On this page of StockholderLetter.com we present the latest annual shareholder letter from NATHANS FAMOUS, INC. — ticker symbol NATH. Reading current and past NATH letters to shareholders can bring important insights into the investment thesis.
2023 ANNUAL REPORT
Total Revenues
Income From Operations (2)
Adjusted EBITDA (3) (5)
($ in millions)
($ in millions)
($ in millions)
35000
$34.4
$29.9
$28.0
$27.1
$130.8
38
36
34
$114.9
$28.0
$101.8
$25.5
$75.8
2019
2020
   19
2021 2019
2022 202020232021
   20
2022
2023    22
   21
23
2019
36
34
$25.5
$27.2
30
28
26
24
24
22
22
20
20
18 15000
2020
2021
   19
   19
2022
   20
2023    21
   20
   21
   22
   22
23
Selected Consolidated Financial Data:
As reported
Total revenues
Income from operations(2)
Net income
Income per share
Basic
Diluted
Weighted average shares used in computing income per share
Basic
Diluted
Supplemental Non-GAAP information(3)
EBITDA(4)
18
23
2023 2023
2019 2019
2020 2020
2021 2021
2022 2022
   19
Fiscal Year (1)
2023
2022
2021
2020
2019
$ 130,785
$ 34,445
$ 19,623
$ 114,882
$ 29,863
$ 13,596
$ 75,839
$ 25,515
$ 11,075
$ 103,325
$ 27,172
$ 13,435
$ 101,849
$ 27,976
$ 21,493








