-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SHDx3bnKhr2th52wzmUu0uXlO310k+I1mEfaFZSex1nwVKNhMI5OpUQCtF8T4FXr Qitf5FW/ALRoBl/iUQQKmQ== 0000892569-95-000745.txt : 19951222 0000892569-95-000745.hdr.sgml : 19951222 ACCESSION NUMBER: 0000892569-95-000745 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19951106 FILED AS OF DATE: 19951221 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CKE RESTAURANTS INC CENTRAL INDEX KEY: 0000919628 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 330602639 STATE OF INCORPORATION: DE FISCAL YEAR END: 0130 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-11313 FILM NUMBER: 95603308 BUSINESS ADDRESS: STREET 1: 1200 N HARBOR BLVD CITY: ANAHEIM STATE: CA ZIP: 92801 BUSINESS PHONE: 7147745796 10-Q 1 FORM 10-Q 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 November 6, 1995 ----------------------- 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 92803 - ------------------------------------------------------------------------------ (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 ----- ----- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: $.01 par value common-18,485,265 shares as of December 12, 1995 --------------------------------------------------------------- 1 2 CKE RESTAURANTS, INC. INDEX
Page ---- Part I. Financial Information Item 1. Consolidated Financial Statements: Consolidated Balance Sheets as of November 6, 1995 and January 30, 1995 . . . . . . . . . . . . . . . . . . . 3 Consolidated Statements of Income for the twelve and forty weeks ended November 6, 1995 and November 7, 1994 . . . 4 Consolidated Statements of Cash Flows for the forty weeks ended November 6, 1995 and November 7, 1994 . . . . . . 5-6 Notes to Consolidated Financial Statements . . . . . . . . 7-8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. . . . . . . . . . . 9-11 Part II. Other Information Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . 12 Exhibit Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2 3 PART 1. FINANCIAL INFORMATION ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS CKE RESTAURANTS, INC. CONSOLIDATED BALANCE SHEETS (Dollars in thousands) (Unaudited)
November 6, January 30, 1995 1995 ---------- ---------- ASSETS Current assets: Cash and cash equivalents $ 8,664 $ 15,174 Marketable securities 2,339 3,088 Accounts receivable 8,184 12,411 Related party receivables 1,611 1,509 Inventories 6,044 5,950 Deferred tax asset, net 12,003 12,254 Other current assets 5,762 6,438 -------- -------- Total current assets 44,607 56,824 Property and equipment, net 127,814 133,248 Property under capital leases, net 28,276 30,515 Notes receivable 12,502 13,139 Related party notes receivable 2,022 2,109 Other assets 25,691 8,526 -------- -------- $240,912 $244,361 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of long-term debt $ 12,495 $ 8,168 Current portion of capital lease obligations 3,677 3,581 Accounts payable 12,323 29,754 Other current liabilities 32,864 30,065 -------- -------- Total current liabilities 61,359 71,568 -------- -------- Long-term debt 30,239 27,178 Capital lease obligations 40,248 42,691 Other long-term liabilities 12,700 14,450 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 19,115,319 and 18,845,138 shares 191 188 Additional paid-in capital 37,137 35,119 Retained earnings 64,147 57,725 Treasury stock, at cost; 670,300 shares and 590,000 shares (5,109) (4,558) -------- -------- Total stockholders' equity 96,366 88,474 -------- -------- $240,912 $244,361 ======== ========
3 4 CKE RESTAURANTS, INC. CONSOLIDATED STATEMENTS OF INCOME (In thousands except per share amounts) (Unaudited)
Twelve Weeks Ended Forty Weeks Ended ------------------------ ------------------------- November 6, November 7, November 6, November 7, 1995 1994 1995 1994 ---------- ---------- ---------- ---------- Revenues: Retail sales $ 95,316 $ 87,061 $302,831 $285,645 Franchised and licensed restaurants 17,758 16,725 55,908 58,459 -------- -------- -------- -------- Total revenues 113,074 103,786 358,739 344,104 -------- -------- -------- -------- Operating costs and expenses: Retail operations: Food and packaging 29,659 26,011 92,839 86,200 Payroll and other employee benefits 26,105 26,051 85,377 87,880 Occupancy and other operating expenses 19,364 19,717 63,619 63,469 -------- -------- -------- -------- 75,128 71,779 241,835 237,549 Franchised and licensed restaurants 16,695 15,929 53,384 55,578 Advertising expenses 4,498 4,408 15,317 15,442 General and administrative expenses 9,380 10,089 29,012 28,658 -------- -------- -------- -------- Total operating costs and expenses 105,701 102,205 339,548 337,227 -------- -------- -------- -------- Operating income 7,373 1,581 19,191 6,877 Interest expense (2,300) (2,143) (7,585) (7,091) Other income, net 254 795 1,458 2,705 -------- -------- -------- -------- Income before income taxes 5,327 233 13,064 2,491 Income tax expense (benefit) 2,306 (53) 5,320 685 -------- -------- -------- -------- Net income $ 3,021 $ 286 $ 7,744 $ 1,806 ======== ======== ======== ======== Net income per common and common equivalent share $ .16 $ .02 $ .42 $ .10 ======== ======== ======== ======== Common and common equivalent shares used in computing per share amounts 18,706 18,693 18,596 18,827 ======== ======== ======== ========
