UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 26, 2022. OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT of 1934 For the transition period from to . Commission File No. 001-35962 NATHAN'S FAMOUS, INC. (Exact name of registrant as specified in its charter) Delaware 11-3166443 (State or other jurisdicti ...

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended March 27, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________to__________ Commission Fi ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) Commission File No. 001-35962 NATHAN'S FAMOUS, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) Delaware 11-3166443 One Jericho Plaza, Second Floor – Wing A, Jericho, New York 11753 (Address and Zip Code of principal executive offices) (516) 338-8500 (Registrant's telephone number, including area code) (For ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 26, 2021. OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT of 1934 For the transition period from to . Commission File No. 001-35962 NATHAN'S FAMOUS, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorpora ...

Revenue Growth - Total revenues increased by 77% to $31,319,000 for the thirteen weeks ended June 27, 2021, compared to $17,686,000 for the same period in 2020[113]. - Total sales increased by 189% to $19,325,000 for the fiscal 2022 period, compared to $6,683,000 for the fiscal 2021 period[114]. - Foodservice sales from the Branded Product Program increased by 237% to $15,996,000 for the fiscal 2022 period, compared to $4,749,000 in the fiscal 2021 period[114]. - Total Company-owned restaurant sales increased by 72% to $3,329,000 during the fiscal 2022 period, compared to $1,934,000 during the fiscal 2021 period[115]. - Franchise restaurant sales increased significantly to $12,985,000 in fiscal 2022 from $2,218,000 in fiscal 2021, as approximately 80% of franchise locations were open compared to 52% in the prior year[117]. EBITDA and Profitability - EBITDA for the thirteen weeks ended June 27, 2021, was $11,032,000, compared to $8,521,000 for the same period in 2020[112]. - Adjusted EBITDA for the thirteen weeks ended June 27, 2021, was $11,061,000, compared to $8,550,000 for the same period in 2020[112]. - Overall cost of sales increased by 190% to $15,365,000 in fiscal 2022, while gross profit was $3,960,000, representing 20.5% of sales[121]. Expenses and Costs - General and administrative expenses rose by $614,000 or 22% to $3,458,000 in fiscal 2022, primarily due to higher corporate payroll and legal fees[126]. - Average selling prices decreased by approximately 4.5% compared to the fiscal 2021 period[114]. - The minimum hourly wage for fast food workers in New York State increased to $15.00 on July 1, 2021, significantly affecting Nathan's Company-owned restaurants[152]. - Continued increases in labor, food, and other operating expenses could adversely affect Nathan's operations and pricing strategy[155]. Cash Flow and Financial Position - Cash and cash equivalents decreased by $1,538,000 to $79,526,000 during fiscal 2022, while net working capital increased to $84,994,000[134]. - Cash provided by operations was $77,000 in fiscal 2022, attributed to net income of $5,763,000 and non-cash operating items[137]. - The company incurred $1,440,000 in cash used for financing activities related to dividend payments in fiscal 2022[138]. - Management believes available cash and cash generated from operations will be sufficient to finance operations and satisfy debt service requirements for at least the next 12 months[146]. Strategic Focus and Future Plans - The strategic emphasis continues to focus on increasing distribution points across all business platforms, including Licensing and Branded Product Programs[97]. - The company plans to invest in existing restaurants and support the growth of Branded Product and Branded Menu Programs in the future[145]. Market and Commodity Risks - The company expects to experience price volatility for beef products during fiscal 2022, which could impact operational results[151]. - Nathan's has not attempted to hedge against fluctuations in commodity prices, leading to exposure to market changes in future purchases[163]. - A short-term increase or decrease of 10.0% in the cost of food and paper products for the thirteen-week period ended June 27, 2021, would have increased or decreased the cost of sales by approximately $1,385,000[163]. - Nathan's has recorded a liability of $113,000 in connection with the Brooklyn Guaranty, which does not include potential additional costs that are not reasonably determinable at this time[149]. Debt and Interest Rates - As of June 27, 2021, Nathan's cash and cash equivalents totaled $79,526,000, with earnings on this cash expected to fluctuate by approximately $199,000 per annum for each 0.25% change in interest rates[159]. - The company has $150,000,000 of 2025 Notes outstanding, with interest expense on these borrowings expected to change by approximately $375,000 per annum for each 0.25% change in interest rates[160].

