FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

(Mark One)

[ X ]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934
	~~EXCHANGE ACT OF 1934~~
	For the quarterly period ended~~Dec~~~~ember~~June 28, ~~2014.~~2015.

[ ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT of 1934
	~~EXCHANGE ACT of 1934~~
	For the transition period from to .

Commission file number 0-3189

NATHAN'S FAMOUS, INC.

(Exact name of registrant as specified in its charter)

Delaware

11-3166443

~~11-3166443~~

(State or other jurisdiction of

incorporation or organization)

~~(I.R.S.~~ (I.R.S. Employer

Identification No.)

One Jericho Plaza, Second Floor – Wing A, Jericho, New York 11753

(Address of principal executive offices)

(Zip Code)

(516) 338-8500

~~(Registrant's~~(Registrant's telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YesX No __

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).YesX No __

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check One):

	Large accelerated filer __	Accelerated filerX
	Non-accelerated filer __	Smaller reporting company __
	(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes __ NoX

~~AtFebruary 6,~~AtAugust 5, 2015, an aggregate of ~~4,496,704~~4,430,523 shares of the registrant's common stock, par value of $.01, were outstanding.

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NATHAN'S FAMOUS, INC. AND SUBSIDIARIES

INDEX

		~~Page~~ ~~Number~~


PART I.	FINANCIAL INFORMATION
		Page Number
Item 1.	Financial Statements.	3

	Consolidated Financial Statements
	Consolidated Balance Sheets – ~~December~~June 28, ~~2014~~2015 (Unaudited) and March ~~30, 2014~~29, 2015	3

	Consolidated Statements of Earnings (Unaudited) - Thirteen ~~and Thirty-nine~~ Weeks Ended ~~December~~June 28, ~~2014~~2015 and ~~December~~June 29, ~~2013~~2014	4

	Consolidated Statements of Comprehensive Income (Unaudited) –- Thirteen ~~and Thirty-nine~~ Weeks Ended ~~December~~June 28, ~~2014~~2015 and ~~December~~June 29, ~~2013~~2014	5

	Consolidated Statement of Stockholders’ ~~Equity~~(Deficit) (Unaudited) – ~~Thirty-nine~~Thirteen Weeks Ended ~~December~~June 28, ~~2014~~2015	6

	Consolidated Statements of Cash Flows (Unaudited) – ~~Thirty-nine~~Thirteen Weeks Ended ~~December~~June 28, ~~2014~~2015 and ~~December~~June 29, ~~2013~~2014	7

	Notes to Consolidated Financial Statements	8

Item 2.	Management's Discussion and Analysis of Financial	18
	Condition and Results of Operations.	16

Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	2426

Item 4.	Controls and Procedures.	2527

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings.	2628

Item 1A.	Risk Factors.	2628

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	2629

Item 3.	Defaults Upon Senior Securities.	2629

Item 4.	Mine Safety Disclosures.	2629

Item 5.	Other Information.	2629

Item 6.	Exhibits.	2730

SIGNATURES		2831

Exhibit Index		2932

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Nathan’s Famous, Inc. and Subsidiaries

CONSOLIDATED BALANCE SHEETS

~~December~~June 28, ~~2014~~2015 and March ~~30, 2014~~29, 2015

(in thousands, except share and per share amounts)

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

	December 28, 2014 (Unaudited)			March30, 2014
ASSETS							June 28, 2015			March 29, 2015
CURRENT ASSETS
Cash and cash equivalents	$	34,537		$	22,077		$	51,603		$	51,393
Marketable securities		6,819			11,187			7,832			7,091
Accounts and other receivables, net		10,405			7,823			12,542			9,499
Inventories		792			947			1,120			822
Prepaid expenses and other current assets		1,630			3,129
Prepaid expenses and other current assets (Note H)								1,360			4,532
Deferred income taxes		26			26			277			277
Total current assets		54,209			45,189			74,734			73,614

Property and equipment, net of accumulated depreciation of $8,540and $7,554, respectively		8,680			8,970
Property and equipment, net of accumulated depreciationof $7,285 and $6,946, respectively								9,072			9,257
Goodwill		95			95			95			95
Intangible asset		1,353			1,353			1,353			1,353
Other assets		855			528			343			347

	$	65,192		$	56,135		$	85,597		$	84,666

LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES AND STOCKHOLDERS’ (DEFICIT)

CURRENT LIABILITIES
Accounts payable	$	5,303		$	4,826		$	7,118		$	5,319
Accrued expenses and other current liabilities		4,102			4,751
Accrued expenses and other current liabilities (Note I)								8,123			6,412
Deferred franchise fees		313			234			376			278
Total current liabilities		9,718			9,811			15,617			12,009

Long-term debt, net of unamortized debt discounts and issuance costs of $5,563and $5,860, respectively (Note N)								129,437			129,140
Other liabilities		1,569			1,693			2,193			2,397
Deferred income taxes		754			734			1,060			1,028

Total liabilities		12,041			12,238			148,307			144,574

COMMITMENTS AND CONTINGENCIES (Note M)
COMMITMENTS AND CONTINGENCIES (Note O)

STOCKHOLDERS’ EQUITY
Common stock, $.01 par value; 30,000,000 shares authorized; 9,144,391and 9,092,183shares issued; and 4,496,704 and 4,482,157 shares outstanding at December 28, 2014 and March 30, 2014, respectively		91			91
STOCKHOLDERS’ (DEFICIT)
Common stock, $.01 par value; 30,000,000 shares authorized;9,263,408 and 9,252,097shares issued; and 4,479,734 and 4,604,410shares outstanding at June 28, 2015 and March 29, 2015, respectively								93			93
Additional paid-in capital		58,665			57,578			60,449			60,196
Retained earnings		51,129			40,963
Accumulated (deficit)								(61,134	)		(63,444	)
Accumulated other comprehensive income		66			149			42			47
		109,951			98,781			(550	)		(3,108	)
Treasury stock, at cost, 4,647,687 and 4,610,026 shares at December 28, 2014and March 30, 2014, respectively		(56,800	)		(54,884	)
Total stockholders’ equity		53,151			43,897
Treasury stock, at cost, 4,783,674 and 4,647,687 shares at June 28, 2015and March 29, 2015, respectively								(62,160	)		(56,800	)
Total stockholders’ (deficit)								(62,710	)		(59,908	)

	$	65,192		$	56,135		$	85,597		$	84,666

The accompanying notes are an integral part of these statements.

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Nathan’s Famous, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF EARNINGS

Thirteen ~~and thirty-nine~~ weeks ended ~~December~~June 28, ~~2014~~2015 and ~~December~~June 29, ~~2013~~2014

(in thousands, except share and per share amounts)

(Unaudited)

	Thirteen weeks ended				Thirty-nine weeks ended
	December 28, 2014		December 29, 2013		December 28, 2014		December 29, 2013		June 28, 2015			June 29, 2014

REVENUES
Sales	$	17,298	$	15,236	$	60,647	$	52,003	$	22,891		$	20,528
License royalties		3,546		1,817		13,652		6,211		6,536			5,568
Franchise fees and royalties		1,471		1,394		4,473		4,279		1,227			1,489
Interest income		21		68		137		246
Insurance gain (Note N)		-		-		-		2,801
Other income		17		18		65		56
Total revenues		22,353		18,533		78,974		65,596		30,654			27,585

COSTS AND EXPENSES
Cost of sales		14,704		12,779		49,097		41,558		18,106			16,288
Restaurant operating expenses		788		741		3,138		2,432		969			1,064
Depreciation and amortization		298		306		985		845		339			346
General and administrative expenses		2,760		2,898		8,561		8,519		3,624			3,108
Interest expense		-		-		-		135
Impairment charge – long-term investment		-		-		-		400
Total costs and expenses		18,550		16,724		61,781		53,889		23,038			20,806

Earnings before provision for income taxes		3,803		1,809		17,193		11,707
Income from operations										7,616			6,779

Interest expense										(3,709	)		-
Interest income										5			62
Other income, net										26			21

Income before provision for income taxes										3,938			6,862
Provision for income taxes		1,562		702		7,027		4,598		1,628			2,791
Net income	$	2,241	$	1,107	$	10,166	$	7,109	$	2,310		$	4,071



PER SHARE INFORMATION
Income per share:
Basic	$	.50	$	.25	$	2.27	$	1.60	$	.50		$	.91
Diluted	$	.49	$	.24	$	2.21	$	1.54	$	.50		$	.89

Weighted average shares used in computing income per share:
Basic		4,482,000		4,466,000		4,475,000		4,447,000		4,584,000			4,471,000
Diluted		4,603,000		4,622,000		4,596,000		4,609,000		4,621,000			4,593,000

The accompanying notes are an integral part of these statements.

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Nathan’s Famous, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Thirteen ~~and thirty-nine~~ weeks ended ~~December~~June 28, ~~2014~~2015 and ~~December~~June 29, ~~2013~~2014

(in thousands)

(Unaudited)

	Thirteen weeks ended						Thirty-nine weeks ended
	Dec. 28, 2014			Dec. 29, 2013			Dec. 28, 2014			Dec. 29, 2013			June 28, 2015			June 29, 2014

Net income	$	2,241		$	1,107		$	10,166		$	7,109		$	2,310		$	4,071

Other comprehensive loss,net of deferred income taxes:
Unrealized losses on available for sale securities		(19	)		(33	)		(83	)		(140	)
Other comprehensive loss, net of deferred income taxes:

Unrealized losses on marketable securities														(5	)		(32	)

Other comprehensive loss		(19	)		(33	)		(83	)		(140	)		(5	)		(32	)

Comprehensive income	$	2,222		$	1,074		$	10,083		$	6,969		$	2,305		$	4,039

The accompanying notes are an integral part of these statements.

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Nathan’s Famous, Inc. and Subsidiaries

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ ~~EQUITY~~(DEFICIT)

~~Thirty-nine~~Thirteen weeks ended ~~December~~June 28, ~~2014~~2015

(in thousands, except share amounts)

(Unaudited)

										Accumulated																					Accumulated
					Additional					Other								Total							Additional						Other							Total
	Common		Common		Paid-in			Retained		Comprehensive			Treasury Stock, at Cost					Stockholders’			Common		Common		Paid-in			(Accumulated			Comprehensive		Treasury Stock, at Cost					Stockholders’
	Shares		Stock		Capital			Earnings		Income (Loss)			Shares		Amount			Equity			Shares		Stock		Capital			Deficit)			Income		Shares		Amount			(Deficit)

Balance, March 30, 2014		9,092,183	$	91	$	57,578		$	40,963	$	149			4,610,026	$	(54,884	)	$	43,897
Balance, March 29, 2015																						9,252,097	$	93	$	60,196		$	(63,444	)	$	47		4,647,687	$	(56,800	)	$	(59,908)

Shares issued in connection with share-based compensation plans		52,208		-		222													222
Shares issued in connection with share- based compensation plans																						11,311		-		44													44

Withholding tax on net share settlementof share-based compensation plans						(825	)												(825	)						(59	)												(59)

Repurchase of common stock																																		135,987		(5,360	)		(5,360)

Income tax benefit on stock option exercises						1,061													1,061							65													65

Share-based compensation						629													629							203													203

Repurchase of common stock														37,661		(1,916	)		(1,916	)

Unrealized loss on available for sale securities, net of deferred income tax benefit of $56											(83	)							(83	)
Unrealized losses on available-for-sale securities, net of deferred income tax benefit of$(3)																																(5)							(5)

Net income		-		-		-			10,166		-			-		-			10,166			-		-		-			2,310			-		-		-			2,310
Balance,December28, 2014		9,144,391	$	91	$	58,665		$	51,129	$	66			4,647,687	$	(56,800	)	$	53,151
Balance, June 28, 2015																						9,263,408	$	93	$	60,449		$	(61,134	)	$	42		4,783,674	$	(62,160	)	$	(62,710)

The accompanying notes are an integral part of this statement.

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Nathan’s Famous, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

~~Thirty-nine~~Thirteen weeks ended ~~December~~June 28, ~~2014~~2015 and ~~December~~June 29, ~~2013~~2014

(in thousands)

(Unaudited)

	December 28, 2014			December 29, 2013			June 28, 2015			June 29, 2014
Cash flows from operating activities:
Net income	$	10,166		$	7,109		$	2,310		$	4,071
Adjustments to reconcile net income to net cash provided by (used in) operating activities
Insurance gain		-			(2,801	)
Impairment charge – long-term investment		-			400
Adjustments to reconcile net income to net cashprovided by operating activities
Depreciation and amortization		985			845			339			346
Amortization of bond premium		129			107			68			48
Amortization of debt discounts and issuance costs								297			-
Share-based compensation expense		629			530			203			191
Provision for doubtful accounts		7			9			16			-
Deferred income taxes		77			1,194			35			44
Changes in operating assets and liabilities:
Accounts and other receivables, net		(3,307	)		(2,445	)		(3,059	)		(3,337	)
Insurance proceeds received for business interruption claim		718			-			-			718
Inventories		155			57			(298	)		(158	)
Prepaid expenses and other current assets		1,499			(728	)		3,172			2,440
Other assets		(327	)		(5	)		4			48
Accrued litigation		-			(5,874	)
Accounts payable, accrued expenses and other current liabilities		(172	)		224			3,635			(1,412	)
Deferred franchise fees		79			(79	)		98			85
Other liabilities		(124	)		(1	)		(204	)		(65	)

Net cash provided by (used in) operating activities		10,514			(1,458	)
Net cash provided by operating activities								6,616			3,019

Cash flows from investing activities:
Proceeds from maturities of available for sale securities		6,620			2,890
Insurance proceeds received for property and equipment		-			2,711
Purchase of available for sale securities		(2,521	)		(2,219	)
Proceeds from sale and maturities of available-for-sale securities								3,070			1,670
Purchase of property and equipment		(695	)		(4,229	)		(154	)		(220	)
Litigation settlement		-			6,009
Change in restricted cash		-			(135	)
Purchase of available-for-sale securities								(3,887	)		-

Net cash provided by investing activities		3,404			5,027
Net cash (used in) provided by investing activities								(971	)		1,450

Cash flows from financing activities:
Income tax benefit on stock option exercises		1,061			1,658			65			294
Proceeds from exercise of stock options		222			525			44			89
Dividends paid upon vesting of restricted stock								(125	)		-
Payments of withholding tax on net share settlement ofshare-based compensation plans		(825	)		(772	)		(59	)		(265	)
Repurchase of common stock		(1,916	)		(262	)
Repurchase of treasury stock								(5,360	)		(1,559	)

Net cash (used in) provided by financing activities		(1,458	)		1,149
Net cash (used in) financing activities								(5,435	)		(1,441	)

Net increase in cash and cash equivalents		12,460			4,718			210			3,028

Cash and cash equivalents, beginning of period		22,077			13,403			51,393			22,077

Cash and cash equivalents, end of period	$	34,537		$	18,121		$	51,603		$	25,105

Cash paid during the year for:
Cash paid during the period for:
Interest	$	-		$	1,099		$	-		$	-
Income taxes	$	4,404		$	2,542
Income taxes (refunded) / paid							$	(1,453	)	$	36

The accompanying notes are an integral part of these statements.

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NATHAN'S FAMOUS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~December~~June 28, ~~2014~~2015

(Unaudited)

~~(Unaudited)~~

NOTE A - BASIS OF PRESENTATION

The accompanying consolidated financial statements of Nathan's Famous, Inc. and subsidiaries (collectively “Nathan’s,” the “Company,” “we,” “us” or “our”) as of and for the thirteen ~~and thirty-nine~~ week periods ended ~~December~~June 28, ~~2014~~2015 and ~~December~~June 29, ~~2013~~2014 have been prepared in accordance with accounting principles generally accepted in the United States of America. The unaudited financial statements include all adjustments (consisting of normal recurring adjustments) which, in the opinion of management, are necessary for a fair presentation of financial condition, results of operations and cash flows for the periods presented. However, our results of operations are seasonal in nature, and the results of any interim period are not necessarily indicative of results for any other interim period or the full fiscal year.

