-----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, Slr7HsHgyHv/64qa8yCcNTsJTD7mNWWGgi1fCtOb35hWB+EQQ0FG+OFKHCTVpU3O WCD7BPnZ/Ylwuh/fNtISKg== 0000892569-97-003506.txt : 19971219 0000892569-97-003506.hdr.sgml : 19971219 ACCESSION NUMBER: 0000892569-97-003506 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19971103 FILED AS OF DATE: 19971218 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CKE RESTAURANTS INC CENTRAL INDEX KEY: 0000919628 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-EATING PLACES [5812] IRS NUMBER: 330602639 STATE OF INCORPORATION: DE FISCAL YEAR END: 0127 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-11313 FILM NUMBER: 97740354 BUSINESS ADDRESS: STREET 1: 1200 N HARBOR BLVD CITY: ANAHEIM STATE: CA ZIP: 92801 BUSINESS PHONE: 7147745796 10-Q 1 FORM 10-Q FOR PERIOD ENDED NOVEMBER 3, 1997 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 3, 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 Incorporation or Organization) Identification No.) 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 --- --- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 41,993,018 shares of Common Stock, par value $.01 per share, as of December 12, 1997 2 CKE RESTAURANTS, INC. --------------------- INDEX -----
Page ---- Part I. Financial Information Item 1. Consolidated Financial Statements: Consolidated Balance Sheets as of November 3, 1997 and January 27, 1997.......................... 2 Consolidated Statements of Income for the twelve and forty weeks ended November 3, 1997 and November 4, 1996.................................................. 3 Consolidated Statements of Cash Flows for the forty weeks ended November 3, 1997 and November 4, 1996........................................................ 4-5 Notes to Consolidated Financial Statements....................................................... 6-8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.................................................... 9-12 Part II. Other Information Item 6. Exhibits and Reports on Form 8-K............................................................ 13-14
3 PART 1. FINANCIAL INFORMATION ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS --------------------------------- CKE RESTAURANTS, INC. --------------------- CONSOLIDATED BALANCE SHEETS --------------------------- (Dollars in thousands) (Unaudited)
November 3, January 27, 1997 1997 ----------- ----------- ASSETS Current assets: Cash and cash equivalents $ 37,963 $ 46,330 Accounts receivable 27,006 7,942 Related party receivables 1,159 2,088 Inventories 16,812 9,223 Deferred income taxes, net 912 7,214 Other current assets and prepaid expenses 14,454 7,400 -------- -------- Total current assets 98,306 80,197 Property and equipment, net 620,520 208,099 Property under capital leases, net 37,123 37,115 Long-term investments 48,073 33,268 Notes receivable 13,402 6,210 Related party receivables 7,414 9,325 Costs in excess of net assets acquired, net 72,046 25,560 Other assets 14,966 10,593 -------- -------- $911,850 $410,367 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of long-term debt $ 15,799 $ 735 Current portion of capital lease obligations 5,318 4,347 Accounts payable 73,556 41,515 Other current liabilities 77,486 36,527 -------- -------- Total current liabilities 172,159 83,124 -------- -------- Long-term debt 125,633 33,770 Capital lease obligations 48,544 48,141 Other long-term liabilities 93,923 30,528 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 41,988,018 and 33,218,751 shares 420 332 Additional paid-in capital 351,759 126,279 Retained earnings 119,412 88,193 -------- -------- Total stockholders' equity 471,591 214,804 -------- -------- $911,850 $410,367 ======== ========
See Accompanying Notes to Consolidated Financial Statements. 2 4 CKE RESTAURANTS, INC. --------------------- CONSOLIDATED STATEMENTS OF INCOME --------------------------------- (In thousands, except per share amounts) (Unaudited)
Twelve Weeks Ended Forty Weeks Ended -------------------------- --------------------------- November 3, November 4, November 3, November 4, 1997 1996 1997 1996 --------- --------- --------- --------- Revenues: Company-operated restaurants: Carl's Jr $ 117,352 $ 106,106 $ 375,132 $ 339,544 Hardee's 146,501 -- 200,399 -- Taco Bueno 17,211 6,784 57,289 6,784 JB's Restaurants 14,843 14,981 50,699 17,512 HomeTown Buffet 5,244 8,760 27,496 10,240 Other 5,725 6,825 23,641 9,250 --------- --------- --------- --------- 306,876 143,456 734,656 383,330 --------- --------- --------- --------- Franchised and licensed restaurants: Carl's Jr 18,687 18,248 61,089 58,973 Hardee's 21,628 -- 28,240 -- Other 264 389 928 452 --------- --------- --------- --------- 40,579 18,637 90,257 59,425 --------- --------- --------- --------- Total revenues 347,455 162,093 824,913 442,755 --------- --------- --------- --------- Operating costs and expenses: Restaurant operations: Food and packaging 95,530 44,998 225,591 117,328 Payroll and other employee benefits 96,838 40,225 220,576 105,237 Occupancy and other operating expenses 60,863 29,865 148,635 77,705 --------- --------- --------- --------- 253,231 115,088 594,802 300,270 Franchised and licensed restaurants 27,459 17,155 69,668 56,678 Advertising expenses 17,431 7,729 42,293 22,837 General and administrative expenses 24,240 10,618 55,759 30,148 --------- --------- --------- --------- Total operating costs and expenses 322,361 150,590 762,522 409,933 --------- --------- --------- --------- Operating income 25,094 11,503 62,391 32,822 Interest expense (4,444) (2,759) (12,027) (7,503) Other income, net 1,192 514 6,733 1,213 --------- --------- --------- --------- Income before income taxes 21,842 9,258 57,097 26,532 Income tax expense 8,740 3,670 22,864 10,419 --------- --------- --------- --------- Net income $ 13,102 $ 5,588 $ 34,233 $ 16,113 ========= ========= ========= ========= Net income per common and common equivalent share $ .30 $ .19 $ .88 $ .55 ========= ========= ========= ========= Common and common equivalent shares used in computing per share amounts 43,367 29,735 38,780 29,199 ========= ========= ========= =========
See Accompanying Notes to Consolidated Financial Statements. 3 5 CKE RESTAURANTS, INC. --------------------- CONSOLIDATED STATEMENTS OF CASH FLOWS ------------------------------------- (Dollars in thousands) (Unaudited)
