What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-02-06 compared with 2024-11-07 · 182 added, 166 removed, 355 unchanged (50% of the section changed)

2 unchanged sentences

and Subsidiaries

CONSOLIDATED BALANCE SHEETS

September 29, 2024 and March 31, 2024

CONDENSED CONSOLIDATED BALANCE SHEETS

December 29, 2024 and March 31, 2024

(in thousands, except share and per share amounts)

September 29,

CURRENT ASSETS

4 unchanged sentences

Property and equipment, net of accumulated depreciation of $ 12,283 and $ 11,687 , respectively

Operating lease assets (Note Q)

Operating lease right-of-use assets (Note Q)

Intangible asset, net (Note I)

2 unchanged sentences

CURRENT LIABILITIES

Current portion of long-term debt

Current portion of long-term debt (Note P)

Accounts payable

4 unchanged sentences

Long-term debt, net of unamortized debt issuance costs of $ 341 and $ 438 , respectively (Note P)

Operating lease liabilities (Note Q)

Long-term portion of operating lease liabilities (Note Q)

Other liabilities

5 unchanged sentences

30,000,000 shares authorized;

9,374,130 shares issued;

and 4,084,615 shares outstanding at September 29, 2024 and March 31, 2024

9,379,025 and 9,374,130 shares issued;

and 4,089,510 and 4,084,615 shares outstanding at December 29, 2024 and March 31, 2024, respectively

Additional paid-in capital

1 unchanged sentence

Stockholders’ equity before treasury stock

Treasury stock, at cost, 5,289,515 shares at September 29, 2024 and March 31, 2024

Treasury stock, at cost, 5,289,515 shares at December 29, 2024 and March 31, 2024, respectively

Total stockholders’ deficit

Total liabilities and stockholders’ deficit

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

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

Nathan ’ s Famous, Inc.

and Subsidiaries

CONSOLIDATED STATEMENTS OF EARNINGS

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(in thousands, except per share amounts)

Thirteen weeks ended

Twenty-six weeks ended

September 29, 2024

September 24, 2023

September 29, 2024

September 24, 2023

Thirty-nine weeks ended

December 29, 2024

December 24, 2023

December 29, 2024

December 24, 2023

Branded Products

21 unchanged sentences

Net income per share:

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

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

Nathan ’ s Famous, Inc.

and Subsidiaries

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS ’ DEFICIT

Thirteen weeks ended September 29, 2024 and September 24, 2023

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS ’ DEFICIT

Thirteen weeks ended December 29, 2024 and December 24, 2023

(in thousands, except share and per share amounts)

1 unchanged sentence

Stockholders’

Balance, June 30, 2024

Balance, September 29, 2024

Shares issued in connection with share-based compensation plans

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

Dividends on common stock ($ 0.50 per share)

Share-based compensation

Balance, September 29, 2024

Balance, December 29, 2024

Treasury Stock, at Cost

Stockholders’

Balance, June 25, 2023

Balance, September 24, 2023

Shares issued in connection with share-based compensation plans

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

Dividends on common stock ($ 0.50 per share)

Share-based compensation

Balance, September 24, 2023

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

Balance, December 24, 2023

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

Nathan ’ s Famous, Inc.

and Subsidiaries

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS ’ DEFICIT

Twenty-six weeks ended September 29, 2024 and September 24, 2023

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS ’ DEFICIT

Thirty-nine weeks ended December 29, 2024 and December 24, 2023

(in thousands, except share and per share amounts)

Retained Earnings

Treasury Stock, at Cost

1 unchanged sentence

Balance, March 31, 2024

Shares issued in connection with share-based compensation plans

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

Dividends on common stock ($ 1.50 per share)

Share-based compensation

Balance, September 29, 2024

Balance, December 29, 2024

Treasury Stock, at Cost

2 unchanged sentences

Cumulative effect of adoption of ASU 2016-13

Shares issued in connection with share-based compensation plans

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

Dividends on common stock ($ 1.50 per share)

