SANTA BARBARA, Calif./PRNewswire/ — CKE Restaurants, Inc. (“CKE” or the “Company”) (NYSE: CKR – news) today announced results for the 12- and 40-weeks ended November 5, 2001.
HIGHLIGHTS FOR THE QUARTER
— Net loss for the period is $1.7 million versus $29.4 million for the
prior year period
— Excluding repositioning activities, pro forma income is
$400,000 versus a pro forma loss of $8.8 million in the prior year
— Excluding repositioning activities and the operating results of Taco
Bueno, and stores sold, closed or to be closed, pro forma net income
is $2.3 million versus a pro forma loss of $11.8 million in the prior
— Same-store sales increased 6.1% at Carl’s Jr. and 1.0% at Hardee’s
— Carl’s Jr. margins increased to 21.0% versus 17.6% in the prior year
— Hardee’s margins increased to 9.4% versus 5.7% in the prior year
— Letter of Intent signed to acquire Santa Barbara Restaurant Group,
Inc. (Nasdaq: SBRG – news) in a transaction expected to be accretive. For
the 40-week period ended October 1, 2001, SBRG reported revenue of
$67.8 million, net income of $2.6 million and EBITDA of $7.2 million.
“The reported net loss of $1.7 million, which is almost break-even and a significant improvement from recent quarters, along with Hardee’s posting positive same-store sales for two consecutive quarters, supports our contention that we are on our way to returning CKE to profitability,” said Chief Executive Officer, Andrew F. Puzder. “We recognize that there is still work to be done with the Hardee’s brand, but the results show we are making progress. We attribute this success to (i) our operations improvement program at Hardee’s emphasizing quality, service and cleanliness, (ii) new products, (iii) charbroiler installations (now in 48% of the company-operated system) and (iv) remodeled restaurants (46% of the company-operated system). We completed the system-wide rollout of the Six-Dollar Burger(TM) at Carl’s Jr. and introduced the sandwich at the beginning of the 4th quarter at Hardee’s.
“We are pleased with our progress toward returning to profitability. However, given the seasonality traditionally experienced by Hardee’s during December and January, we may report an operating loss in the fourth quarter,” Puzder said. “Looking forward to next fiscal year, we hope to make a profit in the first quarter, as well as next fiscal year, absent adjustments, if any, that may be required as a result of adopting required new accounting rules. Such results would occur irrespective of the acquisition of Santa Barbara Restaurant Group, Inc., which we expect to be immediately accretive to earnings. We are very excited about our pending acquisition of Santa Barbara Restaurant Group, Inc. We believe the addition of the La Salsa and Green Burrito brands to CKE provides us with an additional economical and profitable opportunity for long-term development.
“As this quarter’s results show, we have made substantial progress in repositioning the Company and we are now focusing on longer-term plans for both brands,” Puzder said. “The next steps on our road to growing profits is (i) building new restaurants for all brands, (ii) defining and developing Hardee’s brand identity with an emphasis on premium products and less use of discounting and (iii) implementing new marketing strategies. These efforts will allow us to grow our average unit volumes, which we hope will result in increased profit margins. Improving shareholder value remains our primary focus and we believe we are making steady and significant progress toward that goal.”