NATHANS FAMOUS, INC.
For the period ended Mar 29, 2026. Filed Jun 9, 2026.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2026 · Filed Jun 9, 2026
NATH$102.05+0.1%Stored close · as of Oct 23, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2025-03-30; filed 2025-06-10.
0001437749-25-019916
Item 7. Management ’ s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2026-03-29; filed 2026-06-09.
0001437749-26-019923
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 111 previous paragraphs and 108 current paragraphs.
57 unchanged; 41 reworded; 8 added; 12 removed; 1 previous and 2 current paragraphs rearranged.
Tables are not compared: 4 previous and 5 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (8)
Current report
Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to facilitate an understanding of our business and results of operations. This MD&A should be read in conjunction with our Consolidated Financial Statements and the accompanying Notes to Consolidated Financial Statements included elsewhere in this Form 10-K.** **
Current report
The following section generally discusses fiscal year 2026 and fiscal year 2025 items and year-to-date comparisons between 2026 and 2025.
Current report
Merger with Smithfield Foods, Inc.
Current report
On January 20, 2026, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Smithfield Foods, Inc., a Virginia corporation (“Buyer” or “Smithfield Foods”) and Boardwalk Merger Sub, Inc. a Delaware corporation and wholly owned subsidiary of Buyer (“Merger Sub”). Pursuant to the Merger Agreement, and upon the terms and subject to the conditions thereof and in accordance with the General Corporation Law of the State of Delaware, Merger Sub shall merge with and into the Company (the “Merger,” and the effective time of the Merger, the “Effective Time”). As a result of the Merger, at the Effective Time, the separate corporate existence of Merger Sub shall cease, the Company shall continue as the surviving corporation in the Merger (the “Surviving Corporation”) and the Surviving Corporation shall become a wholly owned subsidiary of Buyer. After the Merger, the Company will cease to be publicly traded. Completion of the transaction remains contingent upon meeting several conditions specified in the Merger Agreement. These include securing approval from the holders of a majority of Nathan’s outstanding stock, obtaining clearance from the Committee on Foreign Investment in the United States (CFIUS), and fulfilling other closing requirements. However, given the impact of the partial government shutdown on statutory deadlines for CFIUS’s review process, our anticipated closing timeline has shifted, and we now expect the transaction to close in the second half of 2026. See NOTE N – MERGER to the accompanying Consolidated Financial Statements included in the Annual Report on Form 10-K.
Current report
Inflationary Factors
Current report
Adoption of New Accounting Standard
Current report
General and administrative expenses increased by $3,373,000 to $17,903,000 in the fiscal 2026 period as compared to $14,530,000 in the fiscal 2025 period. The increase in general and administrative expenses was primarily attributable to higher professional fees of $3,365,000 principally related to our pending acquisition with Buyer pursuant to the Merger Agreement. Refer to NOTE N – MERGER in the accompanying consolidated financial statementsand Item 7. Recent Events Affecting our Results of Operations–* Merger Agreement* for further information.
Current report
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the United States. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others to be implemented through 2027. The OBBBA did not have a material impact to our provision for income taxes for the fiscal 2026 period.
Removed paragraphs (12)
Previous report
Refinancing of Senior Secured Notes due 2025
Previous report
On July 10, 2024, the Company entered into a five-year unsecured Credit Agreement (the “Credit Agreement”) with Citibank, N.A. and borrowed $60,000,000 in Term Loan borrowings to refinance and redeem our outstanding 6.625% Senior Secured Notes due 2025 (the “2025 Notes”). See NOTE J – LONG TERM DEBT to the consolidated financial statements and “Liquidity and Capital Resources” for additional information on the Credit Agreement and refinancing. Our future results may be impacted by our debt service and repayment obligations under our Credit Agreement.
Previous report
General and administrative expenses decreased by $1,082,000 to $14,530,000 in the fiscal 2025 period as compared to $15,612,000 in the fiscal 2024 period. The reduction in general and administrative expenses was primarily attributable to higher share-based compensation expense of $259,000, and a higher provision for credit losses of $119,000 which were offset by lower professional fees of $291,000 and a cash bonus payout of $1,000,000 to the Company’s Executive Chairman of the Board in fiscal 2024.
Previous report
During fiscal 2024, the Company completed the partial redemption, in the principal amount of $20,000,000 of the 2025 Notes. In connection with this transaction, the Company recorded a loss on extinguishment of debt of $169,000 that reflected the write-off of a portion of previously recorded debt issuance costs. See NOTE J – LONG-TERM DEBT in the accompanying consolidated financial statements for further information.
Previous report
2025 Notes
Previous report
On May 1, 2024, we paid our first semi-annual interest payment on the 2025 Notes of $1,987,500 for the fiscal 2025 period. On August 13, 2024, in connection with the redemption of all of the outstanding $60,000,000 principal amount of its 2025 Notes, the Company paid its final required interest payment of $1,137,000 on the redeemed 2025 Notes.* *
Previous report
On September 30, 2024 and December 31, 2024, we paid our quarterly mandatory debt principal repayments of $600,000 each, or $1,200,000 in the aggregate, on our Term Loan borrowings under the Credit Agreement. On October 10, 2024, we made a voluntary principal prepayment of $8,000,000 on our outstanding Term Loan borrowings under the Credit Agreement. The prepayment was primarily funded by operating cash flows. As of March 30, 2025, the Company has made cash interest payments of approximately $2,356,000 on the Term Loan borrowings under the Credit Agreement. Subsequent to the year ending March 30, 2025, on March 31, 2025, the Company paid its next quarterly mandatory debt principal repayment of $600,000.