Share-based compensation

Balance, September 24, 2023

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

Balance, December 24, 2023

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

Nathan ’ s Famous, Inc.

and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

Twenty-six weeks ended September 29, 2024 and September 24, 2023

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Thirty-nine weeks ended December 29, 2024 and December 24, 2023

(in thousands)

September 29,

September 24,

Cash flows from operating activities:

6 unchanged sentences

Deferred income taxes

Other non-cash items

Changes in operating assets and liabilities:

1 unchanged sentence

Prepaid expenses and other current assets

Operating lease assets and liabilities

Accounts payable, accrued expenses and other current liabilities

8 unchanged sentences

Repayment of Senior Secured Notes

Repayment of Credit Facility

Debt issuance costs

Dividends paid to stockholders

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

Net cash used in financing activities

Net increase in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents, beginning of period

1 unchanged sentence

Cash paid during the period for:

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

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

NATHAN'S FAMOUS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 29, 2024

(in thousands, except per share amounts)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

December 29, 2024

(in thousands, expect share and per share amounts)

NOTE A - BASIS OF PRESENTATION

The accompanying consolidated financial statements of Nathan's Famous, Inc.

and subsidiaries (collectively “Nathan’s,” the “Company,” “we,” “us” or “our”) as of and for the thirteen and twenty-six week periods ended September 29, 2024 and September 24, 2023 have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

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.

The accompanying condensed consolidated financial statements of Nathan's Famous, Inc.

and subsidiaries (collectively “Nathan’s,” the “Company,” “we,” “us” or “our”) as of and for the thirteen and thirty-nine week periods ended December 29, 2024 and December 24, 2023 have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

The unaudited condensed consolidated 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.

3 unchanged sentences

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 31, 2024 as filed with the SEC on June 12, 2024.

Certain prior period revenue amounts in the condensed consolidated statements of earnings have been reclassified to conform to the current period presentation.

These reclassifications had no effect on previously reported results of operations.

Management believes that the disclosures included in the accompanying condensed 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 31, 2024 as filed with the SEC on June 12, 2024.

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

5 unchanged sentences

The purpose of the guidance is to enable investors to better understand an entity’s overall performance and assess potential future cash flows.

The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning December 15, 2024.

For the Company, annual reporting requirements will be effective for our fiscal year 2025 beginning on April 1, 2024 and interim reporting requirements will be effective beginning with our fourth quarter of fiscal year 2025.

The guidance is effective for all public companies for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

Entities are required to adopt this guidance on a retrospective basis.

We are currently evaluating the impact that the new guidance will have on our consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, “ Income Taxes (Topic 740):

4 unchanged sentences

We are currently evaluating the impact that the new guidance will have on our consolidated financial statements.

The Company does not believe that any recently issued, but not yet effective accounting standards, when adopted, will have a material effect on the accompanying consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, “ Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses ”, which requires the disaggregation of certain expenses in the notes to the financial statements, to provide enhanced transparency into the expense captions presented on the face of the statement of earnings.

Additionally, in January 2025, the FASB issued ASU 2025-01, “ Income Statement Reporting Comprehensive Income Expense Disaggregation Disclosures (Subtopic 220-40):

Clarifying the Effective Date ”, which clarified the effective date for non-calendar year-end entities such as us.

The guidance is effective for the first annual reporting period beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027.

Early adoption is permitted.

The amendments in this Update should be applied either (1) prospectively to financial statements for reporting periods after the effective date of this Update or (2) retrospectively to any or all prior periods presented in the financial statements.

For the Company, annual reporting requirements will be effective for our fiscal year 2028 beginning on March 29, 2027 and interim reporting requirements will be effective beginning with our first quarter of fiscal year 2029.

The Company is currently evaluating the impact that the new guidance will have on our consolidated financial statements.

The Company does not believe that any recently issued, but not yet effective accounting standards, when adopted, will have a material effect on the accompanying condensed consolidated financial statements.