(In thousands, except share and per share amounts)
Adjusted EBITDA
$25.5
26
2023 Financial Highlights
(5)
$29.9
$31.232
$30.4 $28.0
$30.0 $27.1
$27.1
28 25000
25000
38 $36.4
$34.4
$29.9
32
30
$103.3
15000
$34.4
35000
4.80
4.80
3.30
3.30
2.69
2.69
3.19
3.19
5.13
5.09
4,089
4,090
4,115
4,115
4,116
4,116
4,216
4,216
4,187
4,220
$ 35,681
$ 29,725
$ 27,109
$ 29,848
$ 41,414
$ 36,383
$ 31,153
$ 27,225
$ 29,964
$ 30,399
(1) Our fiscal year ends on the last Sunday in March, which results in a 52- or 53-week year. The fiscal years ended March 26, 2023, March 27, 2022, March 28, 2021 and March 29, 2020 were each on the
basis of a 52-week reporting period. The fiscal year ended March 31, 2019 was on the basis of a 53-week reporting period.
(2) Represents total revenues less (i) cost of sales; (ii) restaurant operating expenses; (iii) general and administrative expenses; (iv) depreciation and amortization and (v) advertising fund expense
(3) EBITDA and Adjusted EBITDA are non-GAAP financial measures. The Company has provided EBITDA and Adjusted EBITDA that the Company believes will impact the comparability of its
results of operations. The Company believes that EBITDA and Adjusted EBITDA are useful to investors to assist in assessing and understanding the Company   s operating performance and
underlying trends in the Company   s business because EBITDA and Adjusted EBITDA are (i) among the measures used by management in evaluating performance and (ii) are frequently used
by securities analysts, investors and other interested parties as a common performance measure. EBITDA and Adjusted EBITDA are not recognized terms under US GAAP and should not be
viewed as alternatives to net income or other measures of financial performance or liquidity in conformity with US GAAP. Additionally, our definitions of EBITDA and Adjusted EBITDA may
differ from other companies. Analysis of results and outlook on a non-US GAAP basis should be used as a complement to, and in conjunction with, data presented in accordance with US
GAAP. Please see a reconciliation of EBITDA and Adjusted EBITDA to net income in the Annual Report on Form 10-K for the fiscal year March 26, 2023, included herein and in our filings with
the Securities and Exchange Commission for the fiscal years ending 2022, 2021, 2020, and 2019.
(4) EBITDA represents net income excluding (i) interest expense; (ii) provision for income taxes and (iii) depreciation and amortization expense.
(5) Adjusted EBITDA represents EBITDA excluding (i) loss on disposal of property and equipment in fiscal 2023; (ii) loss on debt extinguishment in fiscal 2023 and fiscal 2022; (iii) gain on sale of property
and equipment in fiscal 2019; and (iv) share-based compensation.
Corporate Profile
Over one hundred years ago, Nathan   s began as a nickel hot dog stand on Coney Island in 1916 and, over the past century,
has become a much-loved    New York institution    that has evolved into a highly recognized brand throughout the
United States and the world.
Through our innovative points-of-distribution strategies, Nathan   s products are marketed within our restaurant system
and throughout a broad spectrum of other foodservice and retail environments. Our programs provide for the sale of
Nathan   s World Famous Beef Hot Dogs, crinkle-cut French fries and other products across a wide range of grocery retail
and foodservice formats. In total, Nathan   s products are marketed for sale in approximately 79,000 locations, including
supermarkets, mass merchandisers and club stores, selected foodservice locations, our Company-owned restaurants
located in New York and our franchised restaurants throughout the United States and in eighteen foreign countries.
Successful market penetration of our highly-recognized valued brand and products, through a wide variety of distribution
channels, continues to provide new and exciting growth opportunities.
   20
   21
   22
23
Shareholder   s Letter
Nathan   s Famous had the
most successful year in its
long history in Fiscal 2023.
Our business model is aimed at increasing the number
of distribution points for our signature products in
three distinct business channels. As of March 26, 2023:
(1) our consumer-packaged goods were sold through
more than 65,000 locations in supermarket/grocery
channels in the United States; (2) our bulk foodservicepackaged goods were sold through 14,000 locations
in foodservice channels in North America; and (3) we
had four Company-owned restaurants in the United
States, 232 franchised restaurants and 267 virtual kitchens throughout the world. These diverse business lines
each drove the Company   s performance in fiscal 2023.
fiscal 2023 increased 5.1% to $33.5 Million
compared to fiscal 2022.
Our most significant licensing agreement is with
Smithfield Foods, Inc. and covers the sale of our
portfolio of consumer packaged and certain bulk packaged Nathan   s Famous hot dog products to retailers
throughout the United States. In fiscal 2023, royalties
earned under this agreement increased by 2.8% to
$28.7 Million compared to fiscal 2022.
Other licenses in our licensing program include
licenses to sell at retail Nathan   s Famous crinkle cut
french fries, beer batter onion rings, mustards, pickles,
franks    n blankets, mini bagel dogs and mozzarella
sticks. Our license with Lamb Weston, Inc. for branded
french fries and onion rings achieved the greatest rate
of growth in the program this past year with royalties
increasing by 57% to $1.5 Million.
OPERATIONAL AND FINANCIAL RESULTS
On an overall basis, results for fiscal 2023 compared
to fiscal 2022 showed double-digit growth as follows:
(1) revenues were $130.8 Million, an increase of 13.8%;
(2) EBITDA1, a non-GAAP financial measure, was $35.7
Million, an increase of 20%; (3) pre-tax income was
$26.8 Million, an increase of 44.6%; (4) net income was
$19.6 Million, an increase of 44.3%; and (5) diluted
earnings per share were $4.80, an increase of 45.5%.
The Branded Products Program
The Branded Products Program is our foodservice
sales program which features the bulk sale of Nathan   s
Famous hot dogs to the food service industry. Our products are sold through the Branded Products Program at
over 14,000 points of distribution, including several large
national and regional restaurant, movie theater and
convenience store chains, as well as thousands of other
locations including ballparks, arenas, amusement parks,
college campuses, hospitals, casinos, resorts and school
systems. Through the Branded Products Program, we
Product Licensing
Our licensing program, which consists primarily of the
sale of Nathan   s Famous branded consumer packaged
goods through supermarkets, club stores and mass
merchandisers, is the largest part of our business today,
both from the perspective of profit contribution and
points of distribution. Overall, license royalties during
Please see a reconciliation of EBITDA to net income in the Annual Report on Form 10-K for the fiscal year March 26, 2023 included herein.
1
Nathan   s Famous, Inc.
1
2023 Annual Report
dividend in the Company   s long history   $0.25 per share
per quarter, or $1.00 per share for the fiscal year. Since
then, we have steadily raised our quarterly dividend
which is currently $0.50 per share, or $2.00 per year.
do business with all of the major foodservice distributors
in the United States, including SYSCO Corporation, US
Foodservice, Inc., Performance Food Group Company,
McLane Company, Inc. and DOT Foods as well as many
regional distributors.
In all, between stock buybacks and cash dividends,
more than $250 Million has been returned to shareholders over the last 20 years   more than eight times
the Company   s market capitalization of less than $30
Million at the beginning of those 20 years!
On a year-over-year basis for fiscal 2023, results in the
Branded Products Program were as follows: (1) net sales
of $78.9 Million, representing an 18.9% increase; (2)
operating profit of $11.2 Million, representing a 34.1%
increase; and (3) a 15.0% increase in the unit volume of
products sold.
Additionally, underscoring our strong cash flow generation over the last two years, we have reduced our outstanding long-term debt by 47% through repurchases
of $70 Million principal amount of our Senior Secured
Notes due in 2025.
Restaurant Operations
As of the end of fiscal 2023, our Restaurant Operations
consisted of four Company-owned locations in the
United States, 232 franchised units and 267 virtual kitchens locations throughout the world. Revenues from
Restaurant Operations in fiscal 2023 increased by 11.4%
to $16.5 Million compared to fiscal 2022.
IN CONCLUSION
Our focused strategies, creative approaches, and
future opportunities should afford us with the ability to
continue to promote the Nathan   s Famous brand and
advance the sale of Nathan   s Famous products through
a broad variety of environments and distribution channels. As we seek to continue to expand and pursue
profitable, new opportunities, we will retain our steadfast commitment to quality and endeavor to serve our
shareholders responsibly. We remain extremely appreciative of your continued support.
RETURNING CAPITAL TO SHAREHOLDERS
The success of our current business model has allowed
us to return significant capital to our shareholders.
Since the early 2000s, we have repurchased more than
5.2 million shares of our common stock. At an average
price of just over $16.38 per share, we reduced our
outstanding share count by more than 50%, creating
significant value for all of our shareholders.
In fiscal 2015, our capital return strategy shifted to dividends. At that time, and again in fiscal 2018, we paid
one-time special dividends to all of our shareholders.
Together, more than $137 Million, or $30 per share, was
returned to shareholders through dividends. In fiscal
2019, we declared and paid the first regular quarterly
Nathan   s Famous, Inc.
Eric Gatoff
Chief Executive Officer
2
2023 Annual Report
FORM 10-K
Nathan   s Famous, Inc.
 • shareholder letter icon 7/21/2023 Letter Continued (Full PDF)
 • stockholder letter icon More "Hotels" Category Stockholder Letters
 • Benford's Law Stocks icon NATH Benford's Law Stock Score = 86


