What changed in this filing

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Item 1. Financial Statements

2026-02-05 compared with 2025-11-06 · 186 added, 147 removed, 424 unchanged (44% of the section changed)

3 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

September 28, 2025 and March 30, 2025

December 28, 2025 and March 30, 2025

(in thousands, except share and per share amounts)

September 28,

CURRENT ASSETS

24 unchanged sentences

30,000,000 shares authorized;

9,379,025 shares issued;

and 4,089,510 shares outstanding at September 28, 2025 and March 30, 2025

9,383,920 and 9,379,025 shares issued;

and 4,094,405 and 4,089,510 shares outstanding at December 28, 2025 and March 30, 2025, respectively

Additional paid-in capital

1 unchanged sentence

Stockholders’ equity before treasury stock

Treasury stock, at cost, 5,289,515 shares at September 28, 2025 and March 30, 2025

Treasury stock, at cost, 5,289,515 shares at December 28, 2025 and March 30, 2025, respectively

Total stockholders’ deficit

4 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

Thirteen and Twenty-six weeks ended September 28, 2025 and September 29, 2024

Thirteen and Thirty-nine weeks ended December 28, 2025 and December 29, 2024

(in thousands, except per share amounts)

Thirteen weeks ended

Twenty-six weeks ended

September 28,

September 29,

September 28,

September 29,

Thirty-nine weeks ended

December 28, 2025

December 29, 2024

December 28, 2025

December 29, 2024

Branded Products

25 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS ’ DEFICIT

Thirteen weeks ended September 28, 2025 and September 29, 2024

Thirteen weeks ended December 28, 2025 and December 29, 2024

(in thousands, except share and per share amounts)

1 unchanged sentence

Stockholders’

Balance, June 29, 2025

Balance, September 28, 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 ($ 3.00 per share)

Share-based compensation

Balance, September 28, 2025

Balance, December 28, 2025

Treasury Stock, at Cost

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

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

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS ’ DEFICIT

Twenty-six weeks ended September 28, 2025 and September 29, 2024

Thirty-nine weeks ended December 28, 2025 and December 29, 2024

(in thousands, except share and per share amounts)

2 unchanged sentences

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 ($ 4.00 per share)

Share-based compensation

Balance, September 28, 2025

Balance, December 28, 2025

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

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

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Twenty-six weeks ended September 28, 2025 and September 29, 2024

Thirty-nine weeks ended December 28, 2025 and December 29, 2024

(in thousands)

September 28,

September 29,

Cash flows from operating activities:

19 unchanged sentences

Proceeds from Credit Facility

Repayment of 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 in cash and cash equivalents

Net (decrease) increase in cash and cash equivalents

Cash and cash equivalents, beginning of period

5 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 28, 2025

December 28, 2025

(in thousands, except share and per share amounts)

1 unchanged sentence

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 twenty-six week periods ended September 28, 2025 and September 29, 2024 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 and thirty-nine week periods ended December 28, 2025 and December 29, 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.

4 unchanged sentences

Securities and Exchange Commission (“SEC”).

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.

20 unchanged sentences

Based on our preliminary evaluation, we do not anticipate a material effect on our consolidated financial statements.

In December 2025, the FASB issued ASU 2025-11, “ Interim Reporting (Topic 270):

Narrow-Scope Improvements, ” which clarifies the applicability of the interim reporting guidance and provides a comprehensive list of required interim disclosures.

The Update also incorporates a disclosure principle that requires entities to disclose events that occur since the end of the last annual reporting period that have a material impact on the entity.

The Update will be effective for interim reporting periods within annual reporting periods beginning after December 15, 2027.

Early adoption is permitted.

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

For the Company, interim reporting requirements will be effective 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 28, 2025 and September 29, 2024 are as follows (in thousands):

The Company’s disaggregated revenues for the thirteen and thirty-nine weeks ended December 28, 2025 and December 29, 2024 are as follows (in thousands):

Thirteen weeks ended

Twenty-six weeks ended

September 28,

September 29,

September 28,

September 29,

Thirty-nine weeks ended

December 28, 2025

December 29, 2024

December 28, 2025

December 29, 2024

Branded Products

7 unchanged sentences

Thirteen weeks ended

Twenty-six weeks ended

September 28,

September 29,

September 28,

September 29,

Thirty-nine weeks ended

December 28, 2025

December 29, 2024

December 28, 2025

December 29, 2024

United States

3 unchanged sentences

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

September 28, 2025

December 28, 2025

March 30, 2025

2 unchanged sentences

“Accrued expenses and other current liabilities” (b)

Deferred franchise fees of $ 250 and $ 631 as of September 28, 2025 and $ 309 and $ 697 as of March 30, 2025 are included in Deferred franchise fees – current and long term, respectively.