NOTE C – REVENUES

The Company’s disaggregated revenues for the thirteen and twenty-six weeks ended September 29, 2024 and September 24, 2023 are as follows (in thousands):

The Company’s disaggregated revenues for the thirteen and thirty-nine weeks ended December 29, 2024 and December 24, 2023 are as follows (in thousands):

Thirteen weeks ended

Twenty-six weeks ended

September 29,

September 24,

September 29,

September 24,

Thirty-nine weeks ended

December 29, 2024

December 24, 2023

December 29, 2024

December 24, 2023

Branded Products

7 unchanged sentences

Thirteen weeks ended

Twenty-six weeks ended

September 29, 2024

September 24, 2023

September 29, 2024

September 24, 2023

Thirty-nine weeks ended

December 29, 2024

December 24, 2023

December 29, 2024

December 24, 2023

United States

3 unchanged sentences

The following table provides information about contract liabilities from contracts with customers (in thousands):

September 29, 2024

December 29, 2024

March 31, 2024

2 unchanged sentences

“Accrued expenses and other current liabilities” (b)

Deferred franchise fees of $ 318 and $ 783 as of September 29, 2024 and $ 327 and $ 899 as of March 31, 2024 are included in Deferred franchise fees – current and long term, respectively.

Includes $ 100 of deferred license royalties and $ 500 of deferred advertising fund revenue as of September 29, 2024 and $ 875 of deferred license royalties and $ 500 of deferred advertising fund revenue as of March 31, 2024.

Deferred franchise fees of $ 312 and $ 714 as of December 29, 2024 and $ 327 and $ 899 as of March 31, 2024 are included in Deferred franchise fees – current and long term, respectively.

Includes $ 250 of deferred advertising fund revenue as of December 29, 2024 and $ 875 of deferred license royalties and $ 500 of deferred advertising fund revenue as of March 31, 2024.

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

Twenty-six weeks ended

September 29, 2024

September 24, 2023

Thirty-nine weeks ended

December 29, 2024

December 24, 2023

Deferred franchise fees at beginning of period

3 unchanged sentences

Significant changes in deferred revenues are as follows (in thousands):

Twenty-six weeks ended

September 29, 2024

September 24, 2023

Thirty-nine weeks ended

December 29, 2024

December 24, 2023

Deferred revenues at beginning of period

6 unchanged sentences

Represents franchise fees expected to be recognized for the remainder of the 2025 fiscal year, which includes international development fees expected to be recognized over the duration of one year or less.

Amount does not include $ 200 of franchise fee revenue recognized for the twenty-six weeks ended September 29, 2024.

Amount does not include $ 294 of franchise fee revenue recognized for the thirty-nine weeks ended December 29, 2024.

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.

2 unchanged sentences

Diluted net income per common share gives effect to all potentially dilutive common shares that were outstanding during the period.

Dilutive common shares used in the computation of diluted net income per common share result from the assumed exercise of stock options, 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 29, 2024 and September 24, 2023, respectively (in thousands, except per share amounts):

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

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 29, 2024 and December 24, 2023, respectively.

Thirteen weeks ended

Twenty-six weeks ended

September 29,

September 24,

September 29,

September 24,

Thirty-nine weeks ended

December 29, 2024

December 24, 2023

December 29, 2024

December 24, 2023

Common Stock:

6 unchanged sentences

The Company considers money market funds or short term investments purchased with an original maturity of three months or less to be cash equivalents.

Cash equivalents at September 29, 2024 were $ 18,000 .

Cash equivalents at December 29, 2024 were $ 16,000 .

The Company did not have any cash equivalents at March 31, 2024.

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

At September 29, 2024 and March 31, 2024, substantially all of the Company’s cash balances are in excess of Federal government insurance limits.

At December 29, 2024 and March 31, 2024, substantially all of the Company’s cash balances are in excess of insurance limits of the Federal Deposit Insurance Corporation, or the FDIC.

The Company has not experienced any losses in such accounts.

