paid on June 24, 2022 to stockholders of record as of the close of business on June 20, 2022.

Effective August 5, 2022, the Board declared its second quarterly cash dividend of $ 0.45 per share for fiscal 2023 payable on September 2, 2022 to stockholders of record as of the close of business on August 22, 2022.

Effective June 10, 2022, the Company’s Board of Directors (the “Board”) declared its first quarterly cash dividend of $ 0.45 per share for fiscal 2023, which was paid on June 24, 2022 to stockholders of record as of the close of business on June 20, 2022.

Effective August 5, 2022, the Board declared its second quarterly cash dividend of $ 0.45 per share for fiscal 2023, which was paid on September 2, 2022 to stockholders of record as of the close of business on August 22, 2022.

Effective November 3, 2022, the Board declared its third quarterly cash dividend of $ 0.45 per share for fiscal 2023 payable on December 2, 2022 to stockholders of record as of the close of business on November 21, 2022.

Our ability to pay future dividends is limited by the terms of the Indenture with U.S.

Bank National Association, as trustee and collateral trustee.

In addition to the terms of the Indenture, the declaration and payment of any cash dividends in the future are subject to final determination of the Board and will be dependent upon our earnings and financial requirements.

In addition to the terms of the Indenture, the declaration and payment of any cash dividends in the future is subject to final determination of the Board and will be dependent upon our earnings and financial requirements.

Stock Repurchase Programs

In 2016, the Board authorized increases to the sixth stock repurchase plan for the purchase of up to 1,200,000 shares of its common stock on behalf of the Company.

As of June 26, 2022, Nathan’s had repurchased 1,086,820 shares at a cost of $ 38,178 under the sixth stock repurchase plan.

At June 26, 2022 there were 113,180 shares remaining to be repurchased pursuant to the sixth stock repurchase plan.

As of September 25, 2022, Nathan’s had repurchased 1,101,884 shares at a cost of $ 39,000 under the sixth stock repurchase plan.

At September 25, 2022 there were 98,116 shares remaining to be repurchased pursuant to the sixth stock repurchase plan.

The plan does not have a set expiration date.

1 unchanged sentence

There is no set time limit on the repurchases.

On June 14, 2022, the Board approved a 10b5 - 1 Plan (the “10b5 - 1 Plan”) which will expire on the earlier of (a) September 13, 2022 or (b) the earlier of when the aggregate purchases under the 10b5 - 1 Plan equals 50,000 shares unless terminated earlier by the Board.

During the thirteen week period ended June 26, 2022, the Company repurchased in open market transactions 20,370 shares of the Company’s common stock at an average share price of $ 52.49 for a total cost of $ 1,070 under the 10b5 - 1 Plan.

Through July 29, 2022, the Company repurchased an additional 13,896 shares of the Company’s common stock at an average share price of $ 54.51 for a total cost of $ 758 .

At July 29, 2022, 15,734 shares were available to repurchase under the 10b5 - 1 Plan.

On June 14, 2022, the Board approved a 10b5 - 1 Plan (the “10b5 - 1 Plan”) which expired on September 13, 2022.

During the twenty-six week period ended September 25, 2022, the Company repurchased in open market transactions 35,434 shares of the Company’s common stock at an average share price of $ 53.39 for a total cost of $ 1,892 under the 10b5 - 1 Plan.

NOTE P –

1 unchanged sentence

Long-term debt consists of the following (in thousands):

September 25,

6.625 % Senior Secured Notes due 2025

9 unchanged sentences

Company as lessee

The components of the net lease cost for the thirteen week periods ended June 26, 2022 and June 27, 2021 were as follows (in thousands):

The components of the net lease cost for the thirteen and twenty-six week periods ended September 25, 2022 and September 26, 2021 were as follows (in thousands):

Thirteen weeks ended

June 26, 2022

June 27, 2021

Statement of Earnings

Twenty-six weeks ended

September 25,

September 26,

September 25,

September 26,

Operating lease cost

2 unchanged sentences

( 20 )  

Total net lease cost (a)

Includes $ 607 , net and $ 700 , net for the thirteen week periods ended June 26, 2022 and June 27, 2021, respectively, recorded to “Restaurant operating expenses” for leases for Company-owned restaurants;

Includes $ 189 and $ 174 for the thirteen week periods ended June 26, 2022 and June 27, 2021, respectively, recorded to “General and administrative expenses”

for leases for corporate offices and equipment;

Also includes $ 22 and $ 16 for the thirteen week periods ended June 26, 2022 and June 27, 2021, respectively, recorded to “Other income, net”

for leased properties that are leased to franchisees.