Forty Weeks Ended --------------------------- November 3, November 4, 1997 1996 --------- --------- Net cash flow from operating activities: Net income $ 34,233 $ 16,113 Adjustments to reconcile net income to net cash provided by operating activities, excluding the effect of acquisitions: Depreciation and amortization 34,583 18,846 Loss on sale of property and equipment and capital leases 2,172 848 Net noncash investment and dividend income (2,734) (661) Deferred income taxes 6,266 547 Loss on noncurrent asset and liability transactions 716 487 Write-down of long-lived assets -- 1,250 Net change in receivables, inventories and other current assets and prepaid expenses (4,110) (6,056) Net change in accounts payable and other current liabilities (18,773) 8,016 --------- --------- Net cash provided by operating activities 52,353 39,390 --------- --------- Cash flow from investing activities: Purchases of: Marketable securities (393) (760) Property and equipment (70,499) (32,795) Long-term investments (14,054) (5,986) Proceeds from sales of: Marketable securities and long-term investments 393 2,689 Property and equipment 2,918 3,779 Collections on leases receivable 140 139 Increase in notes receivable and related party receivables (464) (120) Collections on notes receivable and related party receivables 5,672 2,706 Net change in other assets (388) (1,938) Acquisitions, net of cash acquired (321,132) (52,123) Dispositions, net of cash surrendered 16,286 -- --------- --------- Net cash used in investing activities (381,521) (84,409) --------- --------- Cash flow from financing activities: Net proceeds from common stock offering 222,343 -- Net change in bank overdraft 1,803 9,334 Short-term borrowings 20,000 1,200 Repayments of short-term borrowings (8,750) (1,200) Long-term borrowings 114,389 58,000 Repayments of long-term borrowings (20,418) (27,090) Repayments of capital lease obligations (3,728) (2,949) Deferred financing costs (4,118) -- Net change in other long-term liabilities (933) (1,181) Payment of dividends (3,012) (1,514) Exercise of stock options 3,225 2,160 --------- --------- Net cash provided by financing activities 320,801 36,760 --------- --------- Net decrease in cash and cash equivalents $ (8,367) $ (8,259) ========= =========
See Accompanying Notes to Consolidated Financial Statements. 4 6 CKE RESTAURANTS, INC. --------------------- CONSOLIDATED STATEMENTS OF CASH FLOWS ------------------------------------- (Dollars in thousands) (Unaudited)
Forty Weeks Ended --------------------------- November 3, November 4, 1997 1996 --------- --------- Supplemental disclosures of cash flow information: Cash paid during the period for: Interest (net of amounts capitalized) $ 9,559 $ 7,325 Income taxes 15,433 5,000 Noncash investing and financing activities: Investing activities: Sale of property and equipment -- 2,469 Increase in long-term investments -- (2,469) Stock issued in exchange for Summit Assets -- 11,412 Summit Acquisition: Tangible assets acquired at fair value $ -- $ 59,772 Cost in excess of net assets acquired -- -- Liabilities assumed at fair value -- (30,716) --------- --------- Total purchase price $ -- $ 29,056 ========= ========= Casa Bonita Acquisition: Tangible assets acquired at fair value $ -- $ 40,672 Cost in excess of net assets acquired -- 9,860 Liabilities assumed at fair value -- (8,532) --------- --------- Total purchase price $ -- $ 42,000 ========= ========= Hardee's Acquisition: Tangible assets acquired at fair value $ 439,908 $ -- Cost in excess of net assets acquired 47,338 -- Liabilities assumed at fair value (160,246) -- --------- --------- Total purchase price $ 327,000 $ -- ========= ========= Disposition of Assets: Tangible assets disposed at book value $ 18,832 $ -- Liabilities relieved at book value (8,410) -- --------- --------- Total cash proceeds $ 10,422 $ -- ========= =========
5 7 CKE RESTAURANTS, INC. --------------------- NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ------------------------------------------ NOVEMBER 3, 1997 AND NOVEMBER 4, 1996 ------------------------------------- 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" 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. Operating results for fiscal 1998 include 16 weeks of operations for Hardee's Food Systems, Inc. ("Hardee's"), which was acquired on July 15, 1997 (see Note (B)) and 35 weeks of operations for the 16 HomeTown Buffet franchised restaurants and two Casa Bonita theme restaurants that were disposed of in connection with the initial public offering of Star Buffet, Inc. ("Star Buffet") on September 30, 1997 (see Note (C)). Fiscal 1997 results include 14 weeks of Summit Family Restaurants Inc., 18 weeks of the 26 Rally's restaurants operated by the Company, and five weeks of Taco Bueno Incorporated, formerly known as Casa Bonita Incorporated. NOTE (B) ACQUISITION OF HARDEE'S FOOD SYSTEMS, INC. - --------------------------------------------------- On July 15, 1997, the Company acquired Hardee's Food Systems, Inc., the operator and franchisor of the Hardee's(R) quick-service hamburger restaurant concept. In connection with the acquisition, which was accounted for as a purchase, the Company acquired all of the issued and outstanding shares of Hardee's for cash consideration of $327.0 million. The purchase price remains subject to adjustment to an amount to be agreed upon by the Company and Imasco Holdings, Inc. which represents the net asset value of Hardee's as of July 15, 1997. On July 15, 1997, the Company also (i) completed the sale of 8,337,500 shares of the Company's Common Stock to the public for net proceeds of $222.3 million and (ii) entered into a new bank credit facility and incurred borrowings of $133.9 million thereunder (see Note (D)) of which $125.2 million remained outstanding as of November 3, 1997. The net proceeds of the public offering and such borrowings were primarily used to finance the acquisition of Hardee's. Selected unaudited pro forma combined results of operations for the 40-week periods ended November 3, 1997 and November 4, 1996, assuming the acquisition occurred on January 30, 1996, using actual restaurant-level margins and general and administrative expenses prior to the acquisition, are presented as follows:
Forty Weeks Ended --------------------------- November 3, November 4, 1997 1996 ---------- ---------- Total revenues $1,166,194 $1,052,091 Net income (loss) $ 36,388 $ (4,541) Net income (loss) per common and common equivalent share $ 0.84 $ (0.12)