6 unchanged sentences

Level 3 - inputs to the valuation methodology are unobservable and significant to the fair value measurement of the asset or liability and reflect the Company’s own assumptions

The carrying amounts reported in the Company’s Consolidated Balance Sheets for cash and cash equivalents, accounts receivable and accounts payable approximate fair value due to the short-term nature of those items.

The carrying amount of our long-term debt (see NOTE P – LONG TERM DEBT to the unaudited consolidated financial statements in the Quarterly Report on Form 10-Q) also approximates fair value since such borrowings bear interest at variable market rates and is categorized as Level 2.

The carrying amounts reported in the Company’s Condensed Consolidated Balance Sheets for cash and cash equivalents, accounts receivable and accounts payable approximate fair value due to the short-term nature of those items.

The carrying amount of our long-term debt (see NOTE P – LONG TERM DEBT) also approximates fair value since such borrowings bear interest at variable market rates and is categorized as Level 2.

The face and fair value of the 6.625% Senior Secured Notes due 2025 (“2025 Notes”) as of March 31, 2024 was $ 60,000 and $ 59,903 , respectively, and was based upon review of observable pricing in secondary markets as of March 31, 2024.

2 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 29, 2024, no fair value adjustment or material fair value measurements were required for non-financial assets or liabilities.

At December 29, 2024, no fair value adjustment or material fair value measurements were required for non-financial assets or liabilities.

NOTE G – ACCOUNTS AND OTHER RECEIVABLES, NET

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

September 29,

Branded product sales

10 unchanged sentences

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

Changes in the Company’s allowance for credit losses for the twenty-six week period ended September 29, 2024 and the fiscal year ended March 31, 2024 are as follows (in thousands):

September 29,

Changes in the Company’s allowance for credit losses for the thirty-nine week period ended December 29, 2024 and the fiscal year ended March 31, 2024 are as follows (in thousands):

Beginning balance

Cumulative effect of adoption of ASU 2016-13

Provision for expected credit losses

Bad debt expense

Write offs and other

2 unchanged sentences

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

September 29,

Real estate taxes

7 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 29, 2024 that would indicate that the carrying amount of the Company’s intangible asset may be impaired as of September 29, 2024.

There have been no significant events or changes in circumstances during the thirteen and thirty-nine week periods ended December 29, 2024 that would indicate that the carrying amount of the Company’s intangible asset may be impaired as of December 29, 2024.

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 29, 2024 that would indicate that the carrying amount of the Company’s long-lived assets may be impaired as of September 29, 2024.

There have been no significant events or changes in circumstances during the thirteen and thirty-nine week periods ended December 29, 2024 that would indicate that the carrying amount of the Company’s long-lived assets may be impaired as of December 29, 2024.

NOTE K – ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

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

September 29,

Payroll and other benefits

7 unchanged sentences

NOTE L – INCOME TAXES

The income tax provisions for the thirteen weeks ended September 29, 2024 and September 24, 2023 reflect effective tax rates of 25.5 % and 27.4 %, respectively.

The effective income tax rate for the thirteen weeks ended September 29, 2024 reflected $ 2,069 of income tax expense recorded on $ 8,099 of pre-tax income.

The effective income tax rate for the thirteen weeks ended September 24, 2023 reflected $ 2,153 of income tax expense recorded on $ 7,864 of pre-tax income.

The income tax provisions for the twenty-six weeks ended September 29, 2024 and September 24, 2023 reflect effective tax rates of 26.7 % and 27.2 %, respectively.

The effective income tax rate for the twenty-six weeks ended September 29, 2024 reflected $ 5,576 of income tax expense recorded on $ 20,883 of pre-tax income.

The effective income tax rate for the twenty-six weeks ended September 24, 2023 reflected $ 4,897 of income tax expense recorded on $ 17,996 of pre-tax income.

The effective income tax rates for the thirteen and twenty-six week periods ended September 29, 2024 and September 24, 2023 were higher than the United States statutory income tax rate primarily due to state and local taxes as well as non-deductible compensation under the Internal Revenue Code Section 162(m).

The amount of unrecognized tax benefits included in Other liabilities at September 29, 2024 and March 31, 2024 was $ 494 and $ 465 , respectively, all of which would impact the Company’s effective rate, if recognized.