Includes $ 215 of deferred license royalties and $ 500 of deferred advertising fund revenue as of September 28, 2025 and $ 892 of deferred license royalties and $ 500 of deferred advertising fund revenue as of March 30, 2025.

Deferred franchise fees of $ 216 and $ 557 as of December 28, 2025 and $ 309 and $ 697 as of March 30, 2025 are included in Deferred franchise fees – current and long term, respectively.

Includes $ 250 of deferred advertising fund revenue as of December 28, 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):

Twenty-six weeks ended

September 28, 2025

September 29, 2024

Thirty-nine weeks ended

December 28, 2025

December 29, 2024

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 28, 2025

September 29, 2024

Thirty-nine weeks ended

December 28, 2025

December 29, 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 $ 213 of franchise fee revenue recognized for the twenty-six weeks ended September 28, 2025.

Amount does not include $ 327 of franchise fee revenue recognized for the thirty-nine weeks ended December 28, 2025.

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.

3 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 twenty-six week periods ended September 28, 2025 and September 29, 2024, respectively (in thousands, except share and per share amounts):

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 28, 2025 and December 29, 2024, respectively.

Thirteen weeks ended

Twenty-six weeks ended

September 28,

September 29,

September 28,

September 29,

Thirty-nine weeks ended

Common Stock:

7 unchanged sentences

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

Cash equivalents were $ 24,551 and $ 19,400 at September 28, 2025 and March 30, 2025, respectively.

At September 28, 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.

Cash equivalents were $ 16,280 and $ 19,400 at December 28, 2025 and March 30, 2025, respectively.

At December 28, 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.

10 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 28, 2025, no fair value adjustment or material fair value measurements were required for non-financial assets or liabilities.

At December 28, 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

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

September 28,

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 28, 2025 and the fiscal year ended March 30, 2025 are as follows (in thousands):

September 28,

Changes in the Company’s allowance for credit losses for the thirty-nine week period ended December 28, 2025 and the fiscal year ended March 30, 2025 are as follows (in thousands):

Beginning balance

4 unchanged sentences

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

September 28,

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 28, 2025 that would indicate that the carrying amount of the Company’s intangible asset may be impaired as of September 28, 2025.

There have been no significant events or changes in circumstances during the thirteen and thirty-nine week periods ended December 28, 2025 that would indicate that the carrying amount of the Company’s intangible asset may be impaired as of December 28, 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 twenty-six week periods ended September 28, 2025 that would indicate that the carrying amount of the Company’s long-lived assets may be impaired as of September 28, 2025.

There have been no significant events or changes in circumstances during the thirteen and thirty-nine week periods ended December 28, 2025 that would indicate that the carrying amount of the Company’s long-lived assets may be impaired as of December 28, 2025.

NOTE K – ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

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

September 28,

Payroll and other benefits

7 unchanged sentences

NOTE L – INCOME TAXES

The effective income tax rates for the thirteen week periods ended September 28, 2025 and September 29, 2024 were 26.0 % and 25.5 %, respectively.

The effective income tax rate for the thirteen weeks ended September 28, 2025 reflected $ 1,822 of income tax expense recorded on $ 7,021 of pre-tax income.

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 each of the twenty-six week periods ended September 28, 2025 and September 29, 2024 was 26.7 %.

The effective income tax rate for the twenty-six weeks ended September 28, 2025 reflected $ 5,151 of income tax expense recorded on $ 19,278 of pre-tax income.

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 rates for the thirteen weeks ended December 28, 2025 and December 29, 2024 were 35.0 % and 26.0 %, respectively.

The effective income tax rate for the thirteen weeks ended December 28, 2025 reflected $ 1,664 of income tax expense recorded on $ 4,748 of pre-tax income.

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 rates for the thirty-nine weeks ended December 28, 2025 and December 29, 2024 were 28.4 % and 26.5 %, respectively.

