Company Press Release
Nathan's Famous, Inc. Reports Year End Results
WESTBURY, N.Y.--(BUSINESS WIRE)--June 24, 1999--Nathan's Famous, Inc. (NASDAQ:NATH - news) reported it's results for the fiscal year ended March 28, 1999.
Net earnings for the fifty-two weeks ended March 28, 1999, were $2,728,000 compared to $1,528,000 for the same period ended March 29, 1998. Basic and diluted earnings per share were $0.58 and $0.57, respectively, for the fifty-two weeks ended March 28, 1999, as compared to basic and diluted earnings per share of $0.32 for the fifty-two weeks ended March 29, 1998. Results for fiscal 1999 and fiscal 1998 included income tax benefits of $1,443,000, or $0.31 per share and $523,000, or $0.11 per share, respectively, from the reduction of the Company's deferred tax valuation allowance. Net earnings, exclusive of the income tax benefits, would have been $1,285,000 or $0.27 per share in fiscal 1999 and $1,005,000 or $0.21 per share in fiscal 1998. The Company's earnings before income taxes for the fifty-two weeks ended March 28, 1999 increased by 27.1% or $492,000 to $2,310,000 from $1,818,000 in the prior fiscal year.
Total revenues increased approximately 2.4% to $29,582,000 in fiscal 1999 as compared to $28,877,000 in fiscal 1998. Total systemwide sales, including supermarket sales by the Company's licensee, were $120,163,000 for the fifty-two week period ended March 28, 1999, versus $114,148,000 for the fifty-two week period ended March 29, 1998.
Net earnings for the thirteen weeks ended March 28, 1999 were $991,000, compared to $203,000, for the thirteen weeks ended March 29, 1998. Basic and diluted earnings per share were $0.21 for the thirteen week quarter ended March 28, 1999 as compared to $0.04 for the thirteen week quarter ended March 29, 1998. The reduction of the Company's deferred tax valuation allowance resulted in tax benefits which increased net earnings and earnings per share by $1,017,000 or $0.22 in the fourth quarter fiscal 1999 as compared to $523,000 or $0.11 in the fourth quarter fiscal 1998. Total revenues were $6,380,000 in the fourth quarter of fiscal 1999 compared to $6,592,000 in the fourth quarter of fiscal 1998. The Company's earnings before income taxes for the thirteen weeks ended March 28, 1999 was $11,000 as compared to a loss before income taxes of $397,000 for the thirteen weeks ended March 29, 1998.
Fiscal 1999 results included the reversal of a previous litigation accrual of $349,000 and an impairment charge of $302,000 relating to four underperforming restaurants.
Wayne Norbitz, President and Chief Operating Officer said, ''We are very pleased with the financial results achieved during the past year. The benefits that Nathan's realized from the further reduction of its deferred tax valuation allowance is testimony to the Company's continuing success. We remain committed to expanding our brand marketing and points-of-distribution strategy, domestically and internationally. The Branded Product Program, which was launched in fiscal 1998, was the primary contributor to this years sales growth, generating sales of approximately $2.5 million and now includes over 700 points-of-distribution. The program allows Nathan's signature products to be distributed in a more significant way under different forms of co-branding arrangements and through a variety of venues, including airports, colleges and universities, business & institution accounts, club stores and convenience stores. As an example, this year, our hot dogs were successfully introduced into vending machines, convenience stores and club stores under separate contracts with The Compass Group and Pierre Foods.
''The Company continues to introduce smaller restaurant outlets within non-traditional captive markets as a way of expanding its franchise system and is also selectively pursuing new Company-owned outlets. As we seek to expand our restaurant system, we are also committed to increasing the sales of Nathan's products in supermarkets.''
Mr. Norbitz added, ''We are continuing our menu development efforts and local store marketing activities and have furthered our reinvestment in existing Company-owned restaurants by renovating our restaurants on 86th Street in Brooklyn, NY and in the Kings Plaza Shopping Center in Brooklyn, NY. During fiscal 1999, twenty-one franchised or licensed restaurants were opened, including, two franchised restaurants in the State of Israel and another franchisee opened our first domestic Kosher Nathan's restaurant in Brooklyn, NY. During fiscal 1999, we also executed a master franchise agreement providing exclusive rights to develop Nathan's restaurants and distribute Nathan's products throughout foodservice venues within Egypt under which there are three units currently under development.''
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