As of September 29, 2024 and March 31, 2024, the Company had approximately $ 379 and $ 345 , 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 29, 2024 and December 24, 2023 were 26.0 % and 30.2 %, respectively.

The effective income tax rate for the thirteen weeks ended December 29, 2024 reflected $ 1,575 of income tax expense recorded on $ 6,059 of pre-tax income.

The effective income tax rate for the thirteen weeks ended December 24, 2023 reflected $ 1,128 of income tax expense recorded on $ 3,735 of pre-tax income.

The effective income tax rates for the thirty-nine weeks ended December 29, 2024 and December 24, 2023 were 26.5 % and 27.7 %, respectively.

The effective income tax rate for the thirty-nine weeks ended December 29, 2024 reflected $ 7,151 of income tax expense recorded on $ 26,942 of pre-tax income.

The effective income tax rate for the thirty-nine weeks ended December 24, 2023 reflected $ 6,025 of income tax expense recorded on $ 21,731 of pre-tax income.

The effective income tax rates for the thirteen and thirty-nine weeks ended December 29, 2024 and December 24, 2023 were higher than the United States statutory income tax rate primarily due to state and local taxes, as well as non-deductible compensation under the Internal Revenue Code Section 162(m).

The amount of unrecognized tax benefits included in Other liabilities at December 29, 2024 and March 31, 2024 was $ 506 and $ 465 , respectively, all of which would impact the Company’s effective tax rate, if recognized.

As of December 29, 2024 and March 31, 2024, the Company had approximately $ 392 and $ 345 , respectively, accrued for the payment of interest and penalties in connection with unrecognized tax benefits.

NOTE M – SEGMENT INFORMATION

4 unchanged sentences

Branded Product Program – This segment derives revenue principally from the sale of hot dog products either directly to foodservice operators or to various foodservice distributors who resell the products to foodservice operators.

Product licensing – This segment derives revenue, primarily in the form of royalties, from licensing a broad variety of Nathan’s Famous branded products, including our hot dogs, frozen crinkle-cut French fries and additional products through retail supermarkets, grocery channels and club stores throughout the United States.

Restaurant operations – This segment derives revenue from the sale of our products at Company-owned restaurants and earns fees and royalties from its franchised restaurants, including its virtual kitchens.

4 unchanged sentences

Thirteen weeks ended

Twenty-six weeks ended

September 29,

September 24,

September 29,

September 24,

Thirty-nine weeks ended

December 29, 2024

December 24, 2023

December 29, 2024

December 24, 2023

Branded Product Program

1 unchanged sentence

Restaurant operations

Corporate (1)

Advertising fund revenue

Total revenues

9 unchanged sentences

Income before provision for income taxes

Represents advertising fund revenue

NOTE N – SHARE-BASED COMPENSATION

Total share-based compensation expense during the thirteen and twenty-six week periods ended September 29, 2024 and September 24, 2023 was $ 229 and $ 182 , and $ 417 and $ 359 , respectively.

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

As of September 29, 2024, there was $ 3,857 unamortized compensation expense related to share-based awards.

Total share-based compensation during the thirteen and thirty-nine week periods ended December 29, 2024 and December 24, 2023 was $ 288 and $ 187 , and $ 705 and $ 546 , respectively.

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

As of December 29, 2024, there was $ 3,569 of unamortized compensation expense related to share-based awards.

We expect to recognize this expense over approximately 39 months, which represents the weighted average remaining requisite service periods for such awards.

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

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

Compensation expense under all share-based awards is as follows (in thousands):

Thirteen weeks ended

Twenty-six weeks ended

September 29,

September 24,

September 29,

September 24,

Thirty-nine weeks ended

December 29, 2024

December 24, 2023

December 29, 2024

December 24, 2023

Stock options

2 unchanged sentences

Stock options:

During the twenty-six week period ended September 29, 2024, the Company granted options to purchase 110,000 shares at an exercise price of $ 74.47 per share, all of which expire five years from the date of grant.

