x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
|
|
For
the quarterly period ended June 28,
2009.
|
¨
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT of
1934
|
|
For
the transition period from ________________________ to
________________________.
|
Delaware
|
11-3166443
|
(State
or other jurisdiction of
|
(I.R.S.
Employer
|
incorporation
or organization)
|
Identification
No.)
|
Page
|
||
Number
|
||
PART
I.
|
FINANCIAL
INFORMATION
|
|
Item
1.
|
Financial
Statements.
|
3
|
Consolidated
Financial Statements (Unaudited) Consolidated Balance Sheets – June 28,
2009 (Unaudited) and March 29, 2009
|
3
|
|
Consolidated
Statements of Earnings - Thirteen Weeks Ended June 28, 2009 and June 29,
2008 (Unaudited)
|
4
|
|
Consolidated
Statement of Stockholders’ Equity – Thirteen Weeks Ended June 28, 2009
(Unaudited)
|
5
|
|
Consolidated
Statements of Cash Flows – Thirteen Weeks Ended June 28, 2009 and June 29,
2008 (Unaudited)
|
6
|
|
Notes
to Consolidated Financial Statements
|
7
|
|
Item
2.
|
Management's
Discussion and Analysis of Financial Condition and Results of
Operations.
|
14
|
Item
3.
|
Quantitative
and Qualitative Disclosures About Market Risk.
|
19
|
Item
4.
|
Controls
and Procedures.
|
20
|
PART
II.
|
OTHER
INFORMATION
|
|
Item
1.
|
Legal
Proceedings.
|
21
|
Item 1A.
|
Risk
Factors.
|
21
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds.
|
22
|
Item
6.
|
Exhibits.
|
23
|
SIGNATURES
|
24
|
|
Exhibit
Index
|
25
|
June 28, 2009
|
March 29, 2009
|
|||||||
(Unaudited)
|
||||||||
ASSETS
|
||||||||
CURRENT
ASSETS
|
||||||||
Cash
and cash equivalents
|
$ | 9,011 | $ | 8,679 | ||||
Marketable
securities
|
25,265 | 25,670 | ||||||
Accounts
and other receivables, net
|
6,941 | 4,869 | ||||||
Note
receivable
|
296 | 290 | ||||||
Inventories
|
1,002 | 668 | ||||||
Prepaid
expenses and other current assets
|
700 | 1,326 | ||||||
Deferred
income taxes
|
696 | 696 | ||||||
Total
current assets
|
43,911 | 42,198 | ||||||
Note
receivable
|
1,389 | 1,466 | ||||||
Property
and equipment, net
|
4,110 | 4,126 | ||||||
Goodwill
|
95 | 95 | ||||||
Intangible
asset, net
|
1,353 | 1,353 | ||||||
Deferred
income taxes
|
431 | 428 | ||||||
Other
assets
|
158 | 158 | ||||||
$ | 51,447 | $ | 49,824 | |||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||||||
CURRENT
LIABILITIES
|
||||||||
Accounts
payable
|
$ | 3,200 | $ | 2,857 | ||||
Accrued
expenses and other current liabilities
|
3,485 | 3,867 | ||||||
Deferred
franchise fees
|
143 | 171 | ||||||
Total
current liabilities
|
6,828 | 6,895 | ||||||
Other
liabilities
|
1,039 | 1,080 | ||||||
Total
liabilities
|
7,867 | 7,975 | ||||||
COMMITMENTS
AND CONTINGENCIES (Note K)
|
||||||||
STOCKHOLDERS’
EQUITY
|
||||||||
Common
stock, $.01 par value; 30,000,000 shares authorized; 8,305,683 shares
issued; and 5,611,877 shares outstanding at June 28, 2009 and March 29,
2009.
|
83 | 83 | ||||||
Additional
paid-in capital
|
49,108 | 49,001 | ||||||
Retained
earnings
|
12,791 | 11,228 | ||||||
Accumulated
other comprehensive income
|
396 | 335 | ||||||
62,378 | 60,647 | |||||||
Treasury
stock, at cost, 2,693,806 shares at June 28, 2009 and March 29,
2009.
