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Item 1. Financial Statements

2025-08-08 compared with 2025-02-06 · 163 added, 220 removed, 317 unchanged (55% of the section changed)

3 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

December 29, 2024 and March 31, 2024

June 29, 2025 and March 30, 2025

(in thousands, except share and per share amounts)

June 29, 2025

March 30, 2025

CURRENT ASSETS

4 unchanged sentences

Property and equipment, net of accumulated depreciation of $ 12,479 and $ 12,295 , respectively

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

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

Intangible asset, net (Note I)

17 unchanged sentences

30,000,000 shares authorized;

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

9,379,025 shares issued;

and 4,089,510 shares outstanding at June 29, 2025 and March 30, 2025

Additional paid-in capital

Retained earnings (Accumulated deficit)

Retained earnings

Stockholders’ equity before treasury stock

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

Treasury stock, at cost, 5,289,515 shares at June 29, 2025 and March 30, 2025

Total stockholders’ deficit

4 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

Thirteen weeks ended June 29, 2025 and June 30, 2024

(in thousands, except per share amounts)

Thirteen weeks ended

Thirty-nine weeks ended

December 29, 2024

December 24, 2023

December 29, 2024

December 24, 2023

June 29, 2025

June 30, 2024

Branded Products

13 unchanged sentences

Interest expense

Loss on debt extinguishment (Note P)

Interest and dividend income

9 unchanged sentences

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)

Treasury Stock, at Cost

Stockholders’

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, December 29, 2024

Treasury Stock, at Cost

Stockholders’

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, December 24, 2023

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

Nathan ’ s Famous, Inc.

and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS ’ DEFICIT

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

Thirteen weeks ended June 29, 2025 and June 30, 2024

(in thousands, except share and per share amounts)

Retained Earnings

Treasury Stock, at Cost

1 unchanged sentence

Balance, March 30, 2025

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, December 29, 2024

Balance, June 29, 2025

Treasury Stock, at Cost

1 unchanged sentence

Balance, March 31, 2024

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 ($ 0.50 per share)

Share-based compensation

Balance, December 24, 2023

Balance, June 30, 2024

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

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

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

(in thousands)

Thirteen weeks ended June 29, 2025 and June 30, 2024

(in thousands, except per share amounts)

June 29, 2025

June 30, 2024

Cash flows from operating activities:

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

Loss on debt extinguishment

Adjustments to reconcile net income to net cash (used in) provided by operating activities:

Depreciation and amortization

10 unchanged sentences

Other liabilities

Net cash provided by operating activities

Net cash (used in) provided by operating activities

Cash flows from investing activities:

2 unchanged sentences

Cash flows from financing activities:

Proceeds from Credit Facility

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 (decrease) in cash and cash equivalents

Net (decrease) increase in cash and cash equivalents

Cash and cash equivalents, beginning of period

1 unchanged sentence

Cash paid during the period for:

See Note S for supplemental cash flow information.

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

2 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

December 29, 2024

(in thousands, expect share and per share amounts)

June 29, 2025

(in thousands, except share and per share amounts)

NOTE A - BASIS OF PRESENTATION

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”).

and subsidiaries (collectively “Nathan’s,” the “Company,” “we,” “us” or “our”) as of and for the thirteen week periods ended June 29, 2025 and June 30, 2024 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.

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Securities and Exchange Commission (“SEC”).

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.

Certain prior year amounts have been reclassified in operating activities within the Condensed Consolidated Statements of Cash Flows to conform with the current year presentation.

The reclassification does not affect previously reported cash flows from operating activities in the Condensed Consolidated Statements of Cash Flows.

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 30, 2025 as filed with the SEC on June 10, 2025.

2 unchanged sentences

NOTE B – NEW ACCOUNTING STANDARDS NOT YET ADOPTED

In November 2023, the FASB issued ASU 2023-07, “ Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures ” which provides guidance to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

In addition, the guidance enhances interim disclosure requirements, clarifies circumstances in which an entity can disclose multiple segment measures of profit or loss, provides new segment disclosure requirements for entities with a single reportable segment and contains other disclosure requirements.

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 all public companies for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after 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 first quarter of fiscal year 2026.

Early adoption is permitted.

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

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

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The guidance is effective for fiscal years beginning after December 15, 2024, which for us is our fiscal year 2026 beginning on March 31, 2025.

Early adoption is permitted.