During the thirty-nine week period ended December 29, 2024, the Company granted options to purchase 110,000 shares at an exercise price of $ 74.47 per share, all of which expire five years from the date of grant.

All such options vest ratably over a four-year period commencing August 19, 2024.

The weighted average option fair value, as determined using the Black-Scholes option valuation model, and the assumptions used to estimate these values for stock options granted during the twenty-six week period ended September 29, 2024 are as follows:

The weighted average option fair value, as determined using the Black-Scholes option valuation model, and the assumptions used to estimate these values for stock options granted during the thirty-nine week period ended December 29, 2024 are as follows:

Weighted average option fair values

7 unchanged sentences

The expected option term is the number of years the Company estimates the options will be outstanding prior to exercise based on expected historical exercise patterns and employment termination behavior.

Transactions with respect to stock options for the twenty-six weeks ended September 29, 2024 are as follows :

Transactions with respect to stock options for the thirty-nine weeks ended December 29, 2024 are as follows:

Contractual Life

1 unchanged sentence

Options outstanding at March 31, 2024

Options outstanding at September 29, 2024

Options exercisable at September 29, 2024

Options outstanding at December 29, 2024

Options exercisable at December 29, 2024

Restricted stock units:

Transactions with respect to restricted stock units for the twenty-six weeks ended September 29, 2024 are as follows:

Transactions with respect to restricted stock units for the thirty-nine weeks ended December 29, 2024 are as follows:

Unvested restricted stock units at March 31, 2024

Unvested restricted stock units at September 29, 2024

Unvested restricted stock units at December 29, 2024

NOTE O– STOCKHOLDERS’ EQUITY

Effective June 12, 2024, the Company’s Board of Directors (the “Board”) declared its first quarterly cash dividend of $ 0.50 per share for fiscal 2025 which was paid on July 2, 2024 to stockholders of record as of the close of business on June 24, 2024 .

Effective August 8, 2024, the Board declared its second quarterly cash dividend of $ 0.50 per share for fiscal 2025 which was paid on September 6, 2024 to stockholders of record as of the close of business on August 26, 2024 .

Effective November 7, 2024, the Board declared its third quarterly cash dividend of $ 0.50 per share for fiscal 2025 payable on December 6, 2024 to stockholders of record as of the close of business on November 25, 2024 .

Our ability to pay future dividends is limited by the terms of our Credit Agreement (as defined in NOTE P – LONG TERM DEBT to the unaudited consolidated financial statements in the Quarterly Report on Form 10-Q).

On July 2, 2024, September 6, 2024 and December 6, 2024, the Company paid quarterly dividends of $ 0.50 per share.

Through December 29, 2024, the Company paid quarterly dividends aggregating $ 6,127 .

Effective February 6, 2025 , the Board of Directors (the “Board”) declared its fourth quarterly cash dividend of $ 0.50 per share for fiscal 2025 payable on February 28, 2025 to stockholders of record as of the close of business on February 18, 2025 .

Our ability to pay future dividends is limited by the terms of our Credit Agreement (as defined in NOTE P – LONG TERM DEBT).

In addition to the terms of our Credit Agreement, 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 Programs

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 29, 2024, Nathan’s had repurchased 1,101,884 shares at a cost of $ 39,000 under the sixth stock repurchase plan.

At September 29, 2024 there were 98,116 shares remaining to be repurchased pursuant to the sixth stock repurchase plan.

As of December 29, 2024, Nathan’s had repurchased 1,101,884 shares at a cost of $ 39,000 under the sixth stock repurchase plan.

At December 29, 2024 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

NOTE P – LONG-TERM DEBT

The carrying amounts of the Company’s long-term debt were as follows (in thousands):

September 29,

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

December 29, 2024

March 31, 2024

6.625 % Senior Secured Notes due 2025

4 unchanged sentences

Long-term debt, net

The Company’s mandatory debt principal repayments as of September 29, 2024 were as follows (in thousands):

The Company’s mandatory debt principal repayments as of December 29, 2024 were as follows (in thousands):

Remainder of 2025

Total debt repayments for the remainder of 2025 through 2030 exceed the total carrying amount of the Company’s debt as of December 29, 2024 because the carrying amount reflects the unamortized portion of debt issuance costs.

