<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
--- EXCHANGE ACT OF 1934.
For the quarterly period ended May 19, 1997
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
--- EXCHANGE ACT OF 1934.
for the transition period from ___________ to ___________
Commission file number 1-13192
CKE RESTAURANTS, INC.
-------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 33-0602639
- ---------------------------------- ------------------------------------
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
1200 North Harbor Boulevard, Anaheim, CA 92801
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (714) 774-5796
NOT APPLICABLE
- --------------------------------------------------------------------------------
Former Name, Former Address and Former Fiscal Year, if
Changed Since Last Report.
Indicate by checkmark 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. Yes X No
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding
of each of the issuer's classes of common stock, as of the latest practicable
date.
33,448,926 shares of Common Stock, par value $.01 per share as of June 9, 1997
- --------------------------------------------------------------------------------
<PAGE> 2
CKE RESTAURANTS, INC.
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Part I. Financial Information
Item 1. Consolidated Financial Statements:
Consolidated Balance Sheets as of May 19, 1997 and January 27, 1997................. 2
Consolidated Statements of Income for the sixteen weeks ended
May 19, 1997 and May 20, 1996.................................................... 3
Consolidated Statements of Cash Flows for the sixteen weeks ended
May 19, 1997 and May 20, 1996.................................................... 4-5
Notes to Consolidated Financial Statements.......................................... 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations............................................ 7-10
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K............................................... 11-13
</TABLE>
1
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
CKE RESTAURANTS, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
May 19, January 27,
1997 1997
----------- -----------
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 28,201 $ 39,782
Marketable securities 573 --
Accounts receivable 6,752 7,942
Related party receivables 2,056 2,088
Inventories 9,058 9,223
Deferred income taxes, net 7,214 7,214
Other current assets and prepaid expenses 11,279 6,608
----------- -----------
Total current assets 65,133 72,857
Property and equipment, net 211,256 205,805
Property under capital leases, net 35,951 37,115
Long-term investments 47,119 33,218
Notes receivable 6,036 6,210
Related party receivables 6,078 9,325
Other assets 38,408 36,687
----------- -----------
$ 409,981 $ 401,217
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 758 $ 735
Current portion of capital lease obligations 4,960 4,766
Accounts payable 25,165 33,930
Other current liabilities 51,694 44,463
----------- -----------
Total current liabilities 82,577 83,894
----------- -----------
Long-term debt 34,055 33,770
Capital lease obligations 46,323 48,141
Other long-term liabilities 21,610 20,608
Stockholders' equity:
Preferred stock, $.01 par value; authorized
5,000,000 shares; none issued or outstanding -- --
Common stock, $.01 par value; authorized
50,000,000 shares; issued and outstanding
33,444,420 and 33,218,751 shares 334 332
Additional paid-in capital 127,637 126,279
Retained earnings 97,445 88,193
----------- -----------
Total stockholders' equity 225,416 214,804
----------- -----------
$ 409,981 $ 401,217
=========== ===========
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
2
<PAGE> 4
CKE RESTAURANTS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Sixteen Weeks Ended
----------------------------
May 19, May 20,
1997 1996
----------- -----------
<S> <C> <C>
Revenues:
Company-operated restaurants:
Carl's Jr $ 144,827 $ 129,510
Taco Bueno 22,388 --
JB's Restaurants 20,690 --
HomeTown Buffet 13,170 --
Other 9,828 --
----------- -----------
210,903 129,510
----------- -----------
Franchised and licensed restaurants:
Carl's Jr 24,218 23,424
JB's Restaurants 349 --
----------- -----------
24,567 23,424
----------- -----------
Total Revenues 235,470 152,934
----------- -----------
Operating costs and expenses:
Restaurant operations:
Food and packaging 65,302 39,755
Payroll and other employee benefits 59,606 35,631
Occupancy and other operating expenses 43,178 26,539
----------- -----------
168,086 101,925
Franchised and licensed restaurants 22,496 22,176
Advertising expenses 10,545 7,571
General and administrative expenses 16,112 11,186