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

The adoption of ASU 2023-09 is expected to impact disclosures only and not have an impact on our consolidated financial statements.

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

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NOTE C – REVENUES

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):

The Company’s disaggregated revenues for the thirteen weeks ended June 29, 2025 and June 30, 2024 are as follows (in thousands):

Thirteen weeks ended

Thirty-nine weeks ended

December 29, 2024

December 24, 2023

December 29, 2024

December 24, 2023

June 29, 2025

June 30, 2024

Branded Products

7 unchanged sentences

Thirteen weeks ended

Thirty-nine weeks ended

December 29, 2024

December 24, 2023

December 29, 2024

December 24, 2023

June 29, 2025

June 30, 2024

United States

3 unchanged sentences

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

December 29, 2024

June 29, 2025

March 30, 2025

2 unchanged sentences

“Accrued expenses and other current liabilities” (b)

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.

Deferred franchise fees of $ 274 and $ 644 as of June 29, 2025 and $ 309 and $ 697 as of March 30, 2025 are included in Deferred franchise fees – current and long term, respectively.

Includes $ 497 of deferred license royalties and $ 250 of deferred advertising fund revenue as of June 29, 2025 and $ 892 of deferred license royalties and $ 500 of deferred advertising fund revenue as of March 30, 2025.

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

Thirty-nine weeks ended

December 29, 2024

December 24, 2023

Thirteen weeks ended

June 29, 2025

June 30, 2024

Deferred franchise fees at beginning of period

3 unchanged sentences

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

Thirty-nine weeks ended

December 29, 2024

December 24, 2023

Thirteen weeks ended

June 29, 2025

June 30, 2024

Deferred revenues at beginning of period

6 unchanged sentences

Represents franchise fees expected to be recognized for the remainder of the 2026 fiscal year, which includes international development fees expected to be recognized over the duration of one year or less.

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.

Amount does not include $ 128 of franchise fee revenue recognized for the thirteen weeks ended June 29, 2025.

We have applied the optional exemption, as provided for under 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 – INCOME PER SHARE

2 unchanged sentences

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

Thirty-nine weeks ended

December 29, 2024

December 24, 2023

December 29, 2024

December 24, 2023

The following chart provides a reconciliation of information used in calculating the per-share amounts for the thirteen week periods ended June 29, 2025 and June 30, 2024, respectively (in thousands, except share and per share amounts):

June 29, 2025

June 30, 2024

Common Stock:

5 unchanged sentences

NOTE E – CASH AND CASH EQUIVALENTS

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 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 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.

Cash and cash equivalents principally consist of cash in bank accounts, money market accounts and money market funds.

The Company considers money market accounts and money market funds to be cash equivalents.

Cash equivalents were $ 18,885 and $ 19,400 at June 29, 2025 and March 30, 2025, respectively.

At June 29, 2025 and March 30, 2025, 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.

8 unchanged sentences

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.

Accordingly, the Company classified it as Level 2.

Certain non-financial assets and liabilities are measured at fair value on a non-recurring basis;

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

At June 29, 2025, no fair value adjustment or material fair value measurements were required for non-financial assets or liabilities.

NOTE G – ACCOUNTS AND OTHER RECEIVABLES, NET

12 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 thirty-nine week period ended December 29, 2024 and the fiscal year ended March 31, 2024 are as follows (in thousands):

Changes in the Company’s allowance for credit losses for the thirteen week period ended June 29, 2025 and the fiscal year ended March 30, 2025 are as follows (in thousands):

Beginning balance

Cumulative effect of adoption of ASU 2016-13

Bad debt expense

Provision for expected credit losses

Write offs and other

6 unchanged sentences

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 four years concluding in fiscal year 2028, and the intangible asset is subject to annual amortization.

Based upon review of the current Arthur Treacher’s co-branding agreements, the Company determined that the remaining useful lives of these agreements is three 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 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.

There have been no significant events or changes in circumstances during the thirteen weeks ended June 29, 2025 that would indicate that the carrying amount of the Company’s intangible asset may be impaired as of June 29, 2025.

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 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.

There have been no significant events or changes in circumstances during the thirteen weeks ended June 29, 2025 that would indicate that the carrying amount of the Company’s long-lived assets may be impaired as of June 29, 2025.

NOTE K – ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

6 unchanged sentences

Sales, use and other taxes

Construction costs

Dividend payable

Corporate income taxes

1 unchanged sentence

NOTE L – INCOME TAXES

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.