NOTE (C) INITIAL PUBLIC OFFERING OF STAR BUFFET, INC. - ----------------------------------------------------- On September 30, 1997, the Company participated in an initial public offering of its buffet-style restaurant operations. Prior to the offering, the Company formed Star Buffet to continue to operate its 16 HomeTown Buffet franchised restaurants and two Casa Bonita theme restaurants. Star Buffet then completed an initial public offering of 3,450,000 shares of its common stock, of which 600,000 shares were sold by the Company as a selling shareholder. The Company received net proceeds of $6.7 million in connection with such sale, and retained an approximate 37% interest in Star Buffet. The Company also received dividend income of $9.3 6 8 CKE RESTAURANTS, INC. --------------------- NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ------------------------------------------ NOVEMBER 3, 1997 AND NOVEMBER 4, 1996 ------------------------------------- (continued) million in the transaction, and sold the net assets of two Casa Bonita restaurants to Star Buffet for their net book value of $1.1 million. The Company continues to own and operate the JB's Restaurants and Galaxy Diner restaurant concepts in its new subsidiary, JB's Restaurants, Inc. Operating results for fiscal 1998 include 35 weeks of operations for the 16 HomeTown Buffet franchised restaurants and two Casa Bonita restaurants. NOTE (D) LONG-TERM DEBT - ----------------------- Effective July 15, 1997, the Company entered into a new bank credit facility (the "New Credit Facility"), which replaced the unsecured bank credit facility entered into by the Company in July 1996. The New Credit Facility consists of a $75.0 million term loan facility and a $225.0 million revolving credit facility (which includes a $55.0 million letter of credit subfacility). On July 15, 1997, the Company incurred $75.0 million of borrowings under the term loan facility and $58.9 million of borrowings under the revolving credit facility to finance a portion of the consideration required to acquire Hardee's, of which $71.3 million and $53.9 million, respectively, remain outstanding as of November 3, 1997. Principal repayments under the term loan facility are due in equal quarterly installments of $3.75 million, commencing on October 15, 1997 and continuing thereafter until the final maturity of the New Credit Facility in July 2002. Additional borrowings under the revolving credit facility may be used for working capital and other general corporate purposes, including permitted investments and acquisitions, and any outstanding amounts thereunder will become due in July 2002. The Company is required to repay borrowings under the New Credit Facility with the proceeds from certain asset sales (unless the net proceeds of such sales are reinvested in the Company's business), from the issuance of certain equity securities or from the issuance of additional indebtedness. Of the various options the Company has regarding interest rates, it has selected LIBOR plus a margin, with margin adjustments dependent on certain financial ratios from time to time. Borrowings and other obligations of the Company under the New Credit Facility are general unsubordinated obligations of the Company and are secured by a pledge of the capital stock of certain of the Company's present and future subsidiaries, which subsidiaries have also guaranteed such borrowings and other obligations, and are also secured by certain franchise rights, accounts receivable, contract rights, general intangibles (including trademarks) and other assets of the Company and such subsidiaries. The New Credit Facility also contains a number of significant covenants that, among other things, (i) restrict the ability of the Company and its subsidiaries to incur additional indebtedness and incur liens on their assets, in each case subject to specified exceptions, (ii) impose specified financial tests as a precondition to the Company's and its subsidiaries' acquisition of other businesses and (iii) limit the amount of capital expenditures and certain restricted payments (including dividends and repurchases of stock) the Company and its subsidiaries may make, subject in certain circumstances to specified financial tests. In addition, the Company is required by the New Credit Facility to comply with specified financial ratios and tests. NOTE (E) NEW ACCOUNTING PRONOUNCEMENTS - -------------------------------------- In March 1997, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 128, "Earnings per Share" ("SFAS 128"), effective for fiscal years ending after December 15, 1997. SFAS 128 introduces and requires the presentation of "basic" earnings per share which represents net earnings divided by the weighted average shares outstanding excluding all common stock equivalents. Dual presentation of "diluted" earnings per share, reflecting the dilutive effects of all common stock equivalents, will also be required. The diluted presentation is similar to the current presentation of fully diluted earnings per share. Management has not determined whether the adoption of SFAS 128 will have a material impact on the Company's reporting of its consolidated financial position or results of operations. In June 1997, the FASB issued Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive Income" ("SFAS 130"). SFAS 130 establishes standards for the reporting and display of comprehensive income and its components (revenues, expenses, gains and losses) in a full set of general-purpose financial statements. SFAS 130 requires all items that are required to be recognized under accounting standards as components of comprehensive income to be reported in a financial statement that is displayed with the same prominence as other financial statements. SFAS 130 does not require a specific format for that financial statement but requires that an enterprise display an amount representing total comprehensive income for the period covered by that financial statement. SFAS 130 requires an enterprise to (a) classify items of other comprehensive income by their nature in a financial statement and (b) display the accumulated balance of other 7 9 CKE RESTAURANTS, INC. --------------------- NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ------------------------------------------ NOVEMBER 3, 1997 AND NOVEMBER 4, 1996 ------------------------------------- (continued) comprehensive income separately from retained earnings and additional paid-in capital in the equity section of a statement of financial position. SFAS 130 is effective for fiscal years beginning after December 15, 1997. Management has not determined whether the adoption of SFAS 130 will have a material impact on the Company's reporting of its consolidated financial position or results of operations. In June 1997, the FASB issued Statement of Financial Accounting Standards No. 131, "Disclosures about Segments of an Enterprise and Related Information" ("SFAS 131"). SFAS 131 establishes standards for public business enterprises to report information about operating segments in annual financial statements and requires that those enterprises report selected information about operating segments in interim financial reports issued to stockholders. It also establishes standards for related disclosures about products and services, geographic areas and major customers. This statement supersedes FASB Statement No. 14, "Financial Reporting for Segments of a Business Enterprise," but retains the requirement to report information about major customers. It amends FASB Statement No. 94, "Consolidation of All Majority-Owned Subsidiaries," to remove the special disclosure requirements for previously unconsolidated subsidiaries. SFAS 131 requires, among other items, that a public business enterprise report a measure of segment profit or loss, certain specific revenue and expense items, and segment assets, information about the revenues derived from the enterprise's products or services, and major customers. SFAS 131 also requires that the enterprise report descriptive information about the way that the operating segments were determined and the products and services provided by the operating segments. SFAS 131 is effective for financial statements for periods beginning after December 15, 1997. In the initial year of application, comparative information for earlier years is to be restated. SFAS 131 need not be applied to interim financial statements in the initial year of its application, but comparative information for interim periods in the initial year of application is to be reported in financial statements for interim periods in the second year of application. Management has not determined whether the adoption of SFAS 131 will have a material impact on the Company's segment reporting. 