The effective income tax rate for the thirty-nine weeks ended December 28, 2025 reflected $ 6,815 of income tax expense recorded on $ 24,026 of pre-tax income.

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 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 September 28, 2025 and March 30, 2025 was $ 462 and $ 532 , respectively, all of which would impact the Company’s effective rate, if recognized.

As of September 28, 2025 and March 30, 2025, the Company had approximately $ 418 and $ 395 , respectively, of accrued interest and penalties in connection with unrecognized tax benefits.

The effective income tax rates for the thirteen and thirty-nine weeks ended December 28, 2025 included unfavorable discrete tax adjustments of 5.3 % and 1.0 %, respectively, for non-deductible transaction costs.

The amount of unrecognized tax benefits included in Other liabilities at December 28, 2025 and March 30, 2025 was $ 491 and $ 532 , respectively, all of which would impact the Company’s effective tax rate, if recognized.

As of December 28, 2025 and March 30, 2025, the Company had approximately $ 438 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”).

1 unchanged sentence

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

The OBBBA did not have a material impact to our provision for income taxes for the thirteen and twenty-six weeks ended September 28, 2025.

The OBBBA did not have a material impact to our provision for income taxes for the thirteen and thirty-nine weeks ended December 28, 2025.

The Company is continuing to evaluate the full year impact of the OBBBA and, based on our preliminary analysis, we do not anticipate a material effect on our consolidated financial statements for the fiscal year ending March 29, 2026.

16 unchanged sentences

Thirteen weeks ended

September 28, 2025

December 28, 2025

Cost of sales

Segment gross profit (loss)

Segment gross profit

Restaurant operating expenses (2)

10 unchanged sentences

Thirteen weeks ended

September 29, 2024

December 29, 2024

Cost of sales

12 unchanged sentences

Income (loss) before provision for income taxes

Twenty-six weeks ended

September 28, 2025

Thirty-nine weeks ended

December 28, 2025

Cost of sales

11 unchanged sentences

Income (loss) before provision for income taxes

Twenty-six weeks ended

September 29, 2024

Thirty-nine weeks ended

December 29, 2024

Cost of sales

17 unchanged sentences

NOTE N – SHARE-BASED COMPENSATION

Total share-based compensation expense during the thirteen and twenty-six week periods ended September 28, 2025 and September 29, 2024 was $ 284 and $ 229 , and $ 572 and $ 417 , respectively.

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

As of September 28, 2025, there was $ 2,709 of unamortized compensation expense related to share-based awards.

We expect to recognize this expense over approximately thirty-two 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):

Total share-based compensation during the thirteen and thirty-nine week periods ended December 28, 2025 and December 29, 2024 was $ 280 and $ 288 , and $ 852 and $ 705 , respectively.

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

As of December 28, 2025, there was $ 2,429 of unamortized compensation expense related to share-based awards.

We expect to recognize this expense over approximately thirty 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):

Thirteen weeks ended

Twenty-six weeks ended

September 28,

September 29,

September 28,

September 29,

Thirty-nine weeks ended

December 28, 2025

December 29, 2024

December 28, 2025

December 29, 2024

Stock options

1 unchanged sentence

Total share-based compensation expense

There were no new share-based awards granted during the thirty-nine week period ended December 28, 2025.

Stock options:

There were no new share-based awards granted during the twenty-six week period ended September 28, 2025.

Transactions with respect to stock options for the twenty-six weeks ended September 28, 2025 are as follows :

Transactions with respect to stock options for the thirty-nine weeks ended December 28, 2025 are as follows:

Contractual Life

1 unchanged sentence

Options outstanding at March 30, 2025

Options outstanding at September 28, 2025

Options exercisable at September 28, 2025

Options outstanding at December 28, 2025

Options exercisable at December 28, 2025

Restricted stock units:

Transactions with respect to restricted stock units for the twenty-six weeks ended September 28, 2025 are as follows:

Transactions with respect to restricted stock units for the thirty-nine weeks ended December 28, 2025 are as follows:

Unvested restricted stock units at March 30, 2025

Unvested restricted stock units at September 28, 2025

Unvested restricted stock units at December 28, 2025

NOTE O– STOCKHOLDERS’ EQUITY

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, which was paid on September 5, 2025 to stockholders of record as of the close of business on August 25, 2025.