Certain information and footnote disclosures normally included in financial statements in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to the requirements of the Securities and Exchange Commission. Management believes that the disclosures included in the accompanying consolidated interim financial statements and footnotes are adequate to make the information not misleading, but should be read in conjunction with the consolidated financial statements and notes thereto included in Nathan’s Annual Report on Form 10-K for the fiscal year ended March ~~30, 2014.~~29, 2015.

A summary of the Company’s significant accounting policies is identified in Note B of the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended March ~~30, 2014.~~29, 2015. There have been no changes to the Company’s significant accounting policies subsequent to March ~~30, 2014.~~29, 2015.

NOTE B – ~~RECENTLY ISSUED~~ADOPTION OF NEW ACCOUNTING PRONOUNCEMENTS ~~NOT YET ADOPTED~~

In April 2014, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance changing the criteria for reporting discontinued operations. The revised definition of a discontinued operation includes those components of an entity or a group of components of an entity representing a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. The guidance eliminates the current requirement to assess continuing cash flow and continuing involvement with the disposal group. The revised definition also includes a business or nonprofit activity that, on acquisition, meets the criteria to be classified as held for sale. A disposal meeting the new definition is required to be reported as discontinued operations when the component of an entity or group of components of an entity meets the held for sale criteria, is actually disposed of by sales, or is disposed of through means other than a sale. The guidance iswas effective for ~~Nathan’s for annual periods~~the Company beginning ~~on or after December 15, 2014 and interim periods within those years, which for Nathan’s will be~~in the first quarter of fiscal 2016 ~~beginning on March 30, 2015. Early adoption is permitted for disposals that have~~and did not ~~been previously reported in the financial statements. Nathan’s does not expect the adoption of this new guidance to~~ have a material impact on its results of operations or financial position.

In January 2015, the FASB issued new guidance to simplify the income statement presentation requirements by eliminating the seldom-used concept of extraordinary items. Extraordinary items are events and transactions that are distinguished by their unusual nature and by the infrequency of their occurrence. Eliminating the extraordinary classification simplifies the income statement presentation by no longer segregating such extraordinary items from the ordinary results of operations and separately stating the amount, net of tax along with the effect on earnings per share. This new standard is effective for annual periods beginning after December 15, 2015, including interim periods therein, which for Nathan’s would be its first quarter of fiscal 2017 beginning March 28, 2016. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. The Company early adopted this standard beginning in the first quarter of fiscal 2016. The adoption did not have a material impact on its results of operations or financial position.

NOTE C – NEW ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED

In May 2014, the FASB issued a new accounting standard that attempts to establish a uniform basis for recording ~~revenue~~income to virtually all ~~industries’~~industries financial statements, under U.S. GAAP. The revenue standard’s core principle is built on the contract between a vendor and a customer for the provision of goods and services. It attempts to depict the exchange of rights and obligations between the parties in the pattern of revenue recognition based on the consideration to which the vendor is entitled.In order to accomplish this objective, companies must evaluate the following five basic steps: (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation. There are three basic transition methods that are available – full retrospective, retrospective with certain practical expedients, and a cumulative effect approach. Under the third alternative, an entity would apply the new revenue standard only to contracts that are incomplete under legacy U.S. GAAP at the date of initial application and recognize the cumulative effect of the new standard as an adjustment to the opening balance of retained earnings. Prior years would not be restated and additional disclosures would be required to enable users of the financial statements to understand the impact of adopting the new standard in the current year compared to prior years that are presented under legacy U.S. GAAP. Early adoption is prohibited under U.S. GAAP. Public companies ~~must~~were originally expected to apply the new standard for annual periods beginning after December 15, 2016, including interim periods therein, which for Nathan’s ~~will be~~would have been its first quarter of fiscal 2018, beginning on March 27, 2017. On May 12, 2015 the FASB issued a second proposed update to the standard clarifying the distinction between revenue from licenses of intellectual property that represent a promise to deliver a good or service over time versus a promise to be satisfied at a point in time. On July 9, 2015, the FASB agreed to delay the standard’s effective date to annual reporting periods beginning after December 15, 2017 which will now be our first quarter (June 2018) of our fiscal year ending March 31, 2019. The Company ~~expects to use the modified retrospective method, recognizing a cumulative effect adjustment to retained earnings when adopted, and~~ is currently evaluating the impact of this new accounting standard on its consolidated financial position and results of operations.

-8-

In August 2014, the FASB issued new guidance that requires management to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued. If such conditions exist, management will be required to include disclosures enabling users to understand those conditions and management’s plans to alleviate or mitigate those conditions. This new standard is effective for annual periods ending after December 15, 2016 and interim periods within annual periods beginning after December 16, 2016. This standard will take effect in Nathan’s fourth quarter of our fiscal year ending March 26, 2017.

~~-8-~~

In ~~January~~July 2015, the FASB ~~issued new guidance~~updated U.S. GAAP to simplify the ~~income statement presentation requirements by eliminating~~ways businesses measure inventory. Companies that use the ~~seldom-used concept~~first-in, first-out (FIFO) method or the average cost method will measure inventory at the lower of ~~extraordinary items. Extraordinary items are events~~its cost or net realizable value. Net realizable value is the estimated selling price in the normal course of business, minus the cost of completion, disposal, and ~~transactions that are distinguished by their unusual nature and by the infrequency of their occurrence. Eliminating the extraordinary classification simplifies the income statement presentation by~~transportation. Companies will no longer ~~segregating such extraordinary items from the ordinary results of operations and separately stating the amount,~~consider replacement cost or net ~~of tax along with the effect on earnings per share.~~realizable value less a normal profit margin when measuring inventory. This new standard is effective for annual reporting periods beginning after December 15, ~~2015, including interim periods therein,~~2016 which ~~for Nathan’s would~~will be ~~its~~our first quarter of fiscal 2017 beginning March 28, 2016. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. Nathan’s expects to early adopt this standard in the first quarter(June 2017) of our fiscal year ending March ~~28, 2016 that begins on March 30, 2015.~~25, 2018. Nathan’s does not expect the adoption of this new guidance to have a material impact on its results of operations or financial position.

The Company does not believe that any other recently issued, but not yet effective accounting standards, when adopted, will have a material effect on the accompanying financial statements.

NOTE CD – INCOME PER SHARE

Basic income per common share is calculated by dividing income by the weighted-average number of common shares outstanding and excludes any dilutive effect of stock options. Diluted income per common share gives effect to all potentially dilutive common shares that were outstanding during the period. Dilutive common shares used in the computation of diluted income per common share result from the assumed exercise of stock options and warrants, as determined using the treasury stock method.

The following chart provides a reconciliation of information used in calculating the per-share amounts for the ~~thirteen and thirty-nine week~~thirteen-week periods ended ~~December~~June 28, ~~2014~~2015 and ~~December~~June 29, ~~2013,~~2014, respectively.

Thirteen weeks
									Net Income														Net Income
	Net Income				Number of Shares				Per Share						Net Income				Number of Shares				Per Share
	2014		2013		2014		2013		2014			2013			2015		2014		2015		2014		2015		2014
	(in thousands)				(in thousands)										(in thousands)				(in thousands)
Basic EPS
Basic calculation	$	2,241	$	1,107		4,482		4,466	$	0.50		$	0.25		$	2,310	$	4,071		4,584		4,471	$	0.50	$	0.91
Effect of dilutive employee stockoptions		-		-		121		156		(0.01	)		(0.01	)		-		-		37		122		-		(0.02	)
Diluted EPS
Diluted calculation	$	2,241	$	1,107		4,603		4,622	$	0.49		$	0.24		$	2,310	$	4,071		4,621		4,593	$	0.50	$	0.89

Thirty-nine weeks

Net Income

Net Income

Number of Shares

Per Share

2014

2013

2014

2013

2014

2013

(in thousands)

(in thousands)

Basic EPS

Basic calculation
$ 10,166 $ 7,109 4,475 4,447 $ 2.27 $ 1.60
Effect of dilutive employee stockoptions
- - 121 162 (0.06 ) (0.06 )
Diluted EPS

Diluted calculation
$ 10,166 $ 7,109 4,596 4,609 $ 2.21 $ 1.54

NoThere were no options to purchase shares of common stock for the thirteen ~~or thirty-nine~~ week periods ended ~~December~~June 28, 2015 and June 29, 2014 ~~and December 29, 2013~~that were excluded from the computation of diluted earnings per share.

-9-

NOTE DE – FAIR VALUE MEASUREMENTS

Nathan’s follows a three-level fair value hierarchy that prioritizes the inputs to measure fair value. This hierarchy requires entities to maximize the use of “observable inputs” and minimize the use of “unobservable inputs.” The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability on the measurement date. The three levels are defined as follows:

● Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for an identical asset or liability in an active market

● Level 2 - inputs to the valuation methodology include quoted prices for a similar asset or liability in an active market ~~quoted prices in markets that are not active,~~ or model-derived valuations in which all significant inputs are observable for substantially the full term of the asset or liability

● Level 3 - inputs to the valuation methodology are unobservable and significant to the fair value measurement of the asset or liability

The following table presents assets ~~and liabilities~~ measured at fair value on a recurring basis as of ~~December~~June 28, ~~2014~~2015 and March ~~30, 2014~~29, 2015 based upon the valuation hierarchy (in thousands):

December28, 2014	Level 1		Level 2		Level 3		Carrying Value
June28, 2015									Level 1		Level 2		Level 3		Carrying Value

Marketable securities	$	-	$	6,819	$	-	$	6,819	$	-	$	7,832	$	-	$	7,832

Total assets at fair value	$	-	$	6,819	$	-	$	6,819	$	-	$	7,832	$	-	$	7,832

March 30, 2014	Level 1		Level 2		Level 3		Carrying Value
March 29, 2015									Level 1		Level 2		Level 3		Carrying Value

Marketable securities	$	-	$	11,187	$	-	$	11,187	$	-	$	7,091	$	-	$	7,091

Total assets at fair value	$	-	$	11,187	$	-	$	11,187	$	-	$	7,091	$	-	$	7,091

Nathan’s marketable securities, which consist primarily of municipal bonds, are not actively traded. The valuation of such bonds is based upon quoted market prices for similar bonds currently trading in an active market or model-derived valuations in which all significant inputs are observable for substantially the full term of the ~~asset or liability.~~asset.

The Company’s long-term debt had a carrying value of $135,000,000 as of June 28, 2015 and a fair value of $144,788,000 as of June 28, 2015. The Company estimates the fair value of its long-term debt based upon review of observable pricing in secondary markets as of the last trading day of the fiscal period. Accordingly, the Company classifies its long-term debt as Level 2.

The carrying amounts of cash equivalents, accounts receivable and accounts payable approximate fair value due to the short-term maturity of the instruments.

Certain non-financial assets and liabilities are measured at fair value on a ~~nonrecurring~~non-recurring basis; that is, the assets and liabilities are not measured at fair value on an ongoing basis, but are subject to fair value adjustments in certain circumstances, such as when evidence of impairment exists. At ~~December~~June 28, ~~2014,~~2015, no fair value adjustment or material fair value measurements were required for non-financial assets or liabilities.

NOTE EF – MARKETABLE SECURITIES

The Company determines the appropriate classification of securities at the time of purchase and reassesses the appropriateness of the classification at each reporting date. At ~~December~~June 28, ~~2014~~2015 and March ~~30, 2014,~~29, 2015, all marketable securities held by the Company have been classified as available-for-sale and, as a result, are stated at fair value (Note D)E), with unrealized gains and losses included as a component of accumulated other comprehensive income. Realized gains and losses on the sale of securities are determined on a specific identification basis. Interest income is recorded when it is earned and deemed realizable by the Company.

-10-

The cost, gross unrealized gains, gross unrealized losses and fair market value for marketable securities, which consist entirely of municipal bonds that are classified as available-for-sale securities, are as follows (in thousands):

Cost

Gross
Unrealized
Gains

Gross
Unrealized
Losses

Fair
Market
Value

December 28, 2014
$ 6,718 $ 101 $ - $ 6,819

March 30, 2014
$ 10,947 $ 240 $ - $ 11,187

~~-10-~~

	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Market Value

June 28, 2015	$	7,768	$	64	$	-	$	7,832

March 29, 2015	$	7,019	$	72	$	-	$	7,091

The municipal bonds held at ~~December~~June 28, ~~2014,~~2015, mature at various dates between ~~February 2015 and April~~July 2015and January 2017. The following represents the bond maturities by period (in thousands):

Fair value of Municipal Bonds	Total		Less than 1 Year		1 – 5 Years		5 – 10 Years		After 10 Years		Total		Less than 1 Year		1 – 5 Years		5 – 10 Years		After 10 Years

December 28, 2014	$	6,819	$	4,463	$	2,356	$	-	$	-
June 28, 2015											$	7,832	$	6,767	$	1,065	$	-	$	-

The change in net unrealized losses on available-for-sale securities for the thirteen-week periods ended ~~December~~June 28, 2015 and June 29, 2014 of $5,000 and ~~December 29, 2013 of $19,000 and $33,000,~~$32,000, respectively, which are net of deferred income tax benefit, of ~~$12,000~~$3,000 and $21,000, respectively, have been included as a component of comprehensive income. The net unrealized losses on available-for-sale securities for the thirty-nine week periods ended December 28, 2014 and December 29, 2013 of $83,000 and $140,000, respectively, net of deferred income tax benefit, of $56,000 and $92,000,$22,000, respectively, have been included as a component of comprehensive income. Accumulated other comprehensive income is comprised entirely of the net unrealized gains on available-for-sale securities as of ~~December~~June 28, ~~2014~~2015 and March ~~30, 2014.~~29, 2015.

NOTE FG – ACCOUNTS AND OTHER RECEIVABLES, NET

Accounts and other receivables, net, consist of the following (in thousands):

	December 28,		March 30,		June 28,		March 29,
	2014		2014		2015		2015

Branded product sales	$	6,821	$	5,141	$	7,709	$	6,317
Franchise and license royalties		2,153		1,658		3,708		2,570
Other		1,857		1,457		1,572		1,055
		10,831		8,256		12,989		9,942

Less: allowance for doubtful accounts		426		433		447		443
Accounts and other receivables, net	$	10,405	$	7,823	$	12,542	$	9,499

Accounts receivable are due within 30 days and are stated at amounts due from ~~Branded Product Program customers,~~ franchisees, retail licensees and ~~product manufacturers,~~Branded Product Program customers, net of an allowance for doubtful accounts. Accounts that are outstanding longer than the contractual payment terms are generally considered past due. The Company does not recognize franchise and license royalties that are not deemed to be realizable.

The Company individually reviews each past due account and determines its allowance for doubtful accounts by considering a number of factors, including the length of time accounts receivable are past due, the Company’s previous loss history, the customer’s current and expected future ability to pay its obligation to the Company, the condition of the general economy and the industry as a whole. Based on management’s assessment, the Company provides for estimated ~~uncollectable~~uncollectible amounts through a charge to earnings. After the Company has used reasonable collection efforts it writes off accounts receivable through a charge to the allowance for doubtful accounts.

