EX-99.2 4 dex992.htm POWERPOINT PRESENTATION AT ANNUAL MEETING OF THE SHAREHOLDERS, MAY 28, 2003 Powerpoint Presentation at Annual Meeting of the Shareholders, May 28, 2003

 

Exhibit 99.2

 

Checkers Drive-In Restaurants, Inc.

Annual Shareholders Meeting

 

May 28, 2003

 

Financial Overview

 

Year 2002 Highlights:

 

Same Store Sales Flattened Over 2001 Levels: Rolled Over 2001 SSSG of 11.6% (industry + 1.5%). 2002 Very Competitive Environment (Burger Wars). Company focused on profit margin vs. topline sales.

 

Restaurant Operating Margins Improved:

 

Cost of Sales (food/paper and labor) decreased 235 basis points. Went from 64.8% down to 62.5%.

 

Net Income:

 

$1.7mm loss after $12.6mm non-cash charge offs.

 

Charge-Off Objectives:

 

Finalize Turnaround Phase in 2002. Set the foundation for future profitability.

 

Impairment Charges ($7.4mm):

 

Wrote down the book value of selected stores lagging the Company’s turn-around projections. Positioned Company for future growth opportunities.

 

Restaurant Closure Charge ($5.2mm):

 

Restaurant closure reserve charge taken on 39 vacant properties to reserve 100% of all future lease payment

obligations. Eliminated potential on-going reserve charges in 2003.

 

The Bottom Line:

 

Net Income vs. Adjusted Net Income: Net Income: used when reporting public financial statements under GAAP. Adjusted Net Income: Internally defined term by management to help track the true economic performance of the Company.

 

Adjusted Net Income** Reconciliation


  

1999


    

2000


    

2001


  

2002


 

Net Income (Loss)

  

(25,888

)

  

2,342

 

  

4,335

  

(1,706

)

Add:

                         

Impairment of long-lived assets

  

22,271

 

  

629

 

  

1,170

  

7,420

 

Loss from restaurant closures

  

3,780

 

  

633

 

  

573

  

5,196

 

Loss (Gain) from the early extinguishment of debt

  

(849

)

  

229

 

  

0

  

0

 

Subtract:

                         

Gain on sales of assets

  

2,616

 

  

307

 

  

985

  

789

 

Franchise fees and other income

  

2,424

 

  

4,009

 

  

713

  

400

 

Net Adjustments:

  

20,162

 

  

(2,825

)

  

45

  

11,427

 

Adjusted Net Income

  

(5,726

)

  

(483

)

  

4,380

  

9,721

 

% Change =>

                     

122

%


**   Adjusted Net Income—Considered by management a reflection of the true economic performance of the Company.


 

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Balance Sheet:

 

Total cash increased 71% or $7.5mm to $18.1mm. Total debt decreased 16% or $5.9mm to $31.0mm. Approved for $15mm line of credit for developing new stores.

 

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First Quarter—2003:

 

Q1 2003 Highlights:

 

Same Store Sales Growth 6.4%—quick service industry SSG% down 2.5%. Restaurant Operating Margins Improved from 14.7% to 15.8% or +110 basis points. Net Income Improved—from $2.7mm to $3.2mm or 20. 8%. Margin—from 6.6% to 7.5% or +90 basis points.

 

Q1 2003 Performance Drivers:

 

Technology:

 

New point of sale (POS) systems. New drive-thru timers. New enterprise reporting system.

 

Human Capital:

 

Leadership—involved and passionate. On-going training. Creative and fun incentives.

 

Marketing:

 

Creative, distinct and consistent. Utilizes TV in nearly 85% of our markets. Capitalizes on the human fact ‘You Gotta Eat”.


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