Nathan's Famous (NATH) investor relations material

Executive summary

• Revenues increased 15% year-over-year to $54.1 million for the quarter ended June 28, 2026, driven by pricing actions in the Branded Product Program and higher license royalties, partially offset by lower franchise fees and company-owned restaurant sales.

• Net income was $8.8 million, nearly flat compared to $8.9 million in the prior year quarter.

• The company entered into a pending merger agreement with Smithfield Foods, Inc., expected to close in the second half of 2026, after which it will become a wholly owned subsidiary and cease to be publicly traded.

• Diluted EPS was $2.14, compared to $2.16 year-over-year.

• Adjusted EBITDA reached $13.6 million, essentially flat year-over-year.

Financial highlights

• Branded Product Program sales rose 20% to $35.0 million, with an 8% increase in hot dog volume and a 17% increase in average selling price.

• License royalties increased 10% to $13.6 million, mainly due to higher retail volume and net selling price.

• Company-owned restaurant sales decreased 1% to $4.0 million, impacted by a 1% decline in average check.

• Income from operations was $12.7 million, nearly flat year-over-year.

• Regular cash dividend of $0.50 per share paid on June 30, 2026.

Outlook and guidance

• Inflationary pressures on commodity prices, especially beef and beef trimmings, and rising labor costs are expected to continue impacting results for the remainder of fiscal 2027.

• Management expects to fund operations, capital expenditures, and debt service from operating cash flow and available cash.

• The merger with Smithfield Foods is anticipated to close in the second half of 2026, subject to shareholder and regulatory approvals.

• Forward-looking statements highlight risks related to merger completion, regulatory approvals, and integration.