Franchise Operations - As of March 28, 2021, Nathan's franchise system included 213 units operating in 19 states and eight foreign countries[38] - Approximately 77% of the Company's franchise system is currently open, with many locations having temporarily closed due to the COVID-19 pandemic[29] - During fiscal 2021, franchisees opened seven new Nathan's Famous units and closed ten units, including one international unit[52] - The Nathan's Branded Menu Program allows foodservice operators to offer Nathan's products without the same reporting requirements as standard franchises[55] Financial Performance - Total revenue for fiscal 2021 was $1,102,000, a decrease from $4,872,000 in fiscal 2020, representing a decline of approximately 77.6%[67] - Gross profit for fiscal 2021 was $383,000, down from $1,962,000 in fiscal 2020, indicating a decrease of about 80.5%[67] - The licensing agreement with John Morrell & Co. generated royalties of approximately $27,778,000 in fiscal 2021, accounting for 36.6% of total revenues[82] - The licensing agreement for Nathan's Famous frozen French fries and onion rings generated royalties of $1,137,000 in fiscal 2021, up from $719,000 in fiscal 2020[84] Marketing and Brand Development - The company plans to expand its retail licensing program with John Morrell & Co. to penetrate grocery and mass merchandising channels further[75] - The company continues to explore co-branding opportunities within its restaurant system and with other restaurant concepts[81] - In fiscal 2021, Nathan's marketing efforts focused on online media spending and third-party delivery platforms due to COVID-19[95] - Nathan's continues to upgrade its social media platforms to enhance brand awareness among younger demographics[96] Technology and Operations - The Company upgraded its technology resources by migrating to the PAR Brink Point-of-Sale application and partnering with Restaurant Magic for inventory and food management[47] - Nathan's maintains a cooperative distribution system with UniPro Foodservice, Inc. to enhance market expansion and cost efficiency[90] Employee and Workforce Management - Nathan's employs 146 people as of March 28, 2021, with 55% being female and 73% comprising racial and ethnic minorities[100] - The company has not experienced any strike or work stoppage for over 47 years, indicating effective workforce management[102] - The company has historically matched 401(k) contributions at a rate of $0.25 per dollar contributed by employees, up to 3% of their annual salary[106] Safety and Health Measures - The company has implemented various safety measures during COVID-19, including providing PPE and promoting social distancing[108] Cost and Pricing Strategy - Nathan's expects to experience price volatility for beef products during fiscal 2022, which could impact operational results[340] - The company has not attempted to hedge against fluctuations in commodity prices, leading to exposure to market changes in future purchases[341] - A short-term increase or decrease of 10% in the cost of food and paper products for the year ended March 28, 2021 would have increased or decreased Nathan's cost of sales by approximately $2,877,000[341] Revenue Trends - Revenues from company-owned locations and franchised restaurants are historically highest during the first two fiscal quarters, with the fourth quarter typically being the slowest[126] Product and Menu Development - The Company launched the Wings of New York virtual concept, offering a variety of chicken wing options and sides, during fiscal 2021[42] - Nathan's has developed various restaurant designs, including carts and kiosks, suitable for non-traditional sites like airports and stadiums[37] - Nathan's emphasizes its signature products and value pricing strategy to compete effectively in the fast food industry[129] Cash and Debt Management - As of March 28, 2021, Nathan's cash and cash equivalents totaled $81,064,000, with earnings on this cash expected to change by approximately $203,000 per annum for each 0.25% change in interest rates[336] - Nathan's had $150.0 million of 2025 Notes outstanding, with interest expense on these borrowings expected to change by approximately $375,000 per annum for each 0.25% change in interest rates[337] Cost Analysis - The average cost of hot dogs between October 2019 and March 2020 was approximately 11.2% higher than the average cost between October 2018 and March 2019[338] - The average cost of hot dogs between April 2020 and March 2021 was approximately 0.8% lower than the average cost between April 2019 and March 2020[338]

