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Nathan’s Famous reports net income up 24.5%

The Coney Island Nathan's in May 2009.

The Coney Island Nathan's in May 2009. Credit: Yana Paskova

Nathan’s Famous reported a 24.5 percent increase in net income as sales volume and selling prices rose in the most recent quarter.

The Jericho-based hot dog maker had net income of $3.1 million for the three-month period that ended Sept. 24, up from $2.5 million a year earlier, the company reported Friday.

The company’s stock rose almost 13.7 percent to close at $92 Friday on the Nasdaq stock market. The shares are up more than 70 percent in the past 12 months.

Revenues grew year-over-year by 12.8 percent, to $31.6 million for the quarter. Earnings per diluted share were 74 cents, up from 60 cents a year before.

On Nov. 1, the company issued $150 million in senior secured notes that will be used to pay down other debt and to pay part of a $5 special cash dividend to shareholders. The dividend will go to those who hold stock in the company on Dec. 22 and will be paid Jan. 4.

The notes, bearing a 6.625 percent interest rate and due in 2025, will pay down $135 million in senior secured notes with an interest rate of 10 percent.

For the most recent quarter, Nathan’s Famous reported food service sales increased by 19 percent annually, to $18.1 million, and its average selling prices rose by 6 percent year-over-year, since beef prices rose and the company ties its sales prices to the cost of beef. In addition, license royalties grew by 20 percent, to nearly $5.8 million, mainly due to sales of hot dogs to Sam’s Club. Sales volume increased for food service and license royalties, the company said.

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