8 10 CKE RESTAURANTS, INC. --------------------- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL --------------------------------------------------------- CONDITION AND RESULTS OF OPERATIONS ----------------------------------- OVERVIEW Consolidated net income for the 12-week period ended November 3, 1997 increased 134.5% to $13.1 million, or $0.30 per share as compared with net income of $5.6 million, or $0.19 per share for the prior year quarter. Net income for the 40-week period ended November 3, 1997 increased 112.5% to $34.2 million, or $0.88 per share as compared with net income of $16.1 million, or $0.55 per share for the comparable prior year period. These positive results were primarily due to the additional operations of the Company's recently acquired concepts, including the Company-operated Hardee's restaurants and the Hardee's franchise system, all of which were profitable during the third quarter of fiscal 1998, the continued 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. and Hardee's restaurants. 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 amended agreement with GB Foods Corporation. As of November 3, 1997, there were 97 Company-operated and 11 franchised dual-brand restaurants operating. In addition, the Company has remodeled substantially all of its Carl's Jr. restaurants as of the end of the third quarter. The Company expects to complete its image enhancement program for its Carl's Jr. units by the end of fiscal 1998. During the 12 weeks ended November 3, 1997, the Company converted 47 Hardee's restaurants in the Oklahoma City area to the first Carl's Jr./Hardee's dual-brand restaurants, which are serving Hardee's breakfast and Carl's Jr. charbroiled burgers and chicken sandwiches. Same-store sales increases in the first full four-week reporting period after conversion were 19.6% over the comparable prior year period. Conversion also began in the second test market, Peoria, Illinois, where 29 Hardee's restaurants are scheduled to be converted by the end of December. 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; changes in prevailing interest rates and the availability of financing; food, labor, and employee benefit costs; changes in, or the failure to comply with, government regulations; weather conditions; construction schedules; demands placed on management and capital resources by the substantial increase in the size of the Company resulting from the acquisition of Hardee's, changes in the Company's integration plans for Hardee's and its expansion plans; 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 increased $163.4 million or 113.9% and $351.3 million or 91.7% for the 12- and 40-week periods ended November 3, 1997 to $306.9 million and $734.7 million, respectively. Carl's Jr. Company-operated revenues for the 12- and 40-week periods accounted for sales increases of $11.2 million and $35.6 million, respectively. Additionally, the Company's Hardee's and Taco Bueno restaurants contributed $146.5 million and $10.4 million of the increase in revenues for the 12-week period, respectively, and $200.4 million and $50.5 million for the 40-week period, respectively. Offsetting these increases is the loss of revenues from the Company's HomeTown Buffet and Casa Bonita restaurants which were disposed of in connection with the initial public offering of Star Buffet during the current quarter (see Note (C) of Notes to the Company's consolidated financial statements as of and for the period ended November 3, 1997). On a same-store sales basis (calculated using only restaurants in operation for the full periods being compared), revenues from Company-operated Carl's Jr. restaurants increased 2.1% in the 12-week period ended November 3, 1997 on top of an 8.4% increase in the third quarter of fiscal 1997. Same-store sales for Company-operated Taco Bueno restaurants increased 4.5% in the 12-week period ended November 3, 1997 over the comparable prior year period, while same-store sales in Company-operated Hardee's restaurants decreased 6.7% in the current quarter over the prior year quarter. 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 9 11 CKE RESTAURANTS, INC. --------------------- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL --------------------------------------------------------- CONDITION AND RESULTS OF OPERATIONS ----------------------------------- (Continued) programs, which include the continuation of its conversion of existing Carl's Jr. locations into Carl's Jr./Green Burrito dual-brand restaurants, the continued focus on promoting great tasting new and existing food products through increased innovative advertising, and the image enhancement of its restaurants through a chain-wide remodeling program. Average unit volumes in Company-operated Carl's Jr. restaurants continue to increase and reached $1,142,400 on a 13-period rolling basis, while average unit volumes at Company-operated Hardee's and Taco Bueno restaurants ended the third quarter at $816,000 and $685,000, respectively, on a 13-period rolling basis. The decrease in same-store sales for Hardee's can be attributed to several factors, including the paring down of their oversized menu and the discontinuation of monthly new product introductions. Revenues from franchised and licensed restaurants for the 12- and 40-week periods ended November 3, 1997 increased 117.7% to $40.6 million and 51.9% to $90.3 million, respectively, over the same prior year periods. The increase is primarily due to the royalties earned by the Hardee's franchise system and to increased royalties from, and food purchases by, franchisees of Carl's Jr. as a result of higher sales volume at franchised Carl's Jr. restaurants. Restaurant-level margins of the Company's consolidated restaurant operations decreased in the 12- and 40-week periods ended November 3, 1997 by 2.3% and 2.6%, respectively, as compared with the prior year periods, primarily reflecting the impact of higher operating costs at Summit's family-style restaurants concepts, which were acquired in the latter half of the second quarter of fiscal 1997, and at the Hardee's quick-service hamburger restaurants, which were acquired in the second quarter of fiscal 1998. 