Previous report
Credit Agreement
Previous report
If the Company pays regular quarterly cash dividends for fiscal 2026 at the same rate as declared in the first quarter of fiscal 2026, the Company’s total cash requirement for dividends for all of fiscal 2026 would be approximately $8,179,000 based on the number of shares of common stock outstanding at June 5, 2025. The Company intends to declare and pay quarterly cash dividends; however, there can be no assurance that any additional quarterly dividends will be declared or paid or of the amount or timing of such dividends, if any.
Previous report
Our ability to pay future dividends is limited by the terms of our Credit Agreement. In addition, the payment of any cash dividends in the future are subject to final determination of the Board and will be dependent upon our earnings and financial requirements and the terms of our Credit Agreement.
Previous report
At March 30, 2025, we sublet one property to a franchisee that we lease from a third party. We remain contingently liable for all costs associated with this property including rent, property taxes and insurance. We may incur future cash payments with respect to such property, consisting primarily of future lease payments, including costs and expenses associated with terminating such lease.
Previous report
Inflationary Pressures
Reworded paragraphs (41)
Previous wording
Inflationary pressures impacted our consolidated results of operations during fiscal 2025, and we anticipate continued inflationary pressures on commodity prices, including beef and beef trimmings, as well as labor inflation during fiscal 2026. In general, we have been able to offset some of these cost increases resulting from inflation by increasing prices at our Company-owned restaurants and entering into sales agreements with our Branded Product Program customers that are correlated to our cost of beef and beef trimmings. We continue to monitor these inflationary pressures and will attempt to implement mitigation measures as needed. Inherent volatility in commodity markets, including beef and beef trimmings, could have a significant impact on our results of operations. Delays in implementing price increases, competitive pressures, recession fears, a decline in consumer spending levels and other factors may limit our ability to implement further price increases in the future.
Current wording
Inflationary pressures negatively impacted our consolidated results of operations during fiscal 2026, most notably within our Branded Product Program segment, due primarily to commodity prices on beef and beef trimmings. We anticipate continued inflationary pressures on commodity prices, including beef and beef trimmings during fiscal 2027. In general, we have been able to offset some of these cost increases resulting from inflation through various actions, such as increasing prices at our Company-owned restaurants and entering into sales agreements with our Branded Product Program customers that are correlated to our cost of beef and beef trimmings. We continue to monitor these inflationary pressures and may need to adjust our prices further to mitigate the impact of these inflationary pressures. Inherent volatility in commodity markets, including beef and beef trimmings, could have a significant impact on our results of operations. Delays in implementing price increases, competitive pressures, a decline in consumer spending levels and other factors may limit our ability to implement further price increases in the future.
Previous wording
Uncertainty in the current macroeconomic environment, including the impact of tariffs, may have an adverse impact on our sales or increase our cost of goods sold.
Current wording
Uncertainty in the current macroeconomic environment, including the impact of inflation, may have an adverse impact on our sales or increase our cost of goods sold.
Previous wording
At March 30, 2025, our franchise system consisted of 230 Nathan’s franchised locations, including 121 Branded Menu locations located in 17** states, and 12 **foreign countries. We also operate four Company-owned restaurants (including one seasonal unit), within the New York metropolitan area.
Current wording
At March 29, 2026, our franchise system consisted of 221 Nathan’s franchised locations, including 110 Branded Menu locations located in 19** states, and 11 **foreign countries. We also operate four Company-owned restaurants (including one seasonal unit), within the New York metropolitan area.
Previous wording
While we do not expect to significantly increase the number of Company-owned restaurants, we may opportunistically and strategically invest in a small number of new units as showcase locations for prospective franchisees and master developers as we seek to grow our franchise system.
Current wording
While we do not expect to significantly increase the number of Company-owned restaurants, we may opportunistically and strategically invest in a small number of new units as showcase locations for prospective franchisees and master developers as we seek to grow our franchise system. We continue to seek opportunities to drive sales in a variety of ways as we adapt to the ever-changing consumer and business climate.
Previous wording
As described in Item 1A. “Risk Factors” and other sections in this Annual Report on Form 10-K for the year ended March 30, 2025, our future results could be impacted by many developments including the impact of the inflationary pressures on our business, as well as our dependence on Smithfield Foods, Inc. as our principal supplier, and the dependence of our licensing revenue and overall profitability on our agreement with Smithfield Foods, Inc. Our future operating results could be impacted by supply constraints on beef or by increased costs of beef, beef trimmings and other commodities due to inflationary pressures compared to earlier periods.
Current wording
As described in Item 1A. “Risk Factors” and other sections in this Annual Report on Form 10-K for the year ended March 29, 2026, our future results could be impacted by many developments including the impact of the inflationary pressures on our business, as well as the pendency of the proposed merger with Smithfield Foods.
Previous wording
The Company determined its intangible asset to have a finite useful life based on the expected future use of this intangible asset. Based upon the review of its Arthur Treacher’s Fish & Chips co-branding agreements, the Company determined that the remaining useful lives of these agreements is three years concluding in fiscal 2028 and the intangible asset is subject to annual amortization. The Company’s definite-lived intangible asset is tested for impairment at least annually, or more frequently if events or changes in circumstances indicate that the asset may be impaired. The Company tested for recoverability of its definite-lived intangible asset based on the projected undiscounted cash flows to be derived from such co-branding agreements. Assumptions used to determine projected undiscounted cash flows include future trends and projected sales. Based on the quantitative test performed, the Company determined that the definite-lived intangible asset was recoverable and no impairment charge was recorded for the fiscal years ended March 30, 2025 and March 31, 2024. Cash flow and sales projections require significant estimates and assumptions by management. Should the estimates and assumptions prove to be incorrect, the Company may be required to record an impairment charge in future periods and such impairment could be material.