Changes in the Company’s allowance for doubtful accounts for the ~~thirty-nine week~~thirteen-week period ended ~~December~~June 28, ~~2014~~2015 and the fiscal year ended March ~~30, 2014~~29, 2015 are as follows (in thousands):

	December 28, 2014			March 30, 2014			June 28, 2015			March 29, 2015

Beginning balance	$	433		$	130		$	443		$	433
Bad debt expense		7			21			16			23
Charges to other accounts		-			320
Accounts written off		(14	)		(38	)		(12	)		(13	)
Ending balance	$	426		$	433		$	447		$	443

-11-

NOTE GH – PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets consist of the following (in thousands):

					June 28,		March 29,
	December 28, 2014		March 30, 2014		2015		2015

Income taxes	$	608	$	2,059	$	532	$	3,525
Insurance		619		506		303		497
Other		403		564		525		510
					$	1,360	$	4,532
	$	1,630	$	3,129

NOTE HI – ACCRUED EXPENSES, OTHER CURRENT LIABILITIES AND OTHER LIABILITIES

Accrued expenses and other current liabilities consist of the following (in thousands):

	December 28,		March 30,		June28,		March 29,
	2014		2014		2015		2015
Payroll and other benefits	$	2,101	$	2,433	$	1,452	$	2,847
Accrued rebates		949		855		789		815
Rent and occupancy costs		174		163		301		206
Deferred revenue		146		734		383		601
Construction costs		132		281		186		269
Unexpended advertising funds		-		52
Interest						4,163		750
Professional fees						224		329
Dividend payable						375		375
Other		600		233		250		220
	$	4,102	$	4,751	$	8,123	$	6,412

Other liabilities consist of the following (in thousands):

	December 28,		March 30,		June28,		March 29,
	2014		2014		2015		2015
Deferred development fees	$	213	$	200	$	177	$	214
Reserve for uncertain tax positions		666		620		548		555
Deferred rental liability		606		661		961		991
Dividend payable						500		625
Other		84		212		7		12
	$	1,569	$	1,693	$	2,193	$	2,397

NOTE IJ – SALES

The Company’s sales for the thirteen ~~and thirty-nine~~ weeks ended ~~December~~June 28, ~~2014~~2015 and ~~December~~June 29, ~~2013~~2014 are as follows (in thousands):

	Thirteen weeks ended
	June 28, 2015		June 29, 2014

Branded Products	$	17,415	$	15,064
Company-operated restaurants		5,299		5,291
Other		177		173
Total sales	$	22,891	$	20,528

Thirteen weeks ended Thirty-nine weeks ended

December 28,
2014

December 29,
2013

December 28,
2014

December 29,
2013

Branded Products
$ 14,956 $ 13,156 $ 45,568 $ 40,256
Company-operated restaurants
2,148 1,990 14,497 11,536
Other
194 90 582 211
Total sales
$ 17,298 $ 15,236 $ 60,647 $ 52,003
-12-

NOTE JK – INCOME TAXES

The income tax provisions for the ~~thirty-nine week~~thirteen-week periods ended ~~December~~June 28, ~~2014~~2015 and ~~December~~June 29, ~~2013~~2014 reflect effective tax rates of ~~40.9%~~41.3% and ~~39.3%~~40.7%, respectively, which have been reduced from statutory rates by ~~0.3%~~0.1% and ~~0.8%~~0.4%, respectively, for the differing effects of ~~tax-exempt~~tax exempt interest income. ~~Nathan’s expects that its federal income tax rate will increase to 35% for the fiscal year ending March 29, 2015.~~

~~-12-~~

The amount of unrecognized tax benefits at ~~December~~June 28, ~~2014~~2015 was ~~$315,000,~~$253,000, all of which would impact Nathan’s effective tax rate, if recognized. As of ~~December~~June 28, ~~2014,~~2015, Nathan’s had ~~$362,000~~$291,000 of accrued interest and penalties in connection with unrecognized tax benefits.

During the fiscal year ending March ~~29, 2015,~~27, 2016, Nathan’s will seek to settle additional uncertain tax positions with the tax authorities. As a result, it is reasonably possible the amount of unrecognized tax benefits, excluding the related accrued interest and penalties, could be reduced by up to ~~$64,000,~~$98,000, which would favorably impact Nathan’s effective tax rate, although no assurances can be given in this regard.

Nathan’s estimates that its annual tax rate for the fiscal year ending March ~~29, 2015~~27, 2016 will be in the range of approximately ~~39.5%~~40.4% to ~~41.5%.~~41.6%, excluding the potential impact of any reduction to the Company’s unrecognized tax benefits. The final annual tax rate is subject to many variables, including the effect of tax-exempt interest earned, among other factors, and therefore cannot be determined until the end of the fiscal year; therefore, the actual tax rate could differ from our current estimates.

In June 2015, Nathan’s received notification from the New York State Department of Taxation and Finance that it is seeking to review Nathan’s tax returns for the period April 1, 2011 through March 31, 2014.

NOTE KL – SHARE-BASED COMPENSATION

Total share-based compensation during the thirteen-week periods ended ~~December~~June 28, 2015 and June 29, 2014 was $203,000 and ~~December 29, 2013 was $228,000 and $192,000, respectively. Total share-based compensation during the thirty-nine week periods ended December 28, 2014 and December 29, 2013 was $629,000 and $530,000,~~$191,000, respectively. Total share-based compensation is included in general and administrative expense in our accompanying Consolidated Statements of Earnings. As of ~~December~~June 28, ~~2014,~~2015, there was ~~$2,044,000 of~~$1,599,000of unamortized compensation expense related to share-based incentive awards. We expect to recognize this expense over approximately ~~one year~~two years and ~~four~~eight months, which represents the weighted average remaining requisite service periods for such awards.

There were no new share-based awards granted during the thirteen-week period ended June 28, 2015.

The Company recognizes compensation cost for unvested stock-based incentive awards on a straight-line basis over the requisite service period. Compensation cost charged to expense under all stock-based incentive awards is as follows (in thousands):

	Thirteen weeks ended
	June 28, 2015		June 29, 2014

Stock options	$	68	$	56
Restricted stock		135		135
Total compensation cost	$	203	$	191

Stock options outstanding:

During the ~~thirty-nine week period~~fiscal year ended ~~December 28, 2014,~~March 29, 2015, the Company granted options to purchase 50,000 shares at an exercise price of $53.89 per share, all of which expire five years from the date of grant. All such stock options vest ratably over a four-year period commencing August 6, ~~2015.~~2015.

The ~~weighted-average option fair values,~~ex-dividend date for the special cash dividend was March 30, 2015, which was paid on March 27, 2015, to stockholders of record as ~~determined using~~of March 20, 2015. Pursuant to the ~~Black-Scholes option valuation model, and the assumptions used to estimate these values for stock options granted during the thirty-nine weeks ended December 28, 2014, are as follows:~~

Weighted-average option fair values
$ 11.970
Expected life (years)
4.5
Interest rate
1.66 %
Volatility
22.77 %
Dividend yield
0 %

~~The expected dividend yield is based on historical and projected dividend yields. The Company estimates expected volatility based primarily on historical monthly price changes~~anti-dilution provisions of the Company’s 2010 Stock Incentive Plan, as awarded, the Company issued 75,745 replacement options at an exercise price of $35.576 for the unvested stock ~~equal to the expected life~~options that were outstanding as of ~~the option. The risk free interest rate is~~March 29, 2015. Nathan’s performed its evaluation based on the ~~U.S. Treasury yield in effect at~~closing price of its common stock on Friday, March 27, 2015 of $73.56 per share, or $48.56 per share excluding the ~~time~~dividend of $25.00 per share. No other terms or conditions of the ~~grant.~~outstanding options were modified. The ~~expected option term is~~anti-dilution provisions of the ~~number of years~~original award were structured to equalize the ~~Company estimates the options will be outstanding prior to exercise based on expected employment termination behavior.~~

~~During the thirty-nine weeks ended December 29, 2013, the Company granted 25,000 shares of restricted stock at a~~award’s fair value ~~of $49.80 per share representing~~before and after the closing price on the date of grant, which will be fully vested five years from the date of grant. The restrictions on the shares lapse ratably over a five-year period on the annual anniversary of the date of grant. The compensation expense related to this restricted stock award is expected to be $1,245,000 and will be recognized, commencing on the grant date, over five years.

Thirteen weeks ended Thirty-nine weeks ended

December 28,
2014

December 29,
2013

December 28,
2014

December 29,
2013

Stock options
$ 93 $ 56 $ 224 $ 168
Restricted stock
135 136 405 362
Total compensation cost
$ 228 $ 192 $ 629 $ 530

modification.

-13-

~~Stock options outstanding:~~

Transactions with respect to stock options for the ~~thirty-nine~~thirteen weeks ended ~~December~~June 28, ~~2014~~2015 are as follows:

				Weighted-		Weighted-		Aggregate					Weighted-		Weighted-		Aggregate
				Average		Average		Intrinsic					Average		Average		Intrinsic
				Exercise		Remaining		Value					Exercise		Remaining		Value
	Shares			Price		Contractual Life		(In thousands)		Shares			Price		Contractual Life		(in thousands)

Options outstanding at March 30, 2014		279,500		$	15.22		2.07	$	9,381

Options outstanding at the beginning of thefiscal year (A)											142,964		$	24.36		2.87	$	3,460

Granted		50,000		$	53.89		-		-		-			-		-		-

Expired		-			-		-		-		(3,787	)	$	11.72		-		-

Exercised		(59,250	)	$	12.22		-		-		(9,467	)	$	11.72		-		261

Options outstanding at December 28, 2014		270,250		$	23.03		2.03	$	14,799
Options outstanding at June 28, 2015											129,710		$	25.65		2.79	$	1,423

Options exercisable at December 28, 2014		175,875		$	15.59		1.45	$	10,940
Options exercisable at June 28, 2015											53,965		$	11.72		0.94	$	1,344

A -

Represents outstanding options after giving effect to the replacement options issued in connection with the Company’s special dividend.

Restricted stock:

Transactions with respect to restricted stock for the ~~thirty-nine~~thirteen weeks ended ~~December~~June 28, ~~2014~~2015 are as follows:

				Weighted-					Weighted-
				Average					Average
				Grant-date Fair value					Grant-date Fair value
	Shares			Per share		Shares			Per share
Unvested restricted stock at March 30, 2014		55,000		$	38.61
Unvested restricted stock at March 29, 2015							40,000		$	39.54

Granted		-			-		-			-
Vested		(15,000	)	$	36.13		(5,000	)	$	49.80

Unvested restricted stock at December 28, 2014		40,000		$	39.54
Unvested restricted stock at June 28, 2015							35,000		$	38.07

NOTE LM – STOCKHOLDERS’ EQUITY

During the period from October 2001 through December 28, 2014, Nathan’s purchased 4,647,687 shares of its common stock at a cost of approximately $56,800,000 pursuant to various stock repurchase plans previously authorized by the Board of Directors. During the thirty-nine-week period ended December 28, 2014, we repurchased 37,661 shares of common stock at a cost of $1,916,000.

1.Dividend

On ~~September 11, 2014,~~March 10, 2015, the Company’s Board of Directors declared a special cash dividend of $25.00 per share payable to stockholders of record as of March 20, 2015. On March 27, 2015, the Company ~~and Mutual Securities, Inc. (“MSI”) amended its existing agreement~~paid cash dividends of approximately $115,100,000 to the stockholders of our outstanding common stock. The Company also accrued $1,000,000 for the expected dividends payable on unvested shares pursuant to ~~which MSI~~the terms of the restricted stock agreements. As certain restricted stock grants vest beginning in June 2015, the declared dividend will be paid. We have paid $125,000 of the accrued dividend and estimate that approximately $250,000 will also be paid during the remainder of the fiscal year. The ex-date for the distribution was ~~authorized on the Company’s behalf~~March 30, 2015 pursuant to ~~purchase shares~~NASDAQ regulations for dividend distributions that are greater than 25% of the Company’s common stock, $.01 par value having a value of up to an additional $6,000,000, which purchases could commence on September 24, 2014. The agreement with MSI was adopted under the safe harbor provided by Rule 10b5-1 and Rule 10b-18 of the Securities Exchange Act of 1934, as amended to assist the Company in implementing its previously announced stock purchase plans.market capitalization.

~~As of December 28, 2014, an aggregate of 251,272 shares can still be purchased under Nathan’s existing stock buy-back program.~~

Purchases may be made from time to time, depending on market conditions, in open market or privately-negotiated transactions, at prices deemed appropriate by management. There is no set time limit on the repurchases to be made under these stock-repurchase plans.2. Common Stock Purchase Rights

On June 5, 2013, Nathan’s adopted a new stockholder rights plan (the “2013 Rights Plan”) under which all stockholders of record as of June 17, 2013 received rights to purchase shares of common stock (the “2013 Rights”).

The 2013 Rights were distributed as a dividend. Initially, the 2013 Rights will attach to, and trade with, the Company’s common stock. Subject to the terms, conditions and limitations of the 2013 Rights Plan, the 2013 Rights will become exercisable if (among other things) a person or group acquires 15% or more of the Company’s common stock. Upon such an event and payment of the purchase price of $100.00 (the “2013 Right Purchase Price”), each 2013 Right (except those held by the acquiring person or group) will entitle the holder to acquire one share of the Company’s common stock (or the economic equivalent thereof) or, if the then-current market price is less than the then current 2013 Right Purchase Price, a number of shares of the Company’s common stock which at the time of the transaction has a market value equal to the then current 2013 Right Purchase Price at a purchase price per share equal to the then current market price of the Company’s Common Stock.

-14-

The Company’s Board of Directors may redeem the 2013 Rights prior to the time they are triggered. Upon adoption of the 2013 Rights Plan, the Company initially reserved 10,188,600 shares of common stock for issuance upon exercise of the 2013 Rights. The 2013 Rights will expire on June 17, 2018 unless earlier redeemed or exchanged by the Company.

At ~~December~~June 28, ~~2014,~~2015, the Company has reserved ~~6,515,345~~13,293,670 shares of common stock for issuance upon exercise of the Common Stock Purchase Rights approved by the Board of Directors on June 5, 2013.

3.Stock Repurchase Programs

During the period from October 2001 through June 28, 2015, Nathan’s purchased a total of 4,783,674shares of its common stock at a cost of approximately$62,160,000pursuant to various stock repurchase plans previously authorized by the Board of Directors. During the thirteen-week period ended June 28, 2015, we repurchased 135,987 shares of common stock at a cost of $5,360,000.

On September 11, 2014, the Company and Mutual Securities, Inc. (“MSI”) amended its existing agreement pursuant to which MSI was authorized on the Company’s behalf to purchase shares of the Company’s common stock, $.01 par value having a value of up to an additional $6,000,000, which purchases could commence on September 24, 2014. The agreement with MSI was adopted under the safe harbor provided by Rule 10b5-1 and Rule 10b-18 of the Securities Exchange Act of 1934, as amended to assist the Company in implementing its previously announced stock purchase plans.

As of June 28, 2015, an aggregate of 115,285 shares can still be purchased under Nathan’s existing stock buy-back program.

NOTE ~~M -~~N – LONG-TERM DEBT

Long-term debt consists of the following (in thousands):

	June 28,			March 29,
	2015			2015

10.000% Senior secured notes due 2020	$	135,000		$	135,000
Less: unamortized debt discounts and issuance costs		(5,563	)		(5,860	)
	$	129,437		$	129,140

On March 10, 2015, the Company completed the issuance of $135,000,000 of 10.000% Senior Secured Notes due 2020 (“the Notes”) in a Rule 144A transaction. The Company used the proceeds to pay a special cash dividend of approximately $116,100,000 (see Note M) with the remaining net proceeds for general corporate purposes, including working capital. Debt discounts and issuance costs are presented net of the long-term debt of approximately $5,563,000 which will be amortized into interest expense over the remaining 5-year term of the Notes.

The Notes bear interest at 10.000% per annum, payable semi-annually on March 15^th and September 15^th with the first payment due on September 15, 2015. The Notes have no scheduled principal amortization payments prior to its final maturity on March 10, 2020.

