What changed in this filing

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Item 1. Financial Statements

2023-02-02 compared with 2022-11-03 · 112 added, 278 removed, 389 unchanged (50% of the section changed)

4 unchanged sentences

CONSOLIDATED BALANCE SHEETS

September 25, 2022 and March 27, 2022

December 25, 2022 and March 27, 2022

(in thousands, except share and per share amounts)

September 25, 2022

December 25, 2022

March 27, 2022

ASSETS  

CURRENT ASSETS

Cash and cash equivalents (Note E)

$ 53,857  

$ 50,063  

Accounts and other receivables, net (Note G)

16,171  

13,374  

Prepaid expenses and other current assets (Note H)

Total current assets

71,619  

65,400  

Property and equipment, net of accumulated depreciation of $ 10,824 and $ 10,344 , respectively

Operating lease assets (Note Q)

Intangible asset, net (Note I)

Intangible asset, net

Deferred income taxes

$ 83,973  

$ 78,516  

LIABILITIES AND STOCKHOLDERS’

1 unchanged sentence

Accounts payable

$ 4,945  

$ 6,381  

Accrued expenses and other current liabilities (Note K)

2 unchanged sentences

Total current liabilities

15,031  

16,412  

Long-term debt, net of unamortized debt issuance costs of $ 1,436 and $ 1,817 , respectively (Note P)

108,437  

108,183  

Operating lease liabilities (Note Q)

2 unchanged sentences

Total liabilities

131,430  

133,504  

COMMITMENTS AND CONTINGENCIES (Note R)

3 unchanged sentences

9,369,235 shares issued;

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

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

Additional paid-in capital

62,323  

62,307  

Accumulated deficit

( 23,212 )  

Stockholders’

equity before treasury stock

39,205  

29,782  

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

( 86,662 )  

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

Total stockholders’

( 47,457 )  

Total liabilities and stockholders’

$ 83,973  

$ 78,516  

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

3 unchanged sentences

CONSOLIDATED STATEMENTS OF EARNINGS

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

Thirteen and Thirty-nine weeks ended December 25, 2022 and December 26, 2021

(in thousands, except per share amounts)

Thirteen weeks ended

Twenty-six weeks ended

September 25,

September 26,

September 25,

September 26,

Thirty-nine weeks ended

License royalties

12 unchanged sentences

Interest income

Other income, net

Other (expense) income, net

Income before provision for income taxes

9 unchanged sentences

CONSOLIDATED STATEMENTS OF STOCKHOLDERS ’

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

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

(in thousands, except share amounts)

1 unchanged sentence

Stockholders’

Balance, June 26, 2022

Repurchase of common stock

Balance, September 25, 2022

Dividends on common stock

Share-based compensation

Balance, September 25, 2022

Balance, December 25, 2022

Treasury Stock, at Cost

Stockholders’

Balance, June 27, 2021

Shares issued in connection with share-based compensation plans

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

Balance, September 26, 2021

Dividends on common stock

Share-based compensation

Balance, September 26, 2021

Balance, December 26, 2021

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

3 unchanged sentences

CONSOLIDATED STATEMENTS OF STOCKHOLDERS ’

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

Thirty-nine weeks ended December 25, 2022 and December 26, 2021

(in thousands, except share amounts)

5 unchanged sentences

Share-based compensation

Balance, September 25, 2022

Balance, December 25, 2022

Treasury Stock, at Cost

5 unchanged sentences

Share-based compensation

Balance, September 26, 2021

Balance, December 26, 2021

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

3 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

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

Thirty-nine weeks ended December 25, 2022 and December 26, 2021

(in thousands)

September 25,

September 26,

Cash flows from operating activities:

1 unchanged sentence

Depreciation and amortization

Gain on disposal of property and equipment

Loss on disposal of property and equipment

Amortization of debt issuance costs

23 unchanged sentences

Cash paid during the period for:

Income taxes paid

Non-cash financing activity:

4 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 25, 2022

December 25, 2022

NOTE A - BASIS OF PRESENTATION

4 unchanged sentences

“us”

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.

or “our”) as of and for the thirteen and thirty-nine week periods ended December 25, 2022 and December 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.