Effective November 6, 2025, the Board declared its third quarterly cash dividend of $ 0.50 per share for fiscal 2026 payable on December 5, 2025 to stockholders of record as of the close of business on November 24, 2025.

Additionally, effective November 6, 2025, the Board also declared a special cash dividend of $ 2.50 per share to stockholders of record as of close of business on November 24, 2025 of approximately $ 10,224 payable on December 5, 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

On July 1, 2025, September 5, 2025 and December 5, 2025, the Company paid quarterly dividends of $ 0.50 per share.

Additionally, on December 5, 2025, the Company also paid a special cash dividend of $ 2.50 per share.

Through December 28, 2025, the Company paid dividends aggregating $ 16,358 .

Our ability to pay future dividends is limited by the terms of our Merger Agreement (as defined in NOTE S – SUBSEQUENT EVENTS).

Pursuant to the Merger Agreement, the Company is permitted to declare and pay two regular quarterly cash dividends each in the amount of $ 0.50 per share of the Company’s common stock during the period pending the closing of the proposed transaction with Smithfield Foods, Inc.

Effective February 5, 2026, as permitted under the Merger Agreement, the Board of Directors (the “Board”) declared its fourth quarterly cash dividend of $ 0.50 per share for fiscal 2026 payable on February 27, 2026 to stockholders of record as of the close of business on February 17, 2026.

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 28, 2025, Nathan’s had repurchased 1,101,884 shares at a cost of $ 39,000 under the sixth stock repurchase plan.

At September 28, 2025 there were 98,116 shares remaining to be repurchased pursuant to the sixth stock repurchase plan.

As of December 28, 2025, Nathan’s had repurchased 1,101,884 shares at a cost of $ 39,000 under the sixth stock repurchase plan.

At December 28, 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):

September 28,

SOFR Term Loan Borrowings with an effective interest rate of 5.636 % and 5.825 % at September 28, 2025 and March 30, 2025, respectively.

SOFR Term Loan Borrowings with an effective interest rate of 5.234 % and 5.825 % at December 28, 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 September 28, 2025 were as follows (in thousands):

The Company’s mandatory debt principal repayments as of December 28, 2025 were as follows (in thousands):

Remainder of 2026

Total debt repayments through 2030 exceed the total carrying amount of the Company’s debt as of September 28, 2025 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 December 28, 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).

4 unchanged sentences

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

As of September 28, 2025, 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 during the quarter ending September 29, 2024 that reflected the write-off of the remainder of the debt issuance costs on the Company’s 6.625% Secured Notes due 2025.

As of December 28, 2025, 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 in fiscal 2025 that reflected the write-off of the remainder of the debt issuance costs on the Company’s 6.625 % Secured Notes due 2025.

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.

During the third quarter of fiscal 2025, the Company made a voluntary prepayment of $ 8,000 of its Term Loan borrowings and incurred a loss on debt extinguishment of $ 55 related to the write-off of a portion of previously recorded debt issuance cost on the Term Loan borrowings.

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 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 September 28, 2025 was 5.636 %.

The interest rate on the Term Loan borrowings at December 28, 2025 was 5.234 %.

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 September 28, 2025.

The Company was in compliance with the covenants of the Credit Agreement at December 28, 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 , which began on September 30, 2024, with the balance payable on the final maturity date.

The Company made mandatory principal repayments on the Term Loan of $ 1,200 during fiscal 2026.

Subsequent to the quarter ending September 28, 2025, on September 30, 2025, the Company paid its next quarterly mandatory debt principal repayment of $ 600 .

The Company made mandatory principal repayments on the Term Loan of $ 1,800 during fiscal 2026 and $ 1,200 during fiscal 2025.

Subsequent to the quarter ending December 28, 2025, on December 31, 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:

3 unchanged sentences

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.

As previously announced, on January 20, 2026, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”), by and among the Company, Smithfield Foods, Inc., a Virginia corporation (“Buyer”) and Boardwalk Merger Sub Inc., a Delaware corporation and wholly owned subsidiary of Buyer (“Merger Sub”).

Pursuant to the Merger Agreement, and upon the terms and subject to the conditions thereof and in accordance with the General Corporation Law of the State of Delaware (“DGCL”), Merger Sub shall merge with and into the Company (the “Merger,” and the effective time of the Merger, the “Effective Time”).

