Nathan's Famous, Inc. Reports Second Quarter Results
Nathan's Famous, Inc. (NASDAQ:NATH) today reported results for the second quarter of its 2011 fiscal year that ended September 26, 2010.
For the quarter ended September 26, 2010:
- Net income was $151,000 or $0.03 per share, as compared to $2,163,000 or $0.39 per share for the quarter ended September 27, 2009;
- Non-GAAP earnings, which exclude the litigation expense items described below, were $2,155,000 or $0.38 per share; and
- Revenues increased by 9.3% to $16,282,000, as compared to $14,896,000 during the quarter ended September 27, 2009.
For the twenty-six weeks ended September 26, 2010:
- Net income was $1,811,000 or $0.32 per share, as compared to $3,726,000 or $0.65 per share for the twenty-six weeks ended September 27, 2009;
- Non-GAAP earnings, which exclude the litigation expense items described below, were $3,879,000 or $0.68 per share; and
- Revenues increased by 9.5% to $31,908,000, as compared to $29,129,000 during the twenty-six weeks ended September 27, 2009.
The trial in connection with Nathan’s litigation against its licensee, SMG, Inc.(“SMG”), was concluded on October 13, 2010. The primary issue at trial was whether Nathan’s is entitled to terminate its license agreement with SMG, and no determination on this issue has yet been made by the Court. The other issue at trial related to ancillary claims made by SMG regarding the manner in which Nathan’s had profited from the sale of its proprietary seasonings to SMG, on which the Court granted SMG’s motion for summary judgment. A hearing to determine the actual amount of damages relating to these seasoning claims is scheduled for November 22, 2010. Nathan’s estimates that the amount of damages will be between $2,914,000 and $6,068,000. Nathan’s is unable to determine the amount of damages within that range that the Court will award to SMG. Accordingly, and as previously reported, Nathan’s recorded a litigation accrual of $2,914,000 before tax, or $1,745,000 or $0.31 per share net of tax, as part of its results for the second quarter ended September 26, 2010. Nathan’s also incurred incremental legal expenses in connection with the SMG litigation of $325,000 and $283,000 during the thirteen and twenty-six week periods ended September 26, 2010.
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