nath20211226

nath20211226_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the quarterly period ended December 26, 2021.

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT of 1934

the transition period from to .

Commission File No. 001-35962

NATHAN'S FAMOUS, INC.

(Exact name of registrant as specified in its charter)

Delaware			11-3166443
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

One Jericho Plaza, Second Floor – Wing A, Jericho, New York 11753

(Address and Zip Code of principal executive offices)

(516) 338-8500

(Registrant's telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $.01 per share		NATH		The NASDAQ Global Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

At February 4, 2022, an aggregate of 4,115,154 shares of the registrant's common stock, par value of $.01, were outstanding.

NATHAN'S FAMOUS, INC. AND SUBSIDIARIES

INDEX

		Page Number

PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements.	3

	Consolidated Financial Statements
	Consolidated Balance Sheets – December 26, 2021 (Unaudited) and March 28, 2021	3

	Consolidated Statements of Earnings (Unaudited) – Thirteen and Thirty-nine Weeks Ended December 26, 2021 and December 27, 2020	4

	Consolidated Statements of Stockholders’ Deficit (Unaudited) – Thirteen Weeks Ended December 26, 2021 and December 27, 2020	5

	Consolidated Statements of Stockholders’ Deficit (Unaudited) – Thirty-nine Weeks Ended December 26, 2021 and December 27, 2020	6

	Consolidated Statements of Cash Flows (Unaudited) – Thirty-nine Weeks Ended December 26, 2021 and December 27, 2020	7

	Notes to Consolidated Financial Statements	8

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations.	21

Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	31

Item 4.	Controls and Procedures.	32

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings.	33

Item 1A.	Risk Factors.	33

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	33

Item 3.	Defaults Upon Senior Securities.	33

Item 4.	Mine Safety Disclosures.	33

Item 5.	Other Information.	33

Item 6.	Exhibits.	34

SIGNATURES		35

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

Nathan’s Famous, Inc. and Subsidiaries

CONSOLIDATED BALANCE SHEETS

December 26, 2021 and March 28, 2021

(in thousands, except share and per share amounts)

	December 26, 2021			March 28, 2021
	(Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents (Note F)	$	86,168		$	81,064
Accounts and other receivables, net (Note H)		14,175			11,652
Inventories		371			624
Prepaid expenses and other current assets (Note I)		821			1,325
Total current assets		101,535			94,665

Property and equipment, net of accumulated depreciation of $10,493 and $9,779, respectively		3,833			4,090
Operating lease assets (Note R)		7,573			8,337
Goodwill		95			95
Intangible asset, net		1,071			1,156
Deferred income taxes		148			138
Other assets		200			328

Total assets	$	114,455		$	108,809

LIABILITIES AND STOCKHOLDERS’ DEFICIT

CURRENT LIABILITIES
Current maturities of long-term debt (Note Q)	$	40,000		$	-
Accounts payable		5,714			4,041
Accrued expenses and other current liabilities (Note L)		5,410			8,478
Current portion of operating lease liabilities (Note R)		1,848			1,837
Deferred franchise fees		359			237
Total current liabilities		53,331			14,593

Long-term debt, net of unamortized debt issuance costs of $2,651 and $3,169, respectively (Note Q)		107,349			146,831
Operating lease liabilities (Note R)		6,680			7,553
Other liabilities (Note L)		733			774
Deferred franchise fees		1,663			1,536

Total liabilities		169,756			171,287

COMMITMENTS AND CONTINGENCIES (Note S)

STOCKHOLDERS’ DEFICIT
Common stock, $.01 par value; 30,000,000 shares authorized; 9,369,235 and 9,369,015 shares issued; and 4,115,154 and 4,114,934 shares outstanding at December 26, 2021 and March 28, 2021, respectively		94			94
Additional paid-in capital		62,299			62,240
Accumulated deficit		(32,924	)		(40,042	)
Stockholders’ equity before treasury stock		29,469			22,292