----------- -----------
Total operating costs and expenses 217,239 142,858
----------- -----------
Operating income 18,231 10,076
Interest expense (2,871) (2,595)
Other income, net 2,305 1,274
----------- -----------
Income before income taxes 17,665 8,755
Income tax expense 7,079 3,422
----------- -----------
Net income $ 10,586 $ 5,333
=========== ===========
Net income per common and common equivalent share $ .31 $ .19
=========== ===========
Common and common equivalent shares used in
computing per share amounts 34,300 28,664
=========== ===========
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
3
<PAGE> 5
CKE RESTAURANTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Sixteen Weeks Ended
----------------------------
May 19, May 20,
1997 1996
----------- -----------
<S> <C> <C>
Net cash flow from operating activities:
Net income $ 10,586 $ 5,333
Adjustments to reconcile net income to net cash provided by
operating activities:
Noncash franchise income -- (98)
Depreciation and amortization 10,247 6,440
Loss on sale of property and equipment and capital leases 87 237
Write-off of accounts and notes receivable -- 47
Loss from long-term investments 150 --
Write-down of long-lived assets -- 1,250
Net noncash investment and dividend income (1,063) (232)
Deferred income taxes -- 51
Noncash increase in reserves 280 297
Net change in receivables, inventories and other current assets (3,871) (2,479)
Net change in accounts payable and other current liabilities 2,722 4,953
----------- -----------
Net cash provided by operating activities 19,138 15,799
----------- -----------
Cash flow from investing activities:
Purchases of:
Marketable securities (573) (266)
Property and equipment (14,363) (8,413)
Long-term investments (14,268) (9,190)
Proceeds from sale of:
Marketable securities and long-term investments -- 388
Property and equipment 11 2,478
Collections on leases receivable 57 46
Increases in notes receivable and related party receivables (100) --
Collections on notes receivable and related party receivables 4,156 614
Net change in other assets (927) (406)
----------- -----------
Net cash used in investing activities (26,007) (14,749)
----------- -----------
Cash flow from financing activities:
Net change in bank overdraft (2,998) 1,868
Short-term borrowings 2,000 600
Repayments of short-term debt (2,000) (600)
Long-term borrowings 489 --
Repayments of long-term debt (179) (8,432)
Repayments of capital lease obligations (1,232) (803)
Deferred financing costs (553) --
Net change in other long-term liabilities (265) (366)
Payment of dividends (1,334) (743)
Exercise of stock options 1,360 709
----------- -----------
Net cash used in financing activities (4,712) (7,767)
----------- -----------
Net decrease in cash and cash equivalents $ (11,581) $ (6,717)
=========== ===========
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
4
<PAGE> 6
CKE RESTAURANTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Sixteen Weeks Ended
---------------------------
May 19, May 20,
1997 1996
----------- -----------
<S> <C> <C>
Supplemental disclosures of cash flow information:
Cash paid during period for:
Interest (net of amount capitalized) $ 2,543 $ 2,499
Income taxes 1,770 128
Noncash investing and financing activities:
Investing activities:
Sale of property and equipment -- 2,469
Increase in long-term investments -- (2,469)
</TABLE>
5
<PAGE> 7
CKE RESTAURANTS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MAY 19, 1997 AND MAY 20, 1996
NOTE (A) BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements include the
accounts of CKE Restaurants, Inc. and its consolidated wholly-owned subsidiaries
(the "Company" or "CKE") and have been prepared in accordance with generally
accepted accounting principles, the instructions to Form 10-Q, and Article 10 of
Regulation S-X. These statements should be read in conjunction with the audited
consolidated financial statements presented in the Company's 1997 Annual Report
to Stockholders. In the opinion of management, all adjustments, consisting of
normal recurring accruals, necessary for a fair presentation of financial
position and results of operations for the interim periods presented have been
reflected herein. The results of operations for such interim periods are not
necessarily indicative of results to be expected for the full year or for any
other future periods. Certain reclassifications have been made to the fiscal
1997 consolidated financial statements to conform to the fiscal 1998
presentation. Share and per share information has been retroactively adjusted to
reflect the three-for-two stock split which occurred in January 1997.
NOTE (B) LONG-TERM INVESTMENT IN CHECKER'S DRIVE-IN RESTAURANTS, INC.
