NATHANS FAMOUS, INC. Segments Disclosure

NOTE I – SEGMENT INFORMATION

 

Nathan’s considers itself to be a brand marketer of the Nathan’s Famous signature products to the foodservice industry pursuant to its various business structures. Nathan’s sells its products directly to consumers through its Restaurant Operations segment consisting of Company-owned and franchised restaurants, including virtual kitchens, to distributors that resell our products to the foodservice industry through the Branded Product Program and by third party manufacturers pursuant to license agreements that sell our products to supermarkets, club stores and grocery stores nationwide.

 

The Company’s Chief Executive Officer has been identified as the Chief Operating Decision Maker (“CODM”) who regularly reviews operating results, evaluates performance and allocates resources for the Branded Product Program, Product Licensing and Restaurant Operations segments based upon a number of factors, the primary profit measure being income from operations as reported on the Consolidated Statement of Earnings. The CODM regularly reviews revenues, gross profit and income from operations by segment when evaluating the financial performance of each segment. Significant segment expenses are monitored by the CODM and included in the tables below. Segment asset information is not used by the CODM to assess performance and allocate resources and therefore is not presented. Certain administrative expenses are not allocated to the segments and are reported within the Corporate segment.

 

Branded Product Program – This segment derives revenue principally from the sale of hot dog products either directly to foodservice operators or to various foodservice distributors who resell the products to foodservice operators.

 

Product licensing – This segment derives revenue, primarily in the form of royalties, from licensing a broad variety of Nathan’s Famous branded products, including our hot dogs, frozen crinkle-cut French fries and additional products through retail supermarkets, grocery channels and club stores throughout the United States.

 

Restaurant operations – This segment derives revenue from the sale of our products at Company-owned restaurants and earns fees and royalties from its franchised restaurants, including its virtual kitchens.

 

Revenues from operating segments are from transactions with unaffiliated third parties and do not include any intersegment revenues.

 

Interest expense, loss on debt extinguishment, interest and dividend income and other income, net, are managed centrally at the corporate level, and, accordingly, such items are not presented by segment since they are excluded from the measure of profitability reviewed by the CODM.

 

The following tables summarize segment information and reconcile our segment results to our consolidated results as reported on our Consolidated Statement of Earnings:

 

March 29, 2026		Branded Product Program				Product Licensing				Restaurant Operations				Corporate				Total
Revenues			105,768				37,417				16,825				2,053				162,063
Less:
Cost of sales			99,352				-				7,167				-				106,519
Segment gross profit			6,416				37,417				9,658				2,053				55,544
Less (1):
Restaurant operating expenses (2)			-				-				4,417				-				4,417
Department expenses (3)			890				183				554				387				2,014
Other general and administration expenses (4)			-				-				-				9,846				9,846
Payroll expense			1,109				-				1,430				3,504				6,043
Depreciation and amortization			132				-				640				153				925
Advertising fund expense			-				-				-				2,197				2,197
Income from operations			4,285				37,234				2,617				(14,034	)			30,102
Interest expense			-				-				-				(2,857	)			(2,857	)
Interest and dividend income			-				-				-				780				780
Other income, net			-				-				165				-				165
Income before provision for income taxes			4,285				37,234				2,782				(16,111	)			28,190

 

 

March 30, 2025		Branded Product Program				Product Licensing				Restaurant Operations				Corporate				Total
Revenues			91,828				37,418				16,862				2,074				148,182
Less:
Cost of sales			82,461				-				7,246				-				89,707
Segment gross profit			9,367				37,418				9,616				2,074				58,475
Less (1):
Restaurant operating expenses (2)			-				-				4,379				-				4,379
Department expenses (3)			956				182				713				410				2,261
Other general and administration expenses (4)			-				-				-				6,204				6,204
Payroll expense			1,127				-				1,457				3,481				6,065
Depreciation and amortization			148				-				636				173				957
Advertising fund expense			-				-				-				2,112				2,112
Income from operations			7,136				37,236				2,431				(10,306	)			36,497
Interest expense			-				-				-				(4,106	)			(4,106	)
Loss on debt extinguishment			-				-				-				(389	)			(389	)
Interest and dividend income			-				-				-				672				672
Other income, net			-				-				87				-				87
Income before provision for income taxes			7,136				37,236				2,518				(14,129	)			32,761

 

(1)

The significant expense categories and amounts align with segment-level information that is regularly provided to the CODM.

(2)

Includes occupancy expenses, insurance expenses, utility costs, repair and maintenance expense and other Company-owned restaurant expenses.

(3)

Includes travel expense, marketing and trade show expense and certain other overhead expenses.

(4)

Includes incentive compensation expense, share-based compensation expense, professional fees, occupancy expenses, provision for credit losses and certain other overhead expenses.