Current wording
The Company determined its intangible asset to have a finite useful life based on the expected future use of this intangible asset. Based upon the review of its Arthur Treacher’s Fish & Chips co-branding agreements, the Company determined that the remaining useful lives of these agreements is two years concluding in fiscal 2028 and the intangible asset is subject to annual amortization. The Company’s definite-lived intangible asset is tested for impairment at least annually, or more frequently if events or changes in circumstances indicate that the asset may be impaired. The Company tested for recoverability of its definite-lived intangible asset based on the projected undiscounted cash flows to be derived from such co-branding agreements. Assumptions used to determine projected undiscounted cash flows include future trends and projected sales. Based on the quantitative test performed, the Company determined that the definite-lived intangible asset was recoverable and no impairment charge was recorded for the fiscal years ended March 29, 2026 and March 30, 2025. Cash flow and sales projections require significant estimates and assumptions by management. Should the estimates and assumptions prove to be incorrect, the Company may be required to record an impairment charge in future periods and such impairment could be material.
Previous wording
See Note B item 24 to the consolidated financial statements included in Part IV, Item 15 of this Form 10-K for a summary of new accounting standards applicable to us.
Current wording
See Note B item 23 to the consolidated financial statements included in Part IV, Item 15 of this Form 10-K for a summary of the new accounting standards applicable to us.
Previous wording
Total revenues increased by approximately 7% to $148,182,000 for the fifty-two weeks ended March 30, 2025 (“fiscal 2025”) as compared to $138,610,000 for the fifty-three weeks ended March 31, 2024 (“fiscal 2024”).* *
Current wording
Total revenues increased by approximately 9% to $162,063,000 for the fifty-two weeks ended March 29, 2026 (“fiscal 2026”) as compared to $148,182,000 for the fifty-two weeks ended March 30, 2025 (“fiscal 2025”).* *
Previous wording
Foodservice sales from the Branded Product Program increased by approximately 6% to $91,828,000 for the fiscal 2025 period as compared to $86,489,000 for the fiscal 2024 period. We estimate that the additional week of operations during fiscal 2024 represented approximately $1,202,000 of additional Branded Product Program sales. During the fiscal 2025 period, the total volume of hot dogs sold in the Branded Product Program increased by approximately 1.2% as compared to the fiscal 2024 period. Our average selling prices increased* *by approximately 5% as compared to the fiscal 2024 period.
Current wording
Foodservice sales from the Branded Product Program increased by approximately 15% to $105,768,000 for the fiscal 2026 period as compared to $91,828,000 for the fiscal 2025 period. During the fiscal 2026 period, the total volume of hot dogs sold in the Branded Product Program increased by approximately 1% as compared to the fiscal 2025 period. Our average selling prices increased* *by approximately 12% as compared to the fiscal 2025 period.
Previous wording
Total Company-owned restaurant sales increased by approximately 5% to $12,714,000 during the fiscal 2025 period as compared to $12,103,000 during the fiscal 2024 period. We estimate that the additional week of operations during fiscal 2024 represented approximately $120,000 of additional sales. Restaurant sales were primarily impacted by higher sales at our Coney Island locations due to an increase in our average check.
Current wording
Total Company-owned restaurant sales decreased by approximately 2% to $12,508,000 during the fiscal 2026 period as compared to $12,714,000 during the fiscal 2025 period. Restaurant sales were primarily impacted by a 2% decline in customer traffic due to unfavorable weather conditions, particularly at our Coney Island locations during the key summer season.
Previous wording
License royalties increased by approximately 11% to $37,418,000 in the fiscal 2025 period as compared to $33,581,000 in the fiscal 2024 period. We do not believe that the additional week of operations during fiscal 2024 had a significant impact on license royalties as our licensees continued to report based upon their fiscal reporting periods. Total royalties earned on sales of hot dogs from our license agreement with Smithfield Foods, Inc. at retail and foodservice, increased to $33,589,000 for the fiscal 2025 period as compared to $30,068,000 for the fiscal 2024 period. The increase is due to an 11% increase in retail volume.* The net selling price at retail was comparable year over year. The foodservice business earned higher royalties of $109,000 as compared to the fiscal 2024 period. Royalties earned from all other licensing agreements for the manufacture and sale of Nathan’s products increased *by $316,000 during the fiscal 2025 period as compared to the fiscal 2024 period primarily due to higher royalties earned on sales of French fries, onion rings, proprietary spices, franks-in-a-blanket, mozzarella sticks and bottled mustard offset, in part, by lower royalties earned on sales of pickles.
Current wording
License royalties were $37,417,000 in the fiscal 2026 period which were comparable to the fiscal 2025 period. Total royalties earned on sales of hot dogs from our license agreement with Smithfield Foods at retail and foodservice, were $33,589,000 for the fiscal 2026 period which was unchanged compared to the fiscal 2025 period. Our net selling price increased by 15%, which was offset by a 13% decrease in retail volume. The price increases year over year led to a reduction in promotional activities contributing to the decline in volume. The royalties earned on the foodservice business decreased by $24,000 as compared to the fiscal 2025 period. Royalties earned from all other licensing agreements for the manufacture and sale of Nathan’s products were $3,828,000 during the fiscal 2026 period including $1,598,000 earned on French fries; $1,561,000 earned on proprietary spices; and $669,000 earned on other products including pickles, hors d’oeuvres, mustard and beef sticks.
Previous wording
Franchise fees and royalties decreased by $208,000 to $4,148,000 in the fiscal 2025 period as compared to $4,356,000 in the fiscal 2024 period. Total royalties were $3,767,000 in the fiscal 2025 period as compared to $3,886,000 in the fiscal 2024 period. Royalties earned under the Branded Menu Program were $744,000 in the fiscal 2025 and 2024 periods. Royalties earned under the Branded Menu Program are not based upon a percentage of restaurant sales but are based upon product purchases. Virtual kitchen royalties were $61,000 in the fiscal 2025 period as compared to $81,000 in the fiscal 2024 period. Traditional franchise royalties were $2,962,000 in the fiscal 2025 period as compared to $3,061,000 in the fiscal 2024 period. Franchise restaurant sales declined to $66,905,000 in the fiscal 2025 period as compared to $68,417,000 in the fiscal 2024 period. We estimate that the additional week of operations during fiscal 2024 resulted in $1,215,000 of additional franchise restaurant sales or royalties of approximately $60,000. Comparable domestic franchise sales (consisting of 58 Nathan’s locations, excluding sales under the Branded Menu Program) were $51,250,000 during the fiscal 2025 period as compared to $53,108,000 during the fiscal 2024 period.