The effective income tax rates for the thirteen week periods ended June 29, 2025 and June 30, 2024 were 27.2 % and 27.4 %, respectively.

The effective income tax rate for the thirteen weeks ended June 29, 2025 reflected $ 3,329 of income tax expense recorded on $ 12,257 of pre-tax income.

The effective income tax rate for the thirteen weeks ended June 30, 2024 reflected $ 3,507 of income tax expense recorded on $ 12,784 of pre-tax income.

The effective tax rates are higher than the United States Federal statutory rates 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 June 29, 2025 and March 30, 2025 was $ 579 and $ 532 , respectively, all of which would impact the Company’s effective rate, if recognized.

As of June 29, 2025 and March 30, 2025, the Company had approximately $ 428 and $ 395 , respectively, of accrued interest and penalties in connection with unrecognized tax benefits.

On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act (“OBBBA”).

The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027.

The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation, and the business interest expense limitation.

ASC 740, “Income Taxes”, requires the effects of changes in tax rates and laws on deferred tax balances to be recognized in the period in which the legislation is enacted.

Consequently, as of the date of enactment, and during the three months ended September 28, 2025, the Company will evaluate all deferred tax balances under the newly enacted tax law and identify any other changes required to its financial statements as a result of the OBBBA.

The Company is still evaluating the impact of the OBBBA and the results of such evaluations will be reflected on the Company’s Form 10-Q for the quarter ended September 28, 2025.

NOTE M – SEGMENT INFORMATION

Nathan’s considers itself to be a brand marketer of the Nathan’s Famous signature products to the foodservice industry pursuant to its various business structures.

Nathan’s sells its products directly to consumers through its restaurant operations segment consisting of Company-owned and franchised restaurants, including virtual kitchens, to distributors that resell our products to the foodservice industry through the Branded Product Program and by third party manufacturers pursuant to license agreements that sell our products to supermarkets, club stores and grocery stores nationwide.

The Company’s Chief Executive Officer has been identified as the Chief Operating Decision Maker (“CODM”) who regularly reviews operating results, evaluates performance and allocates resources for the Branded Product Program, Product Licensing and Restaurant Operations segments based upon a number of factors, the primary profit measure being income from operations.

Nathan’s sells its products directly to consumers through its Restaurant Operations segment consisting of Company-owned and franchised restaurants, including virtual kitchens;

to distributors that resell our products to the foodservice industry through the Branded Product Program;

and by third party manufacturers pursuant to license agreements that sell our products to supermarkets, club stores and grocery stores nationwide.

The CODM regularly reviews revenues, gross profit and income from operations by segment when evaluating the financial performance of each segment.

Significant segment expenses are monitored by the CODM and included in the tables below.

Segment asset information is not used by the CODM to assess performance and allocate resources and therefore is not presented.

Certain administrative expenses are not allocated to the segments and are reported within the Corporate segment.

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 primarily 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.

Revenues from operating segments are from transactions with unaffiliated third parties and do not include any intersegment revenues.

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, compliance costs and the operating results of the Advertising Fund.

Interest expense, loss on debt extinguishment, interest and dividend 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.

Operating segment information is as follows (in thousands):

Thirteen weeks ended

Thirty-nine weeks ended

December 29, 2024

December 24, 2023

December 29, 2024

December 24, 2023

Branded Product Program

Product licensing

Restaurant operations

Advertising fund revenue

Total revenues

Interest expense, as well as interest and dividend income 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.

The following tables summarize segment information and reconcile our segment results to our consolidated results as reported on our Condensed Consolidated Statement of Earnings (in thousands):

June 29, 2025

Cost of sales

Segment gross profit

Restaurant operating expenses (2)

Department expenses (3)

Other general and administration expenses (4)

Payroll expense

Depreciation and amortization

Advertising fund expense

Income from operations

Branded Product Program

Product licensing

Restaurant operations

Interest expense

Interest and dividend income

Other income, net

Income before provision for income taxes

June 30, 2024

Cost of sales

Segment gross profit

Restaurant operating expenses (2)

Department expenses (3)

Other general and administration expenses (4)

Payroll expense

Depreciation and amortization

Advertising fund expense

Income from operations

Interest expense

Loss on debt extinguishment

Interest and dividend income

1 unchanged sentence

Income before provision for income taxes

The significant expense categories and amounts align with segment-level information that is regularly provided to the CODM.