Business Operations - As of December 27, 2020, the restaurant system consisted of 215 franchised units and 4 company-owned units, a decrease from 226 franchised units and 4 company-owned units as of December 29, 2019[112]. - The company has expanded into 75 ghost kitchens, including 37 domestically and 38 internationally, to enhance product distribution[115]. - Approximately 60% of franchised locations have reopened as of the date of the report, following temporary closures due to COVID-19[120]. - The company has taken actions to mitigate COVID-19 impacts, including reducing payroll costs and postponing non-essential capital spending[121]. - The company expects to continue investing in existing restaurants and support the growth of its Branded Product and Branded Menu Programs[183]. Financial Performance - The primary drivers of recent growth have been the Licensing and Branded Product Programs, which are now the largest contributors to the company's revenues and profits[113]. - Total sales decreased by 26% to $11,322,000 for the third quarter fiscal 2021 compared to $15,356,000 for the third quarter fiscal 2020[133]. - Foodservice sales from the Branded Product Program decreased by 27% to $10,003,000 for the third quarter fiscal 2021 compared to $13,694,000 in the third quarter fiscal 2020[133]. - License royalties increased by 34% to $5,898,000 in the third quarter fiscal 2021 compared to $4,412,000 in the third quarter fiscal 2020[135]. - Franchise restaurant sales declined to $6,178,000 in the third quarter fiscal 2021 compared to $14,587,000 in the third quarter fiscal 2020[136]. - Total sales decreased by 47% or $27,002,000 to $30,697,000 for the thirty-nine weeks ended December 27, 2020 compared to $57,699,000 for the thirty-nine weeks ended December 29, 2019[152]. - Foodservice sales from the Branded Product Program decreased by 47% to $24,450,000 for the fiscal 2021 period compared to $45,989,000 for the fiscal 2020 period[152]. - License royalties increased by 33% to $24,689,000 in the fiscal 2021 period compared to $18,559,000 in the fiscal 2020 period[154]. - Franchise fees and royalties were $1,087,000 in the fiscal 2021 period compared to $3,610,000 in the fiscal 2020 period[154]. - The company's cost of sales decreased by 45% to $24,161,000 in fiscal 2021 compared to $43,973,000 in fiscal 2020[158]. - Gross profit for fiscal 2021 was $6,536,000, representing 21% of sales, down from $13,726,000 or 24% of sales in fiscal 2020[158]. - General and administrative expenses decreased by $2,407,000 or 22% to $8,709,000 in fiscal 2021 compared to $11,116,000 in fiscal 2020[164]. - Cash provided by operations was $5,710,000 in fiscal 2021, primarily due to net income of $9,014,000[173]. - The company paid three quarterly dividends totaling $4,320,000 during fiscal 2021[170]. Economic Impact - The company expects continued negative impacts on revenue and net income for the remainder of fiscal 2021 due to the ongoing effects of the COVID-19 pandemic[122]. - The sales and profits from the Branded Product Program have been adversely impacted due to many customers operating in closed or reduced traffic venues[121]. - The company's future results could be materially impacted by supply constraints on beef and increased costs compared to earlier periods[116]. - The Company expects to experience price volatility for beef products during the remainder of fiscal 2021 due to market conditions[205]. - Continued increases in labor, food, and other operating expenses could adversely affect Nathan's operations and necessitate a reconsideration of pricing strategies[198]. Tax and Interest - The effective tax rate for the third quarter fiscal 2021 was 26.6% compared to 22.9% for the third quarter fiscal 2020[149]. - The effective tax rate for fiscal 2021 was 27.7%, compared to 26.1% for fiscal 2020[167]. - The company incurred annual interest expense of $9,937,500 from the issuance of $150,000,000 of 6.625% Senior Secured Notes due 2025, reducing cash interest expense by $3,562,500 compared to previous notes[117]. - The Company had $150,000,000 of 2025 Notes outstanding due in November 2025, with interest expense on these borrowings increasing or decreasing by approximately $375,000 per annum for each 0.25% change in interest rates[202]. Cost and Pricing - The average selling prices increased by approximately 2.9% during the fiscal 2021 period compared to the fiscal 2020 period[152]. - The average cost of hot dogs between October 2019 and March 2020 was approximately 11.2% higher than the average cost between October 2018 and March 2019[203]. - The average cost of hot dogs between April 2020 and December 2020 was approximately 2.7% higher than the average cost between April 2019 and December 2019[203]. - A short-term increase or decrease of 10.0% in the cost of food and paper products for the thirty-nine week period ended December 27, 2020 would have increased or decreased the cost of sales by approximately $2,124,000[206]. Internal Controls and Risk Management - The Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective as of the end of the reporting period[208]. - There were no changes in internal controls over financial reporting during the quarter ended December 27, 2020, that materially affected internal control[209]. - The company acknowledges that no control system can provide absolute assurance that all control issues and instances of fraud have been detected[210]. - The company advises stakeholders to consider risk factors that could materially affect its business and financial condition, as detailed in the Annual Report on Form 10-K[211].