11 unchanged sentences

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

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.

Our average cost of hot dogs for the thirty-nine week period ended December 25, 2022 was approximately 3 % higher than during the thirty-nine week period ended December 26, 2021.

Inflation has an impact on food, paper, utility, labor and benefits and other general and administrative expenses which can impact our results of operations.

In general, we have been able to offset cost increases resulting from inflation by increasing prices.

We may not be able to offset cost increases in the future.

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 and twenty-six weeks ended September 25, 2022 and September 26, 2021 are as follows (in thousands):

Thirteen weeks ended  

Twenty-six weeks ended  

September 25,

September 26,

September 25,

September 26,

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

Thirteen weeks ended

Thirty-nine weeks ended

Branded Products

$ 22,030  

$ 19,063  

$ 45,201  

$ 35,059  

Company-owned restaurants

27,301  

23,500  

54,195  

42,825  

License royalties

19,727  

18,340  

Franchise royalties

3 unchanged sentences

Total revenues

$ 37,497  

$ 32,878  

$ 77,217  

$ 64,197  

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

Thirteen weeks ended

Twenty-six weeks ended

September 25,

September 26,

September 25,

September 26,

Thirty-nine weeks ended

United States

$ 36,095  

$ 31,878  

$ 74,012  

$ 62,479  

International

Total revenues

$ 37,497  

$ 32,878  

$ 77,217  

$ 64,197  

Contract balances

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”

Deferred franchise fees (b)

$ 1,838  

$ 2,097  

Includes receivables related to “franchise fees and royalties”

Deferred franchise fees of $ 352 and $ 1,486  

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.

Deferred franchise fees of $ 343 and $ 1,378 as of December 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):

Twenty-six weeks ended

September 25,

September 26,

Thirty-nine weeks ended

Deferred franchise fees at beginning of period

1 unchanged sentence

Revenue recognized during the period

( 336 )  

Deferred franchise fees at end of period

$ 1,838  

$ 2,119  

Anticipated future recognition of deferred franchise fees

1 unchanged sentence

Estimate for fiscal year

$ 1,838  

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 $ 336 of franchise fee revenue recognized for the twenty-six weeks ended September 25, 2022.

Amount does not include $ 483 of franchise fee revenue recognized for the thirty-nine weeks ended December 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.

4 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 and twenty-six week periods ended September 25, 2022 and September 26, 2021, respectively.

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

Thirteen weeks

3 unchanged sentences

Basic calculation

$ 5,958  

$ 3,545  

$ 1.46  

$ 0.86  

Effect of dilutive employee stock options

Diluted calculation

$ 5,958  

$ 3,545  

$ 1.46  

$ 0.86  

Twenty-six weeks

Thirty-nine weeks

Number of Shares

2 unchanged sentences

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.

Options to purchase 20,000 shares of common stock in the thirteen and thirty-nine week periods ended December 25, 2022 and December 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 did not have any cash equivalents at September 25, 2022 and March 27, 2022.

The Company did not have any cash equivalents at December 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.

At December 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 September 25, 2022 and March 27, 2022 were as follows (in thousands):

September 25, 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 December 25, 2022 and March 27, 2022 were as follows (in thousands):

December 25, 2022

March 27, 2022

Long-term debt

$ 110,000  

$ 109,520  

$ 110,000  

$ 111,346  

The Company estimates the fair value of its long-term debt based upon review of observable pricing in secondary markets as of the last trading day of the fiscal period.

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

At December 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

$ 12,007  

$ 9,318  

Franchise and license royalties

16,425  

13,632  

allowance for doubtful accounts

Accounts and other receivables, net

$ 16,171  

$ 13,374  

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.

4 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 twenty-six week period ended September 25, 2022 and the fiscal year ended March 27, 2022 are as follows (in thousands):

September 25,

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

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

Total prepaid expenses and other current assets

$ 1,441  

NOTE I - INTANGIBLE ASSET

NOTE I –

INTANGIBLE ASSET

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.

4 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 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.