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. Although Hardee's restaurant-level margins are substantially lower than the Company's other quick-service restaurant concepts, the Company increased Hardee's restaurant-level margins in the third quarter of fiscal 1998 to 13.6% of sales from 5.2% for restaurants open and operating as of December 31, 1996, primarily from cost reductions. The Company has accomplished this reduction of costs through many of the same cost saving measures it has implemented at its Carl's Jr. restaurants over the past three to four years, including the introduction of the Carl's Jr. labor matrix to refine labor usage, a focus on safety and accident prevention as a way to reduce workers' compensation costs, a reduction of food waste and theft tolerance levels, and a decrease in food and paper costs through the realization of selected purchasing synergies. While the Company's consolidated restaurant-level margins decreased during the first three quarters of fiscal 1998, restaurant-level margins for the Company's Carl's Jr. restaurant chain continued to increase, reaching 23.6% and 24.1% for the 12- and 40-week periods ended November 3, 1997, respectively. 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 increased purchasing efficiencies for food and paper, improving labor productivity and reducing workers' compensation costs. As a percentage of revenues from Company-operated Carl's Jr. restaurants, food and paper have decreased 0.8% to 30.0%, and 0.5% to 29.8%, respectively, for the 12- and 40-week periods ended November 3, 1997, as compared with the same periods a year ago, despite increased pressure from commodity prices and a change in the product mix as a result of the promotion of larger, more expensive sandwiches. As a percentage of revenues from Company-operated Carl's Jr. restaurants, payroll and other employee benefits have decreased 0.3% to 25.7%, and 0.9% to 25.7%, respectively, for the 12- and 40-week periods ended November 3, 1997, as compared with the same periods a year ago, notwithstanding the October 1996 and September 1997 increases 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 Carl's Jr. restaurants have increased 0.5% to 20.7% and 0.4% to 20.4%, respectively, for the 12- and 40-week periods as compared with the same periods in the prior year primarily due to increased equipment costs as the Company implements updated data technology at its restaurants and increased utility and depreciation expenses in connection with the image enhancement of the Company's Carl's Jr. restaurants. 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 in October 1996 and September 1997 has resulted in higher labor costs to the Company and its franchisees. 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. 10 12 CKE RESTAURANTS, INC. --------------------- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL --------------------------------------------------------- CONDITION AND RESULTS OF OPERATIONS ----------------------------------- (Continued) Franchised and licensed restaurant costs have increased 60.1% and 22.9% for the 12- and 40-week periods ended November 3, 1997, respectively, over the same periods of the prior year. The increase is primarily due to the additional costs associated with the Hardee's franchise operations as well as increased food purchases by Carl's Jr. franchisees. As a percentage of franchised and licensed revenues, these costs have decreased 24.4% and 18.9% for the 12- and 40-week periods ended November 3, 1997, respectively, over the same prior year periods. Hardee's earns the majority of its income from franchised and licensed restaurants through royalties paid by its franchisees, whereas Carl's Jr. earns its income from both royalties paid and food purchases by franchisees. As a result, the cost structure associated with Hardee's revenue from franchised and licensed restaurants is significantly lower than that associated with the Carl's Jr. franchise operations. Advertising expenses increased $9.7 million and $19.5 million, respectively, from the 12- and 40-week periods ended November 4, 1996, primarily due to the advertising support added for the newly acquired concepts. Advertising has become increasingly important in the current competitive environment and, as a result, advertising expenses have increased in terms of dollars spent in fiscal 1998, as compared with fiscal 1997, while remaining relatively consistent as a percentage of revenues from Company-operated restaurants. The Company has seen positive same-store sales growth in its Carl's Jr. restaurants in each quarter since the Company began its innovative advertising campaign in May 1995. General and administrative expenses increased $13.6 million and $25.6 million to $24.2 million and $55.8 million, respectively, for the 12- and 40-week periods ended November 3, 1997 over the comparable prior year periods. General and administrative expenses as a percentage of total revenues increased 0.4% in the 12-week period ended November 3, 1997 over the prior year period, although on a year-to-date basis, these expenses as a percentage of total revenues remained relatively unchanged. The increase in general and administrative expenses in the 12-and 40-week periods ended November 3, 1997 is primarily the result of adding the expenses associated with support of the Hardee's operations. Hardee's general and administrative expenses as a percentage of revenues were approximately 8.0% in the third quarter of fiscal 1998, as compared with 10.7% of total revenues at the end of calendar year 1996 under previous ownership. General and administrative expenses have also increased due to recording incentive compensation accruals for regional restaurant management and selected corporate employees as a result of improved restaurant operating performance. Interest expense for the 12- and 40-week periods ended November 3, 1997 increased $1.7 million and $4.5 million, respectively, as compared with the prior year periods, primarily as a result of additional borrowings required to complete the Hardee's acquisition in the second quarter of fiscal 1998 and the write-off of certain loan fees associated with the termination or repayment of certain of the Company's previous credit agreements. Other income, net, is primarily comprised of investment income, interest on notes receivable, gains and losses on sales of restaurants, income and loss on long-term investments, and other non-recurring income. Other income, net, increased $0.7 million and $5.5 million, respectively, for the 12- and 40-week periods ended November 3, 1997, over the comparable