JERICHO, N.Y., Nov. 4, 2016 /PRNewswire/ -- Nathan's Famous, Inc. reported results for the second quarter of its 2017 fiscal year that ended September 25, 2016.
For the fiscal quarter ended September 25, 2016:
- Income from operations was $8,031,000, as compared to $8,426,000 during the thirteen weeks ended September 27, 2015;
- Adjusted EBITDA, as subsequently defined, was $8,610,000 as compared to $9,006,000 for the thirteen weeks ended September 27, 2015;
- Net income was $2,507,000, as compared to $2,847,000 for the thirteen weeks ended September 27, 2015;
- Earnings per diluted share were $0.60 per share, as compared to $0.64 per share for the thirteen weeks ended September 27, 2015; and
- Revenues were $28,013,000, as compared to $30,619,000 during the thirteen weeks ended September 27, 2015.
For the twenty-six weeks ended September 25, 2016:
- Income from operations increased by 5.1% to $16,855,000, as compared to $16,042,000 during the twenty-six weeks ended September 27, 2015;
- Adjusted EBITDA, as subsequently defined, increased by 4.2% to $17,976,000, as compared to $17,257,000 for the twenty-six weeks ended September 27, 2015;
- Net income increased by 17.5% to $6,057,000, as compared to $5,157,000 for the twenty-six weeks ended September 27, 2015;
- Earnings per diluted share were $1.44 per share, as compared to $1.14 per share for the twenty-six weeks ended September 27, 2015; and
- Revenues were $57,429,000, as compared to $61,273,000 during the twenty-six weeks ended September 27, 2015.
The Company reported the following:
- License royalties were $11,612,000 during the twenty-six weeks ended September 25, 2016, as compared to $11,792,000 during the twenty-six weeks ended September 27, 2015. During the twenty-six weeks ended September 25, 2016, total royalties earned under the John Morrell & Co., agreement were $10,714,000, as compared to $10,932,000 of royalties earned during the twenty-six weeks ended September 27, 2015. During this period, the volume of products sold increased by 6.9%; however, a more competitive promotional environment this summer led to an 8.2% decrease in the average net selling price on which our royalty is calculated.
- In the Branded Product Program, which features the sale of Nathan's hot dogs to the foodservice industry, sales were $31,481,000during the twenty-six weeks ended September 25, 2016, as compared to sales of $33,595,000 during the twenty-six weeks ended September 27, 2015. Operating profits increased for the fiscal 2017 period by approximately $1.9 million over the fiscal 2016 period. During the period, the volume of products sold increased by 3.1% but our average selling price declined by approximately 9.2% due to the impact of lower beef markets on that portion of our business that is sold using formula pricing.
- Sales from the Company-operated restaurants were $11,458,000 during the twenty-six weeks ended September 25, 2016 as compared to $12,842,000 during the twenty-six weeks ended September 27, 2015 driven primarily from lower sales at both Coney Island locations, due to unfavorable weather conditions during the fiscal 2017 period compared to the weather conditions during the fiscal 2016 period when we achieved record sales at both of these locations.
- Revenues from franchise operations were $2,664,000 during the twenty-six weeks ended September 25, 2016, as compared to $2,617,000 during the twenty-six weeks ended September 27, 2015. Total franchise fee income was $262,000 during the twenty-six weeks ended September 25, 2016 as compared to $207,000 during the twenty-six weeks ended September 27, 2015, primarily due to higher international development fees. Twenty new franchised outlets opened during the twenty-six weeks ended September 25, 2016, including seven international locations, and 11 Branded Menu Program outlets. Twenty-three new franchised outlets opened, during the twenty-six weeks ended September 27, 2015, including seven international locations, and 11 Branded Menu Program outlets.
- Nathan's tax rate was reduced by 6.5 percentage points as a result of early adopting the provisions of Financial Accounting Standards Board ASU 2016-09, "Stock Compensation", which now reduces the Company's tax provision for the excess tax benefits associated with stock compensation instead of increasing Additional paid-in-capital, as was past practice. Full report.
