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Nathan's Famous net income declines nearly 50% for the quarter

Nathan's Famous on the boardwalk in Coney Island.

Nathan's Famous on the boardwalk in Coney Island. Credit: Jeff Bachner

Nathan’s Famous reported a decline in net income for the most recent quarter and for its fiscal year, as it recorded a loss when it refinanced its debt.
The Jericho-based hot dog maker had net income of $367,000 for its fourth quarter ended March 25, a decline of nearly 50 percent from $729,000 a year earlier, the company reported Friday.

Nathan’s Famous also said Friday it will pay a regular quarterly cash dividend of 25 cents per share to shareholders of record on June 18. The dividend was made possible by the company’s operating performance and cash flow, as well as anticipated savings from the federal tax overhaul, Nathan’s Famous said in a statement.

The company's stock price closed at $88.70 Friday, up 0.8 percent from the previous day's closing price. The shares are up 43 percent in the past 12 months.

Revenues increased by 3.5 percent to $19.9 million for the quarter. Earnings per diluted share were 9 cents, down from 17 cents a year before.

For the recently ended fiscal year, revenues were $104.2 million, up 8.3 percent from the previous year.

For the year, the company reported net income of $2.63 million, down almost 65 percent from from $7.49 million in the previous 12-month period.

Nathan's Famous net income for the year would have been $8.6 million if it had not been for expenses that included a loss on its early debt payoff when it refinanced its notes, the company said.

On Nov. 1 the company issued $150 million in senior secured notes to pay down other debt and to pay part of a $5 special cash dividend to shareholders. The notes, bearing a 6.625 percent interest rate and due in 2025, paid down $135 million in senior secured notes with an interest rate of 10 percent.

The company recorded a loss of $8.87 million on early debt extinguishment, it said Friday.

The refinancing reduced the company’s interest expense by $3.56 million a year, Nathan’s Famous said. The company expects to pay more than $9.9 million a year in interest.

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