Note M - Segment Information

3 Months Ended

Jun. 28, 2026

Notes to Financial Statements

Segment Reporting [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, interest and dividend 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.

The following tables summarize segment information and reconcile our segment results to our consolidated results as reported on our Condensed Consolidated Statements of Earnings (in thousands):

June 28, 2026	Branded Product Program		Product Licensing		Restaurant Operations		Corporate			Total
Revenues		35,039		13,587		5,025		411			54,062
Less:
Cost of sales		33,087		-		2,118		-			35,205
Segment gross profit		1,952		13,587		2,907		411			18,857
Less (1):
Restaurant operating expenses (2)		-		-		1,216		-			1,216
Department expenses (3)		275		46		184		118			623
Other general and administration expenses (4)		-		-		-		2,013			2,013
Payroll expense		317		-		418		952			1,687
Depreciation and amortization		30		-		169		40			239
Advertising fund expense		-		-		-		411			411
Income from operations		1,330		13,541		920		(3,123	)		12,668
Interest expense		-		-		-		(638	)		(638	)
Interest and dividend income		-		-		-		133			133
Other income, net		-		-		-		-			-
Income before provision for income taxes		1,330		13,541		920		(3,628	)		12,163

June 29, 2025	Branded Product Program		Product Licensing		Restaurant Operations		Corporate			Total
Revenues		29,075		12,381		5,115		427			46,998
Less:
Cost of sales		26,233		-		2,190		-			28,423
Segment gross profit		2,842		12,381		2,925		427			18,575
Less (1):
Restaurant operating expenses (2)		-		-		1,179		-			1,179
Department expenses (3)		228		46		154		95			523
Other general and administration expenses (4)		-		-		-		1,841			1,841
Payroll expense		304		-		367		915			1,586
Depreciation and amortization		34		-		157		37			228
Advertising fund expense		-		-		-		427			427
Income from operations		2,276		12,335		1,068		(2,888	)		12,791
Interest expense		-		-		-		(758	)		(758	)
Interest and dividend income		-		-		-		203			203
Other income, net		-		-		21		-			21
Income before provision for income taxes		2,276		12,335		1,089		(3,443	)		12,257

(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.