On February 19, 1997, the Company purchased 6,162,299 shares of Checkers
Drive-In Restaurants, Inc. ("Checkers") common stock at $1.14 per share and
61,636 shares of Checkers Series A preferred stock at $114.00 per share for an
aggregate purchase price of $14.1 million in connection with a private placement
of Checkers' securities to the Company and other investors, including certain
related parties. Registration rights with respect to the common stock will
commence one year from the date of purchase. The shares of Checkers' common
stock acquired by the Company represent approximately 10% of Checkers'
outstanding shares. The shares of Series A preferred stock acquired by the
Company are convertible into an aggregate of 6,162,299 additional shares of
common stock; provided, however, that such conversion is subject to the approval
of Checkers' stockholders at its next annual meeting. If Checkers' stockholders
fail to approve the common stock provisions of the Series A preferred stock,
cash dividends will accrue at a rate of 14.5% six months from the date of
issuance and quarterly thereafter. Assuming full exercise of the Checkers'
warrants and the conversion of all of the Series A preferred stock into
Checkers' common stock, the Company would beneficially own approximately 22% of
Checkers' outstanding shares.
NOTE (C) ACQUISITION OF HARDEE'S FOOD SYSTEMS, INC.
On April 27, 1997, the Company entered into a Stock Purchase Agreement
with Imasco Holdings, Inc., a Delaware corporation ("Imasco") and Hardee's Food
Systems, Inc., a North Carolina corporation ("Hardee's"), pursuant to which the
Company has agreed to acquire from Imasco all of the issued and outstanding
shares of capital stock of Hardee's for a purchase price of $327.0 million
(subject to adjustment). The Company proposes to finance the acquisition of
Hardee's with a combination of new senior secured indebtedness, net proceeds
from a proposed public offering of shares of the Company's Common Stock and cash
on hand at the time of closing. Consummation of the transaction is subject to
the satisfaction of certain conditions, including receipt of the proceeds of the
proposed public stock offering.
6
<PAGE> 8
CKE RESTAURANTS, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
Consolidated net income for the 16-week period ended May 19, 1997 nearly
doubled, increasing 98.5% to $10.6 million, or $0.31 per share, as compared with
net income of $5.3 million, or $0.19 per share, for the comparable period in the
prior year; representing the highest quarterly net income and earnings per share
in the history of the Company. These positive results were primarily due to
increased sales growth resulting from the Company's dual-branding and image
enhancement programs in its Carl's Jr. restaurants, increased advertising and
continued improvements in operating efficiencies in the Company-operated Carl's
Jr. restaurants, and the additional operations of the Company's recently
acquired concepts, all of which were profitable during the first quarter of
fiscal 1998.
The Company is continuing with the conversion of certain of its existing
Carl's Jr. locations into Carl's Jr./Green Burrito dual-brand restaurants,
pursuant to an agreement with GB Foods Corporation. In February 1997, the
Company amended its agreement with GB Foods Corporation, operator of The Green
Burrito(R), to increase the minimum number of dual-brand restaurants from 140 to
306 over the next four years. Accordingly, the Company is accelerating the
original 40 restaurant conversions per year to 60 dual-brand conversions per
year. As of May 19, 1997, there were 69 Company-operated and seven franchised
dual-brand restaurants operating. Post-conversion revenues in the first quarter
of fiscal 1998 for the 49 Company-operated Carl's Jr./Green Burrito dual-brand
restaurants operating less than a year were approximately 17% higher than
same-store sales in the comparable prior year period.
As part of the Company's chain-wide Carl's Jr. restaurant remodeling
program, over 260 remodels have been completed as of the end of the first
quarter, representing over 60% of the Company-operated Carl's Jr. restaurants.
The Company is continuing to experience increased sales in these remodeled
restaurants. The Company expects to have substantially all Company-operated
Carl's Jr. restaurants remodeled by early calendar year 1998.
On April 27, 1997, the Company entered into a Stock Purchase Agreement
with Imasco and Hardee's, pursuant to which the Company agreed to acquire all of
the outstanding capital stock of Hardee's for a purchase price of $327.0
million, subject to certain adjustments. See Note C of Notes to Consolidated
Financial Statements. The Company anticipates that a combination of new senior
secured indebtedness, the net proceeds from a proposed public stock offering,
and cash on hand at the time of closing will provide it with the cash necessary
to complete this acquisition.
