UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported): December 17,
2010
NATHAN'S FAMOUS,
INC.
(Exact
name of registrant as specified in its charter)
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Delaware
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1-3189
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11-3166443
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(State
or other jurisdiction
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(Commission
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(IRS
Employer
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of
incorporation)
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File
Number)
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Identification
No.)
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One
Jericho Plaza, Jericho, New York
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11753
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant's
telephone number, including area code
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(516)
338-8500
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N/A
(Former
name or former address, if changed since last report.)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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|
o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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o
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Pre-commencement
communications pursuant to Rule 13e-14(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
8.01
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Other
Events.
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On
December 17, 2010, Nathan’s Famous, Inc. issued a press release regarding a
court ruling received in connection with its pending litigation against its
licensee, SMG, Inc., in the Circuit Court of Cook County, Illinois.
As
previously reported, Nathan’s has been engaged in litigation with SMG regarding
the License Agreement between them. The main issue in the case is
whether Nathan’s is entitled to terminate the License Agreement
early. On December 17, 2010, the Court ruled that Nathan’s is not
entitled to do so. The License Agreement is scheduled to terminate on
March 1, 2014.
The other
issue in the litigation relates to claims made by SMG regarding the manner in
which Nathan’s profited from the sale of its proprietary seasonings to
SMG. As previously reported, the Court granted SMG’s motion for
summary judgment on this issue on October 13, 2010. At that time,
Nathan’s announced that it estimated the damages relating to the seasoning claim
to be between $2.9 Million and $6 Million, and that because it was unable to
determine the actual amount of damages until the hearing on damages occurred,
Nathan’s recorded a litigation accrual in the amount of $2.9 Million before tax
as part of its results for its second quarter ended September 26,
2010. Based on today’s ruling by the Court, Nathan’s estimates the
amount of seasoning damages will be approximately $4.9 Million before
tax. Accordingly, Nathan’s expects to record an additional litigation
accrual of approximately $2 Million in its third quarter ending December 26,
2010.
Although
the Court issued its ruling on December 17, 2010, Nathan’s does not expect final
judgment to be entered by the Court until January 19, 2011.
Nathan’s
is currently evaluating its legal alternatives, including an appeal of the
Court’s ruling.
Nathan’s has issued a press release
with respect to the foregoing. A copy of the press release is filed as Exhibit
99.1 hereto.
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Item
9.01
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Financial
Statements and Exhibits.
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(d)
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Exhibits.
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The following exhibits are filed
herewith:
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Exhibit
No.
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Description
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99.1
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Press
release dated December 17,
2010
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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NATHAN'S
FAMOUS, INC.
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By:
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/s/
Ronald G DeVos
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Ronald
DeVos
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Vice-President
Finance
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and
Chief Financial Officer
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(Principal
Financial and Accounting Officer)
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Dated: December
17, 2010
Exhibit
99.1
| FOR: | NATHAN’S FAMOUS, INC. | |
| COMPANY | Ronald G. DeVos, Vice President – Finance and CFO | |
| CONTACT: | (516) 338-8500 ext. 229 |
FOR IMMEDIATE
RELEASE
NATHAN’S
FAMOUS, INC.
REPORTS
COURT RULING
JERICHO,
NY, December 17, 2010 – Nathan’s Famous, Inc. (NASDAQ:NATH) today reported that
it received a ruling in the pending litigation between it and its licensee, SMG,
Inc., in the Circuit Court of Cook County, Illinois.
As
previously reported, Nathan’s has been engaged in litigation with SMG regarding
the License Agreement between them. The main issue in the case is
whether Nathan’s is entitled to terminate the License Agreement
early. On December 17, 2010, the Court ruled that Nathan’s is not
entitled to do so. The License Agreement is scheduled to terminate on
March 1, 2014.
The other
issue in the litigation relates to claims made by SMG regarding the manner in
which Nathan’s profited from the sale of its proprietary seasonings to
SMG. As previously reported, the Court granted SMG’s motion for
summary judgment on this issue on October 13, 2010. At that time,
Nathan’s announced that it estimated the damages relating to the seasoning claim
to be between $2.9 Million and $6 Million, and that because it was unable to
determine the actual amount of damages until the hearing on damages occurred,
Nathan’s recorded a litigation accrual in the amount of $2.9 Million before tax
as part of its results for its second quarter ended September 26,
2010. Based on today’s ruling by the Court, Nathan’s estimates the
amount of seasoning damages will be approximately $4.9 Million before
tax. Accordingly, Nathan’s expects to record an additional litigation
accrual of approximately $2 Million in its third quarter ending December 26,
2010.
Although
the Court issued its ruling on December 17, 2010, Nathan’s does not expect final
judgment to be entered by the Court until January 19, 2011.
Nathan’s
is currently evaluating its legal alternatives, including an appeal of the
Court’s ruling.
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 four foreign
countries through its restaurant system, foodservice sales programs and retail
licensing activities. The Nathan’s restaurant system currently
consists of 257 units, comprised of 252 franchised or licensed 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 outcome of any appeals of the Court’s
decision, the timing of any cash payment due under the judgment, and the tax
impact of the judgment; 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; 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.