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

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

$ 2,077  

$ 3,109  

Accrued rebates

6 unchanged sentences

Total accrued expenses and other current liabilities

$ 7,885  

$ 7,833  

NOTE L –

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.

The effective income tax rates for the thirteen weeks ended December 25, 2022 and December 26, 2021 were 27.3 % and 28.8 %, respectively.

The effective income tax rate for the thirteen weeks ended December 25, 2022 reflected $ 1,223 of income tax expense recorded on $ 4,486 of pre-tax income.

The effective income tax rate for the thirteen weeks ended December 26, 2021 reflected $ 860 of income tax expense recorded on $ 2,990 of pre-tax income.

The effective income tax rates for the thirty-nine weeks ended December 25, 2022 and December 26, 2021 were 27.1 % and 28.1 %, respectively.

The effective income tax rate for the thirty-nine weeks ended December 25, 2022 reflected $ 6,093 of income tax expense recorded on $ 22,451 of pre-tax income.

The effective income tax rate for the thirty-nine weeks ended December 26, 2021 reflected $ 4,477 of income tax expense recorded on $ 15,915 of pre-tax income.

The effective income tax rates for the thirteen and thirty-nine weeks ended December 25, 2022 and December 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 December 25, 2022 and March 27, 2022 was $ 437 and $ 403 , respectively, all of which would impact the Company’s effective tax rate, if recognized.

As of December 25, 2022 and March 27, 2022, the Company had approximately $ 315 and $ 271 , respectively, accrued for the payment of interest and penalties in connection with unrecognized tax benefits.

On August 16, 2022, the United States enacted the Inflation Reduction Act.

Among other provisions, this new law imposes a 1% excise tax on stock buybacks made after December 31, 2022, with certain exceptions including stock repurchases of less than $1,000 within a tax year.

We are not expecting this new law to have a material effect on our consolidated financial statements.

NOTE M –

12 unchanged sentences

Income from operations attributable to Corporate consists principally of administrative expenses not allocated to the operating segments such as executive management, finance, information technology, legal, insurance, corporate office costs, corporate incentive compensation and compliance costs and expenses of the Advertising Fund.

Interest expense, interest income, and other income, net, 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.

Interest expense, interest income, and other (expense) income, net, 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.

Operating segment information is as follows (in thousands):

Thirteen weeks ended  

Twenty-six weeks ended  

September 25,

September 26,

September 25,

September 26,

Thirteen weeks ended

Thirty-nine weeks ended

Branded Product Program

$ 22,030  

$ 19,063  

$ 45,201  

$ 35,059  

Product licensing

19,727  

18,340  

Restaurant operations

11,286  

Corporate (1)

Total revenues

$ 37,497  

$ 32,878  

$ 77,217  

$ 64,197  

Income from operations

Branded Product Program

$ 2,485  

$ 1,161  

$ 4,552  

$ 3,415  

Product licensing

19,636  

18,249  

Restaurant operations

( 2,414 )  

( 2,028 )  

( 4,611 )  

Income from operations

$ 9,914  

$ 7,439  

$ 21,694  

$ 18,141  

Interest expense

( 1,943 )  

( 2,651 )  

( 3,887 )  

Interest income

Other income, net

Other (expense) income, net

Income before provision for income taxes

$ 8,085  

$ 4,821  

$ 17,965  

$ 12,925  

Represents advertising fund revenue.

1 unchanged sentence

SHARE-BASED COMPENSATION

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 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.

Total share-based compensation during each of the thirteen and thirty-nine week periods ended December 25, 2022 and December 26, 2021 was $ 65 and $ 8 , and $ 81 and $ 66 , respectively.

As of December 25, 2022, there was $ 3,409 of unamortized compensation expense related to share-based incentive awards.

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

During the thirty-nine week period ended December 25, 2022, the Company granted 50,000 restricted stock units at a fair value of $ 67.59 per unit representing the closing price on the date of grant, which will be fully vested five years from the date of grant.

The restricted stock units vest ratably over a five-year period as follows:

10,000 restricted stock units on December 8, 2023;

10,000 restricted stock units on December 8, 2024;

10,000 restricted stock units on December 8, 2025;

10,000 restricted stock units on December 8, 2026;

and 10,000 restricted stock units on December 8, 2027.