On July 10, 2024 (the “Effective Date”), the Company entered into a five-year unsecured Credit Agreement (the “Credit Agreement”) among the Company, as borrower, direct and indirect subsidiaries of the Company, as guarantors, the lenders from time to time party thereto (the “Lenders”) and Citibank, N.A., as administrative agent, swing line lender, L/C issuer and a Lender (capitalized terms used and not otherwise defined herein shall have the meanings set forth in the Credit Agreement).

4 unchanged sentences

The Company will use any Revolving Loan borrowings under the Credit Agreement for working capital and general corporate purposes.

In connection with the refinancing, the Company recorded a loss on extinguishment of debt of $ 334 during the quarter ending September 29, 2024 that reflected the write-off of the remainder of the debt issuance costs on the 2025 Notes.

As of December 29, 2024, there were no outstanding borrowings under the Revolving Loan.

In connection with the refinancing, the Company recorded a loss on extinguishment of debt of $ 334 that reflected the write-off of the remainder of the debt issuance costs on the 2025 Notes.

Additionally, in connection with the refinancing, the Company incurred $ 431 of debt issuance costs on the Term Loan borrowings that were capitalized and will be amortized over the term of the Credit Agreement.

1 unchanged sentence

The Company will be subject to a commitment fee of 0.20 % per annum on the daily amount of the undrawn portion of the Revolving Committed Amount.

The interest rate on the Term Loan borrowings at September 29, 2024 was 6.805 %.

The Credit Agreement contains customary affirmative covenants and negative covenants and requires the Company to maintain a Consolidated Fixed Charge Ratio not to exceed 1.20 to 1.00 and a Consolidated Net Leverage Ratio not to exceed 3.00 to 1.00, in each case, beginning with the fiscal quarter ending September 29, 2024.

The Company was in compliance with the covenants of the Credit Agreement at September 29, 2024.

The interest rate on the Term Loan borrowings at December 29, 2024 was 5.946 %.

The Company was in compliance with the covenants of the Credit Agreement at December 29, 2024.

The outstanding Term Loan borrowings under the Credit Agreement are payable in equal quarterly installments of 1.0 % of the original principal amount of the Term Loan, or $ 600 , beginning September 30, 2024, with the balance payable on the final maturity date.

1 unchanged sentence

(i) 100 % of any Net Cash Proceeds in excess of $ 2,000 individually or in the aggregate over the term of the Credit Agreement in respect of any Extraordinary Receipt provided that the Company shall be permitted to reinvest such Net Cash Proceeds in accordance with the Credit Agreement, (ii) 100 % of any Net Cash Proceeds of an Equity Issuance, (iii) 100 % of any Net Cash Proceeds from a Debt Issuance and (iv) 100 % of any Net Cash Proceeds from the Disposition of certain assets individually, or in the aggregate, in excess of $ 2,000 in any fiscal year provided that the Company shall be permitted to reinvest such Net Cash Proceeds in accordance with the Credit Agreement.

Subsequent to the quarter ending September 29, 2024, on October 10, 2024, the Company made a voluntary principal prepayment of $ 8,000 of its Term Loan borrowings and expects to incur a loss on debt extinguishment of approximately $ 55 in the third quarter of fiscal 2025 related to the write-off of a portion of previously recorded debt issuance costs on the Term Loan borrowings.

On October 10, 2024, the Company made a voluntary principal prepayment of $ 8,000 of its Term Loan borrowings and incurred a loss on debt extinguishment of approximately $ 55 in the third quarter of fiscal 2025 related to the write-off of a portion of previously recorded debt issuance costs on the Term Loan borrowings.