There are no financial maintenance covenants associated with the Notes. The Indenture contains certain covenants limiting the Company’s ability and the ability of its restricted subsidiaries (as defined in the Indenture) to, subject to certain exceptions and qualifications: (i) incur additional indebtedness; (ii) pay dividends or make other distributions on, redeem or repurchase, capital stock; (iii) make investments or other restricted payments; (iv) create or incur certain liens; (v) incur restrictions on the payment of dividends or other distributions from its restricted subsidiaries; (vi) enter into certain transactions with affiliates; (vii) sell assets; or (viii) effect a consolidation or merger. Certain Restricted Payments which may be made or indebtedness incurred by Nathan’s or its Restricted Subsidiaries may require compliance with the following financial ratios:

-15-

Fixed Charge Coverage Ratio: the ratio of the Consolidated Cash Flow to the Fixed Charges for the relevant period, currently set at 2.0 to 1.0 in the Indenture.The Fixed Charge Coverage Ratio applies to determining whether additional Restricted Payments may be made, certain additional debt may be incurred and acquisitions may be made.

Priority Secured Leverage Ratio: the ratio of (a) Consolidated Net Debt outstanding as of such date that is secured by a Priority Lien to (b) Consolidated Cash Flow of Nathan’s for the Test Period then most recently ended, in each case with such pro forma adjustments as are appropriate; currently set at 0.40 to 1.00 in the Indenture.

Secured Leverage Ratio: the ratio of (a) Consolidated Net Debt outstanding as of such date that is secured by a Lien on any property of Nathan’s or any Guarantor to (b) Consolidated Cash Flow of Nathan’s for the Test Period then most recently ended, in each case with such pro forma adjustments as are appropriate. The Secured Leverage Ratio under the Indenture is 3.75 to 1.00 and applies if Nathan’s wants to incur additional debt on the same terms as the Notes.

The Indenture also contains customary events of default, including, among other things, failure to pay interest, failure to comply with agreements related to the indenture, failure to pay at maturity or acceleration of other indebtedness, failure to pay certain judgments, and certain events of insolvency or bankruptcy. Generally, if any event of default occurs, the Trustee or the holders of at least 25% in principal amount of the Notes may declare the Notes due and payable by providing notice to the Company. In case of default arising from certain events of bankruptcy or insolvency, the Notes will become immediately due and payable.

As of June 28, 2015, Nathan’s was in compliance with all covenants associated with the Notes.

The Notes are general senior secured obligations, are fully and unconditionally guaranteed by substantially all of the Company’s wholly-owned subsidiaries and rankpari passu in right of payment with all of the Company’s existing and future indebtedness that is not subordinated, are senior in right of payment to any of the Company’s existing and future subordinated indebtedness, are structurally subordinated to any existing and future indebtedness and other liabilities of the Company’s subsidiaries that do not guarantee the Notes, and are effectively junior to all existing and future indebtedness that is secured by assets other than the collateral securing the Notes. Pursuant to the terms of a collateral trust agreement, the liens securing the Notes and the guarantees will be contractually subordinated to the liens securing any future credit facility.

The Notes and the guarantees will be the Company and the guarantors’ senior secured obligations and will rank:

	●	senior in right of payment to all of the Company and the guarantors’ future subordinated indebtedness;

	●	effectively senior to all unsecured senior indebtedness to the extent of the value of the collateral securing the Notes and the guarantees;

	●	pari passu with all of the Company and the guarantors’ other senior indebtedness;

	●	effectively junior to any future credit facility to the extent of the value of the collateral securing any future credit facility and the Notes and the guarantees and certain other assets;

	●	effectively junior to any of the Company and the guarantors’ existing and future indebtedness that is secured by assets other than the collateral securing the Notes and the guarantees to the extent of the value of any such assets; and

	●	structurally subordinated to the indebtedness of any of the Company’s current and future subsidiaries that do not guarantee the Notes.

Prior to September 15, 2017, the Company has the option to redeem up to 35% of the aggregate principal amount of the Notes at a redemption price equal to 110% of the principal amount of the Notes redeemed, plus accrued and unpaid interest and any additional interest, with the net cash proceeds of certain equity offerings.

The Company may redeem the Notes in whole or in part prior to September 15, 2017, at a redemption price of 100% of the principal amount of the Notes plus the Applicable Premium, plus accrued and unpaid interest. An Applicable Premium is the greater of 1% of the principal amount of the Notes; or the excess of the present value at such redemption date of (i) the redemption price of the Notes at September 15, 2017 plus (ii) all required interest payments due on the Notes through September 15, 2017 (excluding accrued but unpaid interest to the redemption date), computed using a discount rate equal to the Treasury Rate as of such redemption date plus 50 basis points; over the then outstanding principal amount of the Notes.

-16-

On or after September 15, 2017, the Company may redeem some or all of the Notes at a decreasing premium over time, plus accrued and unpaid interest as follows:

YEAR			PERCENTAGE
On or after September 15, 2017 and prior to March 15, 2018			105.000%
On or after March 15, 2018 and prior to March 15, 2019			102.500%
On or after March 15, 2019			100.000%

In certain circumstances involving a change of control, the Company will be required to make an offer to repurchase all or, at the holder’s option, any part, of each holder’s Notes pursuant to the offer described below (the “Change of Control Offer”). In the Change of Control Offer, the Company will be required to offer payment in cash equal to 101% of the aggregate principal amount of Notes repurchased plus accrued and unpaid interest, to the date of purchase.

If the Company sells certain assets and does not use the net proceeds as required, the Company will be required to use such net proceeds to repurchase the Notes at 100% of the principal amount thereof, plus accrued and unpaid interest and additional interest penalty, if any, to the date of repurchase.

The Notes may be traded between qualified institutional buyers pursuant to Rule 144A of the Securities Act of 1933. We have recorded the Notes at cost.

NOTE O – COMMITMENTS AND CONTINGENCIES

1. Contingencies

The Company and its subsidiaries are from time to time involved in ordinary and routine litigation. Management presently believes that the ultimate outcome of these proceedings, individually or in the aggregate, will not have a material adverse effect on the Company’s financial position, cash flows or results of operations. Nevertheless, litigation is subject to inherent uncertainties and unfavorable rulings could occur. An unfavorable ruling could include money damages and, in such event, could result in a material adverse impact on the Company’s results of operations for the period in which the ruling ~~occurs or is implemented.~~occurs.

~~2. Guaranty~~

On December 1, 2009, a wholly-owned subsidiary of the Company executed a Guaranty of Lease (the “Guaranty”) in connection with its re-franchising of a restaurant located in West Nyack, New York. The Guaranty could be called upon in the event of a default by the tenant/franchisee. The Guaranty extends through the fifth Lease Year, as defined in the lease, and shall not exceed an amount equal to the highest amount of the annual minimum rent, percentage rent and any additional rent payable pursuant to the lease and reasonable attorney’s fees and other costs. We have recorded a liability of approximately $76,000 in connection with the Guaranty, which does not include potential real estate tax increases and attorney’s fees and other costs as these amounts are not reasonably determinable at this time. In connection with Nathan’s franchise agreement, Nathan’s has received a personal guaranty from the franchisee for all obligations under the Guaranty. To date, Nathan’s has not been required to make any payments pursuant to the Guaranty.

NOTE NP – SUPERSTORM SANDY

On October 29, 2012, Superstorm Sandy struck the Northeastern United States, which forced the closing of all of the Company-owned restaurants. Seventy-eight franchised restaurants, including 18 Branded Menu locations, were closed for varying periods of time, one of which remains closed. Our Company-owned restaurant in Oceanside, New York was closed for approximately two weeks. The Coney Island Boardwalk restaurant sustained minor damage and re-opened on March 18, 2013. The Coney Island restaurant incurred significant damage and re-opened on May 20, 2013. As a result of these damages, the Company incurred actual losses duringDuring the fiscal year ended March ~~31, 2013, of approximately $1,340,000, inclusive of amounts written off of $449,000 related to destroyed or damaged property and equipment and $42,000 of unsalable inventories.~~

~~The~~30, 2014, the Company settled ~~the~~its property damage claim ~~with its insurers~~ and received payments of approximately $3,400,000, net of fees, from our insurer and used these proceeds towards the rebuilding of the restaurant. In connection with the settlement of the property and casualty loss, the Company recognized a gain of approximately $2,801,000 during the quarter ended June 30, 2013.

Inin April 2014, the Company settled its claim for reimbursable on-going business ~~expenses while the restaurant was closed of approximately $718,000, net of fees, that was included in accounts and other receivables in the accompanying balance sheet as of March 30, 2014.~~expenses.

NOTE OQ - RECLASSIFICATIONS

Nathan’s has adopted a new income statement format that it believes will better present its results of operations. The Company ~~has revised the presentation of certain license royalties of $9,000~~concluded that it was appropriate to separately present its non-operating revenues and ~~$31,000 during the thirteen~~expenses. Accordingly, interest expense, interest income and ~~thirty-nine week periods ended December 29, 2013 to franchise royalties in the consolidated statements of earnings~~other income, net, have been removed from total revenues and total costs and expenses. These prior year balances have been reclassified to conform towith the current ~~period~~year presentation. ~~There was no impact on total revenues, earnings before provision for income taxes and net income as a result of these reclassifications.~~

~~-15-~~-17-

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

Forward-Looking Statements

Statements in this Form 10-Q quarterly report may be “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, statements that express our intentions, beliefs, expectations, strategies, predictions or any other statements relating to our future activities or other future events or conditions. These statements are based on current expectations, estimates and projections about our business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. These risks and uncertainties, many of which are not within our control, include but are not limited to: economic, weather (including the three-year drought in the Midwest, along with freezing temperatures during the winter causing a reduced supply of cattle), and ~~continued~~ increases in the price of beef trimmings; our ability to pass on the cost of any price increases in beef and beef trimmings; legislative and business conditions; the collectibility of receivables; changes in consumer tastes; the status of our licensing and supply agreements, including the impact of ~~a new~~our supply agreement for hot dogs with John Morrell & Co., the impact of our debt service and ~~any issues arising from or related to~~repayment obligations under the ~~transition from SMG to John Morrell & Co. as our primary hot dog supplier;~~Notes; the continued viability of Coney Island as a destination location for visitors; the ability to continue to attract franchisees; no material increases in the minimum wage or other changes in labor ~~laws;~~laws or the impact of the new union contract; our ability to attract competent restaurant and managerial personnel; the enforceability of ~~International~~international franchising agreements and the future effects of any food borne illness; such as bovine spongiform encephalopathy, BSE; as well as those risks discussed from time to time in this Form 10-Q and our ~~Annual Report on~~ Form 10-K annual report for the year ended March ~~30, 2014,~~29, 2015, and in other documents we file with the Securities and Exchange Commission. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in the forward-looking statements. We generally identify forward-looking statements with the words “believe,” “intend,” “plan,” “expect,” “anticipate,” “estimate,” “will,” “should” and similar expressions. Any forward-looking statements speak only as of the date on which they are made, and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this Form 10-Q.

Introduction

As used in this Report, the terms “we”, “us”, “our”, “Nathan’s” or the “Company” mean Nathan’s Famous, Inc. and its subsidiaries (unless the context indicates a different meaning).

We are engaged primarily in the marketing of the “Nathan’s Famous” brand and the sale of products bearing the “Nathan’s Famous” trademarks through several different channels of distribution. Historically, our business has been the operation and franchising of quick-service restaurants featuring Nathan’s World Famous Beef Hot Dogs, crinkle-cut French-fried potatoes, and a variety of other menu offerings. Our Company-owned and franchised units operate under the name “Nathan’s Famous,” the name first used at our original Coney Island restaurant opened in 1916. Nathan’s product licensing program sells packaged hot dogs and other meat products to retail customers through supermarkets or grocery-type retailers for off-site consumption. Our Branded Product Program enables foodservice retailers and others to sell some of Nathan’s proprietary products outside of the realm of a traditional franchise relationship. In conjunction with this program, purchasers of Nathan’s products are granted a limited use of the Nathan’s Famous trademark with respect to the sale of the purchased products, including Nathan’s World Famous Beef Hot Dogs, certain other proprietary food items and paper goods. Our Branded Menu Program is a limited franchise program, under which foodservice operators may sell a greater variety of Nathan’s Famous menu items than under the Branded Product Program.

Our revenues are generated primarily from selling products under Nathan’s Branded Product Program, operating Company-owned restaurants, licensing agreements for the sale of Nathan’s products within supermarkets and club stores, the sale of Nathan’s products directly to other foodservice operators and the manufacture of certain proprietary spices by third parties and franchising the Nathan’s restaurant concept (including the Branded Menu Program).

Effective March 1, 2014, Nathan’s commenced its new License Agreement with John Morrell & Co. replacing its prior licensee for the exclusive right and obligation to manufacture, distribute, market and sell “Nathan’s Famous” branded hot dog, sausage and corned beef products in refrigerated consumer packages to be resold through retail channels (e.g., supermarkets, groceries, mass merchandisers and club stores) within the United States, among other things. Royalties pursuant to the new agreement increased by 205.7% to $11,069,000 during the thirty-nine weeks ended DecemberAt June 28, 2014 as compared to $3,621,000 earned under the prior agreement during the thirty-nine weeks ended December 29, 2013. For the foreseeable future, our results of operations will be substantially dependent on the success of our agreement with John Morrell & Co.

On October 29, 2012, the Northeastern United States was hit by Superstorm Sandy which caused significant damage to our Flagship Coney Island location closing the restaurant for repair from October 29, 2012 until May 20, 2013. Additionally, we redeveloped our Yonkers restaurant which closed on November 25, 2012 and re-opened on November 18, 2013. The re-opening of these two restaurants significantly impacted our results of operations and the comparability of Company-owned restaurant operations during the thirteen and thirty-nine week periods reported.

~~-16-~~

~~At December 28, 2014,~~2015, our restaurant system consisted of ~~310 units, comprised of 305~~291 Nathan’s franchised units, including ~~122~~118 Branded Menu units, and five Company-owned units (including one seasonal unit), located in 27 states, ~~the Cayman Islands~~ and ten foreign countries. At ~~December~~June 29, ~~2013,~~2014, our restaurant system consisted ~~of 310 units, comprised of 305~~of311 Nathan’s franchised units, including ~~139~~121 Branded Menu units, and five Company-owned units (including one seasonal unit), located in 28 states, the Cayman Islands and nine foreign countries.

In addition to plans for expansion ~~of the Nathan’s brand~~ through our Branded Product Program, licensing and franchising, Nathan’s continues to seek to co-brand within its restaurant system. Nathan’s is also the owner of the Arthur Treacher’s brand. At ~~December~~June 28, ~~2014,~~2015, the Arthur Treacher’s brand was being sold within ~~49 Nathan’s~~45Nathan’s restaurants. Additionally, during the fiscal year ended March 30, 2014, we entered into our first multi-unit Arthur Treacher’s Branded Menu Program agreement with a qualified foodservice operator for inclusion of Arthur Treacher’s products in non-Nathan’s facilities. Currently ~~six~~seven locations are operating, ~~with this program,~~ and we may seek to further market this program in the future.

As described in our Annual Report on Form 10-K for the year ended March ~~30, 2014,~~29, 2015, our future results could be materially impacted by many developments including our dependence on John Morrell & Co. as our principal supplier. In addition, our future operating results could be impacted by supply constraints on beef, as a result of the ~~record high~~lingering effect of the drought in the Midwest on beef prices.

-18-

On March 10, 2015, we consummated a $135 million offering of 10.000% Senior Secured Notes due 2020 (“the Notes”) and paid a dividend of $25.00 per share (or approximately $116.1 million in the aggregate). Our future results could also be impacted by our obligations under the Notes. As a result of the issuance of the Notes, Nathan’s expects to incur interest expense of $13.5 million per annum and annual amortization of debt discounts and issuance costs of $1,185,000. The Indenture governing the Notes will impose operating and other restrictions on us. Because the Notes were entered into in March 2015, and require us to make semi-annual interest payments, our net income for the quarter ended June 28, 2015 is significantly negatively impacted compared to our reported net income for the quarter ended June 29, 2014. Accordingly, as described below we are also including information relating to EBITDA and Adjusted EBITDA in this Form 10-Q quarterly report.