This Quarterly Report on Form 10-Q contains forward looking statements,
which are subject to known and unknown risks, uncertainties and other factors
which may cause the actual results, performance, or achievements of the Company
to be materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Such factors include,
among others, the following: general economic and business conditions; the
impact of competitive products and pricing; success of operating initiatives;
advertising and promotional efforts; adverse publicity; changes in business
strategy or development plans; quality of management; availability terms and
deployment of capital; the results of financing efforts; food, labor, and
employee benefit costs; changes in, or the failure to comply with, government
regulations; weather conditions; construction schedules; and risks that sales
growth resulting from the Company's current and future remodeling and
dual-branding of restaurants and other operating strategies can be sustained at
the current levels experienced.
RESULTS OF OPERATIONS
Revenues from Company-operated restaurants, comprised mainly of sales from
Carl's Jr. restaurants, increased $81.4 million or 62.8% for the 16-week period
ended May 19, 1997 to $210.9 million. Carl's Jr. revenues for the 16-week period
ended May 19, 1997 accounted for sales increases of $15.3 million. Also
contributing to the increase were the restaurant concepts which were added in
fiscal 1997, including $35.6 million and $26.0 million from Summit and Casa
Bonita, respectively, and $4.5 million from Rally's. On a same-store sales basis
(calculated using
7
<PAGE> 9
CKE RESTAURANTS, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(Continued)
only restaurants in operation for the full periods being compared), revenues
from Company-operated Carl's Jr. restaurants increased 6.1% in the 16-week
period ended May 19, 1997 as compared with 12.7% in the first quarter of fiscal
1997. Per store averages in Company-operated Carl's Jr. restaurants continue to
increase and reached $1,132,000 on a 13-period rolling basis. The increase in
revenues from Company-operated Carl's Jr. restaurants is primarily the result of
the continued momentum in the Company's various sales enhancement programs which
include the image enhancement of its restaurants through a chain-wide remodeling
program, the continuation of its conversion of existing Carl's Jr. locations
into Carl's Jr./Green Burrito dual-brand restaurants and the continued focus on
promoting great tasting new and existing food products through increased
innovative advertising. Higher average sales and transaction counts per
restaurant and an increase in the number of Company-operated restaurants
operating in fiscal 1998 as compared with the prior year also contributed to the
increase in revenues from Company-operated Carl's Jr. restaurants.
Revenues from franchised and licensed restaurants for the 16-week period
ended May 19, 1997 increased 4.9% to $24.6 million over the same prior year
period. This increase is largely due to increased royalties from, and food
purchases by, franchisees as a result of higher sales volume at franchised
Carl's Jr. restaurants, partially offset by a decrease in the number of
franchised and licensed Carl's Jr. restaurants operating as compared with the
prior year.
Restaurant-level margins of the Company's consolidated restaurant
operations decreased in the 16-week period ended May 19, 1997 by 1.0% as
compared with the prior year period, primarily reflecting the impact of higher
operating costs at Summit's family-style restaurant concepts which were acquired
in the second quarter of fiscal 1997. The family-style segment of the restaurant
industry typically has lower margins than the quick-service segment of the
industry, mainly due to increased labor and food costs. While the Company's
consolidated restaurant-level margins decreased in the first quarter of fiscal
1998, restaurant-level margins for the Company's Carl's Jr. restaurants chain
continued to increase, reaching 23.0% for the 16-week period ended May 19, 1997.
These improved results in the Company's Carl's Jr. restaurant-level operating
margins reflect the Company's continued commitment to improve the cost structure
of its Carl's Jr. restaurants, particularly in the areas of improving labor
productivity and reducing workers' compensation costs. As a percentage of
revenues from Company-operated Carl's Jr. restaurants, payroll and other
employee benefits have decreased 1.5% to 26.0% for the 16-week period ended May
19, 1997 as compared with the same period a year ago, despite the October 1,
1996 increase in the federal minimum wage and the additional March 1997 increase
in California state minimum wage level. Occupancy and other operating expenses
as a percentage of revenues from Company-operated restaurants have decreased
0.3% to 20.2% from the same period in the first quarter of the prior year mainly
due to the adoption of Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed of," in the prior year which resulted in a non-recurring charge of
$1.3 million. Food and packaging costs have increased marginally as a percentage
of Company-operated revenues due to increased pressure from commodity prices and
a change in the product mix as a result of the promotion of larger, more
expensive sandwiches.