Business Performance - As of September 27, 2020, the restaurant system consisted of 214 franchised units, a decrease from 241 units in the previous year, with 93 Branded Menu units[106]. - The primary drivers of recent growth have been the Licensing and Branded Product Programs, which are now the largest contributors to the Company's revenues and profits[107]. - Approximately 60% of franchised locations have reopened as of the date of the report, with many closures impacting franchise fees and royalties[113]. - The COVID-19 pandemic has negatively impacted revenue and net income, with expectations of continued adverse effects for the remainder of fiscal 2021[115]. - Total sales decreased by 43% to $12,692,000 for the thirteen weeks ended September 27, 2020, compared to $22,106,000 for the same period in 2019[126]. - Foodservice sales from the Branded Product Program decreased by 40% to $9,698,000 for the second quarter fiscal 2021, impacted by the COVID-19 pandemic[126]. - Total Company-owned restaurant sales decreased by 49% to $2,994,000 during the second quarter fiscal 2021 compared to $5,924,000 in the same period of 2020[127]. - Franchise restaurant sales declined to $6,969,000 in the second quarter fiscal 2021, down from $18,323,000 in the second quarter fiscal 2020[130]. - Comparable domestic franchise sales were $5,638,000 in the second quarter fiscal 2021, down from $10,112,000 in the second quarter fiscal 2020[130]. Financial Performance - The Company incurred annual interest expense of $9,937,500 from the issuance of $150,000,000 of 6.625% Senior Secured Notes due 2025, reducing cash interest expense by $3,562,500 compared to previous notes[110]. - General and administrative expenses decreased by $947,000 or 27% to $2,612,000 in the second quarter fiscal 2021 compared to $3,559,000 in the same period of 2020[138]. - Overall cost of sales decreased by 39% to $9,927,000 in the second quarter fiscal 2021 compared to $16,289,000 in the second quarter fiscal 2020[133]. - Adjusted EBITDA for the second quarter fiscal 2021 was $8,040,000, compared to $8,123,000 for the same period in 2019[125]. - Cost of sales decreased by 52% to $15,224,000 in fiscal 2021 compared to $31,711,000 in fiscal 2020, with gross profit at $4,151,000 or 21.4% of sales[152]. - General and administrative expenses decreased by $2,040,000 or 27% to $5,456,000 in fiscal 2021 from $7,496,000 in fiscal 2020[158]. - Cash and cash equivalents increased to $81,519,000 at September 27, 2020, up by $4,402,000 from $77,117,000 at March 29, 2020[164]. - Cash provided by operations was $9,107,000 in fiscal 2021, primarily from net income of $7,655,000[167]. - Cash used in investing activities was $318,000 in fiscal 2021 for capital expenditures related to the Branded Product Program[168]. - Cash used in financing activities totaled $4,387,000 in fiscal 2021, including $2,880,000 for quarterly dividends[169]. Cost Management - The Company has implemented cost-saving measures, including reduced payroll costs and postponed non-essential capital spending[122]. - The sales and profits from the Branded Product Program have been adversely affected due to many customers operating in closed venues[114]. - The company is developing strategies to minimize the financial impact of increased labor costs and has recently raised certain selling prices to offset cost increases[185]. - Future results could be materially impacted by supply constraints on beef and increased costs compared to earlier periods[109]. - The average cost of hot dogs between October 2019 and March 2020 was approximately 11.2% higher than the same period in the previous year, and 9.4% higher between October 2019 and September 2020 compared to the prior year[180]. - A short-term increase or decrease of 10.0% in the cost of food and paper products for the twenty-six week period ended September 27, 2020 would have impacted the cost of sales by approximately $1,310,000[199]. - The company expects to experience price volatility for beef products during fiscal 2021 due to market conditions and the impact of the COVID-19 pandemic on the meat processing industry[182]. Operational Strategies - The Company has launched curbside delivery at three of its four Company-owned restaurants and introduced "ghost kitchens" for product marketing[122]. - The Company aims to improve the performance of the existing restaurant system and grow through franchising efforts, focusing on core items and higher quality menu offerings[108]. - The company expects to make investments in existing restaurants and support the