|
(18,798 | ) | (18,798 | ) | ||||
Total
stockholders’ equity
|
43,580 | 41,849 | ||||||
$ | 51,447 | $ | 49,824 |
June 28, 2009
|
June 29, 2008
|
|||||||
REVENUES
|
||||||||
Sales
|
$ | 11,015 | $ | 11,016 | ||||
Franchise
fees and royalties
|
1,154 | 1,152 | ||||||
License
royalties
|
1,807 | 1,615 | ||||||
Interest
income
|
240 | 247 | ||||||
Other
income
|
16 | 12 | ||||||
Total
revenues
|
14,232 | 14,042 | ||||||
COSTS
AND EXPENSES
|
||||||||
Cost
of sales
|
8,109 | 8,332 | ||||||
Restaurant
operating expenses
|
823 | 912 | ||||||
Depreciation
and amortization
|
199 | 198 | ||||||
General
and administrative expenses
|
2,628 | 2,445 | ||||||
Total
costs and expenses
|
11,759 | 11,887 | ||||||
Income
from continuing operations before provision for income
taxes
|
2,473 | 2,155 | ||||||
Provision
for income taxes
|
910 | 800 | ||||||
Income
from continuing operations
|
1,563 | 1,355 | ||||||
Income
from discontinued operations, including gains on disposal of discontinued
operation before income taxes of $3,906 in 2008
|
- | 3,914 | ||||||
Provision
for income taxes
|
- | 1,447 | ||||||
Income
from discontinued operations
|
- | 2,467 | ||||||
Net
income
|
$ | 1,563 | $ | 3,822 | ||||
PER
SHARE INFORMATION
|
||||||||
Basic
income per share:
|
||||||||
Income
from continuing operations
|
$ | .28 | $ | .22 | ||||
Income
from discontinued operations
|
- | .40 | ||||||
Net
income
|
$ | .28 | $ | .62 | ||||
Diluted
income per share:
|
||||||||
Income
from continuing operations
|
$ | .27 | $ | .21 | ||||
Income
from discontinued operations
|
- | .38 | ||||||
Net
income
|
$ | .27 | $ | .59 | ||||
Weighted
average shares used in computing income per share
|
||||||||
Basic
|
5,612,000 | 6,165,000 | ||||||
Diluted
|
5,879,000 | 6,473,000 |
Accumulated
|
|||||||||||||||||||||||||||
Additional
|
Other
|
Total
|
|||||||||||||||||||||||||
Common
|
Common
|
Paid-in
|
Retained
|
Comprehensive
|
Treasury Stock, at Cost
|
Stockholders’
|
|||||||||||||||||||||
Shares
|
Stock
|
Capital
|
Earnings
|
Income
|
Shares
|
Amount
|
Equity
|
||||||||||||||||||||
Balance,
March 29, 2009
|
8,305,683 | $ | 83 | $ | 49,001 | $ | 11,228 | $ | 335 | 2,693,806 | $ | (18,798 | ) | $ | 41,849 | ||||||||||||
Share-based
compensation
|
- | - | 107 | - | - | - | - | 107 | |||||||||||||||||||
Unrealized
gains on marketable securities, net of deferred income tax
of $40
|
- | - | - | - | 61 | - | - | 61 | |||||||||||||||||||
Net
income
|
- | - | - | 1,563 | - | - | - | 1,563 | |||||||||||||||||||
Balance,
June 28, 2009
|
8,305,683 | $ | 83 | $ | 49,108 | $ | 12,791 | $ | 396 | 2,693,806 | $ | (18,798 | ) | $ | 43,580 |
June 28, 2009
|
June 29, 2008
|
|||||||
Cash
flows from operating activities:
|
||||||||
Net
income
|
$ | 1,563 | $ | 3,822 | ||||
Adjustments
to reconcile net income to net cash provided by (used in) operating
activities
|
||||||||
Depreciation
and amortization
|
199 | 198 | ||||||
Amortization
of intangible assets
|
- | 3 | ||||||
Amortization
of bond premium
|
71 | 58 | ||||||
Amortization
of deferred compensation
|
- | 18 | ||||||
Gains
on sales of subsidiaries
|
- | (3,906 | ) | |||||
Share
based compensation expense
|
107 | 106 | ||||||
Provision
for doubtful accounts
|
121 | - | ||||||
Deferred
income taxes
|
(43 | ) | (43 | ) | ||||
Changes
in operating assets and liabilities:
|
||||||||
Accounts
and other receivables, net
|
(2,193 | ) | (1,698 | ) | ||||
Inventories
|
(328 | ) | (168 | ) | ||||
Prepaid
expenses and other current assets
|
626 | 624 | ||||||
Accounts
payable, accrued expenses and other current liabilities
