x
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QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
|
|
For
the quarterly period ended June 28,
2009.
|
¨
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TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT of
1934
|
|
For
the transition period from ________________________ to
________________________.
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Delaware
|
11-3166443
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(State
or other jurisdiction of
|
(I.R.S.
Employer
|
incorporation
or organization)
|
Identification
No.)
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Page
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||
Number
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||
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.
|