NATHANS FAMOUS, INC. A Pivotal Moment for Investors

Nathan's Famous, Inc. is at a crossroads, with major developments set to reshape its future. This summary cuts through the complexity, offering a clear, investor-friendly guide to the recent events and their implications.

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1. What Happened? (The Core Events)

Nathan's Famous, Inc. faces a significant change: Smithfield Foods, Inc. is acquiring the company for $102.00 per share in cash. This deal will transform Nathan's, the iconic hot dog brand, from a publicly traded company into a private entity under Smithfield's ownership once finalized.

In addition to the acquisition news, Nathan's also released its third fiscal quarter financial results, offering a look at the company's performance just before the merger.

2. When Did These Events Occur?

Nathan's Famous announced the definitive merger agreement with Smithfield Foods on January 20, 2026.

The company reported its third fiscal quarter financial results on February 5, 2026, covering the period through December 28, 2025.

3. The Rationale Behind These Events

The Acquisition: Smithfield Foods already acts as the primary licensee for many Nathan's products, especially its retail hot dogs. This acquisition allows Smithfield to fully integrate and own the valuable Nathan's brand, streamlining operations and expanding its market reach. For Nathan's shareholders, the $102.00 per share cash offer provides a guaranteed and attractive exit for their investment.

The Earnings Report: As a public company, Nathan's Famous routinely releases quarterly financial updates. This latest report offers crucial insight into the company's performance just before the acquisition.

The report presented mixed financial results:

• Revenue Growth: Total revenues rose 9.4% to $35.0 million for the quarter, up from $32.0 million in the prior year.
• Profit Decline: Despite higher sales, profitability fell. Operating income decreased 15% to $6.8 million, net income dropped 18.2% to $4.5 million (from $5.5 million last year), and diluted earnings per share (EPS) declined 17.6% to $0.70 (from $0.85).
• Why Profits Fell: A significant 19% increase in the cost of beef and beef trimmings primarily drove the profit decline. This directly affected the "Branded Product Program" (which sells hot dogs to foodservice and retail), causing its operating income to fall 25% to $6.0 million, despite an increase in sales volume for this key segment.

4. Why This Matters: Impact on the Company

This acquisition marks a pivotal moment, fundamentally reshaping Nathan's Famous's future.

• Company's Future: Nathan's will transition from an independent public company to a wholly-owned subsidiary of Smithfield Foods. This change could bring new operational strategies, greater resources from its larger parent company, and a more integrated supply chain.
• Stock Price (NATH): The $102.00 per share cash acquisition price now largely determines the stock's value. We expect Nathan's stock (NATH) to trade very close to this amount until the deal officially closes. The merger news significantly overshadows the immediate impact of the quarterly earnings report on the stock price, effectively capping current shareholders' future value.
• Earnings Context: While the merger dominates, the earnings report offers Smithfield a clear operational view, highlighting challenges like rising commodity costs that affected Nathan's profitability.

5. Who Else Is Affected? (Beyond the Stock Price)

This acquisition reaches beyond the stock market, influencing several key stakeholders:

• Investors (NATH Shareholders): If you own Nathan's stock, you will receive a cash payout of $102.00 per share when the deal closes. The earnings report's impact on the stock's future value is now largely irrelevant, as the acquisition offer establishes the price.
• Employees: As Nathan's becomes a private company under new ownership, employees may experience changes in organizational structure, job roles, and company culture.
• Customers: While the iconic "Nathan's Famous" brand will likely continue, Smithfield's full ownership might introduce new product innovations, revised marketing strategies, or changes in product distribution.
• Competitors: Other fast-food chains and hot dog brands will closely watch this development. Smithfield, a major food industry player, is strengthening its control over a prominent hot dog brand, potentially shifting market competitive dynamics.

6. What's Next? (The Path Forward)

The acquisition process requires several key steps before finalization:

• Merger Approvals: Nathan's shareholders must approve the acquisition. It also requires regulatory clearances, including reviews under the Hart-Scott-Rodino Antitrust Improvements Act and by the Committee on Foreign Investment in the United States (CFIUS). These are standard procedures to ensure fair competition and national security.
• Closing Timeline: We anticipate the deal will close in the first half of 2026.
• Delisting: Once the merger completes, NASDAQ will delist Nathan's stock, and the company will cease to trade publicly.

7. Key Takeaways for Investors

For those holding or considering NATH stock, here are the practical implications:

• If you own NATH stock: Your shares are now effectively valued at $102.00. The main risk, though generally low, is the merger failing to close due to unforeseen regulatory hurdles, shareholder dissent, or a material adverse change. You will receive cash for your shares once the deal concludes.
• If you don't own NATH stock: Significant price appreciation opportunities are limited. The stock will likely trade very close to the $102 acquisition price, reflecting the deal's terms.
• Earnings are secondary: While the detailed financial results provide valuable context on Nathan's recent operations (e.g., beef cost impact), the merger agreement is the overriding factor for the stock's immediate future. Prioritize monitoring the merger's progress over quarter-to-quarter fluctuations.
• Monitor Merger Conditions: Closely watch for news regarding shareholder approval and regulatory clearances. Unexpected delays or complications could cause the stock price to dip below $102.00.

This marks a pivotal moment for Nathan's Famous as it moves to become a private entity under Smithfield Foods. Staying informed about the merger's progress remains crucial for your investment decision.