|
(39 | ) | 880 | |||||
Deferred
franchise fees
|
(28 | ) | 58 | |||||
Other
liabilities
|
(41 | ) | 47 | |||||
Net
cash provided by (used in) operating activities
|
15 | (1 | ) | |||||
Cash
flows from investing activities:
|
||||||||
Proceeds
from sale of available-for-sale securities
|
435 | 500 | ||||||
Purchase
of property and equipment
|
(189 | ) | (169 | ) | ||||
Payments
received on notes receivable
|
71 | 147 | ||||||
Proceeds
from sale of subsidiary
|
- | 3,961 | ||||||
Net
cash provided by investing activities
|
317 | 4,439 | ||||||
Cash
flows from financing activities:
|
||||||||
Repurchase
of treasury stock
|
- | (1,460 | ) | |||||
Proceeds
from the exercise of stock options
|
- | 10 | ||||||
Net
cash used in financing activities
|
- | (1,450 | ) | |||||
Net
increase in cash and cash equivalents
|
332 | 2,988 | ||||||
Cash
and cash equivalents, beginning of period
|
8,679 | 14,381 | ||||||
Cash
and cash equivalents, end of period
|
$ | 9,011 | $ | 17,369 | ||||
Cash
paid during the period for:
|
||||||||
Interest
|
$ | - | $ | - | ||||
Income
taxes
|
$ | 155 | $ | 123 | ||||
Noncash
Financing Activities:
|
||||||||
Loan
made in connection with the sale of subsidiary
|
$ | - | $ | 250 |
Level 1
|
Level 2
|
Level 3
|
Carrying Value
|
|||||||||||||
Marketable
securities
|
$ | - | $ | 25,265 | $ | - | $ | 25,265 | ||||||||
Total
assets at fair value
|
$ | - | $ | 25,265 | $ | - | $ | 25,265 |
1.
|
Sale
of NF Roasters Corp.
|
Cash
|
$ | 8,000 | (A) | |
Accounts
receivable, net
|
1,000 | |||
Deferred
income taxes, net
|
230,000 | |||
Intangible
assets, net
|
391,000 | |||
Other
assets
|
30,000 | |||
Total
assets sold
|
660,000 | |||
Accrued
expenses
|
27,000 | (B) | ||
Other
liabilities
|
328,000 | |||
Total
liabilities sold
|
355,000 | |||
Net
assets sold
|
$ | 305,000 |
(A)
|
-
Represents unexpended marketing
funds.
|
(B)
|
-
Includes unexpended marketing funds of
$8,000.
|
Income
from
|
||||||||||||||||||||||||
Income
from
|
Continuing
Operations
|
|||||||||||||||||||||||
Continuing Operations
|
Number of Shares
|
Per Share
|
||||||||||||||||||||||
2009
|
2008
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||||||||
(in
thousands)
|
(in
thousands)
|
|||||||||||||||||||||||
Basic EPS
|
||||||||||||||||||||||||
Basic
calculation
|
$ | 1,563 | $ | 1,355 | 5,612 | 6,165 | $ | 0.28 | $ | 0.22 | ||||||||||||||
Effect
of dilutive employee stock options and warrants
|
- | - | 267 | 308 | (0.01 | ) | (0.01 | ) | ||||||||||||||||
Diluted EPS
|
||||||||||||||||||||||||
Diluted
calculation
|
$ | 1,563 | $ | 1,355 | 5,879 | 6,473 | $ | 0.27 | $ | 0.21 |
Weighted-
|
Weighted-
|
|||||||||||||||
Average
|
Average
|
Aggregate
|
||||||||||||||
Exercise
|
Remaining
|
Intrinsic
|
||||||||||||||
Shares
|
Price
|
Contractual Life
|
Value
|
|||||||||||||
Options
outstanding at March 29, 2009
|
1,027,308 | $ | 6.94 | 2.93 | $ | 6,723,000 | ||||||||||
Granted
|
- | - | - | - | ||||||||||||
Expired
|
- | - | - | - | ||||||||||||
Exercised
|
- | - | - | - | ||||||||||||
Options
outstanding at June 28, 2009
|
1,027,308 | $ | 6.94 | 2.68 | $ | 7,081,436 | ||||||||||
Options
exercisable at June 28, 2009
|
869,975 | $ | 5.44 | 2.24 | $ | 7,056,156 |
Thirteen
weeks ended
June 28, 2009
|
Thirteen
weeks ended
June 29, 2008
|
|||||||
(in
thousands)
|
(in
thousands)
|
|||||||
Net
income
|
$ | 1,563 | $ | 3,822 | ||||
Unrealized
gain (loss) on available-for-sale securities, net of tax
expense (benefit) of $40, and ($99), respectively
|
61 | (143 | ) | |||||
Comprehensive
income
|
$ | 1,624 | $ | 3,679 |
1.