4 5 CKE RESTAURANTS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)
Forty weeks Ended -------------------------- November 6, November 7, 1995 1994 ---------- ---------- Net cash flow from operating activities: Net income $ 7,744 $ 1,806 Adjustments to reconcile net income to net cash provided by operating activities: Noncash franchise revenues 131 152 Depreciation and amortization 16,058 16,919 Loss on sale of property and equipment 1,600 1,865 Reversal of rent subsidy reserves (327) (2,680) Loss on equity investments 2,733 -- Net noncash investment income (803) (210) Settlement of notes receivable (1,292) -- Payment of arbitration settlement -- (3,000) Net change in receivables, inventories and other current assets 1,261 (183) Net change in other assets (67) (328) Net change in accounts payable and other current liabilities (1,996) (513) -------- -------- Net cash provided by operating activities 25,042 13,828 -------- -------- Cash flow from investing activities: Purchases of: Marketable securities (686) (3,212) Property and equipment (22,396) (24,599) Long-term investment (1,670) -- Proceeds from sales of: Marketable securities 1,662 14,777 Property and equipment 21 37 Collections on leases receivable 122 110 Increase in notes receivable and related party notes receivable (2,142) (1,173) Collections on notes receivable and related party notes receivable 1,281 1,952 -------- -------- Net cash used in investing activities (23,808) (12,108) -------- -------- Cash flow from financing activities: Net change in bank overdraft (11,285) (776) Short-term borrowings 57,060 19,056 Repayments of short-term borrowings (52,635) (11,256) Long-term borrowings 9,175 -- Repayments of long-term borrowings (6,343) (11,636) Repayments of capital lease obligations (2,326) (2,140) Net change in other long-term liabilities (1,400) (2,614) Purchase of treasury stock (551) (1,979) Exercise of stock options 2,021 775 Payment of dividends (1,460) (1,499) -------- -------- Net cash used in financing activities (7,744) (12,069) -------- -------- Net decrease in cash and cash equivalents $ (6,510) $(10,349) ======== ========
5 6 CKE RESTAURANTS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)
Forty Weeks Ended ------------------------- November 6, November 7, 1995 1994 ---------- ---------- Supplemental disclosures of cash flow information: Cash paid during period for: Interest (net of amount capitalized) $ 7,691 $ 7,011 Income taxes 2,476 645 Noncash investing and financing activities: Investing activities: Transfer of other current assets to marketable securities -- 6,776 Transfer of inventory, current assets and property and equipment to other assets 20,877 -- Other investing activities: Net change in marketable securities from noncash transactions -- (210) Net change in dividends receivable (714) -- Franchising and reorganization activities: Increase in property and equipment (2,853) (1,289) Decrease in notes receivable 2,883 1,441 Increase in accounts receivable (200) --
6 7 CKE RESTAURANTS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOVEMBER 6, 1995 AND NOVEMBER 7, 1994 NOTE (A) BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements include the accounts of CKE Restaurants, Inc. and its wholly owned subsidiaries (the "Company") and have been prepared in accordance with the requirements of Form 10-Q and, therefore, do not include all information and footnotes which would be presented were such consolidated financial statements prepared in accordance with generally accepted accounting principles. These statements should be read in conjunction with the audited financial statements presented in the Company's Fiscal 1995 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. In April 1995, the Company entered into a transaction that resulted in the formation of a new privately owned company, Boston West, L.L.C. ("Boston West"). This new entity assumed the operations of all of the Company's 25 Boston Chicken and Boston Market stores and agreed to fulfill the Company's remaining obligation to develop an additional 175 Boston Market stores under its January 1994 area development agreement with Boston Chicken, Inc. ("BCI"). In connection with this transaction, the Company received preferred units and all the outstanding common equity units in Boston West, valued at approximately $23.0 million and $620,000, respectively, in exchange for a majority of its existing Boston Chicken/Boston Market restaurant assets. In addition, this transaction provides for the leasing of approximately $12.0 million of equipment and real property retained by the Company to Boston West at current market rates. An affiliate of BCI has an option to purchase all the equipment and real property leased by the Company to Boston West. BCI agreed to lend Boston West, over time, up to $63.8 million as part of this transaction. This loan is convertible to equity in Boston West, at BCI's option, at 115% of the original equity price. In addition, pursuant to this agreement, the Company has an option to co-fund, along with BCI loan proceeds, the capital requirements of Boston West up to a maximum of $15.0 million, of which the Company has funded approximately $1.7 million to date through the purchase of additional preferred units. The $15.0 million may be funded, in part, by proceeds of the purchase option in the equipment and real property leases when and if they are exercised. Upon exercise of this co-funding option and upon conversion of the preferred units, the Company's minority interest in Boston West may be increased to up to approximately 35%. On May 30, 1995, Boston West issued an additional $2.5 million of common equity units to an independent investor group in return for cash and certain notes receivable, due January 15, 1996, which are secured by $1.2 million of Boston West common equity units. As of this date, the Company ceased consolidating the operations of Boston West into its financial statements and commenced realizing a pro-rata share of the losses of its minority interest in Boston West. On September 12, 1995, Boston West formally agreed to repurchase one half of the Company's outstanding common equity units in Boston West, at a purchase price of $10.00 per unit, or $310,000. As of this date, the Company began accounting for its minority interest in Boston West using the cost method of accounting for investments. Since the start-up of the Company's Boston Chicken/Boston Market operations began in February 1994, and its first retail store did not open until July 1994, most of the prior year results of operations and other prior year financial performance presented in this Form 10-Q were comprised solely of the Company's Carl's Jr. operations, unless otherwise indicated. 7 8 CKE RESTAURANTS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOVEMBER 6, 1995 AND NOVEMBER 7, 1994 (Continued) NOTE (B) COMMITMENTS AND CONTINGENCIES In the ordinary course of business, the Company is subject to various claims, lawsuits and other disputes with third parties incidental to its operations. While certain of these matters involve claims for substantial amounts, the Company intends to defend these actions vigorously, and it is the opinion of the Company's management, in consultation with its attorneys, that their ultimate resolution will not have a material adverse effect on the Company's consolidated financial statements. NOTE (C) EARNINGS PER SHARE Earnings per share is computed based on the weighted average number of common shares outstanding during the period, after consideration of the dilutive effect of outstanding options. For all periods presented, primary earnings per share approximate fully diluted earnings per share. NOTE (D) SUBSEQUENT EVENT On November 30, 1995, the Company and Summit Family Restaurants Inc. signed an agreement and plan of merger and reorganization. Under the terms of this merger and plan of reorganization agreement, CKE Restaurants will acquire all of the outstanding common and preferred stock of Summit Family Restaurants for a purchase price equal to $3.00 per share in cash and .20513 shares of CKE common stock provided that the average CKE common stock price is between $12.25 per share and $17.00 per share at the closing. If the average CKE common stock price is higher than $17.00 or lower than $12.25 at the closing, the exchange ratio may be adjusted accordingly. This transaction will result in the merger of Summit Family Restaurants into a newly formed subsidiary of CKE Restaurants, which will survive the merger. The merger, which is expected to close in the first quarter of 1996, is subject to Summit Family Restaurants' shareholder approval and the satisfactory completion of certain conditions, which the parties are currently negotiating. The total estimated purchase price of this transaction is approximately $34.5 million. Summit Family Restaurants operates restaurants under three concepts: 80 company-operated and 24 franchised family style JB's Restaurants; six Galaxy Diner restaurants, which is a promising new 50's diner concept; and 16 HomeTown Buffet restaurants, which are operated by Summit as a franchisee. On December 19, 1995, Giant Group, Ltd., a Delaware