Current wording
Franchise fees and royalties were $4,317,000 in the fiscal 2026 period as compared to $4,148,000 in the fiscal 2025 period. Total royalties were $3,897,000 in the fiscal 2026 period as compared to $3,767,000 in the fiscal 2025 period. Royalties earned under the Branded Menu Program were $692,000 in the fiscal 2026 period as compared to $744,000 in the fiscal 2025 period. Royalties earned under the Branded Menu Program are not based upon a percentage of restaurant sales but are based upon product purchases. Virtual kitchen royalties were $124,000 in the fiscal 2026 period as compared to $61,000 in the fiscal 2025 period. Traditional franchise royalties were $3,081,000 in the fiscal 2026 period as compared to $2,962,000 in the fiscal 2025 period. Franchise restaurant sales increased to $70,117,000 in the fiscal 2026 period as compared to $66,905,000 in the fiscal 2025 period principally due to higher sales at travel plazas and airports, offset by lower sales at casino locations primarily in Las Vegas, Nevada. Comparable domestic franchise sales (consisting of 58** **Nathan’s locations, excluding sales under the Branded Menu Program) were $52,449,000 during the fiscal 2026 period as compared to $51,795,000 during the fiscal 2025 period.
Previous wording
At March 30, 2025, 230 franchised locations, including domestic, international and Branded Menu Program units were operating. Total franchise fee income was $381,000 in the fiscal 2025 period as compared to $470,000 in the fiscal 2024 period. Domestic franchise fee income was $108,000 in the fiscal 2025 period as compared to $106,000 in the fiscal 2024 period. International franchise fee income was $237,000 in the fiscal 2025 period as compared to $241,000 in the fiscal 2024 period. We recognized $36,000 and $123,000 of forfeited fees in the fiscal 2025 and fiscal 2024 periods, respectively. During the fiscal 2025 period, 25 franchise locations opened and 25 franchised locations closed. During the fiscal 2024 period, 17 franchised locations opened and 19 franchised locations closed.
Current wording
At March 29, 2026, 221 franchised locations, including domestic, international and Branded Menu Program units were operating. Total franchise fee income was $420,000 in the fiscal 2026 period as compared to $381,000 in the fiscal 2025 period. Domestic franchise fee income was $97,000 in the fiscal 2026 period as compared to $108,000 in the fiscal 2025 period. International franchise fee income was $212,000 in the fiscal 2026 period as compared to $237,000 in the fiscal 2025 period. We recognized $111,000 and $36,000 of forfeited fees in the fiscal 2026 and fiscal 2025 periods, respectively. During the fiscal 2026 period, 23 franchised locations opened and 32 franchised locations closed. During the fiscal 2025 period, 25 franchise locations opened and 25 franchised locations closed.
Previous wording
Advertising fund revenue, after eliminating Company contributions, was $2,074,000 in the fiscal 2025 period as compared to $2,081,000 during the fiscal 2024 period.
Current wording
Advertising fund revenue, after eliminating Company contributions, was $2,053,000 in the fiscal 2026 period as compared to $2,074,000 during the fiscal 2025 period.
Previous wording
Overall, our cost of sales increased by approximately 8% to $89,707,000 in the fiscal 2025 period as compared to $83,182,000 in the fiscal 2024 period. Our gross profit (calculated as total Branded Product sales plus total Company-owned restaurants sales less cost of sales) was $14,835,000 or 14% of sales during the fiscal 2025 period as compared to $15,410,000 or 16% of sales during the fiscal 2024 period.
Current wording
Overall, our cost of sales increased by approximately 19% to $106,519,000 in the fiscal 2026 period as compared to $89,707,000 in the fiscal 2025 period. Our gross profit (calculated as total Branded Product sales plus total Company-owned restaurants sales less cost of sales) was $11,757,000 or 10% of sales during the fiscal 2026 period as compared to $14,835,000 or 14% of sales during the fiscal 2025 period.
Previous wording
Cost of sales in the Branded Product Program increased by 9% to $82,462,000 during the fiscal 2025 period as compared to $75,966,000 in the fiscal 2024 period, primarily due to the 1.2% increase in the volume of hot dogs sold, as well as a 7% increase in the average cost per pound of our hot dogs. A shrinking supply of cattle, combined with industry demand and inflationary pressures have resulted in higher commodity prices, including beef and beef trimmings, contributing to the increase in the average cost per pound of our hot dogs.* *We did not make any purchase commitments for beef during the fiscal 2025 and 2024 periods. If the cost of beef and beef trimmings increases and we are unable to pass on these higher costs through price increases or otherwise reduce any increase in our costs through the use of purchase commitments, our margins will be adversely impacted. With respect to Company-owned restaurants, our cost of sales during the fiscal 2025 period was $7,245,000 or 57% of restaurant sales, as compared to $7,216,000 or 60% of restaurant sales in the fiscal 2024 period. Food and paper costs as a percentage of Company-owned restaurant sales were 25%, down from 28% in the fiscal 2024 period driven, in part, by price increases across most menu offerings. Labor and related expenses as a percentage of Company-owned restaurant sales were 32%, which was comparable to the fiscal 2024 period. Higher wage rates during fiscal 2025 as a result of legislative increases in the New York State minimum wage were offset by price increases across most menu offerings.
