Note N - Segment Information

9 Months Ended

Dec. 24, 2023

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-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. 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, sausages, 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.

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, loss on debt extinguishment, interest income, and other income (expense), 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 24, 2023			December 25, 2022			December 24, 2023			December 25, 2022
Revenues
Branded Product Program	$	19,688		$	16,661		$	68,210		$	61,862
Product licensing		6,078			6,337			26,075			26,064
Restaurant operations		2,616			2,655			13,833			13,941
Corporate (1)		508			501			1,501			1,504
Total revenues	$	28,890		$	26,154		$	109,619		$	103,371
Income from operations
Branded Product Program	$	2,421		$	2,451		$	5,769		$	7,003
Product licensing		6,033			6,292			25,939			25,928
Restaurant operations		(308	)		(238	)		2,000			1,879
Corporate		(3,009	)		(2,173	)		(8,004	)		(6,784	)
Income from operations	$	5,137		$	6,332		$	25,704		$	28,026
Interest expense		(1,392	)		(1,944	)		(4,219	)		(5,831	)
Loss on debt extinguishment		(169	)		-			(169	)		-
Interest income		138			158			350			260
Other income (expense), net		21			(60	)		65			(4	)
Income before provision for income taxes	$	3,735		$	4,486		$	21,731		$	22,451

(1) Represents advertising fund revenue.