corporation, filed an action in the U.S. District court against William P. Foley II, the Company's Chairman of the Board and Chief Executive Officer, Fidelity National Financial, Inc., the Company and certain other individuals alleging that the defendants have engaged in various unlawful activities, including trading in non-public confidential information and violating the disclosure requirements of Section 13(d) of the Securities Exchange Act of 1934, in connection with purchases of shares of Giant Group by Fidelity National Financial, Inc. and Mr. Foley. The Company did not purchase, does not own, and has no intention to purchase or own any Giant Group shares. The Company, Mr. Foley and Fidelity National Financial, Inc. believe the allegations in the complaint to be totally without merit and intend to defend the action vigorously. NOTE (E) RECLASSIFICATIONS Certain prior year amounts in the accompanying consolidated financial statements have been reclassified to conform to the fiscal 1996 presentation. 8 9 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OVERVIEW Consolidated net income for the 12 and 40-weeks ending November 6, 1995 increased $2.7 million and $5.9 million to $3.0 million and $7.7 million, respectively, as compared with the corresponding periods of the prior year. The improved third quarter performance is primarily attributed to the continued progress with the Company's programs to enhance sales growth and to reduce costs through improved operating efficiencies. The Company believes that this trend of improved operating margins will be further enhanced by the rapid roll out of its Carl's Jr./Green Burrito dual-brand program, image enhancement of its restaurants through a chain-wide remodeling program and the expansion of its successful advertising campaign. A new advertising agency was appointed in February 1995 to assist the Company in redirecting its Carl's Jr. marketing programs and restoring its reputation of offering superior quality products. An aggressive new advertising campaign was introduced in the beginning of May 1995 and management continues to be encouraged by its results. The Company has seen consecutive quarterly increases in both same-store sales and customer transactions since the start of the campaign. In May 1995, the Company entered into a five-year agreement with GB Foods Corporation, operator of The Green Burrito concept, under which the Company and, in some cases, its franchisees, will convert up to 200 Carl's Jr./Green Burrito dual-brand restaurants. The roll out of these restaurants will be done in conjunction with the Company's remodeling program. Early results indicate that sales in the 18 Carl's Jr./Green Burrito dual-concept restaurants currently operating are up an average of 30 percent over same-store sales prior to the conversions. The Company plans to convert six additional restaurants by January 1996. In other dual-brand tests, the Company is teaming with Long John Silver's seafood restaurants and UNOCAL 76 Products Company, which operates UNOCAL 76 gasoline service stations. Three Southern California Carl's Jr. locations were converted this year to Carl's Jr./Long John Silver's restaurants. The Company is encouraged by the test results, which continue to show same-store sales up approximately 20 percent. Since November, 1995, two UNOCAL 76/Carl's Jr. Express location opened. The initial agreement, entered into in May 1995, calls for 10 Southern California locations to be opened at UNOCAL's expense. RESULTS OF OPERATIONS Retail sales, comprised mainly of sales from Carl's Jr. restaurants, increased 9.5% and 6.0% for the 12 and 40-week periods ended November 6, 1995 to $95.3 million and $302.8 million, respectively. Same-store sales for the current quarter increased nine percent as compared with a three percent decline for the same period last year. This quarterly increase is the highest same-store sales reported by the Company since the first quarter of fiscal 1990. Same-store sales, as measured by the Company, are calculated using only restaurants open for the full periods being compared. The increase in retail sales in the current year is primarily the result of the numerous sales enhancement programs implemented by the Company which include: the roll out of its Carl's Jr./Green Burrito dual-brand program, the image enhancement of its restaurants through a chain-wide remodeling program and the continued focus on its advertising campaign to promote great tasting new and existing food products, including the introduction of the Crispy Chicken Sandwich during the current quarter. Also contributing to the rise in retail sales for the current periods presented are the efficiencies made in the Carl's Jr. restaurants in the area of speed of service and the increase in the weighted average number of Company restaurants operating in fiscal 1996 as compared with fiscal 1995. 