Pursuant to the Merger Agreement, the Buyer at the Effective Time shall pay all outstanding obligations under the Credit Facility.

NOTE Q – LEASES

The Company is party as lessee to various leases for land, buildings and certain office equipment for its Company-owned restaurants and corporate office, as well as a lessee/sublessor to one other property.

The Company is party as lessee to various leases for land, buildings and certain office equipment for its Company-owned restaurants and corporate office.

The Company previously leased and subleased one property;

this arrangement was terminated on November 4, 2025.

In connection with the termination, the Company received $ 84,000 in settlement income which is included in Other income, net on the Condensed Consolidated Statements of Earnings.

Company as lessee

The components of the net lease cost for the thirteen and twenty-six week periods ended September 28, 2025 and September 29, 2024 were as follows (in thousands):

The components of the net lease cost for the thirteen and thirty-nine week periods ended December 28, 2025 and December 29, 2024 were as follows (in thousands):

Thirteen weeks ended

Twenty-six weeks ended

September 28,

September 29,

September 28,

September 29,

Thirty-nine weeks ended

December 28, 2025

December 29, 2024

December 28, 2025

December 29, 2024

Operating lease cost

2 unchanged sentences

Total net lease cost

The components of the net lease cost are included in the Condensed Consolidated Statements of Earnings for the thirteen and twenty-six week periods ended September 28, 2025 and September 29, 2024 as follows (in thousands):

The components of the net lease cost are included in the Condensed Consolidated Statements of Earnings for the thirteen and thirty-nine week periods ended December 28, 2025 and December 29, 2024 as follows (in thousands):

Thirteen weeks ended

Twenty-six weeks ended

September 28, 2025

September 29, 2024

September 28, 2025

September 29, 2024

Thirty-nine weeks ended

December 28, 2025

December 29, 2024

December 28, 2025

December 29, 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 twenty-six week periods ended September 28, 2025 and September 29, 2024 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 28, 2025 and December 29, 2024 were as follows (in thousands):

Thirteen weeks ended

Twenty-six weeks ended

September 28,

September 29,

September 28,

September 29,

Thirty-nine weeks ended

December 28, 2025

December 29, 2024

December 28, 2025

December 29, 2024

Operating cash flows from operating leases

The weighted average remaining lease term and weighted average discount rate for operating leases as of September 28, 2025 were as follows:

The weighted average remaining lease term and weighted average discount rate for operating leases as of December 28, 2025 were as

Weighted average remaining lease term (years):

Weighted average discount rate:

Future lease commitments to be paid and received by the Company as of September 28, 2025 were as follows (in thousands):

Future lease commitments to be paid and received by the Company as of December 28, 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 $ 920 of lease commitments paid and received by the Company for the twenty-six week period ended September 28, 2025.

Amount does not include $ 1,302 of lease commitments paid and received by the Company for the thirty-nine week period ended December 28, 2025.

The present value of minimum operating lease payments of $ 1,937 and $ 2,320 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 twenty-six week periods ended September 28, 2025 and September 29, 2024 were as follows (in thousands):

The components of net lease income for the thirteen and thirty-nine week periods ended December 28, 2025 and December 29, 2024 were as follows (in thousands):

Thirteen weeks ended

Twenty-six weeks ended

September 28,

September 29,

September 28,

September 29,

Thirty-nine weeks ended

December 28, 2025

December 29, 2024

December 28, 2025

December 29, 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.

Service Provider Agreement

The Company engaged a financial advisor in connection with the Merger Agreement as defined and disclosed in NOTE S – SUBSEQUENT EVENTS to assist the Company and to provide certain advisory services.

In connection with this arrangement, the Company may be required to pay such financial advisor certain contingent fees related to their services to the extent that certain conditions are met.

The contingent fees related to the arrangement are based on (i) a fixed fee that is due upon the delivery of a fairness opinion and (ii) a percentage fee based upon the aggregate transaction value net of the fixed fee in (i) above payable upon the closing of the transaction contemplated by the Merger Agreement.

For the thirteen and thirty-nine weeks ended December 28, 2025, the Company did not record any advisory fee.

NOTE S – SUBSEQUENT EVENTS

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.

