CKE Restaurants reports fiscal Q3 net earnings of US$4.8M, compared with year-ago loss of US$1.5M, as total revenue rises 6.2% to US$310.8M

CARPINTERIA, California , December 11, 2012 (press release) – CKE Restaurants, Inc. (“CKE Restaurants”) announced today its third fiscal quarter financial results for the twelve weeks ended November 5, 2012. The Company expects to file its Quarterly Report on Form 10-Q with the Securities and Exchange Commission (“SEC”) on Wednesday, December 12, 2012 after the close of the financial markets.

Company-Operated Same-Store Sales and Average Unit Volumes

Company-operated same-store sales increased 4.6% in the third quarter of fiscal 2013. Carl’s Jr. same-store sales increased 5.5% and Hardee’s same-store sales increased 3.6% during the quarter.

Third Quarter Year-to-date

At the end of the third quarter, the fifty-two week average unit volume for company-operated restaurants was $1,291,000. The fifty-two week average unit volumes for Carl’s Jr. and Hardee’s were $1,457,000 and $1,142,000, respectively.

To date, company-operated same-store sales for the fourth quarter of fiscal 2013 are positive in the low single digits.

Third Quarter Results

The Company reported total revenue of $310.8 million for the fiscal 2013 third quarter, an increase of $18.2 million, or 6.2%, compared to the fiscal 2012 third quarter.

“We are encouraged by the strong momentum of our business and the positive same-store sales results at both brands during the third quarter. We remain focused on maintaining our premium quality brands and improving same-store sales with innovative products and cutting edge advertising that focuses on the taste, quality, and value of our products. The Company has now had nine consecutive quarters of positive company-operated same-store sales,” said Andrew F. Puzder, Chief Executive Officer.

For the fiscal 2013 third quarter, company-operated restaurant-level adjusted EBITDA margin was 18.8%, a 190 basis point increase over the prior year third quarter, primarily due to the increase in company-operated same-store sales. Food and packaging costs as a percentage of company-operated restaurants revenue decreased 70 basis points, primarily as a result of higher year over year restaurant pricing and changes in product mix. While beef prices were essentially flat compared to the prior year quarter, commodity costs were higher for flour, chicken and potato products and lower for pork, cheese and dairy products. Occupancy and other expense, excluding depreciation and amortization, as a percentage of company-operated restaurants revenue decreased 80 basis points, primarily as a result of sales leverage, lower utilities expense and reduced repairs and maintenance expense. Advertising expense as a percentage of company-operated restaurants revenue decreased 30 basis points. Refer to the further discussion of company-operated restaurant-level adjusted EBITDA margin under the heading “Non-GAAP Measures” below.

Adjusted EBITDA for the third quarter of fiscal 2013 increased by $8.0 million, or 21.2%, over the prior year third quarter. Adjusted EBITDA was $45.9 million in the third quarter of fiscal 2013 compared to $37.9 million in the prior year third quarter. Adjusted EBITDA represents net income (loss) adjusted to exclude income taxes, interest income and expense, asset impairments, facility action charges, depreciation and amortization, management fees, the effects of acquisition accounting adjustments, and certain non-cash and unusual items. Refer to the further discussion of Adjusted EBITDA under the heading “Non-GAAP Measures” below, which includes a reconciliation of net income (loss) to Adjusted EBITDA.

As of November 5, 2012, cash and cash equivalents were $139.7 million and the Company had $69.4 million available under its credit facility with no borrowings outstanding.

During the third quarter of fiscal 2013, the Company entered into agreements with independent third parties under which the Company sold and leased back 23 restaurant properties. The Company generated proceeds of $33.6 million in connection with these transactions.

Capital expenditures for the fiscal 2013 third quarter were $13.9 million, of which $7.9 million related to new store openings, dual-branding and remodeling projects. For fiscal 2013, the Company expects capital expenditures to be between $60.0 million and $70.0 million.

Conference Call Information

The Company will host its third quarter fiscal 2013 conference call on Wednesday, December 12, 2012 at 8:00 a.m. (PST). The dial in information is as follows: (973) 500-2164 U.S. and international. The conference ID is 75796622.

A replay will be made available approximately two hours after the conclusion of the live event. The replay will be available for 7 days and can be accessed by calling (404) 537-3406. The conference ID is 75796622.

Company Overview

CKE Restaurants, Inc. is a privately held company headquartered in Carpinteria, Calif. As of the end of the third quarter of fiscal 2013, the Company, through its subsidiaries, had a total of 3,292 franchised or company-operated restaurants in 42 states and 27 foreign countries. For more information about CKE Restaurants, please visit www.ckr.com.

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