Current wording
Cost of sales in the Branded Product Program increased by approximately 20% to $99,352,000 during the fiscal 2026 period as compared to $82,462,000 in the fiscal 2025 period, primarily due to a 19% increase in the average cost per pound of our hot dogs, as well as a 1% increase in the volume of hot dogs sold. A shrinking supply of cattle due to drought conditions and high input costs, combined with strong industry demand and inflationary pressures have resulted in higher commodity prices, including beef and beef trimmings, contributing to the increase in the average cost per pound of our hot dogs. We did not make any purchase commitments for beef during the fiscal 2026 and 2025 periods. If the cost of beef and beef trimmings increases and we are unable to pass on these higher costs through price increases or otherwise reduce any increase in our costs through the use of purchase commitments, our margins will be adversely impacted. With respect to Company-owned restaurants, our cost of sales during the fiscal 2026 period was $7,167,000 or 57% of restaurant sales, which were comparable to the fiscal 2025 period. Food and paper costs as a percentage of Company-owned restaurant sales were 24.5%, down from 25.1% in the fiscal 2025 period. Labor and related expenses as a percentage of Company-owned restaurant sales were 32.8% up from 31.9% in the fiscal 2025 period primarily as a result of legislative increases in the New York State minimum wage which became effective January 1, 2026.
Previous wording
Restaurant operating expenses increased by $202,000 to $4,379,000 in the fiscal 2025 period as compared to $4,177,000 in the fiscal 2024 period. The increase is due primarily to higher occupancy expenses of $203,000, higher repairs and maintenance expenses of $41,000, and higher insurance costs of $31,000** **which were offset, in part, by lower delivery charges of $62,000.
Current wording
Restaurant operating expenses increased by $38,000 to $4,417,000 in the fiscal 2026 period as compared to $4,379,000 in the fiscal 2025 period. The increase is due primarily to higher repairs and maintenance expenses of $35,000, higher utilities expenses of $27,000 and higher delivery fees of $21,000 which were offset, in part, by lower occupancy expenses of $18,000. As a percentage of Company-owned restaurant sales, restaurant operating expenses were 35.3% in the fiscal 2026 period as compared to 34.4% in the fiscal 2025 period.
Previous wording
Depreciation and amortization, which primarily consists of the depreciation of fixed assets, including leasehold improvements and equipment, and the amortization of a definite-lived intangible asset, was $957,000 in the fiscal 2025 period as compared to $1,135,000 in the fiscal 2024 period.
Current wording
Depreciation and amortization, which primarily consists of the depreciation of fixed assets, including leasehold improvements and equipment, and the amortization of a definite-lived intangible asset, was $925,000 in the fiscal 2026 period as compared to $957,000 in the fiscal 2025 period.
Previous wording
Advertising fund expense, after eliminating Company contributions, was $2,112,000 in the fiscal 2025 period as compared to $1,998,000 in the fiscal 2024 period.
Current wording
Advertising fund expense, after eliminating Company contributions, was $2,197,000 in the fiscal 2026 period as compared to $2,112,000 in the fiscal 2025 period.
Previous wording
Interest expense of $5,355,000 in the fiscal 2024 period represented interest expense of $5,010,000 on the 2025 Notes and amortization of debt issuance costs of $345,000.
Current wording
Interest expense of $2,857,000 in the fiscal 2026 period represented interest expense of $2,787,000 on the Secured Overnight Financing Rate (“SOFR”) Term Loan borrowings and amortization of debt issuance costs of $70,000.
Previous wording
Additionally, the Company made a voluntary principal prepayment of $8,000,000 of its Term Loan borrowings under the Credit Agreement and recorded a loss on debt extinguishment of $55,000 related to the write-off of a portion of previously recorded debt issuance costs on the Term Loan borrowings.
Current wording
During fiscal 2025, the Company refinanced and redeemed the 2025 Notes. In connection with the refinancing, the Company recorded a loss on extinguishment of debt of $334,000 that reflected the write-off of the remainder of the debt issuance costs on the 2025 Notes. Additionally, the Company made a voluntary principal prepayment of $8,000,000 of its Term Loan borrowings under the Credit Agreement and recorded a loss on debt extinguishment of $55,000 related to the write-off of a portion of previously recorded debt issuance costs on the Term Loan borrowings.
Previous wording
Interest and dividend income of $672,000** in the fiscal 2025 period represented amounts earned by the Company on its interest bearing bank and money market accounts and money market funds as compared to **$383,000 in the fiscal 2024 period. The increase is due to higher levels of invested cash earning interest at higher rates in the fiscal 2025 period as compared to the fiscal 2024 period.
Current wording
Interest and dividend income of $780,000** in the fiscal 2026 period represented amounts earned by the Company on its interest bearing money market accounts and money market funds as compared to **$672,000 in the fiscal 2025 period. The increase is due to higher levels of invested cash earning interest at higher rates in the fiscal 2026 period as compared to the fiscal 2025 period.
Previous wording
Other income, net was $87,000 in the fiscal 2025 period, which primarily relates to sublease income from a franchised restaurant as compared to $86,000 in the fiscal 2024 period.
Current wording
Other income, net was $165,000 in the fiscal 2026 period which primarily relates to sublease income and includes $84,000 of settlement income received in connection with the termination of a lease for certain premises located at 281 Walt Whitman Road, Huntington Station, New York. Other income, net was $87,000 in the fiscal 2025 period which primarily relates to sublease income.