NATH Shareholder/Stockholder Letter Transcript:

2023 ANNUAL REPORT

Total Revenues
Income From Operations (2)
Adjusted EBITDA (3) (5)
($ in millions)
($ in millions)
($ in millions)
35000
$34.4
$29.9
$28.0
$27.1
$130.8
38
36
34
$114.9
$28.0
$101.8
$25.5
$75.8
2019
2020
   19
2021 2019
2022 202020232021
   20
2022
2023    22
   21
23
2019
36
34
$25.5
$27.2
30
28
26
24
24
22
22
20
20
18 15000
2020
2021
   19
   19
2022
   20
2023    21
   20
   21
   22
   22
23
Selected Consolidated Financial Data:
As reported
Total revenues
Income from operations(2)
Net income
Income per share
Basic
Diluted
Weighted average shares used in computing income per share
Basic
Diluted
Supplemental Non-GAAP information(3)
EBITDA(4)
18
23
2023 2023
2019 2019
2020 2020
2021 2021
2022 2022
   19
Fiscal Year (1)
2023
2022
2021
2020
2019
$ 130,785
$ 34,445
$ 19,623
$ 114,882
$ 29,863
$ 13,596
$ 75,839
$ 25,515
$ 11,075
$ 103,325
$ 27,172
$ 13,435
$ 101,849
$ 27,976
$ 21,493








