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Tuesday July 21, 8:17 am Eastern Time
Company Press Release
SOURCE: Checkers Drive-In Restaurants, Inc.
Checkers Announces Second Quarter Results; Comparable Store Sales Increase of 4.6%
CLEARWATER, Fla., July 21 /PRNewswire/ -- Checkers Drive-In Restaurants, Inc. (Nasdaq: CHKR - news) today reported a net loss of $207,000 for the twelve weeks ended June 15, 1998. These results compare to a net loss of $1.5 million during the second quarter of the prior year. Highlights for the second quarter of 1998 include:
Total revenues were $34.8 million, which represents a $1.1 million increase over 1997 second quarter revenues of $33.7 million. This revenue increase was primarily attributable to the performance of comparable stores which increased 4.6%, and represents the second consecutive quarter of comparable store sales increases reported by the Company.
Restaurant food and paper costs were 31.3% of restaurant sales for the quarter versus 32.8% of restaurant sales during the same quarter of the prior year. Restaurant labor costs increased to 32.8% of restaurant sales for the quarter versus 30.8% of restaurant sales during the prior year reflecting increased bonus expense and group insurance costs and increased staffing levels at the restaurants necessary to accelerate the speed with which customers are served.
General and administrative expenses declined $474,000 versus the same quarter of the prior year due to terminated merger costs recorded during the prior year of $350,000 and the continued savings associated with the management services agreement between the Company and Rally's Hamburgers, Inc. pursuant to which Checkers is providing the majority of the administrative functions for Rally's.
A disputed state sales tax matter was resolved in favor of the Company resulting in a favorable adjustment to earnings in the amount of $500,000.
Jay Gillespie, chief executive officer, commented, ''We are pleased with the continued positive comparable store sales trends that we have experienced during the first half of 1998. The comparable store sales increase during the second quarter was significant given the increased promotional and discounting activities by our competitors in the quick-service segment. We continue to track the progress of several initiatives that are underway which we believe will position the Company for sustained growth in the future. These initiatives include the testing of a two-patty burger platform that will provide more flexibility in the Company's menu offerings. The Company has also identified the next sites where a dining room will be added as we continue to test the viability and performance of this building modification. Another promising opportunity is the upcoming rollout of our new menu boards that we are planning to begin in the fourth quarter.''
Statements in this release which are not historical facts are ''forward- looking'' statements and ''Safe Harbor'' statements under the Private Securities Litigation Reform Act of 1995 that involve risks and/or uncertainties, including but not limited to the impact of continued discounting by the Company's substantial competitors, success of the Company's advertising and promotion programs, consumer acceptance of the Company's products, increases in operating costs, availability of adequate numbers of hourly paid employees, decreased in the availability of affordable capital resources and other risks documented in the Company's filing on Form 10-K dated March 30, 1998 with the Securities and Exchange Commission.
Checkers Drive-In Restaurants, Inc., along with its franchisees, operates approximately 483 double drive-thru hamburger restaurants primarily in the Southeastern United States.
Consolidated Statements of Operations -- Certain items have been reclassified in the accompanying financial information for prior periods in order to be comparable with the classification adopted for the current period. Such reclassifications had no effect on previously reported net income.
CHECKERS DRIVE-IN RESTAURANTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Quarter Ended Two Quarters Ended
June 15 June 16 June 15 June 16
1998 1997 1998 1997
Revenues:
Net Restaurant sales $33,003 $31,753 $68,110 $64,201
Franchise revenues
and fees 1,756 1,714 3,600 3,325
Modular restaurant packages 67 246 119 344
Total revenues 34,826 33,713 71,829 67,870
Costs and expenses:
Restaurant food and
paper costs 10,343 10,404 21,732 21,509
Restaurant labor costs 10,818 9,792 21,509 21,130
Restaurant occupancy
expenses 2,582 2,270 5,219 4,804
Restaurant depreciation
and amortization 1,641 1,899 3,515 3,827
Other Restaurant
operating expenses 3,329 3,186 6,426 6,432
Advertising expense 1,587 1,596 3,463 3,240
Cost of modular restaurant
package revenues 113 213 183 289
Other depreciation
and amortization 518 509 1,033 1,029
General and
administrative expenses3,268 3,742 6,435 7,327
Loss provisions (437) -- (374) --
Total costs and
expenses 33,762 33,611 69,141 69,587
Operating income (loss)1,064 102 2,688 (1,717)
Other income (expense):
Interest income 64 102 143 181
Interest expense (879) (1,177) (1,833) (2,519)
Interest - loan cost
amortization (414) (485) (829) (2,655)
Loss before minority
interest, and income
tax expense (benefit) (165) (1,458) 169 (6,710)
Minority interests
in earnings (losses) 42 11 (18) (60)
(Loss) income before
income tax expense (207) (1,469) 187 (6,650)
Income tax expense 0 0 0 0
Net (loss) income ($207) ($1,469) $187 ($6,650)
Net (loss) income per
common share - basic ($0.00) ($0.02) $0.00 ($0.11)
Net (loss) income per
common share - diluted ($0.00) ($0.02) $0.00 ($0.11)
Weighted average number of
common shares - basic 73,411 60,750 73,362 57,970
Weighted average number of
common shares - diluted73,411 60,750 74,777 57,970
SOURCE: Checkers Drive-In Restaurants, Inc. |