Previous wording
The effective income tax rate for the fiscal 2025 period was 26.7% compared to 28.5% for the fiscal 2024 period. The effective income tax rate for the fiscal 2025 period reflected income tax expense of $8,735,000 recorded on $32,761,000 of pre-tax income. The effective income tax rate for the fiscal 2024 period reflected income tax expense of $7,835,000 recorded on $27,451,000 of pre-tax income. The effective tax rates are higher than the U.S. Federal statutory rates primarily due to state and local taxes, as well as non-deductible executive compensation under the Internal Revenue Code Section 162(m).
Current wording
The effective income tax rate for the fiscal 2026 period was 28.9% compared to 26.7% for the fiscal 2025 period. The effective income tax rate for the fiscal 2026 period reflected income tax expense of $8,170,000 recorded on $28,190,000 of pre-tax income. The effective income tax rate for the fiscal 2025 period reflected income tax expense of $8,735,000 recorded on $32,761,000 of pre-tax income. The effective tax rates are higher than the U.S. Federal statutory rates primarily due to state and local taxes, as well as non-deductible executive compensation under the Internal Revenue Code Section 162(m) and non-deductible transaction costs.
Previous wording
The amount of unrecognized tax benefits at March 30, 2025 was $532,000 all of which would impact Nathan’s effective tax rate, if recognized. As of March 30, 2025, Nathan’s had $395,000 accrued interest and penalties in connection with unrecognized tax benefits.
Current wording
The amount of unrecognized tax benefits at March 29, 2026 was $362,000 all of which would impact Nathan’s effective tax rate, if recognized. As of March 29, 2026, Nathan’s had $355,000 accrued interest and penalties in connection with unrecognized tax benefits.
Previous wording
Nathan’s estimates that its unrecognized tax benefit excluding accrued interest and penalties could be further reduced by up to $55,000 during the fiscal year ending March 29, 2026, due primarily to the lapse of statutes of limitations which would favorably impact the Company’s effective tax rate, although no assurances can be given in this regard.
Current wording
Nathan’s estimates that its unrecognized tax benefit excluding accrued interest and penalties could be further reduced by up to $50,000 during the fiscal year ending March 28, 2027, due primarily to the lapse of statutes of limitations which would favorably impact the Company’s effective tax rate, although no assurances can be given in this regard.
Previous wording
In addition to disclosing results that are determined in accordance with Generally Accepted Accounting Principles in the United States of America ("US GAAP"), the Company has provided EBITDA, a non-GAAP financial measure, which is defined as net income excluding (i) interest expense; (ii) provision for income taxes and (iii) depreciation and amortization expense. The Company has also provided Adjusted EBITDA, a non-GAAP financial measure, which is defined as EBITDA, excluding (i) loss on debt extinguishment; and (ii) share-based compensation that the Company believes will impact the comparability of its results of operations.
Current wording
In addition to disclosing results that are determined in accordance with Generally Accepted Accounting Principles in the United States of America ("US GAAP"), the Company has provided EBITDA, a non-GAAP financial measure, which is defined as net income excluding (i) interest expense; (ii) provision for income taxes and (iii) depreciation and amortization expense. The Company has also provided Adjusted EBITDA, a non-GAAP financial measure, which is defined as EBITDA, excluding (i) loss on debt extinguishment; (ii) share-based compensation; and (iii) nonrecurring transaction costs consisting primarily of professional fees incurred in connection with the pending Merger that the Company believes will impact the comparability of its results of operations.
Previous wording
Cash and cash equivalents at March 30, 2025 aggregated $27,802,000, a $6,775,000 increase during the fiscal 2025 period as compared to cash and cash equivalents of $21,027,000 at March 31, 2024. Net working capital increased to $28,371,000 at March 30, 2025 as compared to $23,203,000 at March 31, 2024.
Current wording
Cash and cash equivalents at March 29, 2026 aggregated $24,404,000, a $3,398,000 decrease during the fiscal 2026 period as compared to cash and cash equivalents of $27,802,000 at March 30, 2025. Net working capital decreased to $28,218,000 at March 29, 2026 as compared to $28,371,000 at March 30, 2025.
Previous wording
Our primary sources of liquidity are cash flows from operations. Our primary cash requirements are to fund our quarterly dividends, to satisfy the debt service under our credit facility, capital expenditures, working capital and general corporate needs.
Current wording
Our primary sources of liquidity and capital resources are cash flows from operations and our cash and cash equivalents. Our primary cash requirements are to fund our dividends as permitted under the Merger Agreement, to satisfy the debt service under our credit facility, capital expenditures, lease obligations, working capital and general corporate needs.
Previous wording
Cash provided by operations is primarily attributable to net income of $24,026,000 in addition to other non-cash operating items of $2,532,000, offset by changes in other operating assets and liabilities of $1,318,000. Non-cash operating expenses consist principally of a loss on debt extinguishment of $389,000, depreciation and amortization of $957,000, amortization of debt issuance costs of $153,000, share-based compensation expense of $993,000 and a provision for credit losses of $275,000. In the fiscal 2025 period, inventories increased by $379,000 due to timing and Branded Product Program inventory in transit. Prepaid expenses and other current assets decreased by $128,000 due primarily to a decrease in prepaid income taxes of $365,000 which were offset, in part, by an increase in prepaid marketing and insurance expenses of $347,000. Accounts payable, accrued expenses and other current liabilities decreased by $1,227,000 due principally to lower incentive compensation accruals of $253,000 as well as a decrease in accrued interest expense of $1,528,000 resulting from the timing of our debt service payments under our Credit Agreement. Accounts payable increased by $419,000 due to the timing of product purchases for our Branded Product Program and Company-owned restaurants.