Many of the Company's employees are paid hourly rates related to the
federal and state minimum wage laws. Legislation increasing the federal minimum
wage as of October 1, 1996 has resulted in higher labor costs to the Company and
its franchisees. An additional increase in the federal minimum wage will become
effective in September 1997. Moreover, as a result of recent legislation in
California, the California state minimum wage was increased effective March
1997. The Company anticipates that increases in the minimum wage may be offset
through pricing and other cost control efforts; however, there can be no
assurance that the Company or its franchisees will be able to pass such
additional costs on to customers in whole or in part.
Franchised and licensed restaurant costs have increased 1.4% for the
16-week period ended May 19, 1997 over the same period of the prior year. The
increase is primarily due to increased food purchases by Carl's Jr. franchisees,
partially offset by a decrease in the number of franchised and licensed Carl's
Jr. restaurants in operation in the first quarter of fiscal 1998 as compared
with the same prior year quarter.
8
<PAGE> 10
CKE RESTAURANTS, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(Continued)
Advertising expenses increased $3.0 million for the 16-week period ended
May 19, 1997 over the same prior year period. Advertising expenses have become
increasingly important in the current competitive environment and, as a result,
have increased in terms of dollars spent in the first quarter of fiscal 1998 as
compared with the first quarter of the prior year while remaining relatively
consistent as a percentage of Company-operated revenues. The Company has seen
positive same-store sales growth in each subsequent quarter since the Company
began its innovative advertising campaign in May 1995.
General and administrative expenses increased $4.9 million to $16.1
million for the 16-week period ended May 19, 1997 over the comparable prior year
period. However, as a percentage of total revenues, these expenses decreased
0.5% as compared with the same prior year period, reflecting the economies of
scale the Company is realizing by absorbing certain costs from acquired
businesses into the Company's existing infrastructure. The increase in general
and administrative expenses in the 16-week period ended May 19, 1997 is
primarily the result of recording incentive compensation accruals for regional
restaurant management and selected corporate employees as a result of improved
restaurant operating performance, in addition to increased amortization expense
and various corporate legal expenses.
Interest expense for the 16-week period ended May 19, 1997 increased 10.6%
or $0.3 million to $2.9 million as compared with the prior year period,
primarily as a result of higher levels of debt outstanding during the first
quarter of fiscal 1998 as compared with the first quarter of fiscal 1997.
Other income, net, is primarily comprised of investment income, interest
on notes and leases receivable, gains and losses on sales of restaurants, income
and loss on long-term investments, and other non-recurring income. Other income,
net, increased $1.0 million from the 16-week period ended May 20, 1996,
primarily resulting from interest income earned on the Company's note receivable
from Checkers and amortization of the related discount in addition to dividend
income recorded from the Company's long-term investment in Boston West, L.L.C.
FINANCIAL CONDITION
For the 16-week period ended May 19, 1997, the Company generated cash
flows from operating activities of $19.1 million, compared with $15.8 million
for the same period of the prior year. This increase was primarily due to
increased sales levels and increased operating margins in the Company's Carl's
Jr. restaurants. Cash and cash equivalents in the current period decreased $11.6
million from January 27, 1997, as the Company used cash flows from operations to
fund capital additions of approximately $14.4 million, to fund the Company's
long-term investment in Checkers, to reduce the Company's capital lease
obligations by $1.2 million, to pay dividends to its stockholders of
approximately $1.3 million, and to reduce the Company's bank overdraft by $3.0
million. The decrease in cash and cash equivalents was partially offset by cash
generated from collections on notes receivable and related party receivables of
approximately $4.2 million and the exercise of stock options which generated
approximately $1.4 million. Total cash and cash equivalents available to the
Company as of May 19, 1997 was $28.8 million, which included $0.6 million
invested in marketable securities.
