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Nathan's Famous earnings rebound

A Nathan's Famous on the boardwalk at a

A Nathan's Famous on the boardwalk at a U.S. Air base in Kandahar, Afghanistan. Credit: Handout

The Jericho-based hot-dog maker Nathan's Famous Inc. has rebounded to show a $2.2-million profit on $19.1 million in sales for the quarter ended Sept. 25, up from $151,000 profit on $16.2 million sales in the same quarter last year.

The reason for the huge shift in profitability is a court judgment that affected the year-ago quarter, requiring Nathan's to pay part of a multimillion dollar award to a former licensee, SMG Inc., of Illinois, in a contract dispute.

Nathan's, which traditionally sells direct to the consumer through grocery stores and its branded restaurant chain, said its revenues showed a 17.4 percent increase quarter-to-quarter. The increase came from rises in retail royalties; in franchise operations; and in sales of its hot dogs to the food service industry.

Sales were dampened by Tropical Storm Irene, which forced it to shut five company-owned restaurants for two days this summer.

Highlights for the company so far this year includes an expansion of its franchised unit network, adding 35 locations. Nathan's opened its first restaurant in Canada, its third and fourth in China, its fourth in the Dominican Republic, and its 15th in Kuwait.

Nathan's even has a restaurant at Kandahar airfield in Afghanistan as shown in the photo above.

The SMG court dispute centered around the sale of Nathan's proprietary seasonings to the Illinois company.

In the lawsuit, Circuit Court of Cook County, Ill., judge on Oct. 13, 2010, ruled against Nathan's in the amount of $4.9 million, and the hot-dog maker recorded a partial charge of $2.9 million for the quarter ended Sept. 26, 2010. Nathan's appealed and is required to pay 9 percent interest into a bank account, pending a final ruling.

Photo: There is a Nathan's on what is known as the Boardwalk at Kandahar airfield in Afghanistan. The photo was taken by a U.S. Air Force military photographer and is displayed on his blog, My Deployment to Afghanistan.

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