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Nathan's Famous, Inc. Annual Report 2016

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Nathan's Famous, Inc. Annual Report 2016 2016 ANNUAL REPORT CELEBRATING 100 YEARS CELEBRATING 100 YEARS CELEBRATING 100 YEARS CELEBRATING 100 YEARS CELEBRATING 100 YEARS OF NATHAN’S 1916 The original Nathan’s 1916 Famous hot dog stand On July 4th, 1916, legend states that was founded by Nathan four immigrants held a hot dog eating Handwerker in 1916. 1921 contest at Nathan’s Famous stand in In 1921, Nathan hired a redheaded teenager by Coney Island to settle an argument the name of Clara Bowtinelli to assist in serving about who was the most patriotic. his customers. While working at Nathan’s, she was discovered and went on to become Clara Bow, 1918 the “It Girl” of the 1920’s silent films. Legendary gangster and Brooklyn native Al Capone stopped by Nathan’s whenever his travel took him to Brooklyn. This photo was 1933 captured around 1918 during one of his visits. To celebrate the end of prohibition in 1933, Nathan’s Famous served 1965 free beer. Nathan’s opened 1955 their third location in Nathan’s opened their Yonkers, NY in 1965. 1968 second location in 1939 Oceanside, Long In 1939, President Franklin The Nathan’s Island in 1955. Delano Roosevelt served Famous Hot Dog Nathan’s Famous hot dogs Cookbook was pub- to the King and Queen lished by Nathan of England, bringing the Handwerker’s son 1946 delicious taste of Nathan’s Murray Handwerker 1971 In 1946, Nathan’s hot dogs across the pond. in 1968. Nathan’s opened its 4th restaurant introduced seafood in Times Square in 1971 due to products and its the growing demand for Nathan famous clam bar. Handwerker’s mouthwatering hot dogs. 1992 In 1992, Nathan’s Frankster was born. This fun and playful 1972 mascot delights thousands of children as part of the Nathan’s The first major & recorded 1987 kids meal program. hot dog eating contest was 1983 The Handwerker family held in Coney Island on July In 1983, Nathan’s sold the Nathan’s Famous 4th. The winner was Jason business to private inves- Schechter (USA) who ate 14 are first sold in supermarkets. tors in 1987 who expanded hot dogs and buns. franchise operations around New York. 2012 2001 In 2001, Takeru Kobayashi The Nathan’s Famous broke the world record Coney Island location was for the most hot dogs closed in 2012 for the first eaten in 10 minutes time since 1916 due to at 50—doubling the Hurricane Sandy. previous record of 25 set by Kazutoyo Arai. 2012 2007 Kobayashi went on to In 2012, only one year after start- In 2007, Joey Chestnut defeated win the next 6 contests. ing the women’s only Nathan’s Takeru Kobayashi, the 6-time Hot Dog Eating Contest, Sonya defending champion, in the Thomas set the women’s world Nathan’s Famous 92nd Annual 2013 record eating 45 hot dogs & buns. International Hot Dog Eating Contest. In 2013, Joey Chestnut set the world record for the most hot dogs 2015 & buns eaten in In 2015, Matt Stonie defeated 10 minutes at 69! defending champion Joey Chestnut 2014 in the 99th annual Nathan’s Famous 2014 2014 International Hot Dog Eating In June of 2014, Nathan’s began Contest in Coney Island, NY. a sponsorship of Richard Petty Nathan’s launched its Mobile In 2014, Nathan’s donated Motorsports. The first race was Tour in 2014, bringing the fun and built a Coney Island at the historic Pocono Raceway. of Coney Island on the road. inspired playground for the They currently operate two city of Kissimmee in part- 2016 mobile tours that travel 2,000 nership with KaBOOM! Nathan’s Famous celebrates miles every year! 100 Years. CELEBRATING 100 YEARS CELEBRATING 100 YEARS CELEBRATING 100 YEARS CELEBRATING 100 YEARS CORPORATE DIRECTORY Nathan’s Famous, Inc. & Subsidiaries LIST OF DIRECTORS LIST OF OFFICERS FORM 10-K Howard M. Lorber Howard M. Lorber The Company’s annual report on Executive Chairman of the Board, Executive Chairman of the Board Form 10-K as filed with the Securities Nathan’s Famous, Inc. and Exchange Commission, is available Eric Gatoff without charge upon written request: Eric Gatoff Chief Executive Officer Secretary, Nathan’s Famous, Inc. Chief Executive Officer, Ronald G. DeVos One Jericho Plaza Nathan’s Famous, Inc. Vice President—Finance, Second Floor—Wing A Wayne Norbitz Chief Financial Officer and Secretary Jericho, New York 11753 Former President and Scott Harvey Chief Operating Officer, QUARTERLY Executive Vice President Nathan’s Famous, Inc. SHAREHOLDER LETTER Leigh Platte Will be available on our website. Robert J. Eide Vice President—Food Service Copies will be provided upon request. Chairman & Chief Executive Officer, AEGIS Capital Corp. Randy K. Watts CORPORATE HEADQUARTERS Vice President—Franchise Operations Barry Leistner One Jericho Plaza President & Chief Executive Officer, Donald P. Schedler Second Floor—Wing A Koenig Iron Works, Inc. Vice President—Development, Jericho, New York 11753 Architecture & Construction 516-338-8500 Telephone Brian S. Genson 516-338-7220 Facsimile President, F1Collectors.com INDEPENDENT REGISTERED A.F. Petrocelli PUBLIC ACCOUNTING FIRM COMPANY WEBSITE Chairman of the