As a result of the Merger, at the Effective Time, the separate corporate existence of Merger Sub shall cease, the Company shall continue as the surviving corporation in the Merger (the “Surviving Corporation”) and the Surviving Corporation shall become a wholly owned subsidiary of Buyer.

After the Merger, the Company will cease to be publicly traded.

At the Effective Time, as a result of the Merger and without any action on the part of Buyer, Merger Sub, the Company or the holders of any of the following securities:

(i) each share of common stock of the Company, par value $ 0.01 per share (“Company Shares”), issued and outstanding immediately prior to the Effective Time, other than shares to be cancelled in accordance with the terms of the Merger Agreement and shares owned by holders that have exercised their appraisal rights under the DGCL, shall be converted into the right to receive cash in an amount equal to $ 102.00 without interest (the “Per Share Merger Consideration”), less any applicable withholding tax, payable to the holder in accordance with the terms of the Merger Agreement, (ii) each share of common stock of Merger Sub issued and outstanding immediately prior to the Effective Time shall be converted into and become one fully paid, non-assessable share of common stock, par value $ 0.01 per share, of the Surviving Corporation, and (iii) any Company Shares owned or held in treasury by the Company and any Company Shares owned by Buyer, Merger Sub or any of their respective affiliates immediately prior to the Effective Time shall automatically be cancelled and shall cease to exist and no consideration shall be delivered in exchange for such cancellation or retirement.

From and after the Effective Time, all Company Shares converted into the right to receive the Per Share Merger Consideration shall no longer be issued and outstanding and shall automatically be cancelled and cease to exist.

Immediately prior to the Effective Time, (i) each option to purchase Company Shares outstanding under a Company Stock Plan (each a “Company Stock Option”), whether or not vested and exercisable, that is outstanding and unexercised immediately prior to the Effective Time, shall be automatically converted into the right to receive from Buyer or the Surviving Corporation an amount in cash (subject to applicable withholding taxes) equal to the product obtained by multiplying (A) the excess, if any, of the Per Share Merger Consideration over the per share exercise price of such Company Stock Option, by (B) the aggregate number of Company Shares that were issuable upon exercise of such Company Stock Option immediately prior to the Effective Time and (ii) each restricted stock unit of the Company granted and outstanding pursuant to a Company Stock Plan (each a “Company RSU”) shall be deemed to have been earned and become fully vested (in the case of any performance based award, with the applicable performance metrics at the target level), shall be canceled and extinguished as of the Effective Time and, in exchange, each former holder of any such Company RSU shall have the right to receive from Buyer or the Surviving Corporation an amount in cash equal to the product obtained by multiplying (A) the number of Company Shares subject to such Company RSU by (B) the Per Share Merger Consideration (such amount, the “RSU Award Payment”).

Any dividend equivalents earned prior to the Effective Time will be paid in cash as soon as administratively practicable following settlement of the Company RSUs.

From and after the Effective Time, each Company RSU shall no longer represent the right to receive Company Shares by the former holder thereof, but shall only entitle such holder to the payment of the RSU Award Payment.

The Compensation Committee of the Company Board will adopt resolutions to provide that all Company Stock Options and Company RSUs shall terminate conditioned upon, and effective immediately prior to, the Effective Time and the holders thereof will be entitled only to the amount, if any, specified herein in respect thereof.

The Company has also agreed not to, among other things, (i) solicit, initiate, knowingly encourage or knowingly facilitate any alternative competing transaction, (ii) participate in any discussions or negotiations with any third party with respect to any alternative competing transaction, (iii) approve or recommend any alternative competing transaction, (iv) enter into any letter of intent, memorandum of understanding, agreement in principle, acquisition agreement, merger agreement, share purchase agreement, asset purchase agreement, share exchange agreement, option agreement or other similar definitive agreement relating to an alternative competing transaction or (v) propose or agree to do any of the foregoing.

Notwithstanding the foregoing customary “no-shop” restrictions, if prior to obtaining the Company Stockholder Approval (as defined in the Merger Agreement) the Company receives an unsolicited written Acquisition Proposal (as defined in the Merger Agreement) from a third party and the Company Board determines in good faith that (x) such Acquisition Proposal constitutes or could be reasonably expected to result in a Superior Proposal (as defined in the Merger Agreement) and (y) the failure to take the actions set forth in clauses (i) and (ii) of this paragraph would be inconsistent with its fiduciary duties under law, the Company may, in response to such Acquisition Proposal, (i) furnish Company information and access to the third party making such Acquisition Proposal and (ii) participate in discussions or negotiations with such third party with respect to such Acquisition Proposal, or otherwise cooperate with or assist or participate in, or facilitate, any such discussions or negotiations.

