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Note M - Segment Information
 3 Months Ended
Jun. 29, 2025
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

NOTE M – 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 Condensed 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, as well as interest and dividend income 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 Condensed Consolidated Statement of Earnings (in thousands):

 

June 29, 2025

  

Branded

Product

Program

    

Product

Licensing

    

Restaurant

Operations

    

Corporate

    

Total

  
                                         

Revenues

     29,075       12,381       5,115       427       46,998  

Less:

                                        

Cost of sales

     26,233       -       2,190       -       28,423  

Segment gross profit

     2,842       12,381       2,925       427       18,575  

Less (1):

                                        

Restaurant operating expenses (2)

     -       -       1,179       -       1,179  

Department expenses (3)

     228       46       154       95       523  

Other general and administration expenses (4)

     -       -       -       1,841       1,841  

Payroll expense

     304       -       367       915       1,586  

Depreciation and amortization

     34       -       157       37       228  

Advertising fund expense

     -       -       -       427       427  

Income from operations

     2,276       12,335       1,068       (2,888 )     12,791  

Interest expense

     -       -       -       (758 )     (758 )

Interest and dividend income

     -       -       -       203       203  

Other income, net

     -       -       21       -       21  

Income before provision for income taxes

     2,276       12,335       1,089       (3,443 )     12,257  

 

June 30, 2024

  

Branded

Product

Program

    

Product

Licensing

    

Restaurant

Operations

    

Corporate

    

Total

  
                                         

Revenues

     26,146       12,921       5,272       428       44,767  

Less:

                                        

Cost of sales

     22,972       -       2,269       -       25,241  

Segment gross profit

     3,174       12,921       3,003       428       19,526  

Less (1):

                                        

Restaurant operating expenses (2)

     -       -       1,129       -       1,129  

Department expenses (3)

     332       46       268       100       746  

Other general and administration expenses (4)

     -       -       -       1,617       1,617  

Payroll expense

     304       -       394       914       1,612  

Depreciation and amortization

     38       -       166       45       249  

Advertising fund expense

     -       -       -       428       428  

Income from operations

     2,500       12,875       1,046       (2,676 )     13,745  

Interest expense

     -       -       -       (1,060 )     (1,060 )

Interest and dividend income

     -       -       -       78       78  

Other income, net

     -       -       21       -       21  

Income before provision for income taxes

     2,500       12,875       1,067       (3,658 )     12,784  

 

(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.