Current wording
Cash provided by operations is primarily attributable to net income of $20,020,000 in addition to other non-cash operating items of $2,168,000, offset by changes in other operating assets and liabilities of $3,954,000. Non-cash operating expenses consist principally of depreciation and amortization of $925,000, amortization of debt issuance costs of $70,000, share-based compensation expense of $1,132,000 and a provision for credit losses of $129,000. In the fiscal 2026 period, accounts and other receivables increased by $5,906,000 due primarily to higher Branded Product Program receivables of $5,740,000. Inventories decreased by $330,000 due to timing and Branded Product Program inventory in transit. Prepaid expenses and other current assets decreased by $64,000 due primarily to a decrease in prepaid income taxes of $283,000 which were offset, in part, by an increase in prepaid marketing and other expenses of $221,000. Accounts payable, accrued expenses and other current liabilities increased by $2,238,000 due principally to an increase in accounts payable of $1,741,000 due to the timing of product purchases for our Branded Product Program and Company-owned restaurants, as well as an increase in accrued rebates of $388,000 and an increase in accrued professional fees of $286,000.
Previous wording
Cash used in investing activities of $225,000 is primarily attributable to capital expenditures incurred for our Branded Product Program and our Coney Island restaurants.
Current wording
Cash used in investing activities was $370,000 in the fiscal 2026 period primarily attributable to capital expenditures incurred for our Branded Product Program and our Coney Island restaurants.
Previous wording
In connection with the Company’s refinancing of the 2025 Notes, the Company borrowed $60,000,000 in Term Loan borrowings pursuant to the Credit Agreement and simultaneously redeemed the 2025 Notes. We incurred $431,000 of debt issuance costs in connection with this refinancing. During fiscal 2025, we made $1,200,000 of mandatory principal repayments, as well as an $8,000,000 voluntary principal repayment on our Term Loan borrowings under the Credit Agreement. Further, the Company paid its four quarterly cash dividends of $0.50 per share totaling $8,172,000. The Company also paid $437,000 for withholding taxes on the net share vesting of 10,000 restricted stock units.
Current wording
During fiscal 2026, we made $2,400,000 of mandatory principal repayments on our Term Loan borrowings under the Credit Agreement. Additionally, the Company paid its four quarterly cash dividends of $0.50 per share, along with a special cash dividend of $2.50 per share totaling $18,403,000. The Company also paid $459,000 for withholding taxes on the net share vesting of 10,000 restricted stock units.
Previous wording
In 2016, the Board authorized increases to the sixth stock repurchase plan for the repurchase of up to 1,200,000 shares of its common stock on behalf of the Company. As of March 30, 2025, Nathan’s has repurchased 1,101,884 shares at a cost of approximately $39,000,000 under the sixth stock repurchase plan. At March 30, 2025, there were 98,116 shares remaining to be repurchased pursuant to the sixth stock repurchase plan. The plan does not have a set expiration date. Purchases under the Company’s stock repurchase program may be made from time to time, depending on market conditions, in open market or privately negotiated transactions, at prices deemed appropriate by management. There is no set time limit on the repurchases. There were no stock repurchases during the fiscal 2025 period. We may return capital to our stockholders through stock repurchases, subject to any restrictions in our Credit Agreement, although there is no assurance that the Company will make any repurchases under its existing stock repurchase plan.
Current wording
In 2016, the Board authorized increases to the sixth stock repurchase plan for the repurchase of up to 1,200,000 shares of its common stock on behalf of the Company. As of March 29, 2026, Nathan’s has repurchased 1,101,884 shares at a cost of approximately $39,000,000 under the sixth stock repurchase plan. At March 29, 2026, there were 98,116 shares remaining to be repurchased pursuant to the sixth stock repurchase plan. The plan does not have a set expiration date. Purchases under the Company’s stock repurchase program may be made from time to time, depending on market conditions, in open market or privately negotiated transactions, at prices deemed appropriate by management. There is no set time limit on the repurchases. There were no stock repurchases during the fiscal 2026 period and the fiscal 2025 period. The terms of the Merger Agreement prohibit the Company from repurchasing any of its common stock.
Previous wording
As discussed above, we had cash and cash equivalents at March 30, 2025 aggregating $27,802,000. Our Board routinely monitors and assesses its cash position and our current and potential capital requirements. During the fiscal 2025 period, the Company declared and paid four quarterly dividends of $0.50 per share aggregating $8,172,000.
Current wording
As discussed above, we had cash and cash equivalents at March 29, 2026 aggregating $24,404,000. Our Board routinely monitors and assesses its cash position and our current and potential capital requirements. During the fiscal 2026 period, the Company declared and paid four quarterly dividends of $0.50 per share, as well as a special cash dividend of $2.50 per share on December 5, 2025 aggregating $18,403,000.
Previous wording
Effective June 10, 2025, the Board declared its first quarterly cash dividend of $0.50 per share for fiscal 2026 which is payable on July 1, 2025 to stockholders of record as of the close of business on June 23, 2025.
Current wording
Our ability to pay future dividends is limited by the terms of our Merger Agreement (as defined in NOTE N – MERGER). Effective June 9, 2026, as permitted under the Merger Agreement, the Board declared its regular quarterly cash dividend of $0.50 per share for fiscal 2027 which is payable on June 30, 2026 to stockholders of record as of the close of business on June 22, 2026 (the “June 2026 Regular Cash Dividend”). After the payment of the June 2026 Regular Cash Dividend, the Company is no longer permitted to declare and pay any further dividends under the Merger Agreement.
Previous wording
We expect that in the future we will make investments in certain existing restaurants, support the growth of the Branded Product and Branded Menu Programs, service the principal and interest obligations under the Credit Agreement, fund our dividend program and may continue our stock repurchase programs, funding those investments from our operating cash flow. We may also incur capital and other expenditures or engage in investing activities in connection with opportunistic situations that may arise on a case-by-case basis. While our Credit Agreement bears interest at a fluctuating interest rate based on SOFR plus a spread adjustment, if the Company makes its fiscal year 2026 cash interest payments on its outstanding Term Loan borrowings at the interest rate effective at March 30, 2025, then during the fiscal year ended March 29, 2026, we expect to make cash interest payments of approximately $2,895,000 on the Term Loan borrowings.