|
Commitments
|
Payments Due by Period
|
|||||||||||||||||
Less
than
|
More
than
|
||||||||||||||||
Cash Contractual
Obligations
|
Total
|
1 Year
|
1 - 3 Years
|
3-5 Years
|
5 Years
|
||||||||||||
Employment
Agreements (a)
|
$ | 3,202 | $ | 1,236 | $ | 1,166 | $ | 400 | $ | 400 | |||||||
Operating
Leases
|
10,925 | 1,576 | 1,347 | 1,082 | 6,920 | ||||||||||||
Gross
Cash Contractual Obligations
|
14,127 | 2,812 | 2,513 | 1,482 | 7,320 | ||||||||||||
Sublease
Income
|
1,173 | 232 | 452 | 244 | 245 | ||||||||||||
Net
Cash Contractual Obligations
|
$ | 12,954 | $ | 2,580 | $ | 2,061 | $ | 1,238 | $ | 7,075 | |||||||
Amount of Commitment Expiration by
Period
|
|||||||||||||||||
Total
|
|||||||||||||||||
Amounts
|
Less
than
|
More
than
|
|||||||||||||||
Other Contractual
Commitment
|
Committed
|
1 Year
|
1 - 3 Years
|
3-5 Years
|
5 Years
|
||||||||||||
Commitment
to purchase
|
$ | 2,251 | $ | 2,251 | $ | - | $ | - | $ | - | |||||||
Total
Other Contractual Commitment
|
$ | 2,251 | $ | 2,251 | $ | - | $ | - | $ | - |
Valuation of securities
|
Valuation of securities
|
||||||||||||||||||||||||
Given an interest rate
|
Given an interest rate
|
||||||||||||||||||||||||
Decrease of X Basis points
|
Fair
|
Increase of X Basis points
|
|||||||||||||||||||||||
(150BPS)
|
(100BPS)
|
(50BPS)
|
Value
|
+50BPS
|
+100BPS
|
+150BPS
|
|||||||||||||||||||
Municipal
notes and bonds
|
$ | 26,399 | $ | 26,071 | $ | 25,692 | $ | 25,265 | $ | 24,817 | $ | 24,369 | $ | 23,928 |
Period (A)
|
(a) Total Number of
Shares Purchased
|
(b) Average Price
Paid per Share
|
(c) Total Number of
Shares Purchased as
Part of Publicly
Announced Plans
|
(d) Maximum
Number of Shares
that May Yet Be
Purchased Under the
Plan
|
||||||||||||
March
30, 2009
April
26, 2009
|
-0-
|
$ | - |
-0-
|
306,194 | |||||||||||
April
27, 2009
May
24, 2009
|
-0-
|
$ | - |
-0-
|
306,194 | |||||||||||
May
25, 2009
June
28, 2009
|
-0-
|
$ | - |
-0-
|
306,194 | |||||||||||
Total
|
-0-
|
$ | - |
-0-
|
306,194 |
3.1
|
Certificate
of Incorporation. (Incorporated by reference to Exhibit 3.1 to
Registration Statement on Form S-1 No. 33-
56976.)
|
3.2
|
Amendment
to the Certificate of Incorporation, filed December 15, 1992.
(Incorporated by reference to Exhibit 3.2 to Registration Statement on
Form S-1 No. 33-56976.)
|
3.3
|
By-Laws,
as amended. (Incorporated by reference to Exhibit 3.1 to Form 8-K dated
November 1, 2006.)
|
4.1
|
Specimen
Stock Certificate. (Incorporated by reference to Exhibit 4.1 to
Registration Statement on Form S-1 No.
