Nathan's Famous Q1 2017 income from operations increased 15.9%
Staff Writer |
Nathan's Famous reported results for the first quarter of its 2017 fiscal year that ended June 26, 2016.
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Income from operations increased by 15.9% to $8,824,000, as compared to $7,616,000 during the thirteen weeks ended June 28, 2015.
Adjusted EBITDA increased by 13.4% to $9,366,000 as compared to $8,257,000 for the thirteen weeks ended June 28, 2015.
Net income increased by 53.7% to $3,550,000, as compared to $2,310,000 for the thirteen weeks ended June 28, 2015.
Earnings per diluted share increased by 70.0% to $0.85 per share, as compared to $0.50 per share for the thirteen w
eeks ended June 28, 2015; an
Revenues were $29,416,000, as compared to $30,654,000 during the thirteen weeks ended June 28, 2015.
License royalties increased by 4.4% to $6,824,000 during the thirteen weeks ended June 26, 2016, as compared to $6,536,000 during the thirteen weeks ended June 28, 2015.
During the thirteen weeks ended June 26, 2016, royalties earned under the John Morrell & Co., agreement increased by 4.4% to $6,362,000 as compared to $6,095,000 of royalties earned during the thirteen weeks ended June 28, 2015.
The increase is substantially attributable to significant volume growth in company's consumer packaged hot dog business compared to the thirteen weeks ended June 28, 2015, as a result of the ongoing sales, marketing and promotional strategies tied to lower beef costs.
Sales from the Branded Product Program, featuring the sale of Nathan's hot dogs to the foodservice industry, were $16,254,000 during the thirteen weeks ended June 26, 2016, as compared to sales of $17,415,000 during the thirteen weeks ended June 28, 2015.
This change was attributable to a 2.7% increase in the volume of products sold, which was more than offset by lower average selling prices of 9.6% due to the impact of lower beef prices on that portion of company's business that is priced using formulas tied to the cost of beef.
Sales from the Company-operated restaurants were $4,843,000 during the thirteen weeks ended June 26, 2016 as compared to $5,299,000 during the thirteen weeks ended June 28, 2015.
Sales at company-owned restaurants were unfavorably affected during the quarter due primarily to the amount of rain and unseasonably cool weather during April and May 2016 that hurt company's Coney Island locations.
Revenues from franchise operations increased to $1,330,000 during the thirteen weeks ended June 26, 2016, as compared to $1,227,000 during the thirteen weeks ended June 28, 2015.
Total franchise fee income was $178,000 during the thirteen weeks ended June 26, 2016 as compared to $41,000 during the thirteen weeks ended June 28, 2015, primarily due to the difference in fees earned from company's international franchising program.
Eight new franchised units were opened during the thirteen weeks ended June 26, 2016, including four Branded Menu Program outlets. Fifteen new franchised units were opened during the thirteen weeks ended June 28, 2015, including ten Branded Menu Program outlets.
Nathan's tax rate was reduced by 12.0 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. ■