Nathan's Famous, Inc. Reports Second Quarter Results

             Nathan's Famous, Inc. Reports Second Quarter Results

PR Newswire

JERICHO, N.Y., Oct. 31, 2012

JERICHO, N.Y., Oct. 31, 2012 /PRNewswire/ --Nathan's Famous, Inc. (NASDAQ:
NATH) today reported results for the second quarter of its 2013 fiscal year
that ended September 23, 2012.

For the fiscal quarter ended September 23, 2012:

  oNet income increased 25.4% to $2,845,000 as compared to $2,269,000 for the
    thirteen weeks ended September 25, 2011;
  oEarnings per diluted share increased 40.9% to $0.62 as compared to $0.44
    for the thirteen weeks ended September 25, 2011;
  oNon-GAAP earnings, which exclude the litigation expense items described
    below, were $2,912,000 or $0.63 per diluted share, as compared to
    $2,343,000 or $0.45 per diluted share for the thirteen weeks ended
    September 25, 2011; and
  oRevenues increased 11.7% to $21,360,000, as compared to $19,118,000 during
    the thirteen weeks ended September 25, 2011.

For the twenty-six weeks ended September 23, 2012:

  oNet income increased 25.5% to $4,851,000 as compared to $3,865,000 for the
    twenty-six weeks ended September 25, 2011;
  oEarnings per diluted share increased 41.3% to $1.06 as compared to $0.75
    for the twenty-six weeks ended September 25, 2011;
  oNon-GAAP earnings, which exclude the litigation expense items described
    below, were $4,985,000 or $1.09 per diluted share, as compared to
    $4,009,000 or $0.77 per diluted share for the twenty-six weeks ended
    September 25, 2011; and
  oRevenues increased 12.2% to $41,542,000, as compared to $37,015,000 during
    the twenty-six weeks ended September 25, 2011.

The Company also reported the following:

  oSales from the Branded Product Program, featuring the sale of Nathan's hot
    dogs to the foodservice industry, increased 12.5% to $23,291,000 during
    the twenty-six weeks ended September 23, 2012, as compared to sales of
    $20,706,000 during the twenty-six weeks ended September 25, 2011.
  oSales and direct operating cash flows from the five Company-owned
    restaurants were $10,697,000 and $3,032,000, respectively, during the
    twenty-six weeks ended September 23, 2012 as compared to $9,051,000 and
    $2,413,000, respectively during the twenty-six weeks ended September 25,
    2011.
  oGross profit increased to 23.9% of sales during the twenty-six weeks ended
    September 23, 2012, as compared to 22.0% of sales during the twenty-six
    weeks ended September 25, 2011 due primarily to improved margins from our
    Branded Product Program.
  oRetail license royalties increased 18.5% or $678,000 to $4,351,000 during
    the twenty-six weeks ended September 23, 2012, as compared to $3,673,000
    during the twenty-six weeks ended September 25, 2011.
  oRevenues from franchise operations were $2,938,000 during the during the
    twenty-six weeks ended September 23, 2012, as compared to $2,855,000
    during the twenty-six weeks ended September 25, 2011. Twenty-three new
    franchised units were opened during the twenty-six weeks ended September
    23, 2012, including our first two mobile trucks, our sixth restaurant in
    the Dominican Republic and twelve Branded Menu Program outlets.
  oNathan's executed two Master Development Agreements comprising the
    Republic of Turkey, including the Turkish Republic of Northern Cyprus and
    Mexico City, Mexico.
  oIn April 2012, we opened our newly relocated seasonal restaurant on the
    Boardwalk in Coney Island, New York.

As previously described with respect to our litigation with SMG, on April 7,
2011, the Court entered a stipulation and order which granted a stay of
enforcement of the final judgment which is in the amount of approximately
$4,910,000.

On March 4, 2011, Nathan's filed a notice of appeal seeking to appeal the
final judgment. Throughout the duration of the appeal, Nathan's is required to
deposit post-judgment interest on the damages awarded at 9% per annum into a
security account. Nathan's has continued to make these deposits and recorded
interest expense of $134,000, net of tax, during each of the twenty-six week
periods ended September 23, 2012 and September 25, 2011.