growth of Branded Product and Menu Programs[175]. Risk Management - The company highlights the importance of considering risk factors that could materially affect its business and financial condition, as detailed in the Annual Report on Form 10-K[203]. - The minimum hourly wage for fast food workers in New York State is set to increase to $14.50 on December 31, 2020, and $15.00 on July 1, 2021, which could significantly affect the company's operations[184]. - The company has not attempted to hedge against fluctuations in commodity prices, which may expose it to market volatility in future purchases[198]. - The company has not purchased future contracts or options to hedge against foreign currency fluctuations, as payments are generally made in United States dollars[200]. - There were no changes in internal controls over financial reporting during the quarter ended September 27, 2020, that materially affected internal control[201]. - The Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures are effective at a reasonable assurance level[202]. - The company acknowledges that no control system can provide absolute assurance against fraud or control issues[202]. - There are no legal proceedings currently affecting the company[203]. Tax and Liabilities - As of September 27, 2020, the company had unrecognized tax benefits of $333,000, with a potential decrease of $16,000 expected within the next year[179]. - The company recorded a liability of $110,000 related to the Brooklyn Guaranty, which does not include potential additional costs that are not reasonably determinable[179]. - The company had $150,000,000 of 2025 Notes outstanding, with interest expense expected to change by approximately $375,000 per annum for each 0.25% change in interest rates[194]. - Cash and cash equivalents totaled $81,519,000 as of September 27, 2020, with earnings on this cash expected to change by approximately $204,000 per annum for each 0.25% change in interest rates[193].

Financial Performance - For the thirteen weeks ended June 28, 2020, net income was $4,000,000, a decrease from $5,369,000 for the same period in 2019[126] - EBITDA for the same period was $8,521,000, down from $10,145,000 in the prior year[126] - Adjusted EBITDA was $8,550,000 compared to $10,173,000 in the previous year, reflecting a decline in performance[126] - Total sales decreased by 67% to $6,683,000 for the thirteen weeks ended June 28, 2020, compared to $20,237,000 for the same period in 2019[127] - Foodservice sales from the Branded Product Program decreased by 70.5% to $4,749,000 during the fiscal 2021 period[127] - Total Company-owned restaurant sales decreased by 53.1% to $1,934,000 during the fiscal 2021 period[129] - Franchise restaurant sales declined to $2,218,000 in the fiscal 2021 period compared to $17,516,000 in the fiscal 2020 period[131] - The cost of sales decreased by 65.7% to $5,297,000 in the fiscal 2021 period compared to $15,422,000 in the fiscal 2020 period[134] COVID-19 Impact - Approximately 52% of franchised locations have reopened as of the report date, following temporary closures due to COVID-19[114] - The company has taken actions to mitigate COVID-19 impacts, including reduced payroll costs and the launch of curbside delivery[118] - The company expects continued negative impacts on revenue and net income for the remainder of fiscal 2021 due to the pandemic[116] - The company anticipates continued volatility in beef prices, which could impact operational results, as the cost of hot dogs has increased significantly due to the COVID-19 pandemic[165] Cash and Debt Management - Cash and cash equivalents at June 28, 2020, aggregated $76,941,000, a decrease of $176,000 compared to March 29, 2020[147] - Cash provided by operations was $3,002,000 in the fiscal 2021 period, primarily attributable to net income of $4,000,000[150] - The company incurred annual interest expense of $9,937,500 due to the issuance of $150,000,000 of Senior Secured Notes[111] - Nathan's plans to continue stock repurchase programs and invest in existing restaurants, funded from operating cash flow[160] - Nathan's total cash contractual obligations as of June 28, 2020, amounted to $167,667,000, with net cash contractual obligations of $166,392,000[162] Cost and Pricing Trends - The average cost of hot dogs between April 2020 and June 2020 was approximately 9.1% higher than the same period in 2019, reflecting significant cost volatility[164] - The average cost of hot dogs increased by approximately 11.2% between October 2019 and March 2020 compared to the same