prior year periods, generally resulting from interest income earned on the Company's note receivable from Checkers Drive-In Restaurants, Inc. ("Checkers") and amortization of the related discount, in addition to lease income recorded from the Company's long-term investment in Boston West, LLC. FINANCIAL CONDITION For the 40-week period ended November 3, 1997, the Company generated cash flows from operating activities of $52.4 million, compared with $39.4 million for the same period of the prior year. This increase was mainly due to increased sales levels from the newly acquired concepts and increased operating margins in the Company's Carl's Jr. restaurants. Cash and cash equivalents in the 40-week period ended November 3, 1997 decreased $8.4 million from January 27, 1997, as the Company used cash flows from operations to fund capital additions of approximately $70.5 million, to fund the Company's investment in Checkers of $14.1 million, to repay capital lease obligations of $3.7 million, and to pay dividends to its stockholders of approximately $3.0 million. The increase in new long-term and short-term borrowings of $114.4 million and $20.0 million, respectively, combined with the net proceeds from the common stock offering of $222.3 million were primarily used to fund the acquisition of Hardee's for $320.6 million (net of cash acquired) and to replace existing long-term debt of $20.0 million. The decrease in cash and cash equivalents was partially offset by $16.3 million (net of cash surrendered) generated from the sale of shares by the Company and the disposition of its HomeTown Buffet and Casa Bonita restaurants in connection with the initial public offering of Star Buffet, collections on notes receivable and related party receivables of approximately $5.7 million and the exercise of stock options which generated approximately $3.2 million. Total cash and cash equivalents available to the Company as of November 3, 1997 was $38.0 million. 13 CKE RESTAURANTS, INC. --------------------- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL --------------------------------------------------------- CONDITION AND RESULTS OF OPERATIONS ----------------------------------- (Continued) Effective July 15, 1997, the Company entered into a new bank credit facility (the "New Credit Facility"), which replaced the unsecured bank credit facility arranged for the Company in July 1996. (See Note (D) of Notes to the Company's consolidated financial statements as of and for the period ended November 3, 1997). The New Credit Facility consists of a $75.0 million term loan facility and a $225.0 million revolving credit facility (which includes a $55.0 million letter of credit subfacility). On July 15, 1997, the Company incurred $75.0 million of borrowings under the term loan facility and $58.9 million of borrowings under the revolving credit facility to finance a portion of the consideration required to acquire Hardee's, of which $71.3 million and $53.9 million, respectively, remain outstanding as of November 3, 1997. Principal repayments under the term loan facility are due in equal quarterly installments of $3.75 million, commencing on October 15, 1997 and continuing thereunder until the final maturity of the New Credit Facility in July 2002. Additional borrowings under the revolving credit facility may be used for working capital and other general corporate purposes, including permitted investments and acquisitions, and any outstanding amounts thereunder will become due in July 2002. The Company is required to repay borrowings under the New Credit Facility with the proceeds from certain asset sales (unless the net proceeds of such sales are reinvested in the Company's business), from the issuance of certain equity securities or from the issuance of additional indebtedness. Of the various options the Company has regarding interest rates, it has selected LIBOR plus a margin, with margin adjustments dependent on certain financial ratios from time to time. Borrowings and other obligations of the Company under the New Credit Facility are general unsubordinated obligations of the Company and are secured by a pledge of the capital stock of certain of the Company's present and future subsidiaries, which subsidiaries have also guaranteed such borrowings and other obligations, and are also secured by certain franchise rights, accounts receivable, contract rights, general intangibles (including trademarks) and other assets of the Company and such subsidiaries. The New Credit Facility also contains a number of significant covenants that, among other things, (i) restrict the ability of the Company and its subsidiaries to incur additional indebtedness and incur liens on their assets, in each case subject to specified exceptions, (ii) impose specified financial tests as a precondition to the Company's and its subsidiaries' acquisition of other businesses and (iii) limit the amount of capital expenditures and certain restricted payments (including dividends and repurchases of stock) the Company and its subsidiaries may make, subject in certain circumstances to specified financial tests. In addition, the Company is required by the New Credit Facility to comply with specified financial ratios and tests. 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 repurchase of certain Hardee's restaurants from franchisees, the conversion of certain restaurants to the Carl's Jr./Green Burrito and Carl's Jr./serving Hardee's breakfast dual-brand concepts and capital expenditures to be incurred in connection with the Company's integration of Hardee's. The Company is in the process of converting 29 Hardee's restaurants in Peoria, Illinois to the Carl's Jr./serving Hardee's breakfast and is evaluating further test markets for conversion. 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 restaurant operations, along with cash and cash equivalents on hand as of November 3, 1997 and amounts available under the 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. 13 14 PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K: --------------------------------- (a) Exhibits: 10.47 First Amendment to Credit Agreement and Limited Waiver dated September 29, 1997, by and among CKE Restaurants, Inc., Banque Paribas, as Agent, and the lenders party thereto. 11 Calculation of Earnings per Share 27 Financial Data Schedule (included in electronic filing only). (b) Current Reports on Form 8-K: None. 