Note N - Segment Information

9 Months Ended

Dec. 26, 2021

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, including virtual or “ghost” kitchens, 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, including its virtual or “ghost” kitchens.

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							Thirty-nine weeks ended
	December 26, 2021			December 27, 2020			December 26, 2021			December 27, 2020
Revenues
Branded Product Program	$	16,901		$	10,003		$	51,960		$	24,450
Product licensing		5,878			5,898			24,218			24,689
Restaurant operations		2,655			1,739			12,495			7,334
Corporate (1)		479			390			1,437			1,082
Total revenues	$	25,913		$	18,030		$	90,110		$	57,555
Income from operations
Branded Product Program	$	1,681		$	1,550		$	5,096		$	3,074
Product licensing		5,832			5,852			24,081			24,552
Restaurant operations		(69	)		(1,162	)		623			(2,193	)
Corporate		(1,831	)		(1,837	)		(6,046	)		(5,352	)
Income from operations	$	5,613		$	4,403		$	23,754		$	20,081
Interest expense		(2,650	)		(2,650	)		(7,951	)		(7,951	)
Interest income		24			89			88			309
Other income, net		3			9			24			31
Income before provision for income taxes	$	2,990		$	1,851		$	15,915		$	12,470

(1) Represents advertising fund revenue