Board, President Grant Thornton LLP www.nathansfamous.com and Chief Executive Officer, 445 Broadhollow Road United Capital Corp. Melville, New York 11747 ANNUAL SHAREHOLDERS’ MEETING Charles Raich CORPORATE COUNSEL The Annual Meeting of Shareholders Retired Founding Partner, Olshan Frome & Wolosky LLP of the Company will be held at 10:00 Raich, Ende, Malter & Co. LLP 1325 Avenue of the Americas a.m., EST on Wednesday, September 14, New York, New York 10019 2016, in the Offices of Nathan’s Famous, Inc., One Jericho Plaza, TRANSFER AGENT Second Floor—Wing A, Jericho, American Stock Transfer & New York 11753. Trust Company 59 Maiden Lane New York, New York 10038 Annual Report Design by Curran & Connors, Inc. / www.curran-connors.com / Inc. Connors, & Curran by Report Design Annual CELEBRATING 100 YEARS CELEBRATING 100 YEARS CELEBRATING 100 YEARS CELEBRATING 100 YEARS The Flavor of New York Since 1916 One hundred years ago, Nathan’s began as a nickel hot dog stand on Coney Island in 1916 and, over the past century, has become a much-loved “New York institution” that has evolved into a highly recognized brand throughout the United States and the world. Through our innovative points-of-distribution strategies, Nathan’s products are marketed within our restaurant system and throughout a broad spectrum of other food- service and retail environments. Our programs provide for the sale of Nathan’s World Famous Beef Hot Dogs, crinkle-cut French fries and other famous favorites to retail and food-service locations nationwide and within fourteen foreign territories and countries. In total, Nathan’s products are marketed for sale in approximately 55,000 locations, including supermarkets and club stores throughout the United States. Last year, over 550 million Nathan’s Famous hot dogs were sold. Successful market penetration of our highly-recognized valued brand and products, through a wide variety of distribution channels, continues to provide new and excit- ing growth opportunities. CELEBRATING 100 YEARS CELEBRATING 100 YEARS CELEBRATING 100 YEARS CELEBRATING 100 YEARS SHAREHOLDER’S LETTER Fiscal 2016 was another great year for Nathan’s Famous, as we achieved the highest level of revenues and operating income in the company’s history. It was also the twelfth consecutive year in which we achieved a year-over-year increase in revenues from continuing operations. During this period, we have grown income from operations at a compounded annual rate of 11.9%. Our primary objective continues to be to increase the Other licenses in our licensing program include licenses number and types of points of distribution for Nathan’s to sell at retail Nathan’s Famous Crinkle Cut French Fries, Famous products. Our focus on this strategy has driven Nathan’s Famous Beer Batter Onion Rings, specialty salty our success over the last several years and transformed snacks, mustards, pickles, franks ’n blankets and mini bagel Nathan’s Famous from a regional quick service restaurant dogs. Additionally, we have a licensing program with John concept to an internationally-recognized brand with a wide Morrell where bulk Nathan’s Famous hot dogs are sold in variety of quality products sold throughout varied channels specific food service environments, including cafes located of distribution. Today, Nathan’s Famous products are mar- in approximately 570 Sam’s Clubs. keted for sale at approximately 55,000 food service and retail locations throughout all 50 states, the District of The Branded Products Program Columbia, Puerto Rico, Guam, the U.S. Virgin Islands and The Branded Products Program is our foodservice sales 11 foreign countries. Through all channels of distribution, program which features the bulk sale of our World Famous over 550 million Nathan’s World Famous Beef Hot Dogs Beef Hot Dogs to the food service industry. Today, our were sold during fiscal 2016. products are sold through the Branded Products Program at over 13,000 points of distribution, to include several large national and regional restaurant, movie theater and conven- FINANCIAL RESULTS Our overall financial results for fiscal 2016 were very strong. ience store chains, as well as thousands of other locations Income from operations increased 25.1% to $24,963,000 and including ballparks, arenas, amusement parks, college cam- adjusted EBITDA increased by 20.7% to $27,155,000. Revenues puses, hospitals, casinos, resorts and school systems. We increased by 1.8% to $100,890,000. Net income and earnings now do business with all of the major foodservice distribu- per share were $6,035,000 and $1.35, respectively. tors in the United States, including SYSCO, US Foodservice, PFG and McLane, as well as many regional distributors. Product Licensing In fiscal 2016, the Branded Products Program achieved its Our licensing program, which consists primarily of the sale best performance in the 20 year history of the program, of Nathan’s Famous branded consumer packaged goods and was the largest contributor to the company’s overall through supermarkets, club stores and mass merchandisers, improvement in operating income.
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