Critical Accounting Policies and Estimates

As discussed in our Form 10-K for the fiscal year ended March ~~30, 2014,~~29, 2015, the discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in conformity with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and assumptions that affect the amounts of assets, liabilities, revenues and expenses reported in those financial statements. These judgments can be subjective and complex, and consequently, actual results could differ from those estimates. Our most critical accounting policies and estimates relate to revenue recognition; impairment of goodwill and other intangible assets; impairment of long-lived assets; share-based compensation and income taxes (including uncertain tax positions). Since March ~~30, 2014,~~29, 2015, there have ~~been no~~beenno changes in our critical accounting policies or significant changes to the assumptions and estimates related to them.

~~Recently Issued~~Adoption of New AccountingPronouncements ~~Not Yet Adopted~~

Please refer to Note B of the preceding consolidated financial statements for our discussion of ~~Recently Issued~~the Adoption of New Accounting Pronouncements.

New AccountingPronouncements Not Yet Adopted

Please refer to Note C of the preceding consolidated financial statements for our discussion of New Accounting Pronouncements Not Yet Adopted.

EBITDA and Adjusted EBITDA

The Company believes that EBITDA and Adjusted EBITDA are useful to investors to assist in assessing and understanding the Company's operating performance and underlying trends in the Company's business because EBITDA and Adjusted EBITDA are (i) among the measures used by management in evaluating performance and (ii) are frequently used by securities analysts, investors and other interested parties as a common performance measure.

Reconciliation of GAAP and Non-GAAP Measures

The following is provided to supplement certain Non-GAAP financial measures.

In addition to disclosing results that are determined in accordance with Generally Accepted Accounting Principles in the United States of America ("US GAAP"), the Company has provided EBITDA excluding (i) interest expense; (ii) provision for income taxes and (iii) depreciation and amortization expense. The Company has also provided Adjusted EBITDA excluding (i) stock-based compensation and (ii) amortization of bond premium on the Company’s available-for sale investments that the Company believes will impact the comparability of its results of operations.

EBITDA and Adjusted EBITDA are not recognized terms under US GAAP and should not be viewed as alternatives to net income (loss) or other measures of financial performance or liquidity in conformity with US GAAP. Additionally, our definitions of EBITDA and Adjusted EBITDA may differ from other companies. Analysis of results and outlook on a non-US GAAP basis should be used as a complement to, and in conjunction with, data presented in accordance with US GAAP.

-19-

The following is a reconciliation of Net income to Adjusted EBITDA (in thousands):

	Thirteen weeks ended
	June 28, 2015		June 29, 2014


Net income	$	2,310	$	4,071
Interest expense		3,709		-
Income taxes		1,628		2,791
Depreciation and amortization		339		346
EBITDA		7,986		7,208

Stock-based compensation		203		191
Amortization of bond premium		68		48
Adjusted EBITDA	$	8,257	$	7,447

Results of Operations

Thirteen weeks ended ~~December~~June 28, ~~2014~~2015 compared to thirteen weeks ended ~~December~~June 29, ~~2013~~2014

Revenues

Total sales increased ~~13.5%~~by 11.5% to ~~$17,298,000~~$22,891,000 for the thirteen weeks ended ~~December~~June 28, ~~2014~~2015 (“~~third quarter~~ fiscal ~~2015”~~2016 period”) as compared to ~~$15,236,000~~$20,528,000 for the thirteen weeks ended ~~December~~June 29, ~~2013~~2014 (“~~third quarter~~ fiscal ~~2014”~~2015 period”). Foodservice sales from the Branded Product Program increased ~~13.7%~~by 15.6% to ~~$14,956,000~~$17,415,000 for the ~~third quarter~~ fiscal ~~2015~~2016 period as compared to sales of ~~$13,156,000~~$15,064,000 in the ~~third quarter~~ fiscal ~~2014.~~2015 period. This increase was primarily attributable to anapproximately a 10.9% increase in the volume of products sold and the impact of higher average selling ~~price of hot dogs due primarily~~prices instituted throughout fiscal 2015. Total Company-owned restaurant sales were $5,299,000 during the fiscal 2016 period compared to ~~price increases~~$5,291,000 during the fiscal 2015 period. Direct retail sales also increased by $4,000 during the fiscal 2016 period as compared to the ~~third quarter fiscal 2014. Total Company-owned restaurant sales increased 7.9% to $2,148,000 during the third quarter~~ fiscal 2015 compared to $1,990,000 during the third quarter fiscal 2014. This sales increase was primarily attributable to higher sales from the Yonkers restaurant, which only operated for approximately six weeks in the third quarter fiscal 2014. The sales from the Yonkers restaurant during the third quarter fiscal 2015 were approximately $490,000. Other sales, primarily to Wal-Mart, were approximately $104,000 higher than the third quarter fiscal 2014.period.

License royalties were ~~$3,546,000~~$6,536,000 in the ~~third quarter~~ fiscal ~~2015~~2016 period as compared to ~~$1,817,000~~$5,568,000 in the ~~third quarter~~ fiscal ~~2014.~~2015 period. Total royalties earned on sales of hot dogs from our ~~retail and foodservice~~ license ~~agreements increased 128.8% to $3,125,000 from $1,366,000 in the third quarter fiscal 2014. Royalties earned from~~agreement with John Morrell & Co., were $2,714,000 during the third quarter fiscal 2015 as compared to royalties earned from SMG, Inc. of $963,000 during the third quarter fiscal 2014 primarily resulting from the higher royalty rate earned pursuant to the new agreement. Royalties earned from our at retail and foodservice, ~~license agreement,~~ substantially from sales of hot dogs to Sam’s Club, ~~were $411,000 during~~increased 19.7% to $6,095,000 for the ~~third quarter~~2016 fiscal ~~2015~~period as compared to ~~$403,000 during~~$5,090,000 in the ~~third quarter~~ fiscal ~~2014.~~2015 period. The increase is substantially attributable to significant organic growth in our consumer packaged hot dog business as a result of more effective sales, marketing and promotional strategies. Royalties earned from all other licensing agreements for the manufacture and sale of Nathan’s products decreased by ~~$30,000,~~$37,000 during the ~~third quarter~~ fiscal ~~2015,~~2016 period as compared to the ~~third quarter~~ fiscal ~~2014, primarily~~2015 period. During the fiscal 2015 period, we recorded royalties in excess of the annual contractual minimum of $62,000 from ~~lower royalties earned from the sale of mini-bagel dogs~~our license for French Fries and ~~franks-in-the-blanket and other hors d’oeuvres over the previous year partly offset by higher royalties on the sale of French fries and onion rings from Lamb Weston.~~Onion Rings.

~~-17-~~

Franchise fees and royalties were ~~$1,471,000~~$1,227,000 in the ~~third quarter~~fiscal 2016 period as compared to $1,489,000 in the fiscal 2015 ~~compared to $1,394,000 in the third quarter fiscal 2014.~~period. Total royalties were ~~$1,069,000~~$1,186,000 in the ~~third quarter~~fiscal 2016 period as compared to $1,262,000 in the fiscal 2015 ~~compared to $1,125,000 in the third quarter fiscal 2014.~~period. Royalties earned under the Branded Menu ~~programs~~program were ~~$222,000~~$308,000 in the ~~third quarter~~ fiscal ~~2015~~2016 period as compared to ~~$240,000~~$283,000 in the ~~third quarter~~ fiscal ~~2014~~2015 period due principally to ~~the reduced number of units in operation.~~a higher royalty rate that took effect July 1, 2014. Royalties earned under the Branded Menu Program are not based upon ~~product purchases rather than~~ a percentage of restaurant ~~sales.~~sales but are based upon product purchases. Traditional franchise royalties were ~~$847,000~~$878,000 in the ~~third quarter~~fiscal 2016 period as compared to $979,000 in the fiscal 2015 ~~compared to $885,000 in the third quarter fiscal 2014.~~period. Franchise restaurant sales decreased to ~~$18,665,000~~$19,413,000 in the ~~third quarter~~ fiscal ~~2015~~2016 period as compared to ~~$19,256,000~~$21,696,000 in the ~~third quarter~~ fiscal ~~2014~~2015 period primarily due to the impact of closed ~~restaurants.~~locations. Comparable domestic franchise sales (consisting of ~~107~~103 Nathan’s outlets, excluding sales under the Branded Menu Program) were ~~$15,063,000~~$15,362,000 in the ~~third quarter~~ fiscal ~~2015~~2016 period as compared to ~~$15,366,000~~$15,463,000 in the ~~third quarter~~ fiscal ~~2014,~~2015 period, a decrease of ~~2.0%~~0.7%.

At ~~December~~June 28, ~~2014 and December 29, 2013, our franchise system consisted of 305~~2015, 291 domestic and international franchised or Branded Menu Program franchise ~~outlets.~~outlets were operating as compared to 311 domestic and international franchised or Branded Menu Programfranchise outlets at June 29, 2014. Total franchise fee income was ~~$402,000~~$41,000 in the ~~third quarter~~fiscal 2016 period compared to $227,000 in the fiscal 2015 ~~including $120,000 of cancellation or termination fees, compared to $269,000 in the third quarter fiscal 2014.~~period. Domestic franchise fee income was ~~$90,000~~$40,000 in the ~~third quarter~~fiscal 2016 period compared to $35,000 in the fiscal 2015 ~~compared to $176,000 in the third quarter fiscal 2014.~~period. International franchise fee income was ~~$192,000~~$1,000 in the ~~third quarter~~fiscal 2016 period compared to $192,000 during the fiscal 2015 ~~compared~~period primarily due to ~~$53,000 during the third quarter fiscal 2014.~~store opening variances in our international franchising program. During the ~~third quarter~~fiscal 2016 period, five new franchised outlets opened and ten new Branded Menu Program outlets opened. During the fiscal 2015 ~~eight~~period, four new franchised outlets opened, including ~~locations in Costa Rica, the Dominican Republic and~~ our first location in ~~Malaysia. During the third quarter fiscal 2014, nine new franchised~~Costa Rica and five Branded Menu Program outlets opened, including ~~two locations in Moscow and one location in Mexico.~~three Arthur Treacher’s units.

-20-

Interest income was $21,000 in the third quarter fiscal 2015 as compared to $68,000 in the third quarter fiscal 2014, primarily due to lower interest income earned on marketable securities. As additional marketable securities mature or are called by the issuer and we are unable to earn similar returns upon reinvestment, we would anticipate lower investment income in the future.

~~Other income, relating primarily to a sublease of a co-branded franchised restaurant, was $17,000 in the third quarter fiscal 2015 as compared to $18,000 in the third quarter fiscal 2014.~~

Costs and Expenses

Overall, our cost of sales increased by ~~$1,925,000~~$1,818,000 to ~~$14,704,000~~$18,106,000 in the ~~third quarter~~ fiscal 2015 compared to $12,779,000 in the third quarter fiscal 2014. Our gross profit (representing the difference between sales and cost of sales) was $2,594,000 or 15.0% of sales during the third quarter fiscal 2015 compared to $2,457,000 or 16.1% of sales during the third quarter fiscal 2014. The margin decline was primarily due to the impact of higher food costs for our Branded Product Program and Company-owned restaurants.

Cost of sales in the Branded Product Program increased approximately $1,787,000 during the third quarter fiscal 2015 compared to the third quarter fiscal 2014, primarily as a result of an approximately 19.5% increase in the average cost per pound of our hot dogs. We did not enter into any purchase commitments during the third quarter fiscal 2015 or the third quarter fiscal 2014. As a result, Nathan’s purchased all of its hot dogs at market price during the third quarter fiscal 2015 and the third quarter fiscal 2014. If the cost of beef and beef trimmings increase and we are unable to pass on these higher costs through price increases or otherwise reduce any increase in our costs through purchase commitments, our margins will be adversely impacted. We have recently increased our selling prices to pass on these recent cost increases and expect to perform ongoing reviews based on market conditions, but there can be no assurance that we will be able to continue to increase our selling prices.

With respect to Company-owned restaurants, our cost of sales during the third quarter fiscal 2015 was $1,447,000 or 67.4% of restaurant sales, as compared to $1,361,000 or 68.4% of restaurant sales in the third quarter fiscal 2014, due primarily to the impact of higher food and labor costs. We have recently increased certain selling prices to pass on recent cost increases.

Restaurant operating expenses were $788,000 in the third quarter fiscal 2015 as compared to $741,000 in the third quarter fiscal 2014. Approximately $21,000 of the increase in restaurant operating costs results from the Yonkers restaurant that operated for only six weeks during the third quarter fiscal 2014. Utility costs for the three restaurants operating for comparative periods increased by approximately $30,000 from the third quarter fiscal 2014 to the third quarter fiscal 2015. We continue to be concerned about the volatile market conditions for oil and natural gas.

~~Depreciation and amortization was $298,000 in the third quarter fiscal 2015 as compared to $306,000 in the third quarter fiscal 2014.~~

General and administrative expenses decreased by $138,000 or 4.8% to $2,760,000 in the third quarter fiscal 2015 as compared to $2,898,000 in the third quarter fiscal 2014. The decrease in general and administrative expenses was primarily due to decreased professional fees of $90,000, lower marketing costs of $79,000 and lower management training of $19,000 partially offset by higher compensation costs, including stock-based compensation and payroll related taxes of $87,000.

~~Provision for Income Taxes~~

In the third quarter fiscal 2015, the income tax provision was $1,562,000 or 41.1% of earnings before income taxes as compared to $702,000 or 38.8% of income before income taxes in the third quarter fiscal 2014. Nathan’s effective tax rate was reduced by 0.2% during the third quarter fiscal 2015 and reduced by 1.5% during the third quarter fiscal 2014, due to the differing effects of tax-exempt interest income. Nathan’s effective tax rates without these adjustments would have been 41.3% for the third quarter fiscal 2015 and 40.3% for the third quarter fiscal 2014. Nathan’s estimates that its unrecognized tax benefits including the related accrued interest and penalties could be further reduced by up to $124,000 during the remainder of fiscal 2015. As described under Note J to the Consolidated Financial Statements, Nathan’s estimates that its annual tax rate for the fiscal year ending March 29, 2015 will be in the range of approximately 39.5% to 41.5%.

~~-18-~~

~~Results of Operations~~

~~Thirty-nine weeks ended December 28, 2014 compared to thirty-nine weeks ended December 29, 2013~~

~~Revenues~~

Total sales increased by 16.6% to $60,647,000 for the thirty-nine weeks ended December 28, 2014 (“fiscal 2015 period”) as compared to $52,003,000 for the thirty-nine weeks ended December 29, 2013 (“fiscal 2014 period”). Foodservice sales from the Branded Product and Branded Menu Programs increased by 13.2% to $45,568,000 for the fiscal 20152016 period as compared to ~~sales of $40,256,000~~$16,288,000 in the fiscal 2014 period. This increase was primarily attributable to a higher average selling price due primarily to price increases as compared to the fiscal 2014 period. Total Company-owned restaurant sales increased 25.7% to $14,497,000 during the fiscal 2015 period compared to $11,536,000 during the fiscal 2014 period. This increase was primarily attributed to operating our Coney Island and Yonkers restaurants for the entire fiscal 2015 period. Our Flagship Coney Island restaurant operated for approximately thirty-one weeks during the fiscal 2014 period and our Yonkers restaurant operated for six weeks during the fiscal 2014 period. The sales impact while these restaurants were closed was approximately $2,233,000. Additionally, sales at our two Coney Island restaurants during the periods operated during the fiscal 2015 period were approximately $827,000 higher than the periods operated during the fiscal 2014 period due primarily to an increase in customer counts of approximately 8.3%.