(In thousands, except share and per share amounts)
Adjusted EBITDA
$25.5
26
2023 Financial Highlights
(5)
$29.9
$31.232
$30.4 $28.0
$30.0 $27.1
$27.1
28 25000
25000
38 $36.4
$34.4
$29.9
32
30
$103.3
15000
$34.4
35000
4.80
4.80
3.30
3.30
2.69
2.69
3.19
3.19
5.13
5.09
4,089
4,090
4,115
4,115
4,116
4,116
4,216
4,216
4,187
4,220
$ 35,681
$ 29,725
$ 27,109
$ 29,848
$ 41,414
$ 36,383
$ 31,153
$ 27,225
$ 29,964
$ 30,399
(1) Our fiscal year ends on the last Sunday in March, which results in a 52- or 53-week year. The fiscal years ended March 26, 2023, March 27, 2022, March 28, 2021 and March 29, 2020 were each on the
basis of a 52-week reporting period. The fiscal year ended March 31, 2019 was on the basis of a 53-week reporting period.
(2) Represents total revenues less (i) cost of sales; (ii) restaurant operating expenses; (iii) general and administrative expenses; (iv) depreciation and amortization and (v) advertising fund expense
(3) EBITDA and Adjusted EBITDA are non-GAAP financial measures. The Company has provided EBITDA and Adjusted EBITDA that the Company believes will impact the comparability of its
results of operations. The Company believes that EBITDA and Adjusted EBITDA are useful to investors to assist in assessing and understanding the Company   s operating performance and
underlying trends in the Company   s business because EBITDA and Adjusted EBITDA are (i) among the measures used by management in evaluating performance and (ii) are frequently used
by securities analysts, investors and other interested parties as a common performance measure. EBITDA and Adjusted EBITDA are not recognized terms under US GAAP and should not be
viewed as alternatives to net income or other measures of financial performance or liquidity in conformity with US GAAP. Additionally, our definitions of EBITDA and Adjusted EBITDA may
differ from other companies. Analysis of results and outlook on a non-US GAAP basis should be used as a complement to, and in conjunction with, data presented in accordance with US
GAAP. Please see a reconciliation of EBITDA and Adjusted EBITDA to net income in the Annual Report on Form 10-K for the fiscal year March 26, 2023, included herein and in our filings with
the Securities and Exchange Commission for the fiscal years ending 2022, 2021, 2020, and 2019.
(4) EBITDA represents net income excluding (i) interest expense; (ii) provision for income taxes and (iii) depreciation and amortization expense.
(5) Adjusted EBITDA represents EBITDA excluding (i) loss on disposal of property and equipment in fiscal 2023; (ii) loss on debt extinguishment in fiscal 2023 and fiscal 2022; (iii) gain on sale of property
and equipment in fiscal 2019; and (iv) share-based compensation.
Corporate Profile
Over one hundred years ago, Nathan   s began as a nickel hot dog stand on Coney Island in 1916 and, over the past century,
has become a much-loved    New York institution    that has evolved into a highly recognized brand throughout the
United States and the world.
Through our innovative points-of-distribution strategies, Nathan   s products are marketed within our restaurant system
and throughout a broad spectrum of other foodservice and retail environments. Our programs provide for the sale of
Nathan   s World Famous Beef Hot Dogs, crinkle-cut French fries and other products across a wide range of grocery retail
and foodservice formats. In total, Nathan   s products are marketed for sale in approximately 79,000 locations, including
supermarkets, mass merchandisers and club stores, selected foodservice locations, our Company-owned restaurants
located in New York and our franchised restaurants throughout the United States and in eighteen foreign countries.
Successful market penetration of our highly-recognized valued brand and products, through a wide variety of distribution
channels, continues to provide new and exciting growth opportunities.
   20
   21
   22
23