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  

Twenty-six weeks ended  

September 25,

September 26,

September 25,

September 26,

Thirteen weeks ended

Thirty-nine weeks ended

Stock options

Restricted stock

Restricted stock units

Total compensation cost

Stock options:

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 :

There were no new share-based awards granted during the thirty-nine week period ended December 25, 2022.

Transactions with respect to stock options for the thirty-nine weeks ended December 25, 2022 are as follows:

Contractual Life

1 unchanged sentence

Options outstanding at March 27, 2022

20,000  

$ 79.20  

Options outstanding at September 25, 2022

20,000  

$ 79.20  

Options exercisable at September 25, 2022

12,500  

$ 85.62  

Options outstanding at December 25, 2022

Options exercisable at December 25, 2022

Restricted stock units:

Transactions with respect to restricted stock units for the thirty-nine weeks ended December 25, 2022 are as follows:

Unvested restricted stock units at March 27, 2022

Unvested restricted stock units at December 25, 2022

NOTE O–

2 unchanged sentences

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.

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

Effective February 2, 2023, the Board authorized the increase of its regular dividend from $0.45 to $0.50 per quarter and declared its fourth quarterly cash dividend of $ 0.50 per share payable on March 3, 2023 to stockholders of record as of the close of business on February 21, 2023.

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 is subject to final determination of the Board and will be dependent upon our earnings and financial requirements.

Stock Repurchase Programs

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.

Stock Repurchase Program

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 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.

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

At December 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.

2 unchanged sentences

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.

During the thirty-nine week period ended December 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

$ 110,000  

unamortized debt issuance costs

( 1,563 )  

Long-term debt, net

$ 108,437  

$ 108,183  

NOTE Q –

1 unchanged sentence

Company as lessee

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):

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

Thirteen weeks ended

Twenty-six weeks ended

September 25,

September 26,

September 25,

September 26,

Thirty-nine weeks ended

Operating lease cost

1 unchanged sentence

Sublease income, net

( 20 )  

( 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):

The following table presents the components of the net lease cost on the Consolidated Statement of Earnings for the thirteen and thirty-nine week periods ended December 25, 2022 and December 26, 2021 (in thousands):

Thirteen weeks ended

Twenty-six weeks ended

September 25,

September 26,

September 25,

September 26,

Thirty-nine weeks ended

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

Twenty-six weeks ended

September 25,

September 26,

September 25,

September 26,

Thirty-nine weeks ended

Operating cash flows from operating leases

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

were as follows:

The weighted average remaining lease term and weighted average discount rate for operating leases as of December 25, 2022 were as follows:

Weighted average remaining lease term (years):

Weighted average discount rate:

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

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

Operating Leases

Total lease commitments

$ 9,688  

$ 1,812  

$ 7,876  

Amount representing interest

Present value of lease liabilities (b)

$ 7,601  

Represents future lease commitments to be paid and received by the Company for the remainder of the 2023 fiscal year.

Amount does not include $ 1,216  

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

of lease commitments paid and received by the Company for the thirty-nine week period ended December 25, 2022.

The present value of minimum operating lease payments of $ 1,827 and $ 5,583  

1 unchanged sentence

Company as lessor

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):

The components of lease income for the thirteen and thirty-nine week periods ended December 25, 2022 and December 26, 2021 were as follows (in thousands):

Thirteen weeks ended

Twenty-six weeks ended

September 25,

September 26,

September 25,

September 26,

Thirty-nine weeks ended

Operating lease income, net

1 unchanged sentence

COMMITMENTS AND CONTINGENCIES

On December 8, 2022, the Company amended its employment agreement with its Executive Chairman of the Board, Howard M.

Under the amendment, the term of the employment agreement was extended from December 31, 2022 to December 31, 2027.

In addition, Mr.

Lorber received a grant of 50,000 restricted stock units subject to vesting as provided in a Restricted Stock Unit Award Agreement between Mr.

Lorber and the Company.

Contingencies

8 unchanged sentences

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