The Company's existing credit facility (the "Current Credit Facility")
consists of (i) a revolving credit facility for working capital and other
general corporate purposes, under the terms of which the Company may borrow from
time to time up to $30.0 million (including a letter of credit subfacility of up
to $20.0 million), and (ii) a revolving credit facility for the purposes of
financing investments in and acquisitions of other companies, under the terms of
which the Company may borrow from time to time up to $25.0 million. As of May
19, 1997, no borrowings remained outstanding under the Current Credit Facility,
and the Company was in compliance with all financial covenants contained
therein. The Current Credit Facility will be replaced by a proposed new credit
facility prior to or concurrently with the closing of the Company's proposed
acquisition of Hardee's.
9
<PAGE> 11
CKE RESTAURANTS, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(Continued)
The Company's primary source of liquidity is its revenues from
Company-operated restaurants, which are generated in cash. Future capital needs
will arise primarily for the construction of new restaurants, the remodeling of
existing restaurants, the conversion of certain restaurants to the Carl's
Jr./Green Burrito dual-brand concept and capital expenditures expected to be
incurred in connection with the Company's integration of Hardee's. The Company
plans to open up to 30 new Carl's Jr. restaurants in fiscal 1998 and is
evaluating opening additional Taco Bueno restaurants in its existing markets in
fiscal 1998. During fiscal 1998, the Company also expects to continue with its
schedule to remodel the remaining Company-operated Carl's Jr. restaurants, and
to convert up to 60 Carl's Jr. locations into Carl's Jr./Green Burrito
dual-brand restaurants.
The Company believes that cash generated from its various restaurants
concept operations, along with cash and cash equivalents and marketable
securities on hand as of May 19, 1997 and amounts to be available under the
Company's proposed new credit facility, will provide the Company with the funds
necessary to meet all of its capital spending and working capital requirements
for at least the next 12 months. If those sources of capital are insufficient to
satisfy the Company's capital spending and working capital requirements, or if
the Company determines to make any significant acquisitions of, or investments
in, other businesses, the Company may be required to sell additional equity or
debt securities or obtain additional credit facilities. The sales, if any, of
additional equity or debt securities could result in additional dilution to the
Company's stockholders.
10
<PAGE> 12
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
11 Calculation of Earnings Per Share.
27 Financial Data Schedule (included in electronic filing
only).
(b) Current Reports on Form 8-K:
A Current Report on Form 8-K dated April 27, 1997 was filed during
the first quarter of the fiscal year to report matters relating to
the Company's proposed acquisition of Hardee's Food Systems, Inc.
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.
CKE RESTAURANTS, INC.
(Registrant)
June 13, 1997 /s/ Carl A. Strunk
- ---------------------- -------------------------------------
Date Executive Vice President,
Chief Financial Officer
11
<PAGE> 13
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit# Description
-------- -----------
<S> <C>
11 Calculation of Earnings Per Share.
27 Financial Data Schedule (included in
electronic filing only).
</TABLE>
12
<PAGE> 1
EXHIBIT 11
CKE RESTAURANTS, INC.
CALCULATION OF EARNINGS PER SHARE
(In thousands except per share amounts)
<TABLE>
<CAPTION>
Sixteen Weeks Ended
---------------------------
May 19, May 20,
1997 1996
----------- -----------
<S> <C> <C>
PRIMARY EARNINGS PER SHARE
Net income $ 10,586 $ 5,333
=========== ===========
Weighted average number of common shares outstanding
during the period 33,317 27,857
Incremental common shares attributable to
exercise of outstanding options 886 566
----------- -----------
Total shares 34,203 28,423
=========== ===========
Primary earnings per share $ .31 $ .19
=========== ===========
FULLY DILUTED EARNINGS PER SHARE
Net income $ 10,586 $ 5,333
=========== ===========
Weighted average number of common shares outstanding
during the period 33,317 27,857
Incremental common shares attributable to
exercise of outstanding options 983 807
----------- -----------
Total shares 34,300 28,664
=========== ===========
Fully diluted earnings per share $ .31 $ .19
=========== ===========
</TABLE>
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CKE
RESTAURANTS, INC. CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED STATEMENTS OF
INCOME AS OF AND FOR THE SIXTEEN WEEKS ENDED MAY 19, 1997, AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MAY
19, 1997.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-26-1998
<PERIOD-START> JAN-28-1997
<PERIOD-END> MAY-19-1997
<CASH> 28,201
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0
0
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<EPS-PRIMARY> .31
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</TABLE>