Treasury stock, at cost, 5,254,081 shares at December 26, 2021 and March 28, 2021		(84,770	)		(84,770	)
Total stockholders’ deficit		(55,301	)		(62,478	)

Total liabilities and stockholders’ deficit	$	114,455		$	108,809

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

Nathan’s Famous, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF EARNINGS

Thirteen and Thirty-nine weeks ended December 26, 2021 and December 27, 2020

(in thousands, except per share amounts)

(Unaudited)

	Thirteen weeks ended						Thirty-nine weeks ended
	December 26, 2021			December 27, 2020			December 26, 2021			December 27, 2020

REVENUES
Sales	$	18,637		$	11,322		$	61,462		$	30,697
License royalties		5,878			5,898			24,218			24,689
Franchise fees and royalties		919			420			2,993			1,087
Advertising fund revenue		479			390			1,437			1,082
Total revenues		25,913			18,030			90,110			57,555

COSTS AND EXPENSES
Cost of sales		16,040			8,937			51,536			24,161
Restaurant operating expenses		547			759			2,874			2,622
Depreciation and amortization		259			288			807			900
General and administrative expenses		2,975			3,253			9,702			8,709
Advertising fund expense		479			390			1,437			1,082
Total costs and expenses		20,300			13,627			66,356			37,474

Income from operations		5,613			4,403			23,754			20,081

Interest expense		(2,650	)		(2,650	)		(7,951	)		(7,951	)
Interest income		24			89			88			309
Other income, net		3			9			24			31

Income before provision for income taxes		2,990			1,851			15,915			12,470
Provision for income taxes		860			492			4,477			3,456
Net income	$	2,130		$	1,359		$	11,438		$	9,014

PER SHARE INFORMATION
Weighted average shares used in computing income per share:
Basic		4,115			4,115			4,115			4,117
Diluted		4,115			4,115			4,115			4,117

Income per share:
Basic	$	.52		$	.33		$	2.78		$	2.19
Diluted	$	.52		$	.33		$	2.78		$	2.19

Dividends declared per share	$	.35		$	.35		$	1.05		$	1.05

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

Nathan’s Famous, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

Thirteen weeks ended December 26, 2021 and December 27, 2020

(in thousands, except share amounts)

(Unaudited)

					Additional										Total
	Common		Common		Paid-in		Accumulated			Treasury Stock, at Cost					Stockholders’
	Shares		Stock		Capital		Deficit			Shares		Amount			Deficit

Balance, September 26, 2021		9,369,235	$	94	$	62,291	$	(33,614	)		5,254,081	$	(84,770	)	$	(55,999	)

Dividends on common stock		-		-		-		(1,440	)		-		-			(1,440	)
Share-based compensation		-		-		8		-			-		-			8
Net income		-		-		-		2,130			-		-			2,130
Balance, December 26, 2021		9,369,235	$	94	$	62,299	$	(32,924	)		5,254,081	$	(84,770	)	$	(55,301	)

					Additional										Total
	Common		Common		Paid-in		Accumulated			Treasury Stock, at Cost					Stockholders’
	Shares		Stock		Capital		Deficit			Shares		Amount			Deficit

Balance, September 27, 2020		9,369,015	$	94	$	62,182	$	(40,581	)		5,254,081	$	(84,770	)	$	(63,075	)

Dividends on common stock		-		-		-		(1,440	)		-		-			(1,440	)
Share-based compensation		-		-		29		-			-		-			29
Net income		-		-		-		1,359			-		-			1,359
Balance, December 27, 2020		9,369,015	$	94	$	62,211	$	(40,662	)		5,254,081	$	(84,770	)	$	(63,127	)

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

Nathan’s Famous, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

Thirty-nine weeks ended December 26, 2021 and December 27, 2020

(in thousands, except share amounts)

(Unaudited)

Additional

Total

SEC Form 10-Q filed by Nathan's Famous Inc.