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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) June 12, 1996
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CKE RESTAURANTS, INC.
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(Exact name of registrant as specified in charter)
Delaware 1-13192 33-0602639
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1200 North Harbor Boulevard, Anaheim, California 92801
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (714) 774-5796
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(Former name or former address, if changed since last report)
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Item 5. Other Events
On June 12, 1996, CKE Restaurants, Inc. announced the operating
results for the 16-week interim period ending May 20, 1996; a copy of which is
attached hereto.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Not applicable
(b) Not applicable
(c) Exhibits:
99.1 Press Release dated June 12, 1996
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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 hereunto duly authorized.
CKE RESTAURANTS, INC.
Date: June 12, 1996 By: /s/ Joseph N. Stein
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Chief Financial Officer
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EXHIBIT INDEX
Exhibit Number Description Page Number
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99.1 Press Release dated June 12, 1996 5
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EXHIBIT 99.1
NEWS RELEASE
FOR: CKE Restaurants, Inc.
CONTACT: Loren Pannier
CKE Restaurants, Inc.
714.778.7109
FOR IMMEDIATE RELEASE
CKE RESTAURANTS, INC. ANNOUNCES SAME-STORE SALES INCREASES OF
12.7 PERCENT AND THE HIGHEST QUARTERLY NET INCOME IN SEVEN YEARS
ANAHEIM, Calif. -- June 12, 1996 -- CKE Restaurants, Inc. (NYSE:CKR)
today announced that the results for the first quarter ended May 20, 1996
included the highest quarterly net income in seven years.
o Revenues for the 16-week period ended May 20, 1996 increased $15.3
million, or 11 percent, to $152.9 million as compared with the prior
year 16-week period.
o Net income for the first fiscal quarter nearly tripled to $5.3
million, or $.28 per share, compared with net income of $1.9 million,
or $.11 per share for the same prior year period.
o The company adopted Statement of Financial Accounting Standards No.
121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of," resulting in a $1.3 million
non-recurring charge during the current quarter. Net income would have
been $6.1 million, or $.32 per share, the highest quarterly net income
reported by the company in eight years, excluding the effect of this
adoption.
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o Same-store sales increased 12.7 percent as compared with a 0.6 percent
decline for the same period last year, marking the fourth consecutive
quarterly increase in same-store sales and the highest same-store
sales reported by the company since the first quarter of fiscal year
1990, which ended May 22, 1989.
o Per store averages in company-operated restaurants reached $1,043,000
on a 13-period rolling basis, the highest per store average attained
since fiscal 1993.
"We are extremely pleased with our first quarter results, which
reflect the continuing strong improvement in the company's sales growth and
operating performance," said William P. Foley II, CKE's chairman and chief
executive officer. Foley continued, "The company has made tremendous progress
in achieving its goal of getting its Carl's Jr. restaurants back on track."
Foley also noted, "The company has delivered on its promise to enhance
stockholder value. The average CKE stock price during the first quarter of
fiscal year "97 was $17.57 per share as compared with an average stock price of
$7.02 per share in the first quarter of fiscal '96. In addition, our stock
reached an all-time high closing price of $25.13 within recent weeks."
"Adding to the excitement is the continued momentum in sales growth
resulting from our aggressive advertising, dual-branding venture and image
enhancement program," said Tom Thompson, president and chief operating officer
of the Carl's Jr. restaurants. In the current quarter, customer transactions
increased 4 percent, while gross margins from retail operations increased $6.3
million, or 3 percent as compared with the first quarter of the prior year.
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Thompson also noted that excluding the effects of FASB 121, the company's
retail gross margins would have increased nearly 1 percent to 22.2 percent in
the current quarter.
Thompson reported that contributing to the increase in same-store
sales is the company's image enhancement remodeling program. Many of the
company's high volume stores already have been revitalized with a fresh,
contemporary exterior and interior look. To date, 27 restaurants have undergone
this transformation, contributing to the boost in system-wide sales. The
company is currently remodeling at the pace of three restaurants per week and
anticipates a total of 160 restaurants to be remodeled this fiscal year.
The company also continues to convert existing Carl's Jr. locations
into Carl's Jr./Green Burrito dual-brand restaurants. Currently, there are 33
dual-brand units operating, with sales tracking approximately 25 percent over
same-store sales prior to the conversions.
This quarter CKE purchased from GIANT GROUP, LTD. ("Giant") a 15
percent stake in Rally's Hamburgers, Inc. ("Rally's") and has options to buy
another 7.5 percent of Rally's stock from Giant. "This arrangement gives us the
opportunity to participate in Rally's turnaround and growth, and we look
forward to working with their management team," said Foley. Additionally, in an
effort to expand its presence in the western United States, CKE and Rally's
announced, shortly after the quarter ended, that the two companies have entered
into an operating agreement whereby 28 Rally's-owned restaurants located in
California and Arizona will be operated by CKE, the majority of which will be
converted to Carl's Jr. restaurants. Foley added, "We are excited about this
opportunity to take advantage of our management strength and strong presence in
California to enhance the return on those 28 restaurants."
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The company's merger and plan of reorganization (the "Merger") of
Summit Family Restaurants Inc. ("Summit"), as previously announced, is
progressing. Summit stockholders will vote on the Merger at a special meeting
to be held on Friday, July 12, 1996. In the event that Summit stockholders
approve the Merger, the company will acquire Summit for a combination of cash
and stock of approximately $30.9 million. The number of shares of CKE stock to
be issued will be determined pursuant to a formula described in the Merger
Agreement. Summit operates restaurants under three concepts: 77 company-owned
and 24 franchised family-style JB's Restaurants, six Galaxy Diner restaurants
and 16 HomeTown Buffet restaurants, which are operated by Summit as a
franchisee.
CKE Restaurants, Inc. is the parent of Carl Karcher Enterprises, Inc.,
which, along with its franchisees and licensees, operates approximately 665
Carl's Jr. quick-service restaurants, primarily located in California, Nevada,
Oregon, Arizona, Mexico and the Pacific Rim.
"Safe Harbor" Statements under the Private Securities Litigation
Reform Act of 1995: Statements which are not historical facts contained in
this release are forward looking statements that involve risks and
uncertainties, including, but not limited to, product demand and market
acceptance risks; the effect of economic conditions; the impact of competitive
products and pricing; the results of financing efforts; the effect of the
company's accounting policies and other risks detailed in the company's
Securities and Exchange Commission filings.
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