9 10 RESULTS OF OPERATIONS (Continued) Revenues from franchised restaurants include sales of food service products by the Company's distribution centers, rental income, royalties and initial franchise fees from franchised and licensed restaurants for all periods presented. Distribution center sales to the Company's Carl's Jr. franchisees and licensees, which account for nearly 74% and 3%, respectively, of total revenues from franchised and licensed restaurants for both periods presented, decreased $2.6 million for the 40-week period ending November 6, 1995 due to a net decrease in the weighted- average number of franchised restaurants operating in the current year as compared with the prior year. Distribution center sales for the current 12-week period, however, increased $1.0 million from the same period a year ago as a result of a change in the mix of products sold to Carl's Jr. franchisees to higher food cost products. Gross margins of the Company's retail operations increased approximately 3.6% and 3.3% to 21.2% and 20.1% for the 12 and 40-week periods ended November 6, 1995, respectively, as compared with the corresponding periods of the prior year. The improvements in gross margin were primarily attributable to notable declines in payroll and other benefit costs due to the Company's continuous efforts to improve labor productivity and decrease workers' compensation costs. As a percentage of retail sales, food and packaging cost increased in the current 12-week period as a result of a change in the mix of products sold to higher food cost products and remained relatively flat on a year-to-date basis, while occupancy and other operating expenses decreased as a percentage of retail sales for both periods presented in the current year as compared with the same periods of the prior year. These favorable results in the Company's retail operating margins reflect the Company's continued commitment to improve the cost structure of its Carl's Jr. restaurants. Gross margins for the current 40-week period were unfavorably impacted during the first 16 weeks by the start-up nature of the Company' Boston Chicken/Boston Market operations. General and administrative expenses decreased $709,000 to $9.4 million in the third quarter of fiscal 1996 as compared with the third quarter of fiscal 1995. Included in the prior year 12- week quarter were start-up costs related to the Company's Boston Chicken/Boston Market operations, costs associated with the design and implementation of dual concept tests and certain severance related costs. Year-to-date general and administrative expenses were $29.0 million, or 1.2% higher as compared to the same period in the prior year, largely due to the Company's Boston Chicken/Boston Market operations. Current year-to-date general and administrative expenses compares favorably considering prior year amounts were reduced by approximately $1.7 million as a result of several non-recurring items, primarily including the reduction of certain previously established lease subsidy reserves. Interest expense for the 12 and 40-week periods of the current year increased 7.3% and 7.0% to $2.3 million and $7.6 million, respectively, as compared with the 12 and 40-week periods of fiscal 1995, as a result of higher levels of borrowings outstanding and higher interest rates in the current year. Other income, net, in both fiscal 1996 and 1995 was comprised of investment income, interest on notes and leases receivables, gain and losses on sales of restaurants, and other non-recurring income. Other income, net decreased $541,000 and $1.2 million from the 12 and 40- week periods of fiscal 1995, respectively, primarily due to lower average investment portfolios and lower average notes receivable balances during fiscal 1996 as compared with the prior year periods. The current year effective tax rate is higher than fiscal 1995 and approximates statutory levels. The increase is largely due to the elimination in December 1994 of federal tax credits of certain qualified employees and higher operating income in the current year as compared with the prior year. 10 11 FINANCIAL CONDITION (Continued) For the 40-week period ended November 6, 1995, the Company generated cash flows from operating activities of $25.0 million, compared with $13.8 million for the same period of the prior year. Prior to the sale of the common equity units in Boston West on May 30, 1995, the development of the Company's Boston Chicken/Boston Market operations unfavorably impacted the Company's financial results. Total cash and cash equivalents decreased $6.5 million from January 30, 1995, as the Company used cash flows from operations to fund capital additions of approximately $22.4 million and increased total bank borrowings by $7.3 