Certain Non-GAAP Financial Information:

In addition to disclosing results that are determined in accordance with
Generally Accepted Accounting Principles in the United States of America
("GAAP"), the Company has provided its Non- GAAP earnings and earnings per
diluted share as adjusted for the litigation expenses described above,
including the interest expense that has accrued during the appeals process
through the end of the second quarter, that the Company believes impacts the
comparability of its results of operations.

The Company believes that such non-GAAP financial information is useful to
investors to assist in assessing and understanding the Company's operating
performance and underlying trends in the Company's business because management
considers the litigation expenses referred to above to be outside the
Company's normal operating results. This non-GAAP financial information is
among the indicators management uses as a basis for evaluating the Company's
financial and operating performance.

The presentation of this additional non-GAAP financial information is not
meant to be considered in isolation or as a substitute for, or alternative to,
earnings and earnings per diluted share determined in accordance with GAAP.
Analysis of results and outlook on a non-GAAP basis should be used as a
complement to, and in conjunction with, data presented in accordance with
GAAP.

About Nathan's Famous

Nathan's products are currently distributed in 50 states, the District of
Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, the Cayman Islands and
six foreign countries through its restaurant system, foodservice sales
programs and product licensing activities. The Nathan's restaurant system
currently consists of 309 units, comprised of 304 franchised units and five
company-owned units (including one seasonal unit). For additional information
about Nathan's please visit our website at www.nathansfamous.com.

Except for historical information contained in this news release, the matters
discussed are forward looking statements that involve risks and
uncertainties. Words such as "anticipate", "believe", "estimate", "expect",
"intend", and similar expressions identify forward-looking statements, which
are based on the current belief of the Company's management, as well as
assumptions made by and information currently available to the Company's
management. Among the factors that could cause actual results to differ
materially are the following: the effect of business and economic conditions;
the impact of competitive products and pricing; the ability to obtain an
adequate supply of beef and other food products at competitive prices; the
terms and conditions of our next hot dog licensing agreement; capacity; the
regulatory and trade environment; and the risk factors reported from time to
time in the Company's SEC reports. The Company does not undertake any
obligation to update such forward-looking statements.



Nathan's Famous, Inc.
Financial
Highlights
                        Thirteen weeks ended            Twenty-six weeks
                                                        ended
                   Sept. 23, 2012      Sept. 25,    Sept. 23,      Sept. 25,
                                       2011         2012           2011
                             (unaudited)                  (unaudited)
Total revenues     $  21,360,000     $           $             $ 
                                       19,118,000   41,542,000     37,015,000
Net income         $   2,845,000    $          $            $  
                                       2,269,000    4,851,000      3,865,000
Basic income per
share
 Net income      $            $        $          $    
                   0.65                  0.45      1.11        0.77
Diluted income per
share
 Net income      $            $        $          $    
                   0.62                  0.44      1.06        0.75
Weighted-average
shares used in
 computing
income per share
      Basic        4,407,000           5,025,000    4,387,000      5,051,000
      Diluted      4,604,000           5,163,000    4,568,000      5,182,000



Nathan's Famous, Inc.
Reconciliation of GAAP and Non-GAAP Measures
                 Thirteen weeks ended                      Twenty-six weeks
                                                           ended
           Sept. 23, 2012        Sept. 25,      Sept. 23,         Sept. 25,
                                 2011           2012              2011
                       (unaudited)                            (unaudited)
NET INCOME
Net income $   2,845,000      $            $               $  
                                 2,269,000      4,851,000         3,865,000
Legal
expense    -                     7,000          -                 10,000
(a), (net
of tax)
Interest
expense    67,000                67,000         134,000           134,000
(b), (net
of tax)
Non-GAAP   $   2,912,000      $            $               $  
income                           2,343,000      4,985,000         4,009,000
DILUTED
INCOME PER
SHARE
Net income $              $         $           $    
           0.62                   0.44        1.06               0.75
Legal
expense    -                     -              -                 -
(a), (net
of tax)
Interest
expense    0.01                  0.01           0.03              0.02
(b), (net
of tax)
Non-GAAP   $              $         $           $    
income per 0.63                   0.45        1.09               0.77
share


(a)Represents legal expense incurred in connection with the SMG matter
during the respective periods.


(b)Represents accrued interest expense incurred in connection with
Nathan's appeal of the SMG damages award.



COMPANY   Ronald G. DeVos, Vice President - Finance and CFO
CONTACT: (516) 338-8500 ext. 229

SOURCE Nathan's Famous, Inc.

Website: http://www.nathansfamous.com
 
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