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. December 17, 1997 By: /s/ CARL A. STRUNK ---------------------------- Carl A. Strunk Executive Vice President and Chief Financial Officer 14 EX-10.47 2 FIRST AMENDMENT OT CREDIT AGREEMENT 1 EXHIBIT 10.47 AMENDMENT NO. 1 TO CREDIT AGREEMENT AND LIMITED WAIVER This AMENDMENT NO. 1 TO CREDIT AGREEMENT AND LIMITED WAIVER (this "Amendment") is entered into as of September 29, 1997 among CKE Restaurants, Inc., the Lenders and Banque Paribas, as Agent. RECITALS CKE Restaurants, Inc., a Delaware corporation (the "Borrower"), certain financial institutions (the "Lenders") and Banque Paribas, as agent (in such capacity, the "Agent") are parties to that certain Credit Agreement, dated as of July 15, 1997 (as amended hereby and as further amended, restated, supplemented or otherwise modified, the "Credit Agreement"). Star Buffet, Inc., a newly-formed, wholly-owned Subsidiary of the Borrower ("Star Buffet") proposes to assume certain Indebtedness (the "Star Buffet Indebtedness") in connection with its acquisition of certain assets of North Restau rants, Inc. and, in connection therewith, the Borrower proposes to enter into a guaranty, pursuant to which the Borrower will guarantee the repayment by Star Buffet of the Star Buffet Indebtedness (the "Guaranty"). Summit Family Restaurants Inc., a wholly-owned Subsidiary of the Borrower ("Summit") proposes to sell certain of its assets identified on Schedule I hereto (the "Summit Assets") to a newly formed, wholly-owned Subsidiary of the Borrower, for a sale price equal to the book value of the Summit Assets (the "Summit Sale"). Casa Bonita Incorporated, an indirect, wholly-owned Subsidiary ("CB") of the Borrower proposes to sell certain of its assets identified on Schedule II hereto (the "CB Assets") to Summit, for a sale price equal to the book value of the CB Assets (the "CB Sale"). The Borrower has requested that the Agent and the Lenders amend and grant certain waivers with respect to, certain provisions of the Credit Agreement in connection with the Guaranty, the Summit Sale and the CB Sale, all as more fully described herein. The Agent and the Banks have agreed to grant such amendments and waivers upon the terms and conditions set forth herein. 2 AGREEMENT NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto hereby agree as follows: Section 1. Definitions. Capitalized terms used herein and not otherwise defined herein shall have the respective meanings assigned thereto in the Credit Agreement. Section 2. Amendments to the Credit Agreement. Subject to the terms and conditions set forth herein, the Credit Agreement is hereby amended as follows: (a) Definitions. Section 1.1 of the Credit Agreement is hereby amended by adding, in proper alphabetical order, the following definition: "Star Buffet Guaranty" shall mean that certain guaranty to be executed by the Borrower in favor of United States National Bank of Oregon, in an aggregate principal amount not in excess of $7,000,000. (b) Indebtedness. Section 7.2 of the Credit Agreement is hereby amended by (i) deleting the word "and" as it appears immediately after the words "7.6(a)" in subsection (c) thereof and replacing such word with a comma and (ii) adding, immediately before the semicolon as it appears at the end of subsection (c) thereof, the words "and 7.6(d)." (c) Contingent Obligations. Section 7.6 of the Credit Agreement is hereby amended by (i) deleting the word "and" as it appears at the end of subsection (b) thereof, (ii) deleting the period as it appears at the end of subsection (c) thereof and replacing such period with a semicolon and the word "and" and (iii) adding the following new subsection (d): "(d) pursuant to the Star Buffet Guaranty." Section 3. Limited Waiver. Subject to the terms and conditions set forth herein, the Agent and the Banks hereby agree to waive the requirements of Section 7.5(a)(i) of the Credit Agreement (i) solely to the extent that the sale price paid to Summit for the Summit Assets is less than the fair market value of such assets at the time of the Summit Sale and (ii) solely to the extent that the 2 3 sale price paid to CB for the CB Assets is less than the fair market value of such assets at the time of the CB Sale. Section 4. Conditions to Effectiveness of Amendment. The effectiveness of this Amendment is subject to the satisfaction of the following conditions precedent: (a) Amendment. This Amendment shall have been duly executed and delivered by the Borrower and the Required Lenders. (b) Officer's Certificate. The Agent shall have received a certificate of an Authorized Officer of the Borrower certifying as to the matters set forth in Sections 5(a) and 5(b) of this Amendment. (c) Transaction Documentation. The Agent shall have approved the form and substance of each of the agreements to be executed by the Borrower in connection with each of the transactions contemplated by Sections 2 and 3 of this Amendment. (d) Additional Matters. The Agent shall have received such other certificates, opinions, documents and instruments relating to the transactions contemplated hereby as may have been requested by the Agent or any Lender, in each case, in form and substance satisfactory to the Agent. Section 5. Representations and Warranties. The Borrower represents and warrants to the Agent and the Lenders, as of the date hereof, that both before and after giving effect to this Amendment: (a) no Default or Event of Default has occurred and is continuing; and (b) all of the representations and warranties contained in the Credit Agreement and in the other Loan Documents (other than those that expressly speak only as of a different date) are true and correct. 3 4 Section 6. Miscellaneous. (a) Effect; Ratification. The amendments and waivers set forth herein are effective solely for the purposes set forth herein and shall be limited precisely as written, and shall not be deemed to (i) be a consent to any amendment, consent or modification of any other term or condition of the Credit Agreement or of any other instrument or agreement referred to therein; or (ii) prejudice any right or remedy which the Agent or the Lenders may now have or may have in the future under or in connection with the Credit Agreement or any other instrument or agreement referred to therein. Each reference in the Credit Agreement to "this Agreement", "herein", "hereof" and words of like import and each reference in the other Loan Documents to the "Agreement" or the "Credit Agreement" shall mean the Credit Agreement as amended hereby. This Amendment shall be construed in connection with and as part of the Credit Agreement and all terms, conditions, representations, warranties, covenants and agreements set forth in the Credit Agreement and each other instrument or agreement referred to therein, except as herein amended or waived, are hereby ratified and confirmed and shall remain in full force and effect. (b) Loan Documents. This Amendment is a Loan Document executed pursuant to the Credit Agreement and shall (unless otherwise expressly indicated herein) be construed, administered and applied in accordance with the terms and provisions thereof. (c) Costs, Fees and Expenses. The Borrower agrees to pay all costs, fees and expenses (including the reasonable fees and expenses of counsel to the Agent) incurred in connection with the preparation, execution and delivery of this Amendment as required pursuant to the Credit Agreement. (d) Headings Descriptive. The headings of the several Sections and Subsections of this Amendment are inserted for convenience only and shall not in any way affect the meaning or construction of any provision or term of this Amendment. (e) Counterparts. This Amendment may be executed in any number of counterparts, each such counterpart constituting an original and all of which when taken together shall constitute one and the same instrument. (f) Severability. Any provision contained in this Amendment that is held to be inoperative, unenforceable or invalid in any jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable or invalid without affecting the remaining provisions of this Amendment in that jurisdiction or the operation, enforceability or validity of such provision in any other jurisdiction. 