Note M - Segment Information

6 Months Ended

Sep. 28, 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, loss on debt extinguishment and 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):

	Thirteen weeks ended
	September 28, 2025
	Branded Product Program			Product Licensing		Restaurant Operations		Corporate			Total
Revenues		29,047			9,227		6,847		566			45,687
Less:
Cost of sales		29,590			-		2,788		-			32,378
Segment gross profit (loss)		(543	)		9,227		4,059		566			13,309
Less (1):
Restaurant operating expenses (2)		-			-		1,432		-			1,432
Department expenses (3)		236			46		109		103			494
Other general and administration expenses (4)		-			-		-		1,478			1,478
Payroll expense		270			-		360		850			1,480
Depreciation and amortization		33			-		165		38			236
Advertising fund expense		-			-		-		687			687
Income (loss) from operations		(1,082	)		9,181		1,993		(2,590	)		7,502
Interest expense		-			-		-		(739	)		(739	)
Interest and dividend income		-			-		-		236			236
Other income, net		-			-		22		-			22
Income (loss) before provision for income taxes		(1,082	)		9,181		2,015		(3,093	)		7,021

	Thirteen weeks ended
	September 29, 2024
	Branded Product Program		Product Licensing		Restaurant Operations		Corporate			Total
Revenues		24,536		9,491		6,522		560			41,109
Less:
Cost of sales		23,318		-		2,711		-			26,029
Segment gross profit		1,218		9,491		3,811		560			15,080
Less (1):
Restaurant operating expenses (2)		-		-		1,389		-			1,389
Department expenses (3)		216		45		133		102			496
Other general and administration expenses (4)		-		-		-		1,311			1,311
Payroll expense		267		-		345		833			1,445
Depreciation and amortization		38		-		163		46			247
Advertising fund expense		-		-		-		560			560
Income (loss) from operations		697		9,446		1,781		(2,292	)		9,632
Interest expense		-		-		-		(1,441	)		(1,441	)
Loss on debt extinguishment		-		-		-		(334	)		(334	)
Interest and dividend income		-		-		-		219			219
Other income, net		-		-		23		-			23
Income (loss) before provision for income taxes		697		9,446		1,804		(3,848	)		8,099

	Twenty-six weeks ended
	September 28, 2025
	Branded Product Program		Product Licensing		Restaurant Operations		Corporate			Total
Revenues		58,122		21,608		11,962		993			92,685
Less:
Cost of sales		55,823		-		4,978		-			60,801
Segment gross profit		2,299		21,608		6,984		993			31,884
Less (1):
Restaurant operating expenses (2)		-		-		2,611		-			2,611
Department expenses (3)		464		92		263		198			1,017
Other general and administration expenses (4)		-		-		-		3,319			3,319
Payroll expense		574		-		727		1,765			3,066
Depreciation and amortization		67		-		322		75			464
Advertising fund expense		-		-		-		1,114			1,114
Income (loss) from operations		1,194		21,516		3,061		(5,478	)		20,293
Interest expense		-		-		-		(1,497	)		(1,497	)
Interest and dividend income		-		-		-		439			439
Other income, net		-		-		43		-			43
Income (loss) before provision for income taxes		1,194		21,516		3,104		(6,536	)		19,278

	Twenty-six weeks ended
	September 29, 2024
	Branded Product Program		Product Licensing		Restaurant Operations		Corporate			Total
Revenues		50,682		22,412		11,794		988			85,876
Less:
Cost of sales		46,290		-		4,980		-			51,270
Segment gross profit		4,392		22,412		6,814		988			34,606
Less (1):
Restaurant operating expenses (2)		-		-		2,518		-			2,518
Department expenses (3)		548		91		401		202			1,242
Other general and administration expenses (4)		-		-		-		2,928			2,928
Payroll expense		571		-		739		1,747			3,057
Depreciation and amortization		76		-		329		91			496
Advertising fund expense		-		-		-		988			988
Income (loss) from operations		3,197		22,321		2,827		(4,968	)		23,377
Interest expense		-		-		-		(2,501	)		(2,501	)
Loss on debt extinguishment		-		-		-		(334	)		(334	)
Interest and dividend income		-		-		-		297			297
Other income, net		-		-		44		-			44
Income (loss) before provision for income taxes		3,197		22,321		2,871		(7,506	)		20,883

(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.