period in the previous year, and by approximately 9.1% between April 2020 and June 2020 compared to the same period in the previous year[179][181] - A short-term increase or decrease of 10.0% in the cost of food and paper products for the thirteen-week period ended June 28, 2020 would have resulted in a cost of sales change of approximately $439,000[182] Franchise and Business Strategy - The strategic emphasis has been on increasing distribution points through Licensing and Branded Product Programs, which are key profit contributors[107] - The company plans to strategically invest in a small number of new units to showcase to prospective franchisees[108] - There were no changes in internal controls over financial reporting during the quarter ended June 28, 2020 that materially affected internal control effectiveness[185] Tax and Regulatory Matters - The effective tax rate for the thirteen-week period ended June 28, 2020, was 28.1% compared to 25.3% for the same period in 2019[144] - Nathan's has unrecognized tax benefits of $321,000, with a reasonable possibility of a decrease by $16,000 within the next year[162] - The company incurred approximately $1,000 of additional costs due to the Fair Work Week Legislation during the fiscal 2021 period[173] Dividend and Shareholder Returns - Nathan's Board of Directors authorized a regular dividend of $1.00 per share per annum, with the first quarter fiscal 2021 dividend paid amounting to $1,440,000[158] - The company expects to incur interest payments of $9,937,500 during the fiscal year ending March 28, 2021, of which $4,968,750 has already been paid[161] Foreign Operations - Foreign franchisees conduct business in U.S. dollars, minimizing risks from foreign currency fluctuations, which are not expected to materially impact financial results[183]

Franchise Operations - As of March 29, 2020, the franchise system consisted of 216 franchised units, down from 255 units at the beginning of the period, reflecting a net closure of 55 units[245]. - Franchise restaurant sales decreased to $61,542,000 in fiscal 2020 from $65,607,000 in fiscal 2019, impacted by unit closures and a 2.3% decline in comparable domestic sales[306]. - The company recognized $951,000 of forfeited franchise fees in fiscal 2020, significantly higher than $192,000 in fiscal 2019, due to terminations of Master Franchise Agreements[308]. Financial Performance - Total sales for the fiscal year ended March 29, 2020, were $70,559,000, a decrease of approximately 1.4% compared to $71,561,000 for the fiscal year ended March 31, 2019[301]. - Foodservice sales from the Branded Product Program were $57,586,000 for fiscal 2020, down from $57,960,000 in fiscal 2019, reflecting a volume decrease of approximately 2.1%[301]. - Company-owned restaurant sales decreased to $12,973,000 in fiscal 2020 from $13,601,000 in fiscal 2019, with comparable sales increasing by approximately 4.5% when excluding the sold restaurant[303]. - License royalties increased to $25,859,000 in fiscal 2020, up from $23,615,000 in fiscal 2019, driven by an 11.0% increase in retail volume[305]. - Total cost of sales increased by $1,709,000 to $54,488,000 in fiscal 2020, resulting in a gross profit margin of 22.8%, down from 26.2% in fiscal 2019[310]. - General and administrative expenses rose by $928,000 or 6.7% to $14,779,000 in fiscal 2020, primarily due to transformation efforts within the restaurant business[315]. - Interest expense for fiscal 2020 was $10,601,000, compared to $10,792,000 in fiscal 2019, reflecting a decrease due to the shorter fiscal year[317]. Debt and Financing - The Company issued $150 million of 6.625% Senior Secured Notes due 2025, with annual interest expense expected to be $9.94 million[247][254]. - The 2025 Notes have no scheduled principal amortization payments prior to maturity on November 1, 2025[250]. - The Company authorized the repurchase of up to $10 million of the 2025 Notes effective June 1, 2020[252]. - The Company authorized the repurchase of up to $10 million of the 2025 Notes, with no set time limit on the repurchases[263]. - The Company recorded a loss on early extinguishment of debt of $8.87 million for the year ended March 25, 2018, related to the redemption of the 2020 Notes[248]. Cash Flow and Investments - Cash and cash equivalents increased to $77,117,000 as of March 29, 2020, up from $75,446,000 at March 31, 2019, representing a $1,671,000 increase[324]. - Cash provided by operations was $12,349,000 for the fiscal 2020 period, primarily driven by net income of $13,435,000[325]. - The company declared