Note N - Segment Information

6 Months Ended

Sep. 27, 2020

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

NOTE N – 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-operated and franchised restaurants, to distributors that resell our products to the foodservice industry through the Branded Product Program (“BPP”) and by third party manufacturers pursuant to license agreements that sell our products to club stores and grocery stores nationwide. The Company’s Chief Executive Officer has been identified as the Chief Operating Decision Maker (“CODM”) who 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. 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, sausage and corned beef products, frozen French fries and additional products through retail 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.

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

Income from operations attributable to Corporate consists principally of administrative expenses not allocated to the operating segments such as executive management, finance, information technology, legal, insurance, corporate office costs, corporate incentive compensation and compliance costs and expenses of the advertising fund.

Interest expense, interest 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.

Operating segment information is as follows (in thousands):

	Thirteen weeks ended						Twenty-six weeks ended
	Sept. 27, 2020			Sept. 29, 2019			Sept. 27, 2020			Sept. 29, 2019
Revenues
Branded Product Program	$	9,698		$	16,182		$	14,447		$	32,295
Product licensing		8,268			5,425			18,791			14,147
Restaurant operations		3,470			7,422			5,595			12,623
Corporate (1)		403			697			692			1,179
Total revenues	$	21,839		$	29,726		$	39,525		$	60,244
Income from operations
Branded Product Program	$	1,252		$	2,124		$	1,524		$	4,327
Product licensing		8,223			5,380			18,700			14,056
Restaurant operations		(138	)		2,103			(1,031	)		2,853
Corporate		(1,753	)		(2,241	)		(3,515	)		(4,422	)
Income from operations	$	7,584		$	7,366		$	15,678		$	16,814
Loss on disposal of property and equipment		-			(2	)		-			(2	)
Interest expense		(2,651	)		(2,651	)		(5,301	)		(5,301	)
Interest income		103			370			220			736
Other income, net		22			20			22			41
Income before provision for income taxes	$	5,058		$	5,103		$	10,619		$	12,288

(1) Represents advertising fund revenue