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Nathan's Famous profit rises 61 percent

Hot dog maker Nathan's Famous, based in Jericho,

Hot dog maker Nathan's Famous, based in Jericho, saw net income jump in the latest quarter, partly due to lower beef and interest costs. Credit: Chuck Fadely

Nathan's Famous Inc. announced a 61 percent gain in net income for the most recent quarter on Friday, due to its lower cost of sales and decreased interest expense.

The Jericho-based hot dog maker had net income of $4.8 million for the three-month period ended June 24, up from $2.92 million a year earlier. Its cost of sales fell by almost $2 million, to $15.45 million, due to the declining cost of beef. That drop was "partly offset" by higher labor costs, the company said. 

Its interest expense for the quarter was $2.65 million, down by about $1 million from a year ago. In November, Nathan's Famous refinanced $135 million in outstanding debt at 10 percent interest, replacing it with $150 million in debt at 6.625 interest.

The company's revenues for the quarter were $30.17 million, an annual decline of 2 percent.

Its income per diluted share was $1.13, up from 69 cents a year earlier.

The company’s stock fell 8.2 percent Friday to close at $88.80. The shares were $60.60 a year ago.

Sales fell by 7.9 percent annually, to $20.47 million for the quarter, a company filing shows. License royalties increased by 9.4 percent year-over-year, to almost $8.1 million, due to an 8.5 percent increase in volume and a 4 percent rise in selling price under its license agreement with John Morrell & Co., a division of meat industry giant Smithfield Foods.

Nathan's Famous signed an agreement in 2014 with Morrell, which now manufactures, sells and markets Nathan's products for stores and food-service venues such as movie theaters and ballparks.

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