33-56976.)
|
4.2
|
Form
of Rights Certificate. (Incorporated by reference to Exhibit A to Form 8-K
dated June 6, 2008.)
|
4.3
|
Rights
Agreement dated as of June 4, 2008 between Nathan’s Famous, Inc. and
American Stock Transfer and Trust Company. (Incorporated by reference to
Exhibit 4.2 to Form 8-K dated June 6,
2008.)
|
10.1
|
*Stock
Purchase Agreement dated June 30, 2009 among Nathan’s Famous, Inc., Prime
Logic Capital LLC and Cantor Fitzgerald &
Co.
|
31.1
|
*Certification
of the Chief Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|
31.2
|
*Certification
of the Chief Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|
32.1
|
*Certification
by Eric Gatoff, CEO, Nathan’s Famous, Inc., pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
32.2
|
*Certification
by Ronald G. DeVos, CFO, Nathan’s Famous, Inc., pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.
|
NATHAN'S
FAMOUS, INC.
|
||
Date:
August 7, 2009
|
By:
|
/s/Eric Gatoff
|
Eric Gatoff
|
||
Chief Executive Officer
|
||
(Principal Executive Officer)
|
||
Date:
August 7, 2009
|
By:
|
/s/Ronald G. DeVos
|
Ronald
G. DeVos
|
||
Vice
President - Finance
|
||
and
Chief Financial Officer
|
||
(Principal
Financial and Accounting
Officer)
|
3.1
|
Certificate
of Incorporation. (Incorporated by reference to Exhibit 3.1 to
Registration Statement on Form S-1 No. 33-
56976.)
|
3.2
|
Amendment
to the Certificate of Incorporation, filed December 15, 1992.
(Incorporated by reference to Exhibit 3.2 to Registration Statement on
Form S-1 No. 33-56976.)
|
3.3
|
By-Laws,
as amended. (Incorporated by reference to Exhibit 3.1 to Form 8-K dated
November 1, 2006.)
|
4.1
|
Specimen
Stock Certificate. (Incorporated by reference to Exhibit 4.1 to
Registration Statement on Form S-1 No.
33-56976.)
|
4.2
|
Form
of Rights Certificate. (Incorporated by reference to Exhibit A to Form 8-K
dated June 6, 2008.)
|
4.3
|
Rights
Agreement dated as of June 4, 2008 between Nathan’s Famous, Inc. and
American Stock Transfer and Trust Company. (Incorporated by reference to
Exhibit 4.2 to Form 8-K dated June 6,
2008.)
|
10.1
|
*Stock
Purchase Agreement dated June 30, 2009 among Nathan’s Famous, Inc., Prime
Logic Capital LLC and Cantor Fitzgerald &
Co.
|
31.1
|
*Certification
of the Chief Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|
31.2
|
*Certification
of the Chief Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|
32.1
|
*Certification
by Eric Gatoff, CEO, Nathan’s Famous, Inc., pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
32.2
|
*Certification
by Ronald G. DeVos, CFO, Nathan’s Famous, Inc., pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.
|
PRIME
LOGIC CAPITAL LLC
|
||
By:
|
/s/ Marc Cummings
|
|
Title:
Partner
|
||
CANTOR
FITZGERALD & CO.
|
||
By:
|
/s/Heid Olson
|
|
Title:
CAO
|
||
NATHAN’S
FAMOUS, INC.
|
||
By:
|
/s/Eric Gatoff
|
|
|
1.
|
I
have reviewed this quarterly report on Form 10-Q for the quarter ended
June 28, 2009 of Nathan’s Famous,
Inc.;
|
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
|
4.
|
The
registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
|
|
5.
|
The
registrant's other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the audit committee of the registrant's
board of directors (or persons performing the equivalent
functions):
|
/s/
Eric Gatoff
|
|
Eric
Gatoff
|
|
Chief
Executive Officer
|
|
1.
|
I
have reviewed this quarterly report on Form 10-Q for the quarter ended
June 28, 2009 of Nathan’s Famous,
Inc.;
|
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
|
4.
|
The
registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
|
|
5.
|
The
registrant's other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the audit committee of the registrant's
board of directors (or persons performing the equivalent
functions):
|
Date:
August 7, 2009
|
/s/ Ronald G. DeVos
|
Ronald
G. DeVos
|
|
Chief
Financial Officer
|
/s/
Eric Gatoff
|
|
Name:
Eric Gatoff
|
|
Date:
August 7, 2009
|
/s/
Ronald G. DeVos
|
|
Name:
Ronald G. DeVos
|
|
Date:
August 7, 2009
|