million, the majority of which was attributable to the seven Boston Market stores opened and the eleven additional stores that were under development during the first quarter of fiscal 1996. Lower proceeds from the sale of marketable securities is also contributing to the decrease in cash and cash equivalents from the prior year. Total cash available to the Company as of November 6, 1995 was $11.0 million, which included $2.3 million of holdings in a diversified, highly liquid investment portfolio with minimal interest rate risk. Following the formation of Boston West, the Company's loan agreement with its bank was amended such that borrowings totaling $28.0 million, drawn against a former revolving credit line primarily to fund the development of the Company's Boston Chicken/Boston Market operations, were converted to a term loan, payable in quarterly installments through September 1998. In addition, a new $15.0 million unsecured revolving credit line that expires in June 1996 was established for use in the Company's ongoing Carl's Jr. operations. As of November 6, 1995, a total of $10.6 million was available to the Company under this new credit line. The Company's primary source of liquidity is its retail sales, which are generated in cash. As the Company is no longer the exclusive provider of capital for Boston West, future capital needs will arise, principally, for the construction of new Carl's Jr. restaurants, the remodeling of existing restaurants, the payment of lease obligations, the repayment of debt, the possible exercise of the option to increase the Company's existing equity interest in Boston West and the anticipated closing of the Summit Family Restaurants Inc. merger and reorganization. The Company believes that cash generated from its Carl's Jr. operations, along with the cash and marketable securities on hand as of November 6, 1995, and a combination of proceeds from its new revolving credit line and borrowings from other banks or financial institutions, along with the potential sale for cash of certain of the Company's notes receivable will generate cash flows sufficient to fund all of the Company's capital requirements and other obligations described above. 11 12 PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibit 11 Computation of Earnings per Share. (b) Exhibit 27 Financial Data Schedule (included in electronic filing only). (c) No reports on Form 8-K were filed during the twelve weeks ended November 6, 1995. 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) December 20, 1995 /s/ Joseph N. Stein ---------------------- --------------------------- Date Chief Financial Officer 12 13 EXHIBIT INDEX
Exhibit Page Number Description Number ------- ----------- ------ 11 Computation of Earnings per share . . . . . . . . . . . . . . . 14 27 Financial Data Schedule
13 EX-11 2 COMPUTATION OF EARNINGS PER SHARE 1 EXHIBIT 11 CKE RESTAURANTS, INC. COMPUTATION OF EARNINGS PER SHARE (In thousands except per share amounts)
Twelve Weeks Ended Forty Weeks Ended ----------------------------- ------------------------ November 6, November 7, November 6, November 7, 1995 1994 1995 1994 ---------- ---------- ---------- ---------- PRIMARY EARNINGS PER SHARE Net income $ 3,021 $ 286 $ 7,744 $ 1,806 ======= ======= ======= ======= Weighted average number of common shares outstanding during the period 18,363 18,813 18,253 18,780 Incremental common shares attributable to exercise of outstanding options 298 2 156 87 Repurchase and retirement of shares -- (122) -- (40) ------- ------- ------- ------- Total shares 18,661 18,693 18,409 18,827 ======= ======= ======= ======= Primary earnings per share $ .16 $ .02 $ .42 $ .10 ======= ======= ======= ======= FULLY DILUTED EARNINGS PER SHARE Net income $ 3,021 $ 286 $ 7,744 $ 1,806 ======= ======= ======= ======= Weighted average number of common shares outstanding during the period 18,363 18,813 18,253 18,780 Incremental common shares attributable to exercise of outstanding options 343 2 343 87 Repurchase and retirement of shares -- (122) -- (40) ------- ------- ------- ------- Total shares 18,706 18,693 18,596 18,827 ======= ======= ======= ======= Fully diluted earnings per share $ .16 $ .02 $ .42 $ .10 ======= ======= ======= =======
14 EX-27 3 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CKE RESTAURANTS, INC. CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED STATEMENTS OF INCOME AS OF AND FOR THE FORTY WEEKS ENDED NOVEMBER 6, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORM 10-Q FOR THE QUARTERLY PERIOD ENDED NOVEMBER 6, 1995 1,000 9-MOS JAN-29-1996 JAN-31-1995 NOV-06-1995 8,664 2,339 24,319 0 6,044 44,607 280,078 152,264 240,912 61,359 0 191 0 0 96,175 240,912 302,831 358,739 241,835 339,548 (1,458) 0 7,585 13,064 5,320 7,744 0 0 0 7,744 .42 .42
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