Nathan's Famous reports income increase for Q1 2017
Aug. 5, 2016
by Kimberlie Clyma
Nathan's Famous Branded Products Program, licensing program and company-owned restaurants all delivered strong results.
JERICHO, NY – Nathan’s Famous, Inc. reported a 15.9 percent increase in income from operations and a 53.7 percent increase in net income in its Q1 2017 results that ended June 26, compared to the same 13-week period that ended June 28, 2015.
Revenues, however, were down 4 percent (or $1,238,000) to $29,416,000, during the year-ago quarter, the company reported.
Income from operations increased to $8,824,000, as compared to $7,616,000 for Q1 2016, ended June, 28, 2015, and net income increased to $3,550,000, as compared to $2,310,000 for the same period.
Adjusted EBITDA increased by 13.4 percent to $9,366,000 as compared to $8,257,000 for the same period in 2015. Earnings per diluted share increased by 70 percent to $0.85 per share, as compared to $0.50 per share for the 13 weeks ended June 28, 2015.
Revenues for Nathan’s Famous were down $1,238,000 (or 4 percent) to $29,416,000 as compared to $30,654,000 for the same period in 2015.
“Fiscal 2016 was a very strong year for Nathan’s Famous,” Eric Gatoff, CEO, said in a statement regarding the company’s Q4 2016 year-end results. “Our Branded Products Program, licensing program and company-owned restaurants all delivered outstanding results, helping the company achieve the highest Income from operations in its history.”
Significant volume growth in the company’s consumer packaged hot dog business as a result of ongoing sales, marketing and promotional strategies continues to contribute to increases in license royalties, according to the company. For the quarter ended June 26, license royalties increased by 4.4 percent to $6,824,000 as compared to $6,536,000 for the quarter a year ago. Total royalties earned under the John Morrell & Co., agreement advanced 4.4 percent to $6,362,000 as compared to $6,095,000 reported for Q1 a year ago.
Sales from the Branded Product Program, including the sale of Nathan’s hot dogs to the foodservice industry, totaled $16,254,000, as compared to $17,415,000 for the same 13-week period reported a year ago. There was a 2.7 percent increase in the volume of products sold which was offset by lower average selling prices of 9.6 percent due to the impact of lower beef prices on the foodservice portion of the business.
Sales from company-operated restaurants were down to $4,843,000 during the 13 weeks ended June 26, as compared to $5,299,000 during the year-ago period. Sales at the Coney Island locations were affected by rain and unseasonably cool weather during April and May 2016, according to the company.
Revenues from franchise operations increased for the quarter to $1,330,000 from $1,227,000 in 2015. Eight new franchised units were opened during Q1 2017, including four Branded Menu Program outlets.
Nathan’s Famous distributes its products in 50 states, the District of Columbia, Puerto Rico, the US Virgin Islands, Guam, and 11 foreign countries through its restaurant system, foodservice sales programs and product licensing activities. Last year, over 550 million Nathan’s Famous hot dogs were sold.