The consummation of the Merger is subject to certain closing conditions, including but not limited to (a) receipt of the Company Stockholder Approval, (b) that no law or governmental order prohibits, restrains, enjoins or makes illegal the consummation of the Merger, (c) that any waiting period (and any extension thereof) applicable to the Merger and the other transactions under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 have terminated or expired and (d) that the parties have obtained CFIUS Clearance (as defined in the Merger Agreement) for the Merger.

Each of Buyer’s, Merger Sub’s, and the Company’s obligation to consummate the Merger is also subject to certain additional conditions, including (i) subject to certain materiality standards, the accuracy of the representations and warranties of the other party or parties, (ii) performance in all material respects by the other party or parties of its or their obligations under the Merger Agreement and (iii) with respect to Buyer’s and Merger Sub’s obligations to consummate the Merger, the absence of a Company Material Adverse Effect (as defined in the Merger Agreement) with respect to the Company.

The Merger Agreement also contains certain termination provisions for the Company and Buyer, including the right of the Company, in certain circumstances, to terminate the Merger Agreement and accept a Superior Proposal.

The Company will be required to pay Buyer a termination fee in cash equal to $ 10,581,814 if the Merger Agreement is terminated (a) by Buyer because the Company Board changed its recommendation of the Merger, (b) by Buyer or the Company if the approval of the Company’s stockholders is not obtained at the Stockholders’ Meeting and the Company Board previously changed its recommendation of the Merger or (c) (i) by Buyer or the Company following June 22, 2026, subject to extension to October 20, 2026 in accordance with the Merger Agreement (the “End Date”), (ii) by Buyer or the Company because of failure to obtain the approval of the stockholders at the Stockholders’ Meeting or (iii) by Buyer because of certain breaches of the Merger Agreement by the Company, only if, in the case of clauses (i) to (iii), an Acquisition Proposal has been made publicly and within nine (9) months of the termination date the Company consummates or enters into a definitive agreement for an Acquisition Proposal.

Upon the election of the Company, the Company and Smithfield Packaged Meats Corp., an affiliate of Buyer (“SPMC”), will enter into an amendment to the licensing and supply letter agreement, dated as of December 5, 2012 (the “Licensing Agreement”), by and between Nathan’s Famous Systems, Inc., a subsidiary of the Company, and SPMC, which will extend the term of the Licensing Agreement for an additional four years to March 2, 2036 from the current expiration date of March 2, 2032, and Buyer will be required to pay the Company a termination fee in cash equal to $ 7,407,270 if the Merger Agreement is terminated (a) because of a CFIUS Turndown (as defined in the Merger Agreement) and the Company is not in material breach of the Merger Agreement at the time of termination or (b) following the End Date if, at such time, (i) a government order or other government action would have prevented the consummation of the Merger (solely as it relates to CFIUS) or the parties have not received CFIUS Clearance, (ii) certain other closing conditions have been satisfied, (iii) the Company's breach of the provisions of the Merger Agreement to obtain certain consents and approvals is not the primary cause of a government order or other government action that would prevent the consummation of the Merger and (iv) the Company is not in material breach of the Merger Agreement at the time of termination.

On January 20, 2026, the Company entered into letter agreements (each a “Retention Agreement”) with each of Eric Gatoff, Chief Executive Officer of the Company, and Robert Steinberg, the Chief Financial Officer of the Company.

Under the Retention Agreements, each such individual is entitled to a cash retention bonus payment if (1) such individual is actively employed by the Company or a subsidiary as of closing under the Merger Agreement and has not given notice of his intent to resign or (2) the individual is terminated by the Company for any reason and closing under the Merger Agreement later occurs.

The retention bonus payment amount is $ 3,250,000 for Mr.

Gatoff and $ 1,050,000 for Mr.

As consideration for the retention bonus payment, Mr.

Gatoff agreed to non-competition provisions that apply for one (1) year following the termination of his employment by the Company for any reason.

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