( 42 )  

Total net lease cost

$ 1,644  

$ 1,790  

The following table presents the components of the net lease cost on the Consolidated Statements of Earnings for the thirteen and twenty-six week periods ended September 25, 2022 and September 26, 2021 ( in thousands):

Thirteen weeks ended

Twenty-six weeks ended

September 25,

September 26,

September 25,

September 26,

Restaurant operating expenses

$ 1,319  

$ 1,470  

General and administrative expenses

Other income, net

( 20 )  

( 42 )  

Total net lease cost

$ 1,644  

$ 1,790  

Cash paid for amounts included in the measurement of lease liabilities were as follows (in thousands):

Thirteen weeks ended

June 26, 2022

June 27, 2021

Twenty-six weeks ended

September 25,

September 26,

September 25,

September 26,

Operating cash flows from operating leases

The weighted average remaining lease term and weighted-average discount rate for operating leases as of June 

26, 2022  were as follows:

The weighted average remaining lease term and weighted-average discount rate for operating leases as of September 25, 2022 

were as follows:

Weighted average remaining lease term (years):

Operating leases

Weighted average discount rate:

Operating leases

Future lease commitments to be paid and received by the Company as of June 26, 2022 were as follows (in thousands):

Future lease commitments to be paid and received by the Company as of September 25, 2022 were as follows (in thousands):

Operating Leases

$ 1,305  

$ 1,119  

Total lease commitments

7 unchanged sentences

Amount does not include $ 884  

of lease commitments paid and received by the Company for the thirteen week period ended June 26, 2022.

(b) The present value of minimum operating lease payments of $ 1,849 and $ 6,122 are included in “Current portion of operating lease liabilities” and “Long-term operating lease liabilities,” respectively on the Consolidated Balance Sheet.

of lease commitments paid and received by the Company for the twenty-six week period ended September 25, 2022.

The present value of minimum operating lease payments of $ 1,849 and $ 5,752  

are included in “Current portion of operating lease liabilities” and “Long-term operating lease liabilities,” respectively on the Consolidated Balance Sheet.

Company as lessor

The components of lease income for the thirteen week periods ended June 26, 2022 and June 27, 2021 were as follows (in thousands):

The components of net lease income for the thirteen and twenty-six week periods ended September 25, 2022 and September 26, 2021 were as follows (in thousands):

Thirteen weeks ended

June 26, 2022

June 27, 2021

Twenty-six weeks ended

September 25,

September 26,

September 25,

September 26,

Operating lease income, net

NOTE R –

SUPPLEMENTAL CASH FLOW INFORMATION

Noncash Investing Transactions

Omitted from the Company’s Consolidated Statement of Cash Flows for the thirteen weeks ended June 26, 2022 were capital expenditures related to property and equipment of $ 78 that were accrued and not yet paid as of the end of the period.

NOTE S - COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

Contingencies

3 unchanged sentences

An unfavorable ruling could include money damages and, in such event, could result in a material adverse impact on the Company’s results of operations for the period in which the ruling occurs.

NOTE T –

NOTE S –

SUBSEQUENT EVENTS

The Company evaluated subsequent events through the date the Consolidated Financial Statements were issued and filed with the U.S.

Securities and Exchange Commission.

There were no subsequent events that required recognition or disclosure.

The Company evaluated subsequent events through the date the Consolidated Financial Statements were issued and filed with the SEC.

There were no subsequent events that require recognition or disclosure.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements