Note M - Segment Information

9 Months Ended

Dec. 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
	December 28, 2025
	Branded Product Program		Product Licensing		Restaurant Operations			Corporate			Total
Revenues		23,749		7,385		2,666			512			34,312
Less:
Cost of sales		21,943		-		1,195			-			23,138
Segment gross profit		1,806		7,385		1,471			512			11,174
Less (1):
Restaurant operating expenses (2)		-		-		907			-			907
Department expenses (3)		254		46		147			89			536
Other general and administration expenses (4)		-		-		-			2,385			2,385
Payroll expense		262		-		341			872			1,475
Depreciation and amortization		33		-		160			39			232
Advertising fund expense		-		-		-			512			512
Income (loss) from operations		1,257		7,339		(84	)		(3,385	)		5,127
Interest expense		-		-		-			(707	)		(707	)
Interest and dividend income		-		-		-			206			206
Other income, net		-		-		122			-			122
Income (loss) before provision for income taxes		1,257		7,339		38			(3,886	)		4,748

	Thirteen weeks ended
	December 29, 2024
	Branded Product Program		Product Licensing		Restaurant Operations			Corporate			Total
Revenues		21,099		7,105		2,795			520			31,519
Less:
Cost of sales		18,336		-		1,235			-			19,571
Segment gross profit		2,763		7,105		1,560			520			11,948
Less (1):
Restaurant operating expenses (2)		-		-		991			-			991
Department expenses (3)		245		46		153			112			556
Other general and administration expenses (4)		-		-		-			1,403			1,403
Payroll expense		274		-		346			871			1,491
Depreciation and amortization		35		-		156			44			235
Advertising fund expense		-		-		-			520			520
Income (loss) from operations		2,209		7,059		(86	)		(2,430	)		6,752
Interest expense		-		-		-			(842	)		(842	)
Loss on debt extinguishment		-		-		-			(55	)		(55	)
Interest and dividend income		-		-		-			183			183
Other income, net		-		-		21			-			21
Income (loss) before provision for income taxes		2,209		7,059		(65	)		(3,144	)		6,059

	Thirty-nine weeks ended
	December 28, 2025
	Branded Product Program		Product Licensing		Restaurant Operations		Corporate			Total
Revenues		81,871		28,993		14,628		1,505			126,997
Less:
Cost of sales		77,766		-		6,173		-			83,939
Segment gross profit		4,105		28,993		8,455		1,505			43,058
Less (1):
Restaurant operating expenses (2)		-		-		3,518		-			3,518
Department expenses (3)		718		138		410		287			1,553
Other general and administration expenses (4)		-		-		-		5,704			5,704
Payroll expense		836		-		1,068		2,637			4,541
Depreciation and amortization		100		-		482		114			696
Advertising fund expense		-		-		-		1,626			1,626
Income (loss) from operations		2,451		28,855		2,977		(8,863	)		25,420
Interest expense		-		-		-		(2,204	)		(2,204	)
Interest and dividend income		-		-		-		645			645
Other income, net		-		-		165		-			165
Income (loss) before provision for income taxes		2,451		28,855		3,142		(10,422	)		24,026

	Thirty-nine weeks ended
	December 29, 2024
	Branded Product Program		Product Licensing		Restaurant Operations		Corporate			Total
Revenues		71,781		29,517		14,589		1,508			117,395
Less:
Cost of sales		64,626		-		6,215		-			70,841
Segment gross profit		7,155		29,517		8,374		1,508			46,554
Less (1):
Restaurant operating expenses (2)		-		-		3,509		-			3,509
Department expenses (3)		793		137		554		314			1,798
Other general and administration expenses (4)		-		-		-		4,331			4,331
Payroll expense		845		-		1,085		2,618			4,548
Depreciation and amortization		111		-		485		135			731
Advertising fund expense		-		-		-		1,508			1,508
Income (loss) from operations		5,406		29,380		2,741		(7,398	)		30,129
Interest expense		-		-		-		(3,343	)		(3,343	)
Loss on debt extinguishment		-		-		-		(389	)		(389	)
Interest and dividend income		-		-		-		480			480
Other income, net		-		-		65		-			65
Income (loss) before provision for income taxes		5,406		29,380		2,806		(10,650	)		26,942

(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.