License royalties were $13,652,000 in the fiscal 2015 period as compared to $6,211,000 in the fiscal 2014 period. Total royalties earned on sales of hot dogs from our retail and foodservice license agreements increased 155.2% to $12,342,000 for the 2015 fiscal period compared to $4,836,000 in the fiscal 2014 period. Royalties earned from John Morrell & Co., primarily from the retail sale of hot dogs, were $11,069,000 during the fiscal 2015 period compared to royalties earned from SMG, Inc. of $3,621,000 during the fiscal 2014 period primarily resulting from the higher royalty rate earned pursuant to the new agreement. Royalties earned from our foodservice license agreement, substantially from sales of hot dogs to Sam’s Club, were $1,273,000 during the fiscal 2015 period compared to $1,215,000 during the fiscal 2014 period. Royalties earned from all other licensing agreements for the manufacture and sale of Nathan’s products decreased by $65,000, during the fiscal 2015 period, compared to the fiscal 2014 period, primarily from lower royalties earned from the sale of mini-bagel dogs and franks-in-the-blanket and other hors d’oeuvres over the previous year partly offset by higher royalties on the sale of French fries and onion rings from Lamb Weston.

Franchise fees and royalties were $4,473,000 in the fiscal 2015 period as compared to $4,279,000 in the fiscal 2014 period. Total royalties were $3,594,000 in the fiscal 2015 period as compared to $3,780,000 in the fiscal 2014 period. Royalties earned under the Branded Menu programs were $766,000 in the fiscal 2015 period as compared to $793,000 in the fiscal 2014 period due principally to a fewer number of units operating. Royalties earned under the Branded Menu Program are based on product purchases rather than a percentage of restaurant sales. Traditional franchise royalties were $2,828,000 in the fiscal 2015 period compared to $2,987,000 in the fiscal 2014 period. Franchise restaurant sales decreased to $63,431,000 in the fiscal 2015 period compared to $66,016,000 in the fiscal 2014 period primarily due to the impact of closed restaurants. Comparable domestic franchise sales (consisting of 99 Nathan’s outlets, excluding sales under the Branded Menu Program) were $45,780,000 in the fiscal 2015 period compared to $46,870,000 in the fiscal 2014 period, a decrease of 2.3%.

At December 28, 2014 and December 29, 2013, our franchise system consisted of 305 domestic and international franchised or Branded Menu Program franchise outlets. Total franchise fee income was $879,000 in the fiscal 2015 period, including $120,000 of cancellation or termination fees compared to $499,000 in the fiscal 2014 period. Domestic franchise fee income was $211,000 in the fiscal 2015 period compared to $294,000 in the fiscal 2014 period. International franchise fee income was $548,000 in the fiscal 2015 period, compared to $165,000 during the fiscal 2014 period. During the fiscal 2015 period, 28 new franchised outlets opened, including 10 international locations, including our first locations in Costa Rica and Malaysia, and 14 Branded Menu Program outlets. Additionally, during the fiscal 2015 period, a master franchisee exercised an option to acquire the rights to develop franchised outlets throughout Mexico. During the fiscal 2014 period, twenty-six new franchised outlets opened, including eight locations in Moscow and six Branded Menu Program outlets.

Interest income was $137,000 in the fiscal 2015 period compared to $246,000 in the fiscal 2014 period, primarily due to lower interest income earned on marketable securities. As additional marketable securities mature or are called by the issuer and we are unable to earn similar returns upon reinvestment, we would anticipate lower investment income in the future.

The insurance gain of $2,801,000 during the fiscal 2014 period represents the difference between insurance proceeds received and the historical net book value of assets destroyed at our Flagship Coney Island restaurant and demolition costs resulting from Superstorm Sandy (See Note N).

~~-19-~~

~~Other income of $65,000 in the fiscal 2015 period as compared to $56,000 in the fiscal 2014 period relates primarily to a sublease of a co-branded franchised restaurant.~~

~~Costs and Expenses~~

~~Overall, our cost of sales increased $7,539,000 to $49,097,000 in the fiscal 2015 period compared to $41,558,000 in the fiscal 2014~~ period. Our gross profit (representing the difference between sales and cost of sales) was ~~$11,550,000~~$4,785,000 or ~~19.0%~~20.9% of sales during the fiscal 2016 period as compared to $4,240,000 or 20.7% of sales during the fiscal 2015 ~~period as compared to $10,445,000 or 20.1% of sales during the fiscal 2014~~ period. The margin ~~decline~~improvement was primarily due to the impact of ~~higher average cost per pound of hot dogs for our~~price increases previously taken during fiscal 2015 in the Branded Product Program ~~during~~and in the ~~second and third quarters fiscal 2015.~~Company-operated restaurants.

Cost of sales in the Branded Product Program increased by approximately ~~$5,640,000~~$1,879,000 during the fiscal ~~2015~~2016 period as compared to the fiscal ~~2014~~2015 period,primarily ~~as a result~~due to the higher volume of ~~an approximately 17.7%~~product sold and the 4.8% increase in the average cost per pound of our hot dogs. ~~During the fiscal 2015 period, the market cost of our hot dogs was approximately 17.0% higher than~~We have not entered into any purchase commitments during the fiscal ~~2014 period. During the~~2016 period or fiscal 2014 period, our purchase commitments yielded savings of approximately $198,000. During the fiscal 2014 period, approximately 17.3% of our product was purchased pursuant to our purchase commitments. The purchase commitments lowered our costs by approximately $0.014 per pound during the fiscal 20142015 period. If the cost of beef and beef trimmings increases and we are unable to pass on these higher costs through price increases or otherwise reduce any increase in our costs through the use of purchase commitments, our margins will be adversely impacted. We have recently increased our selling prices to pass on these recent cost increases and expect to perform ongoing reviews based on market conditions, but there can be no assurance that we will be able to continue to increase our selling prices.

With respect to Company-owned restaurants, our cost of sales during the fiscal ~~2015~~2016 period was ~~$7,995,000~~$2,827,000 or ~~55.1%~~53.3% of restaurant sales, as compared to ~~$6,365,000~~$2,894,000 or ~~55.2%~~54.7% of restaurant sales in the fiscal ~~2014~~2015 period due primarily to ~~the impact of higher~~lower food ~~costs. We have recently increased certain selling prices to pass on recent cost increases.~~and labor costs at our Company-owned restaurants. Our costs going forward could also be impacted by proposed new minimum wage requirements in New York State.

Restaurant operating expenses were ~~$3,138,000~~$969,000 in the fiscal 2016 period as compared to $1,064,000 in the fiscal 2015 ~~period compared to $2,432,000 in the fiscal 2014~~ period. The ~~increase~~decrease in restaurant operating costs results primarily from the ~~different number of months that the Coney Island~~reduction in occupancy and ~~Yonkers restaurants operated in the two fiscal periods. During the fiscal 2014 period, the Coney Island~~related costs at our new Oceanside restaurant ~~operated for approximately thirty-one weeks~~which is smaller and ~~the Yonkers restaurant operated for approximately six weeks. Incremental costs were approximately $441,000 during fiscal 2015, as compared~~more efficient to ~~the closed periods during fiscal 2014. In connection with~~operate than our ~~October 2013 insurance renewal, we incurred a significant increase in insurance costs, primarily property insurance, due to the impact of Superstorm Sandy on the insurance marketplace. Utility~~previous Oceanside restaurant. Operating costs of the ~~three~~four comparable restaurants ~~operating for comparative periods increased~~decreased by approximately ~~10.7%~~$22,000 from the fiscal ~~2014~~2015 period to the fiscal ~~2015~~2016 period. WeDespite the recent reduction in our utility costs, we continue to be concerned about the volatile market conditions for oil and natural gas.

Depreciation and amortization was ~~$985,000~~$339,000 in the fiscal 2016 period as compared to $346,000 in the fiscal 2015 ~~period compared to $845,000 in the fiscal 2014~~ period. This ~~increase~~decrease is primarily attributable to ~~the increased~~decreased depreciation from the investments made in ~~the Coney Island~~consigned equipment provided by our Branded Product Program, reduced depreciation and ~~Yonkers restaurants.~~amortization of computer hardware and software which were partly offset by higher depreciation from expenditures made in our relocated Oceanside restaurant that re-opened in March 2015. We expect to incur ~~approximately $350,000 and $130,000 of~~ depreciation expense of approximately $100,000 per annum in connection with ~~the redevelopment of the Coney Island and Yonkers restaurants, respectively.~~this new restaurant.

General and administrative expenses increased ~~$42,000~~by $516,000 or ~~0.5%~~16.6% to ~~$8,561,000~~$3,624,000 in the fiscal ~~2015~~2016 period as compared to ~~$8,519,000~~$3,108,000 in the fiscal ~~2014~~2015 period. The increase in general and administrative expenses was primarily due to increased ~~compensation costs, including stock-based compensation and payroll related taxes of $253,000, higher insurance~~severance costs of ~~$52,000 partially offset by lower marketing and associated expenses of $143,000 and~~$263,000, professional fees of ~~$46,000.~~$117,000 and recruiting fees of $71,000.

Other Items

Interest income was $5,000 in the fiscal 2016 period compared to $62,000 in the fiscal 2015 period, primarily due to lower interest income earned on marketable securities. As additional marketable securities mature or are called by the issuer and we are unable to earn similar returns upon reinvestment, we would anticipate lower investment income in the future. We have recently sold all of the tax-exempt marketable securities and are in the process of re-investing the proceeds into short-term taxable bonds.

Other income of $26,000 in the fiscal 2016 period as compared to $21,000 in the fiscal 2015 period relates primarily to a sublease of a franchised restaurant.

Interest expense of ~~$135,000~~$3,709,000 in the fiscal ~~2014~~2016 period ~~represented~~represents accrued interest ~~in connection with Nathan’s appeal~~of $3,412,000 on the Notes and amortization of debt discounts and issuance costs of $297,000 during the same period. As a result of the ~~SMG damages award calculated at~~issuance of the ~~New York State statutory rate~~Notes, Nathan’s expects to incur interest expense of 9%$13.5 million per ~~annum. On July 24, 2013, we satisfied the judgment in full settlement~~annum and annual amortization of ~~this matter.~~debt discounts and issuance costs of $1,185,000.

The Company recognized an, other-than-temporary impairment charge on its long-term investment of $400,000 in the fiscal 2014 period based on management’s assessment of the future recoverability of the investment.

Provision for Income Taxes

In the fiscal ~~2015~~2016 period, the income tax provision was ~~$7,027,000~~$1,628,000 or ~~40.9%~~41.3% of earnings before income taxes as compared to ~~$4,598,000~~$2,791,000 or ~~39.3%~~40.7% of income before income taxes in the fiscal ~~2014~~2015 period.Nathan’s effective tax rate was reduced by ~~0.3%~~0.1% during the fiscal ~~2015~~2016 period and reduced by ~~0.8%~~0.4% during the fiscal ~~2014~~2015 period, due to the differing effects of tax-exempt interest income. Nathan’s effective tax rates without these adjustments would have been ~~41.2%~~41.4% for the fiscal 2016 period and 41.1% for the fiscal 2015 ~~period and 40.1% for the fiscal 2014 period. Nathan’s~~period.Nathan’s estimates that its unrecognized tax benefits including the related accrued interest and penalties could be further reduced by up to ~~$124,000~~$183,000 during the remainder of fiscal ~~2015.~~2016. As described under Note JK to the Consolidated Financial Statements, Nathan’s estimates that its annual tax rate for the fiscal year ending March ~~29, 2015~~27, 2016 will be in the range of approximately ~~39.5%~~40.4% to ~~41.5%.~~

41.6% excluding the potential impact of any reduction to the Company’s unrecognized tax benefits.

~~-20-~~-21-

Off-Balance Sheet Arrangements

~~Nathan’s has not entered into any purchase commitments for hot dogs since the completion of its last purchase commitment in July 2013.~~ Nathan’s did not have any open purchase commitments for hot dogs outstanding as of ~~December~~June 28, 2014. In connection with the upcoming relocation of the Oceanside restaurant, Nathan’s has entered into construction contracts of approximately $700,000 in October 2014, which it expects will be completed within six months.2015. Nathan’s may ~~continue to~~ enter into ~~additional~~ purchase commitments in the future as favorable market conditions become available.

Liquidity and Capital Resources

Cash and cash equivalents at ~~December~~June 28, ~~2014~~2015 aggregated ~~$34,537,000,~~$51,603,000, a ~~$12,460,000~~$210,000 increase during the fiscal ~~2015~~2016 period as compared to cash and cash equivalents of ~~$22,077,000~~$51,393,000 at March ~~30, 2014.~~29, 2015. At ~~December~~June 28, ~~2014,~~2015, marketable securities were ~~$6,819,000~~$7,832,000 compared to ~~$11,187,000~~$7,091,000 at March ~~30, 2014~~29, 2015 and net working capital ~~increased~~decreased to ~~$44,491,000~~$59,117,000 from ~~$35,378,000~~$61,605,000 at March ~~30, 2014.~~29, 2015.

On March 10, 2015, the Company completed an offering of $135.0 million aggregate principal amount of the Notes. The Company used the net proceeds of the Notes offering to pay a special dividend of $25.00 per share (approximately $116.1 million in the aggregate) to Company stockholders of record and will use the remaining net proceeds for general corporate purposes, including working capital.

The Notes were issued pursuant to an indenture, dated as of March 10, 2015 (the “Indenture”), by and among the Company, certain of its wholly-owned subsidiaries, as guarantors, and U.S. Bank National Association, a national banking association, as trustee and collateral trustee.

The Notes mature on March 15, 2020 and bear interest at a rate of 10.000% per annum, payable semi-annually in cash in arrears on March 15 and September 15 of each year, beginning September 15, 2015. The Notes are redeemable under certain circumstances.

The Indenture contains certain covenants limiting the Company’s ability and the ability of its restricted subsidiaries (as defined in the Indenture) to, subject to certain exceptions and qualifications: (i) incur additional indebtedness; (ii) pay dividends or make other distributions on, redeem or repurchase, capital stock; (iii) make investments or other restricted payments; (iv) create or incur certain liens; (v) incur restrictions on the payment of dividends or other distributions from its restricted subsidiaries; (vi) enter into certain transactions with affiliates; (vii) sell assets; or (viii) effect a consolidation or merger.

As of June 28, 2015, Nathan’s was in compliance with all covenants associated with the Notes.

The Notes and the guarantees will be the Company and the guarantors’ senior secured obligations and will rank:

●	senior in right of payment to all of the Company and the guarantors’ future subordinated indebtedness;

●	effectively senior to all unsecured senior indebtedness to the extent of the value of the collateral securing the Notes and the guarantees;

●	pari passu with all of the Company and the guarantors’ other senior indebtedness;

●	effectively junior to any future credit facility to the extent of the value of the collateral securing any future credit facility and the Notes and the guarantees and certain other assets;

●	effectively junior to any of the Company and the guarantors’ existing and future indebtedness that is secured by assets other than the collateral securing the Notes and the guarantees to the extent of the value of any such assets; and

●	structurally subordinated to the indebtedness of any of the Company’s current and future subsidiaries that do not guarantee the Notes.

-22-

Cash provided by operations of ~~$10,514,000~~$6,616,000 in the fiscal ~~2015~~2016 period is primarily attributable to net income of ~~$10,166,000 and~~$2,310,000 in addition to other non-cash operating items of ~~$1,827,000, reduced by~~$958,000, and increased changes in other operating assets and liabilities of ~~$1,479,000.~~$3,348,000. Accounts and other receivables ~~net of insurance proceeds received,~~ increased ~~$2,589,000~~by $3,059,000 due primarily to increased sales from our Branded Product Program, ~~temporary advances to our advertising fund and~~ higher license royalties from John Morrell & Co. and temporary advances to the Advertising Fund. The decrease in prepaid expenses ~~and other current assets~~ of ~~$1,499,000~~$3,172,000 primarily relates to the utilization of prepaid income taxes at March ~~30, 2014~~29, 2015 against Nathan’s first quarter estimated income tax payments ~~for~~and the ~~fiscal 2015 period.~~receipt of a quick refund of $1,500,000 from the IRS. The increase in accounts payable, accrued expenses and other current liabilities of $3,643,000 is primarily due to an increase of accrued interest of $3,413,000 on the Notes.