Includes occupancy expenses, insurance expenses, utility costs, repair and maintenance expense and other Company-owned restaurant expenses.

Includes travel expense, marketing and trade show expense and certain other overhead expenses.

Includes incentive compensation expense, share-based compensation expense, professional fees, occupancy expenses, provision for credit losses and certain other overhead expenses.

NOTE N – SHARE-BASED COMPENSATION

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 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):

Total share-based compensation expense during the thirteen week periods ended June 29, 2025 and June 30, 2024 was $ 288 and $ 188 , respectively.

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

As of June 29, 2025, there was $ 2,993 of unamortized compensation expense related to share-based awards.

We expect to recognize this expense over approximately thirty-three 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.

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

Thirteen weeks ended

Thirty-nine weeks ended

December 29, 2024

December 24, 2023

December 29, 2024

December 24, 2023

June 29, 2025

June 30, 2024

Stock options

2 unchanged sentences

Stock options:

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 thirty-nine week period ended December 29, 2024 are as follows:

Weighted average option fair values

Expected life (years)

Interest rate

Dividend yield

The expected dividend yield is based on historical and projected dividend yields.

The Company estimates volatility based primarily on historical monthly price changes of the Company’s stock equal to the expected life of the option.

The risk-free interest rate is based on the U.S.

Treasury yield in effect at the time of grant.

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 thirty-nine weeks ended December 29, 2024 are as follows:

There were no new share-based awards granted during the thirteen week period ended June 29, 2025.

Transactions with respect to stock options for the thirteen weeks ended June 29, 2025 are as follows:

Contractual Life

1 unchanged sentence

Options outstanding at March 30, 2025

Options outstanding at December 29, 2024

Options exercisable at December 29, 2024

Options outstanding at June 29, 2025

Options exercisable at June 29, 2025

Restricted stock units:

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

Transactions with respect to restricted stock units for the thirteen weeks ended June 29, 2025 are as follows:

Unvested restricted stock units at March 30, 2025

Unvested restricted stock units at December 29, 2024

Unvested restricted stock units at June 29, 2025

NOTE O – STOCKHOLDERS’ EQUITY

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 .

Effective June 10, 2025, the Company’s Board of Directors (the “Board”) declared its first quarterly cash dividend of $ 0.50 per share for fiscal 2026, which was paid on July 1, 2025 to stockholders of record as of the close of business on June 23, 2025.

Effective August 8, 2025, the Board declared its second quarterly cash dividend of $ 0.50 per share for fiscal 2026 payable on September 5, 2025 to stockholders of record as of the close of business on August 25, 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 Program

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 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.

As of June 29, 2025, Nathan’s had repurchased 1,101,884 shares at a cost of $ 39,000 under the sixth stock repurchase plan.

At June 29, 2025 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.

3 unchanged sentences

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

December 29, 2024

June 29, 2025

March 30, 2025

6.625 % Senior Secured Notes due 2025

SOFR Term Loan Borrowings with an effective interest rate of 5.946 %

SOFR Term Loan Borrowings with an effective interest rate of 5.812 % and 5.825 % at June 29, 2025 and March 30, 2025, respectively.

unamortized debt issuance costs

2 unchanged sentences

Long-term debt, net

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

The Company’s mandatory debt principal repayments as of June 29, 2025 were as follows (in thousands):

Remainder of 2026

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.

Total debt repayments through 2030 exceed the total carrying amount of the Company’s debt as of June 29, 2025 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).

2 unchanged sentences

The Credit Agreement matures on July 10, 2029.

The Company borrowed $ 60,000 in Term Loan borrowings on the Effective Date to refinance and redeem its outstanding 2025 Notes.

The Company borrowed $ 60,000 in Term Loan borrowings on the Effective Date to refinance and redeem its outstanding 6.625 % Senior Secured Notes due 2025.

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

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.

Term Loan and Revolving Loan borrowings under the Credit Agreement will bear interest at a rate per annum, at the Company’s option, of (a) for Base Rate Loans, the Base Rate plus the Applicable Rate of 0.00 % or (b) for Term SOFR Loans, Term SOFR plus the Applicable Rate of 1.40 % for one (1), three (3) or six (6) month periods, as selected by the Company in its Loan Notice.

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 December 29, 2024 was 5.946 %.