and paid four regular dividends of $0.35 per common share, totaling $5,912,000 during the fiscal 2020 period[324]. - The company repurchased 85,642 shares of common stock for $4,966,000 during the fiscal 2020 period[327]. - The company anticipates making investments in existing restaurants and supporting the growth of its Branded Product and Branded Menu Programs using operating cash flow[335]. Regulatory and Market Conditions - The Company expects declines in sales and profits from its Branded Product Program due to the closure of venues like sports arenas and amusement parks[240]. - The minimum hourly rate of pay in New York State will increase to $14.50 on December 31, 2020, and $15.00 on July 1, 2021, significantly affecting the company's operations[345]. - The company incurred approximately $6,000 in additional costs during fiscal 2020 due to the Fair Work Week Legislation, which requires predictable work schedules for fast food workers[348]. - The company expects future labor costs to be impacted by ongoing minimum wage increases in New York State and other labor regulations[312]. Revenue Recognition and Accounting - Revenue from license royalties is generally based on a percentage of sales, recognized on a monthly basis when earned and collectible[268]. - Franchise fees and royalties that are not collectible are recorded as bad debts until paid or collectibility is assured[279]. - The Company maintains a national advertising fund, with revenues and expenses fully consolidated into the financial statements under Topic 606[281]. - The adoption of Topic 606 did not impact the timing and amount of revenue recognized from the Branded Product Program and Company-owned restaurant sales[266][267]. - The Company recognizes revenue from sub-leasing properties as income when earned and collectible[283]. Asset Management - Goodwill amounts to $95,000 from the acquisition of Nathan's in 1987, and intangible assets related to Arthur Treacher's total $1,269,000[285]. - The Company recorded amortization expense of $84,000 for the fiscal year ending March 29, 2020, related to its intangible assets[286]. - Operating lease assets and liabilities recognized as of the first day of fiscal year 2020 were $7,804,000 and $8,533,000, respectively[294]. - The Company has determined that no impairment exists for goodwill and intangible assets as of March 29, 2020, and March 31, 2019[285]. Cost and Price Volatility - The average cost of hot dogs increased by approximately 11.4% between October 2019 and March 2020 compared to the previous year, impacting market prices which were about 6.7% higher[341]. - The company expects to continue experiencing price volatility for beef products and has previously entered into purchase commitments to mitigate rising costs[343]. - A short-term increase or decrease of 10.0% in the cost of food and paper products for the year ended March 29, 2020, would have altered the cost of sales by approximately $4,908,000[358]. - The company expects to experience price volatility for beef products during fiscal 2021 due to market conditions and the COVID-19 pandemic[357]. - The company has not hedged against fluctuations in commodity prices, exposing future purchases to market changes[358]. - Continued increases in labor, food, and operating expenses may necessitate a reconsideration of the pricing strategy to maintain margins[349]. Taxation - The effective tax rates for the fiscal year ended March 29, 2020, and March 31, 2019, were 25.4% and 26.9%, respectively, with adjustments reducing the rates by 1.3% and 1.1% due to tax benefits from stock compensation[321]. - Unrecognized tax benefits amounted to $311,000 as of March 29, 2020, with an estimated potential reduction of up to $16,000 in the next fiscal year[322]. Other Financial Metrics - The Fixed Charge Coverage Ratio is currently set at 2.0 to 1.0, which applies to determining additional restricted payments and debt incurrence[258]. - As of March 29, 2020, the company had total cash contractual obligations of $168,712,000, with net obligations of $167,362,000 after accounting for sublease income[338]. - As of March 29, 2020, the company's cash and cash equivalents totaled $77,117,000, with earnings affected by interest rate changes[353]. - The company had $150.0 million of 2025 Notes outstanding as of March 29, 2020, with interest expense sensitive to interest rate fluctuations[354]. - The company does not believe fluctuations in foreign currencies would materially impact financial results, as foreign franchisees conduct business in U.S. dollars[359].