Shareholder   s Letter
Nathan   s Famous had the
most successful year in its
long history in Fiscal 2023.
Our business model is aimed at increasing the number
of distribution points for our signature products in
three distinct business channels. As of March 26, 2023:
(1) our consumer-packaged goods were sold through
more than 65,000 locations in supermarket/grocery
channels in the United States; (2) our bulk foodservicepackaged goods were sold through 14,000 locations
in foodservice channels in North America; and (3) we
had four Company-owned restaurants in the United
States, 232 franchised restaurants and 267 virtual kitchens throughout the world. These diverse business lines
each drove the Company   s performance in fiscal 2023.
fiscal 2023 increased 5.1% to $33.5 Million
compared to fiscal 2022.
Our most significant licensing agreement is with
Smithfield Foods, Inc. and covers the sale of our
portfolio of consumer packaged and certain bulk packaged Nathan   s Famous hot dog products to retailers
throughout the United States. In fiscal 2023, royalties
earned under this agreement increased by 2.8% to
$28.7 Million compared to fiscal 2022.
Other licenses in our licensing program include
licenses to sell at retail Nathan   s Famous crinkle cut
french fries, beer batter onion rings, mustards, pickles,
franks    n blankets, mini bagel dogs and mozzarella
sticks. Our license with Lamb Weston, Inc. for branded
french fries and onion rings achieved the greatest rate
of growth in the program this past year with royalties
increasing by 57% to $1.5 Million.
OPERATIONAL AND FINANCIAL RESULTS
On an overall basis, results for fiscal 2023 compared
to fiscal 2022 showed double-digit growth as follows:
(1) revenues were $130.8 Million, an increase of 13.8%;
(2) EBITDA1, a non-GAAP financial measure, was $35.7
Million, an increase of 20%; (3) pre-tax income was
$26.8 Million, an increase of 44.6%; (4) net income was
$19.6 Million, an increase of 44.3%; and (5) diluted
earnings per share were $4.80, an increase of 45.5%.
The Branded Products Program
The Branded Products Program is our foodservice
sales program which features the bulk sale of Nathan   s
Famous hot dogs to the food service industry. Our products are sold through the Branded Products Program at
over 14,000 points of distribution, including several large
national and regional restaurant, movie theater and
convenience store chains, as well as thousands of other
locations including ballparks, arenas, amusement parks,
college campuses, hospitals, casinos, resorts and school
systems. Through the Branded Products Program, we
Product Licensing
Our licensing program, which consists primarily of the
sale of Nathan   s Famous branded consumer packaged
goods through supermarkets, club stores and mass
merchandisers, is the largest part of our business today,
both from the perspective of profit contribution and
points of distribution. Overall, license royalties during
Please see a reconciliation of EBITDA to net income in the Annual Report on Form 10-K for the fiscal year March 26, 2023 included herein.
1
Nathan   s Famous, Inc.
1
2023 Annual Report

dividend in the Company   s long history   $0.25 per share
per quarter, or $1.00 per share for the fiscal year. Since
then, we have steadily raised our quarterly dividend
which is currently $0.50 per share, or $2.00 per year.
do business with all of the major foodservice distributors
in the United States, including SYSCO Corporation, US
Foodservice, Inc., Performance Food Group Company,
McLane Company, Inc. and DOT Foods as well as many
regional distributors.
In all, between stock buybacks and cash dividends,
more than $250 Million has been returned to shareholders over the last 20 years   more than eight times
the Company   s market capitalization of less than $30
Million at the beginning of those 20 years!
On a year-over-year basis for fiscal 2023, results in the
Branded Products Program were as follows: (1) net sales
of $78.9 Million, representing an 18.9% increase; (2)
operating profit of $11.2 Million, representing a 34.1%
increase; and (3) a 15.0% increase in the unit volume of
products sold.
Additionally, underscoring our strong cash flow generation over the last two years, we have reduced our outstanding long-term debt by 47% through repurchases
of $70 Million principal amount of our Senior Secured
Notes due in 2025.
Restaurant Operations
As of the end of fiscal 2023, our Restaurant Operations
consisted of four Company-owned locations in the
United States, 232 franchised units and 267 virtual kitchens locations throughout the world. Revenues from
Restaurant Operations in fiscal 2023 increased by 11.4%
to $16.5 Million compared to fiscal 2022.
IN CONCLUSION
Our focused strategies, creative approaches, and
future opportunities should afford us with the ability to
continue to promote the Nathan   s Famous brand and
advance the sale of Nathan   s Famous products through
a broad variety of environments and distribution channels. As we seek to continue to expand and pursue
profitable, new opportunities, we will retain our steadfast commitment to quality and endeavor to serve our
shareholders responsibly. We remain extremely appreciative of your continued support.
RETURNING CAPITAL TO SHAREHOLDERS
The success of our current business model has allowed
us to return significant capital to our shareholders.
Since the early 2000s, we have repurchased more than
5.2 million shares of our common stock. At an average
price of just over $16.38 per share, we reduced our
outstanding share count by more than 50%, creating
significant value for all of our shareholders.
In fiscal 2015, our capital return strategy shifted to dividends. At that time, and again in fiscal 2018, we paid
one-time special dividends to all of our shareholders.
Together, more than $137 Million, or $30 per share, was
returned to shareholders through dividends. In fiscal
2019, we declared and paid the first regular quarterly
Nathan   s Famous, Inc.
Eric Gatoff
Chief Executive Officer
2
2023 Annual Report

FORM 10-K
Nathan   s Famous, Inc.



shareholder letter icon 7/21/2023 Letter Continued (Full PDF)
 

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