As of June 29, 2025, there were no outstanding borrowings under the Revolving Loan.

Term Loan and Revolving Loan borrowings under the Credit Agreement bear interest at a rate per annum, at the Company’s option, of (a) for Base Rate Loans, the Base Rate plus the Applicable Rate of 0.00 % or (b) for Term SOFR Loans, Term SOFR plus the Applicable Rate of 1.40 % for one (1), three (3) or six (6) month periods, as selected by the Company in its Loan Notice.

The Company is 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 June 29, 2025 was 5.812 %.

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, as of the end of each fiscal quarter.

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

The Company was in compliance with the covenants of the Credit Agreement at June 29, 2025.

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.

The Company made mandatory principal repayments on the Term Loan of $ 600 during fiscal 2026.

Subsequent to the quarter ending June 29, 2025, on June 30, 2025, the Company paid its next quarterly mandatory debt principal repayment of $ 600 .

The outstanding Term Loan borrowings and the Revolving Loan borrowings under the Credit Agreement are voluntarily prepayable by the Company without penalty or premium, provided, that each of the following shall require a mandatory prepayment of outstanding Term Loan borrowings and Revolving Loan borrowings by the Company as follows:

(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.

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.

The Company’s obligations under the Credit Agreement are fully and unconditionally guaranteed by all of the Company’s wholly-owned subsidiaries.

The Credit Agreement provides that certain Change of Control events constitutes an Event of Default.

Such an Event of Default entitles the Lenders to, among other things, cause all outstanding debt obligations under the Credit Agreement to become immediately due and payable.

NOTE Q – LEASES

1 unchanged sentence

Company as lessee

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):

The components of the net lease cost for the thirteen week periods ended June 29, 2025 and June 30, 2024 were as follows (in thousands):

Thirteen weeks ended

Thirty-nine weeks ended

December 29, 2024

December 24, 2023

December 29, 2024

December 24, 2023

June 29, 2025

June 30, 2024

Operating lease cost

2 unchanged sentences

Total net lease cost

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):

The components of the net lease cost are included in the Condensed Consolidated Statement of Earnings for the thirteen week periods ended June 29, 2025 and June 30, 2024 as follows (in thousands):

Thirteen weeks ended

Thirty-nine weeks ended

December 29, 2024

December 24, 2023

December 29, 2024

December 24, 2023

June 29, 2025

June 30, 2024

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 thirty-nine week periods ended December 29, 2024 and December 24, 2023 were as follows (in thousands):

Cash paid for amounts included in the measurement of lease liabilities for the thirteen week periods ended June 29, 2025 and June 30, 2024 were as follows (in thousands):

Thirteen weeks ended

Thirty-nine weeks ended

December 29, 2024

December 24, 2023

December 29, 2024

December 24, 2023

June 29, 2025

June 30, 2024

Operating cash flows from operating leases

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

The weighted average remaining lease term and weighted average discount rate for operating leases as of June 29, 2025 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 December 29, 2024 were as follows (in thousands):

Future lease commitments to be paid and received by the Company as of June 29, 2025 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 2026 fiscal year.

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.

Amount does not include $ 471 of lease commitments paid and received by the Company for the thirteen week period ended June 29, 2025.

The present value of minimum operating lease payments of $ 1,924 and $ 3,075 are included in “Current portion of operating lease liabilities” and “Long-term portion of operating lease liabilities,” respectively, on the Condensed Consolidated Balance Sheet.

Company as lessor

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):

The components of lease income for the thirteen week periods ended June 29, 2025 and June 30, 2024 were as follows (in thousands):

Thirteen weeks ended

Thirty-nine weeks ended

December 29, 2024

December 24, 2023

December 29, 2024

December 24, 2023

June 29, 2025

June 30, 2024

Operating lease income, net

5 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 S – SUBSEQUENT EVENTS

NOTE S – SUPPLEMENTAL CASH FLOW INFORMATION

Non-cash investing activities

Accruals for purchases of property and equipment of $ 52 are included in Accrued expenses and other current liabilities on the Condensed Consolidated Balance Sheet at June 29, 2025.

Non-cash financing activities

Dividends declared but not yet paid of $ 2,045 are included in Accrued expenses and other current liabilities on the Condensed Consolidated Balance Sheet at June 29, 2025.

NOTE T – SUBSEQUENT EVENTS

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

1 unchanged sentence

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