Cash ~~provided by~~used in investing activities was ~~$3,404,000~~$971,000 in the fiscal ~~2015~~2016 period. ~~We received cash proceeds of $6,620,000 from the maturity of available-for-sale securities.~~ We purchased available-for-sale securities of ~~$2,521,000. We~~$3,887,000 and incurred capital expenditures of ~~$695,000~~$154,000 in connection with our Branded Product Program and select restaurant improvements. We ~~expect to incur capital spending~~received cash proceeds of ~~approximately $1,300,000 in connection with~~$3,070,000 from the ~~relocation~~maturity of ~~our Company-owned restaurant in Oceanside, New York during the remainder of the current fiscal year.~~available-for-sale securities.

Cash used in financing activities of ~~$1,458,000~~$5,435,000 in the fiscal ~~2015~~2016 period relates to the Company’s purchase of ~~37,661~~135,987 shares of its common stock at a cost of ~~$1,916,000~~$5,360,000 during the fiscal ~~2015~~2016 period. We paid dividends of $125,000 relating to the previously declared special cash dividend in connection with the vesting of 5,000 shares of the Company’s restricted stock. Additionally, the Company paid ~~$825,000~~$59,000 for the payment of withholding tax on the net share settlement exercise of ~~share-based compensation plans.~~employee stock options. Nathan’s expects to realize tax benefits associated with employee stock option exercises of ~~$1,061,000~~$65,000 and also received proceeds from the exercise of employee stock options of ~~$222,000.~~$44,000.

During the period from October 2001 through ~~December~~June 28, ~~2014,~~2015, Nathan’s purchased ~~4,647,687 shares~~a total of 4,783,674shares of its common stock at a cost of ~~approximately $56,800,000~~approximately$62,160,000 pursuant to its stock repurchase plans previously authorized by the Board of Directors. Since March 26, 2007, to date, we have repurchased 2,892,574 shares at a total cost of approximately $55,002,000, reducing the number of shares then-outstanding by 48.1%.

On November 3, 2009, Nathan’s Board of Directors authorized its sixth stock repurchase plan for the purchase of up to 500,000 shares of its common stock on behalf of the Company. On February 1, 2011, Nathan’s Board of Directors authorized a 300,000 share increase in the number of shares that the Company may repurchase. As of ~~December~~June 28, ~~2014,~~2015, the Company had repurchased ~~548,728~~684,715 shares at a cost of ~~$13,194,000~~$18,554,000 under the sixth stock repurchase plan.

An aggregate of 115,285 shares can still be purchased under Nathan’s existing stock buy-back program, as of June 28, 2015. Purchases may be made from time to time, depending on market conditions, in open market or privately-negotiated transactions, at prices deemed appropriate by management. There is no set time limit on the repurchases to be made under these stock-repurchase plans.

On September 11, 2014, the Company and Mutual Securities, Inc. (“MSI”) amended its existing agreement to provide MSI with authorization on the Company’s behalf to purchase shares of the Company’s common stock, $.01 par value having a value of up to an additional $6,000,000, which purchases could commence on September 24, 2014. The agreement with MSI was adopted under the safe harbor provided by Rule 10b5-1 and Rule 10b-18 of the Securities Exchange Act of 1934, as amended to assist the Company in implementing its previously announced stock purchase plans.

An aggregate of 251,272 shares can still be purchased under Nathan’s existing stock buy-back program, as of December 28, 2014. Purchases may be made from time to time, depending on market conditions, in open market or privately-negotiated transactions, at prices deemed appropriate by management. There is no set time limit on the repurchases to be made under these stock-repurchase plans.

Management believes that available cash, marketable securities and cash generated from operations should provide sufficient capital to finance our operations, satisfy our debt service requirements and stock repurchases for at least the next 12 months.

As discussed above, we had cash and cash equivalents at ~~December~~June 28, ~~2014~~2015 aggregating ~~$34,537,000,~~$51,603,000, and marketable securities of ~~$6,819,000.~~$7,832,000. Our Board routinely monitors and assesses its cash position and our current and potential capital requirements. WeIn March 2015, we completed a dividend recapitalization, to return approximately $116,100,000 to our shareholders and we may continue to return capital to our shareholders through stock repurchases, although there is no assurance that the Company will make any repurchases under its existing stock-repurchase plan. ~~Since March 26, 2007, to date, we have repurchased 2,756,587 shares at a total cost of approximately $49,642,000, reducing the number of shares then-outstanding by 45.8%.~~

~~-21-~~

We expect that in the future we will make investments in certain existing restaurants, support the growth of the Branded Product and Branded Menu Programs, service the outstanding debt and continue our stock repurchase programs, funding those investments from our operating cash flow. We may also incur capital and other expenditures or engage in investing activities in connection with opportunistic situations that may arise on a case-by-case basis. In the fiscal year ending March 27, 2016, we will be required to make interest payments of approximately $13.8 million.

-23-

At ~~December~~June 28, ~~2014,~~2015, we subleased two properties to franchisees ~~three properties~~that we lease from third parties. We remain contingently liable for all costs associated with these properties including: rent, property taxes and insurance. We may incur future cash payments with respect to such properties, consisting primarily of future lease payments, including costs and expenses associated with terminating any of such leases.

On December 1, 2009, a wholly-owned subsidiary of the Company executed a Guaranty of Lease in connection with its re-franchising of a restaurant located in West Nyack, New York. The Guaranty could be called upon in the event of a default by the tenant/franchisee. The Guaranty extends through the fifth Lease Year, as defined in the lease, and shall not exceed an amount equal to the highest amount of the annual minimum rent, percentage rent and any additional rent payable pursuant to the lease and reasonable attorney’s fees and other costs. We have recorded a liability of approximately $76,000 in connection with this Guaranty, which does not include potential real estate tax increases and attorney’s fees and other costs as these amounts are not reasonably determinable at this time. In connection with the Nathan’s franchise agreement, Nathan’s has received a personal guaranty from the franchisee for all obligations under the Guaranty. To date, Nathan’s has not been required to make any payments pursuant to the Guaranty.

The following schedule represents Nathan’s cash contractual obligations and commitments by maturity as of June 28, 2015 (in thousands):

			Payments Due by Period								Payments Due by Period
Cash Contractual Obligations	Total		Less than 1 Year		1-3 Years		3-5 Years		More than 5 Years		Total		Less than 1 Year		1-3 Years		3-5 Years		More than 5 Years
Long term debt (a)											$	135,000	$	-	$	-	$	135,000	$	-
Employment Agreements	$	3,289	$	1,489	$	1,200	$	400	$	200		3,183		1,478		1,105		400		200
Operating Leases (a)		16,173		1,587		3,266		3,298		8,022
Dividends Payable												875		375		500		-		-
Operating Leases												15,760		1,644		3,347		3,012		7,757
Gross Cash Contractual Obligations		19,462		3,076		4,466		3,698		8,222		154,818		3,497		4,952		138,412		7,957
Sublease Income		2,749		282		518		532		1,417		2,615		271		514		534		1,296
Net Cash Contractual Obligations	$	16,713	$	2,794	$	3,948	$	3,166	$	6,805	$	152,203	$	3,226	$	4,438	$	137,878	$	6,661

Nathan’s has entered into agreements to terminate its lease for the existing Oceanside restaurant and relocate to a smaller restaurant in the same area. The existing restaurant closed in January 2015 and we expect to commence operations of the new Oceanside restaurant inRepresents 10.000% Senior Secured Notes due March ~~2015. We estimate that we will incur approximately $1,300,000 in connection with the redevelopment of our Oceanside restaurant this year.~~2020.

At ~~December~~June 28, ~~2014,~~2015, the Company had unrecognized tax benefits of ~~$315,000.~~$253,000. The Company believes that it is reasonably possible that the unrecognized tax benefits may decrease by ~~$64,000~~$98,000 within the next year. A reasonable estimate of the timing of the remaining liabilities is not ~~possible.~~practicable.

Inflationary Impact

We do not believe that general inflation has materially impacted earnings since 2006. However, we have experienced significant volatility in our costs for our hot dogs and certain food products, distribution costs and utilities. Our commodity costs for beef have been especially volatile since fiscal 2004. We ~~continue~~have continued to experience unprecedented increases in the cost of ~~beef.~~beef since 2011. The market price of hot dogs during the fiscal 2016 period was approximately 4.8% higher than the fiscal 2015. The market price of hot dogs during the fiscal 2015 period was approximately ~~17.0%~~17.1% higher than the fiscal 2014 period. The market price of hot dogs during fiscal 2014 was approximately 7.4% higher than fiscal 2013. We are unable to predict the future cost of our hot dogs and expect to experience price volatility for our beef products during ~~the remainder of~~ fiscal ~~2015.~~2016. Beef prices continue to be extremely volatile due to the supply constraints, as a result of the lingering effect of the drought in the Midwest during 2012. Beginning January 2008, we had entered into purchase commitments for a portion of our hot dogs in an effort to reduce the impact of increasing market prices. Our last purchase commitment was completed in July 2013 and to date we have not entered in any new purchase commitments for beef. We may attempt to enter into similar purchase arrangements for hot dogs and other products in the future. Additionally, we expect to continue experiencing volatility in oil and gas prices on our distribution costs for our food products and utility costs in the Company-owned restaurants and volatile insurance costs resulting from the uncertainty of the insurance markets.

In March 2010, the Federal government passed new legislation to reform the U.S. health care system. As part of the plan, employers will be expected to provide their employees that work more than 30 hours per week with minimum levels of healthcare coverage or incur certain financial penalties. As Nathan’s workforce includes numerous part-time workers that typically are not offered healthcare coverage, we may be forced to expand healthcare coverage in ~~2015~~2016 or incur new penalties beginning January 2015 which may increase our health care costs.

~~-22-~~

From time to time, various Federal and New York State legislators have proposed changes to the minimum wage requirements. The New York State minimum wage increased to ~~$8.00 on December 31, 2013 and~~ $8.75 on December 31, 2014 and ~~will~~is scheduled to increase to $9.00 ~~per hour~~ on December 31, 2015. The impact of the December 31, 2014 New York minimum wage increase on the Company amounted to a 6.9% average salary increase for our employees that were affected. There have been recent protests in New York and other municipalities relating to compensation at fast food restaurants. In Governor Cuomo’s State of The State address, he also called for an increase in New York State’s minimum wage to $10.50 per hour throughout New York State and $11.50 per hour in New York City. Mayor DeBlasio, of the City of New York, ~~had~~has previously stated that New York City should have ~~additional increases~~a minimum wage of $15.00 per hour.In addition, in July 2015 a commission appointed by Governor Cuomo approved a proposal which would raise the minimum wage of fast food workers in New York State, who are employed by restaurant chains with at least 30 or more national locations, to $15.00 per hour over a period of time. If adopted, the proposal would be phased in over three years in New York City and six years elsewhere in New York State beginning December 31, 2015. The Company currently has five-Company owned restaurants in New York State and 46 franchised locations throughout the State. The Company is in the ~~minimum wage. We estimate that~~process of studying the ~~recent increase in minimum wage has~~impact of the ~~potential to increase our restaurant cost of sales by approximately 80 bps if prices remain~~proposal on the ~~same.~~Company’s operations. Although we only operate five Company-owned restaurants, we believe that significant increases in the minimum wage could have a significant financial impact on our financial results and the results of our franchisees.

-24-

Effective April 1, 2014, the City of New York, passed legislation requiring employers to offer paid sick leave to all employees, including part-time employees, ~~that~~who work more than 80 hours for the employer. Nathan’s operates three restaurants that ~~will be~~have been affected by this new ~~legislation and is currently evaluating the potential impact on its results of operations.~~legislation.

~~In addition, our union contract has been extended effective July 1, 2014 for three years which we believe will not have a material effect on our results of operations or financial condition.~~

Continued increases in labor, food and other operating expenses, including health care, could adversely affect our operations and those of the restaurant industry and we might have to further reconsider our pricing strategy as a means to offset reduced operating margins.

The Company’s business, financial condition, operating results and cash flows can be impacted by a number of factors, including but not limited to those set forth above in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” any one of which could cause our actual results to vary materially from recent results or from our anticipated future results. For a discussion identifying additional risk factors and important factors that could cause actual results to differ materially from those anticipated, also see the discussions in “Forward-Looking Statements” and “Notes to Consolidated Financial Statements” in this Form 10-Q and “Risk Factors” in this Form 10-Q and our ~~Annual Report on~~ Form 10-K for our fiscal year ended March ~~30, 2014.~~

29, 2015.

~~-23-~~-25-

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Cash and Cash Equivalents

We have historically invested our cash and cash equivalents in short term, fixed rate, highly rated and highly liquid instruments which are generally reinvested when they mature throughout the year. Although our existing investments are not considered at risk with respect to changes in interest rates or markets for these instruments, our rate of return on short-term investments could be affected at the time of reinvestment as a result of intervening events. As of ~~December~~June 28, ~~2014,~~2015, Nathan’s cash and cash equivalents aggregated ~~$34,537,000.~~$51,603,000. Earnings on this amount of cash and cash equivalents would increase or decrease by approximately ~~$86,000~~$129,000 per annum for each 0.25% change in interest rates.

Marketable Securities

We have invested our marketable securities in intermediate term, fixed rate, highly rated and highly liquid instruments. These investments are subject to fluctuations in interest rates. As of ~~December~~June 28, ~~2014,~~2015, the market value of Nathan’s marketable securities aggregated ~~$6,819,000.~~$7,832,000. These marketable securities are considered at risk with respect to interest rates to determine their current market value. As additional notes mature or are called by the issuer and we are unable to earn similar returns upon reinvestment, we would anticipate lower investment income in the future. Our future rate of return could also be affected at the time of reinvestment as a result of intervening events. Interest income on these marketable securities would increase or decrease by approximately ~~$17,000~~$19,600 per annum for each 0.25% change in interest rates. The following chart presents the hypothetical changes in the fair value of the marketable investment securities held at ~~December~~June 28, ~~2014~~2015 that are sensitive to interest rate fluctuations (in thousands):

Valuation of securities

Valuation of securities

Given an interest rate

Given an interest rate

Decrease of X Basis points

Fair

Increase of X Basis points

(150BPS)

(100BPS)

(50BPS)

Value

+50BPS

+100BPS

+150BPS

Municipal bonds
$ 6,818 $ 6,818 $ 6,819 $ 6,819 $ 6,827 $ 6,835 $ 6,844

Valuation of securities

Valuation of securities

Given an interest rate

Given an interest rate

Decrease of X Basis points

Fair

Increase of X Basis points

(150BPS)

(100BPS)

(50BPS)

Value

+50BPS

+100BPS

+150BPS

Municipal bonds
$ 7,838 $ 7,838 $ 7,838 $ 7,832 $ 7,808 $ 7,784 $ 7,760

Borrowings

At ~~December~~June 28, ~~2014,~~2015, we had no$135.0 million of Notes outstanding ~~indebtedness. If~~which are due in March 2020. Upon maturity, we ~~were~~anticipate having to ~~borrow money in~~refinance a significant portion of the ~~future,~~Notes and such ~~borrowings~~refinancing would be based upon the then-prevailing interest rates. Interest expense on these borrowings would increase or decrease by approximately $337,000 per annum for each 0.25% change in interest rates. We currently do not anticipate entering into interest rate swaps or other financial instruments to hedge our borrowings.