4 5 (g) GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF ILLINOIS. (h) WAIVER OF TRIAL BY JURY. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN CONNECTION WITH THIS AMENDMENT OR ANY OTHER LOAN DOCUMENT OR ANY MATTER ARISING HEREUNDER OR THEREUNDER. * * * * 5 6 IN WITNESS WHEREOF, the parties hereto have caused their duly authorized officers to execute and deliver this Amendment as of the date first above written. CKE RESTAURANTS, INC. By:_____________________________________ Name:___________________________________ Title:__________________________________ BANQUE PARIBAS, as Agent and as a Lender By:_____________________________________ Name:___________________________________ Title:__________________________________ By:_____________________________________ Name:___________________________________ Title:__________________________________ BANK OF MONTREAL By:_____________________________________ Name:___________________________________ Title:__________________________________ 6 7 NATEXIS BANQUE (previously Banque Francaise du Commerce Exterieur) By:_____________________________________ Name:___________________________________ Title:__________________________________ By:_____________________________________ Name:___________________________________ Title:__________________________________ CREDITANSTALT-BANKVEREIN By:_____________________________________ Name:___________________________________ Title:__________________________________ By:_____________________________________ Name:___________________________________ Title:__________________________________ 7 8 THE DAI-ICHI KANGYO BANK, LTD., LOS ANGELES AGENCY By:_____________________________________ Name:___________________________________ Title:__________________________________ By:_____________________________________ Name:___________________________________ Title:__________________________________ DEUTSCHE BANK AG, NEW YORK BRANCH AND CAYMAN ISLANDS BRANCH By:_____________________________________ Name:___________________________________ Title:__________________________________ By:_____________________________________ Name:___________________________________ Title:__________________________________ FIRST BANK & TRUST By:_____________________________________ Name:___________________________________ Title:__________________________________ 8 9 THE LONG-TERM CREDIT BANK OF JAPAN, LTD., LOS ANGELES AGENCY By:_____________________________________ Name:___________________________________ Title:__________________________________ MANUFACTURERS BANK By:_____________________________________ Name:___________________________________ Title:__________________________________ THE SAKURA BANK, LIMITED, LOS ANGELES AGENCY By:_____________________________________ Name:___________________________________ Title:__________________________________ By:_____________________________________ Name:___________________________________ Title:__________________________________ 9 10 THE SANWA BANK, LIMITED, LOS ANGELES BRANCH By:_____________________________________ Name:___________________________________ Title:__________________________________ SUMITOMO BANK OF CALIFORNIA By:_____________________________________ Name:___________________________________ Title:__________________________________ THE SUMITOMO TRUST & BANKING CO., LTD., LOS ANGELES AGENCY By:_____________________________________ Name:___________________________________ Title:__________________________________ UNITED STATES NATIONAL BANK OF OREGON By:_____________________________________ Name:___________________________________ Title:__________________________________ 10 11 WELLS FARGO BANK By:_____________________________________ Name:___________________________________ Title:__________________________________ BANK OF AMERICA NT&SA By:_____________________________________ Name:___________________________________ Title:__________________________________ NATIONAL BANK OF KUWAIT, S.A.K., GRAND CAYMAN BRANCH By:_____________________________________ Name:___________________________________ Title:__________________________________ 11 EX-11 3 CALCULATION OF EARNINGS PER SHARE 1 EXHIBIT 11 CKE RESTAURANTS, INC. --------------------- CALCULATION OF EARNINGS PER SHARE --------------------------------- (In thousands, except per share amounts)
Twelve Weeks Ended Forty Weeks Ended -------------------------- ------------------------- November 3, November 4, November 3, November 4, 1997 1996 1997 1996 ----------- ----------- ----------- ----------- PRIMARY EARNINGS PER SHARE - -------------------------- Net income $13,102 $5,588 $34,233 $16,113 ======= ======= ======= ======= Weighted average number of common shares outstanding during the period 41,920 28,845 37,333 28,309 Incremental common shares attributable to exercise of outstanding options 1,419 890 1,137 742 ------- ------ ------- ------- Total shares 43,339 29,735 38,470 29,051 ======= ======= ======= ======= Primary earnings per share $ .30 $ .19 $ .89 $ .55 ======= ======= ======= ======= FULLY DILUTED EARNINGS PER SHARE - -------------------------------- Net income $13,102 $5,588 $34,233 $16,113 ======= ======= ======= ======= Weighted average number of common shares outstanding during the period 41,920 28,845 37,333 28,309 Incremental common shares attributable to exercise of outstanding options 1,447 890 1,447 890 ------- ------ ------- ------- Total shares 43,367 29,735 38,780 29,199 ======= ======= ======= ======= Fully diluted earnings per share $ .30 $ .19 $ .88 $ .55 ======= ======= ======= =======
14 EX-27 4 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 TWELVE WEEKS ENDED NOVEMBER 3, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORM 10-Q FOR THE QUARTERLY PERIOD ENDED NOVEMBER 3, 1997. 1,000 3-MOS JAN-26-1998 JAN-28-1997 NOV-03-1997 37,963 0 48,981 0 16,812 98,306 855,214 234,694 911,850 172,159 0 0 0 420 471,171 911,850 306,876 347,455 253,231 322,361 (1,192) 0 4,444 21,842 8,740 13,102 0 0 0 13,102 .30 .30
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