NOTE Q – LEASES

1 unchanged sentence

Company as lessee

The components of the net lease cost for the thirteen and twenty-six week periods ended September 29, 2024 and September 24, 2023 were as follows (in thousands):

The components of the net lease cost for the thirteen and thirty-nine week periods ended December 29, 2024 and December 24, 2023 were as follows (in thousands):

Thirteen weeks ended

Twenty-six weeks ended

September 29,

September 24,

September 29,

September 24,

Thirty-nine weeks ended

December 29, 2024

December 24, 2023

December 29, 2024

December 24, 2023

Operating lease cost

2 unchanged sentences

Total net lease cost

The components of the net lease cost on the Consolidated Statements of Earnings for the thirteen and twenty-six week periods ended September 29, 2024 and September 24, 2023 (in thousands):

The following table presents the components of the net lease cost on the Condensed Consolidated Statements of Earnings for the thirteen and thirty-nine week periods ended December 29, 2024 and December 24, 2023 (in thousands):

Thirteen weeks ended

Twenty-six weeks ended

September 29,

September 24,

September 29, 2024

September 24,

Thirty-nine weeks ended

December 29, 2024

December 24, 2023

December 29, 2024

December 24, 2023

Restaurant operating expenses

2 unchanged sentences

Total net lease cost

Cash paid for amounts included in the measurement of lease liabilities for the thirteen and twenty-six week periods ended September 29, 2024 and September 24, 2023 were as follows (in thousands):

Cash paid for amounts included in the measurement of lease liabilities for the thirteen and thirty-nine week periods ended December 29, 2024 and December 24, 2023 were as follows (in thousands):

Thirteen weeks ended

Twenty-six weeks ended

September 29,

September 24,

September 29,

September 24,

Thirty-nine weeks ended

December 29, 2024

December 24, 2023

December 29, 2024

December 24, 2023

Operating cash flows from operating leases

The weighted average remaining lease term and weighted average discount rate for operating leases as of September 29, 2024 were as follows:

The weighted average remaining lease term and weighted average discount rate for operating leases as of December 29, 2024 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 29, 2024 were as follows (in thousands):

Future lease commitments to be paid and received by the Company as of December 29, 2024 were as follows (in thousands):

Operating Leases

3 unchanged sentences

Represents future lease commitments to be paid and received by the Company for the remainder of the 2025 fiscal year.

Amount does not include $ 908 of lease commitments paid and received by the Company for the twenty-six week period ended September 29, 2024.

The present value of minimum operating lease payments of $ 1,907 and $ 4,084 are included in “Current portion of operating lease liabilities” and “Long-term operating lease liabilities,” respectively on the Consolidated Balance Sheet.

Amount does not include $ 1,255 of lease commitments paid and received by the Company for the thirty-nine week period ended December 29, 2024.

The present value of minimum operating lease payments of $ 1,915 and $ 3,809 are included in “Current portion of operating lease liabilities” and “Long-term operating lease liabilities,” respectively on the Condensed Consolidated Balance Sheets.

Company as lessor

The components of net lease income for the thirteen and twenty-six week periods ended September 29, 2024 and September 24, 2023 were as follows (in thousands):

The components of net lease income for the thirteen and thirty-nine week periods ended December 29, 2024 and December 24, 2023 were as follows (in thousands):

Thirteen weeks ended

Twenty-six weeks ended

September 29,

September 24,

September 29,

September 24,

Thirty-nine weeks ended

December 29, 2024

December 24, 2023

December 29, 2024

December 24, 2023

Operating lease income, net

6 unchanged sentences

NOTE S – SUBSEQUENT EVENTS

The Company evaluated subsequent events through the date the consolidated financial statements were issued and filed with the SEC.

Except for the voluntary principal prepayment of $ 8,000 of its Term Loan borrowings under the Credit Agreement (see NOTE P – LONG TERM DEBT to the unaudited consolidated financial statements in the Quarterly Report on Form 10-Q), there were no additional subsequent events that required recognition or disclosure.

The Company evaluated subsequent events through the date the condensed consolidated financial statements were issued and filed with the SEC.

There were no subsequent events that required 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