Commodity Costs

The cost of commodities is subject to market fluctuation. Our commodity costs for beef have been especially volatile since fiscal 2004. We ~~continue~~have continued to experience unprecedented increases in the cost of ~~beef.~~beef since 2011. The market price of hot dogs during the fiscal 2016 period was approximately 4.8% higher than the fiscal 2015 period. The market price of hot dogs during the fiscal 2015 period was approximately ~~17.0%~~17.1% higher than the fiscal 2014 period. The market price of hot dogs during fiscal 2014 was approximately 7.4% higher than fiscal ~~2013.~~2013, and the fiscal 2013 price of hot dogs was approximately 0.01% higher than fiscal 2012. These increases are in addition to fiscal 2012’s increase of approximately 12.9% over fiscal 2011. The market price also increased during fiscal 2011 by 9.9% over fiscal 2010. We are unable to predict the future cost of our hot dogs and expect to experience price volatility for our beef products during ~~the remainder of~~ fiscal ~~2015.~~2016. Beef prices continue to be extremely volatile due to the supply constraints, as a result of the lingering effect of the drought in the Midwest during 2012. Beginning January 2008, we had entered into purchase commitments for a portion of our hot dogs in an effort to reduce the impact of increasing market prices. Our last purchase commitment was completed in July 2013 and to date we have not entered in any new purchase commitments for beef. We may attempt to enter into similar purchase arrangements for hot dogs and other products in the future. ~~Additionally,~~With the exception of those commitments, we have not attempted to hedge against fluctuations in the prices of the commodities we purchase using future, forward, option or other instruments. As a result, we expect that the majority of our future commodity purchases will be subject to ~~continue experiencing volatility~~market changes in ~~oil and gas~~the prices of such commodities. Generally, we have attempted to pass through permanent increases in our commodity prices to our customers, thereby reducing the impact of long-term increases on our ~~distribution costs for our food products and utility costs in the Company-owned restaurants and volatile insurance costs resulting from the uncertainty of the insurance markets.~~financial results. A short-term increase or decrease of ~~10%~~10.0% in the cost of our food and paper products for the ~~thirty-nine~~thirteen weeks ended ~~December~~June 28, ~~2014~~2015 would have increased or decreased our cost of sales by approximately ~~$4,399,000.~~$1,629,000.

-26-
Foreign Currencies

Foreign franchisees generally conduct business with us and make payments in United States dollars, reducing the risks inherent with changes in the values of foreign currencies. As a result, we have not purchased future contracts, options or other instruments to hedge against changes in values of foreign currencies and we do not believe fluctuations in the value of foreign currencies would have a material impact on our financial results.
~~-24-~~

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as required by Exchange Act Rule 13a-15. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective to ensure that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Controls

There were no changes in our internal controls over financial reporting that occurred during the ~~quarter~~thirteen weeks ended ~~December~~June 28, ~~2014~~2015 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on the Effectiveness of Controls

We believe that a control system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the control system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives and our Chief Executive Officer and Chief Financial Officer have concluded that such controls and procedures are effective at the reasonable assurance level.

~~-25-~~-27-

PART II. OTHER INFORMATION

~~Item~~Item 1. Legal Proceedings.

None

Item 1A. Risk Factors.
��
In addition to the other information set forth in this report, you should carefully consider the risk factors discussed in Part I, “Item 1A. Risk Factors” in the Annual Report on Form 10-K for the fiscal year ended March ~~30, 2014,~~29, 2015, which could materially affect our business, financial condition or future results. The risks described in our Annual Report on Form 10-K are not the only risks facing Nathan's. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

A recent ruling ~~and complaint filed~~ by the general counsel of the National Labor Relations Board could, if upheld, make us liable for violations of overtime, wage or union-organization violations by our franchisees.

On July 29, 2014, the general counsel of the National Labor Relations Board ruled that McDonald’s could be held jointly liable for labor and wage violations by its franchise operations. ~~Subsequently on December 19, 2014,~~McDonald’s has stated that they will contest the ~~National Labor Relations Board issued complaints naming McDonald’s Corp.~~joint employer allegation as ~~a “joint employer” at its franchisees.~~well as the unfair labor practice charges in the proper forums. While we believe ~~McDonald’s will seek to dismiss these complaints,~~that to the extent that ~~the complaints are~~this ruling is not ~~dismissed and the National Labor Relations Board prevails in litigation~~ultimately overturned and is deemed applicable to other businesses with a significant number of franchises such as Nathan’s, we could be held partly liable in cases of overtime, wage or union-organizing violations. By making us partly liable, the ~~complaint,~~ruling, if upheld and ultimately applied to Nathan’s, could among other things give employees of our franchisee’s restaurants and labor unions leverage to make it easier to unionize employees at these restaurants and to request that Nathan’s have its franchisees raise wages. Unionization and a significant increase in wages at our franchisees could make it more difficult to operate a Nathan’s franchised restaurant. A decrease in profitability at our franchisee’s restaurants or the closing of a significant number of franchised restaurants could significantly impact our business and our business could also be significantly impacted if the National Labor Relations Board ~~seeks to bring an action against Nathan’s as a “joint employer”~~ruling is ultimately applied to Nathan’s and our liability for labor and wage violations increases.

A wage panel recently recommended that the minimum wage be raised for employees of fast-food chain restaurants operating within New York State to $15.00 per hour.
On July 23, 2015, a three-member wage panel that was formed in May 2015 to investigate and make recommendations for a minimum wage increase recommended that the minimum wage be raised for employees of fast-food chain restaurants in New York State to $15.00 per hour. The proposed increases would affect restaurant chains that operate 30 or more national establishments. The increases would take effect beginning December 31, 2015 and be fully phased in by December 31, 2018 in New York City, where we operate three Company-owned restaurants and by December 31, 2021 throughout the rest of New York State which would impact our two remaining Company-owned restaurants and the majority of our 46 franchised restaurants. If the cost of labor increases and we are unable to pass on these higher costs through price increases our margins and profitability will be adversely impacted. Additionally, a decrease in profitability at our franchisee’s restaurants, the potential loss of new franchisees or the closing of a significant number of existing franchised restaurants could significantly impact our business.
-28-
Item 2. Unregistered Sales of Equity Securities and Use of ~~Proceeds.~~Proceeds.

~~None.~~             ISSUER PURCHASES OF EQUITY SECURITIES
Period (A)
(a) Total Number of Shares Purchased
(b) Average Price Paid per Share
(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
(d) Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs

March 30, 2015
April 26, 2015

-

  -

-

251,272

April 27, 2015
May 24, 2015

-
-

-

251,272

May 25, 2015
June 28, 2015

135,987

$39.3932

135,987

115,285

Total

135,987

$39.3932

135,987

115,285
A) Represents the Company’s fiscal periods during the quarter ended June 28, 2015.

Item 3. Defaults Upon Senior Securities.

None.

Item 4.Mine Safety Disclosures.

None.

Item 5. Other Information.

None.

~~-26-~~-29-

~~Item~~Item 6. Exhibits.

3.1
Certificate of Incorporation. (Incorporated by reference to Exhibit 3.1 to Registration Statement onForm S-1 No. 33- 56976.)

3.2
Amendment to the Certificate of Incorporation, filed December 15, 1992. (Incorporated by referenceto Exhibit 3.2 to Registration Statement on Form S-1 No. 33-56976.)

3.3
By-Laws, as amended. (Incorporated by reference to Exhibit 3.1 to Form 8-K dated November 1, 2006.)

4.1
Specimen Stock Certificate. (Incorporated by reference to Exhibit 4.1 to Registration Statement onForm S-1 No. 33-56976.)

4.2
Rights Agreement, dated as of June 5, 2013, between Nathan’s Famous, Inc. and American Stock Transfer and Trust Company, LLC, as Rights Agent, which includes form of Rights Certificate as Exhibit A and the Summary of Rights to Purchase as Exhibit B. (Incorporated by reference to Exhibit 4.2 to the Company’s Current Report filed on Form 8-K dated June 11, 2013.)

~~10.1~~ 4.3
~~Amendment to 10b5-1 Issuer Repurchase Instructions~~Indenture, dated as of March 10, 2015, by and among Nathan’s Famous, Inc., certain of its wholly owned subsidiaries, as guarantors, and U.S. Bank National Association, a National Banking Association, as trustee and collateral trustee (including the form of Note (Incorporated by reference to Exhibit ~~99.1~~4.1 to the Company’s Current Report filed on Form 8-K dated ~~September 11, 2014).~~
March 10, 2015.)
31.1
*Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2
*Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1
*Certification by Eric Gatoff, CEO, Nathan’s Famous, Inc., pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2
*Certification by Ronald G. DeVos, CFO, Nathan’s Famous, Inc., pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.1
*The following materials from the Nathan’s Famous, Inc., Quarterly Report on Form 10-Q for the quarter ended ~~December~~June 28, ~~2014~~2015 formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Earnings, (iii) the Consolidated Statement of Stockholders’ Equity, (iv) the Consolidated Statements ~~of Cash Flows and (v) related notes.~~


*Filed herewith.

~~-27-~~-30-

SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

NATHAN'S FAMOUS, INC.

Date: ~~February 6,~~August 7, 2015
By:
/s/ Eric Gatoff

Eric Gatoff

~~Chief Executive Officer~~
~~(Principal Executive Officer)~~
~~Date: February 6, 2015~~ ~~By:~~ ~~/s/ Ronald G. DeVos~~
~~Ronald G. DeVos~~
~~Vice President - Finance~~

~~and~~ Chief ~~Financial~~Executive Officer

(Principal Executive Officer)
Date: August 7, 2015
By:
/s/Ronald G. DeVos
Ronald G. DeVos
Vice President - Finance and Chief Financial Officer
(Principal Financial and Accounting Officer)

~~-28-~~-31-

Exhibit Index.

3.1
Certificate of Incorporation. (Incorporated by reference to Exhibit 3.1 to Registration Statement onForm S-1 No. 33- 56976.)

3.2
Amendment to the Certificate of Incorporation, filed December 15, 1992. (Incorporated by referenceto Exhibit 3.2 to Registration Statement on Form S-1 No. 33-56976.)

3.3
By-Laws, as amended. (Incorporated by reference to Exhibit 3.1 to Form 8-K dated November 1, 2006.)

4.1
Specimen Stock Certificate. (Incorporated by reference to Exhibit 4.1 to Registration Statement onForm S-1 No. 33-56976.)

4.2
Rights Agreement, dated as of June 5, 2013, between Nathan’s Famous, Inc. and American Stock Transfer and Trust Company, LLC, as Rights Agent, which includes form of Rights Certificate as Exhibit A and the Summary of Rights to Purchase as Exhibit B. (Incorporated by reference to Exhibit 4.2 to the Company’s Current Report filed on Form 8-K dated June 11, 2013.)

~~10.1~~ 4.3
~~Amendment to 10b5-1 Issuer Repurchase Instructions~~Indenture, dated as of March 10, 2015, by and among Nathan’s Famous, Inc., certain of its wholly owned subsidiaries, as guarantors, and U.S. Bank National Association, a National Banking Association, as trustee and collateral trustee (including the form of Note (Incorporated by reference to Exhibit ~~99.1~~4.1 to the Company’s Current Report filed on Form 8-K dated ~~September 11, 2014).~~March 10, 2015.)
31.1
*Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2
*Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1
*Certification by Eric Gatoff, CEO, Nathan’s Famous, Inc., pursuant to 18 U.S.C. Section 1350, as adoptedpursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2
*Certification by Ronald G. DeVos, CFO, Nathan’s Famous, Inc., pursuant to 18 U.S.C. Section 1350, as adoptedpursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.1
*The following materials from the Nathan’s Famous, Inc.,Quarterly Report on Form 10-Q for the quarter ended ~~December~~June 28, ~~2014~~2015 formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Earnings, (iii) the Consolidated Statement of Stockholders’ Equity, (iv) the Consolidated Statements of Cash Flows and (v) related notes.
*Filed ~~herewith~~herewith.
~~-29-~~

Thirty-nine weeks
									Net Income
	Net Income				Number of Shares				Per Share
	2014		2013		2014		2013		2014			2013
	(in thousands)				(in thousands)
Basic EPS
Basic calculation	$	10,166	$	7,109		4,475		4,447	$	2.27		$	1.60
Effect of dilutive employee stockoptions		-		-		121		162		(0.06	)		(0.06	)
Diluted EPS
Diluted calculation	$	10,166	$	7,109		4,596		4,609	$	2.21		$	1.54

Weighted-average option fair values	$	11.970
Expected life (years)		4.5
Interest rate		1.66	%
Volatility		22.77	%
Dividend yield		0	%

	Valuation of securities								Valuation of securities
	Given an interest rate								Given an interest rate
	Decrease of X Basis points						Fair		Increase of X Basis points
	(150BPS)		(100BPS)		(50BPS)		Value		+50BPS		+100BPS		+150BPS

Municipal bonds	$	6,818	$	6,818	$	6,819	$	6,819	$	6,827	$	6,835	$	6,844

3.1	Certificate of Incorporation. (Incorporated by reference to Exhibit 3.1 to Registration Statement onForm S-1 No. 33- 56976.)

3.2	Amendment to the Certificate of Incorporation, filed December 15, 1992. (Incorporated by referenceto Exhibit 3.2 to Registration Statement on Form S-1 No. 33-56976.)

3.3	By-Laws, as amended. (Incorporated by reference to Exhibit 3.1 to Form 8-K dated November 1, 2006.)

4.1	Specimen Stock Certificate. (Incorporated by reference to Exhibit 4.1 to Registration Statement onForm S-1 No. 33-56976.)

4.2	Rights Agreement, dated as of June 5, 2013, between Nathan’s Famous, Inc. and American Stock Transfer and Trust Company, LLC, as Rights Agent, which includes form of Rights Certificate as Exhibit A and the Summary of Rights to Purchase as Exhibit B. (Incorporated by reference to Exhibit 4.2 to the Company’s Current Report filed on Form 8-K dated June 11, 2013.)

~~10.1~~ 4.3	~~Amendment to 10b5-1 Issuer Repurchase Instructions~~Indenture, dated as of March 10, 2015, by and among Nathan’s Famous, Inc., certain of its wholly owned subsidiaries, as guarantors, and U.S. Bank National Association, a National Banking Association, as trustee and collateral trustee (including the form of Note (Incorporated by reference to Exhibit ~~99.1~~4.1 to the Company’s Current Report filed on Form 8-K dated ~~September 11, 2014).~~ March 10, 2015.)


31.1	*Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2	*Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1	*Certification by Eric Gatoff, CEO, Nathan’s Famous, Inc., pursuant to 18 U.S.C. Section 1350, as adopted
	pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2	*Certification by Ronald G. DeVos, CFO, Nathan’s Famous, Inc., pursuant to 18 U.S.C. Section 1350, as adopted
	pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.1	*The following materials from the Nathan’s Famous, Inc., Quarterly Report on Form 10-Q for the quarter ended ~~December~~June 28, ~~2014~~2015 formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Earnings, (iii) the Consolidated Statement of Stockholders’ Equity, (iv) the Consolidated Statements ~~of Cash Flows and (v) related notes.~~

	NATHAN'S FAMOUS, INC.

Date: ~~February 6,~~August 7, 2015	By:	/s/ Eric Gatoff
		Eric Gatoff
		~~Chief Executive Officer~~
		~~(Principal Executive Officer)~~

~~Date: February 6, 2015~~	~~By:~~	~~/s/ Ronald G. DeVos~~
		~~Ronald G. DeVos~~
		~~Vice President - Finance~~
		~~and~~ Chief ~~Financial~~Executive Officer
		(Principal Executive Officer)


Date: August 7, 2015	By:	/s/Ronald G. DeVos
		Ronald G. DeVos
		Vice President - Finance and Chief Financial Officer
		(Principal Financial and Accounting Officer)