Current wording
We expect that in the future we will make investments in certain existing restaurants, support the growth of the Branded Product and Branded Menu Programs, service the principal and interest obligations under the Credit Agreement, and pay the June 2026 Regular Cash Dividend, funding those investments from our operating cash flow. We may also incur capital and other expenditures or engage in investing activities in connection with opportunistic situations that may arise on a case-by-case basis. While our Credit Agreement bears interest at a fluctuating interest rate based on the SOFR plus a spread adjustment, if the Company makes cash interest payments on the Term Loan borrowings at the interest rate effective at March 29, 2026, then during the fiscal year ended March 28, 2027, we expect to make cash interest payments of approximately $2,305,000 on the Term Loan borrowings.
Previous wording
We may from time to time seek to make voluntary principal prepayments of Term Loan borrowings under our Credit Agreement. Such voluntary prepayments, if any, will depend on market conditions, our liquidity requirements, satisfactory compliance of covenants and conditions pursuant to our Credit Agreement and other factors.
Current wording
We may from time to time seek to make voluntary principal prepayments of Term Loan borrowings under our Credit Agreement. Such voluntary prepayments, if any, will depend on market conditions, our liquidity requirements, satisfactory compliance of covenants and conditions pursuant to our Credit Agreement, the Merger Agreement and other factors.
Previous wording
Management believes that available cash and cash equivalents and cash generated from operations should provide sufficient capital to finance our operations, satisfy our debt service requirements, fund dividend distributions and, if any, stock repurchases for at least the next 12 months.
Current wording
Management believes that available cash and cash equivalents and cash generated from operations should provide sufficient capital to finance our operations, satisfy our debt service requirements, and fund the June 2026 Regular Cash Dividend for at least the next 12 months.
Previous wording
Inflationary pressures on labor and rising commodity prices, most notably for beef and beef trimmings, have impacted our consolidated results of operations during the fiscal 2025 period, and this trend may continue into fiscal 2026. Our average cost of hot dogs during the fiscal 2025 period was approximately 7% higher than during the fiscal 2024 period. Our average cost of hot dogs during the fiscal 2024 period was approximately 10% higher than during the fiscal 2023 period. Inherent volatility experienced in certain commodity markets, such as those for beef and beef trimmings due to seasonal shifts, climate conditions, industry demand, inflationary pressures and other macroeconomic factors could have an adverse effect on our results of operations. This impact will depend on our ability to manage such volatility through price increases and product mix. We are unable to predict the future cost of our hot dogs and expect to experience price volatility for our beef products during fiscal 2026. To the extent that beef prices increase as compared to earlier periods, it could impact our results of operations. In the past, we entered into purchase commitments for a portion of our hot dogs to reduce the impact of increasing market prices. We may attempt to enter into similar purchase arrangements for hot dogs and other products in the future.
Current wording
Our average cost of hot dogs during the fiscal 2026 period was approximately 19% higher than during the fiscal 2025 period. Our average cost of hot dogs during the fiscal 2025 period was approximately 7% higher than during the fiscal 2024 period. Inherent volatility experienced in certain commodity markets, such as those for beef and beef trimmings due to seasonal shifts, climate conditions, industry demand, inflationary pressures and other macroeconomic factors could have an adverse effect on our results of operations. This impact will depend on our ability to manage such volatility through price increases and product mix. We are unable to predict the future cost of our hot dogs and expect to experience price volatility for our beef products during fiscal 2027. To the extent that beef prices increase as compared to earlier periods, it could impact our results of operations. In the past, we entered into purchase commitments for a portion of our hot dogs to reduce the impact of increasing market prices. We may attempt to enter into similar purchase arrangements for hot dogs and other products in the future.
Previous wording
We have experienced competitive pressure on labor rates as a result of the increase in the minimum hourly wage for fast food workers where our Company-owned restaurants are located. On January 1, 2025, the minimum wage increased from $16.00 to $16.50 in New York City, Long Island and Westchester which will be followed by an additional $0.50 increase in 2026. Further, beginning in 2027, the minimum wage across New York State will increase annually according to the Consumer Price Index. There has also been an increased demand for labor at all levels which has resulted in greater challenges retaining adequate staffing levels at our Company-owned restaurants; our franchised restaurants and Branded Menu Program locations; as well as for certain vendors in our supply chain that we depend on for our commodities. We remain in contact with our major suppliers and to date we have not experienced significant disruptions in our supply chain.
Current wording
We have experienced competitive pressure on labor rates as a result of the increase in the minimum hourly wage for fast food workers where our Company-owned restaurants are located. On January 1, 2026, the minimum wage increased from $16.50 to $17.00 in New York City, Long Island and Westchester. Further, beginning in 2027, the minimum wage across New York State will increase annually according to the Consumer Price Index. There has also been an increased demand for labor at all levels which has resulted in greater challenges retaining adequate staffing levels at our Company-owned restaurants; our franchised restaurants and Branded Menu Program locations; as well as for certain vendors in our supply chain that we depend on for our commodities. We remain in contact with our major suppliers and to date we have not experienced significant disruptions in our supply chain.
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Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
See Note B item 22 to the consolidated financial statements included in Part IV, Item 15 of this Form 10-K for a summary of the new accounting standard adopted.
Current report — wording carried from elsewhere
Inflationary pressures on labor and rising commodity prices, most notably for beef and beef trimmings, have impacted our consolidated results of operations during the fiscal 2026 period, and this trend may continue into fiscal 2027.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
During fiscal 2025, the Company refinanced and redeemed the 2025 Notes. In connection with the refinancing, the Company recorded a loss on extinguishment of debt of $334,000 that reflected the write-off of the remainder of the debt issuance costs on the 2025 Notes.