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Hardee's Sales Slump Widens CKE Losses

Fast food: The Anaheim-based parent of Carl's Jr. loses $148.3 million in the fourth quarter.

April 25, 2001|From Times Wire Services

CKE Restaurants Inc., the Anaheim operator of Hardee's and Carl's Jr. fast-food chains, said Tuesday its fiscal fourth-quarter loss widened because sales at Hardee's restaurants fell while labor and maintenance costs increased.

Despite a larger loss for the year as well, the company's stock rose 26% Tuesday, gaining 56 cents to close at $2.70 on the New York Stock Exchange.

CKE's shares have fallen 38% in the last year as the company struggled with declining sales, higher costs and delays from the remodeling of Hardee's restaurants, a national chain it acquired in 1997.

"Without a doubt, fiscal 2001 was a very challenging year," Chief Executive Andrew Puzder said in a press release. "Carl's Jr. is performing extremely well, but there is no silver bullet to turn around Hardee's."

For the fourth quarter ended Jan. 29, CKE posted a net loss of $148.3 million, or $2.94 a share, compared with a loss of $61.8 million, or $1.22 a share, for the comparable quarter last year. Its revenue fell 26% to $354.2 million from $475.5 million.

Excluding one-time special charges and a tax impairment, CKE lost $19.2 million, or 38 cents a share, compared with a loss of $12.5 million, or 25 cents a share, excluding one-time charges, in last year's fourth quarter.

CKE, which operates 3,700 restaurants, has been selling outlets to franchisees to reduce debt and run a more efficient business with a smaller number of stores.

Puzder said that with the sale of its 125-unit Taco Bueno chain for $72.5 million, CKE will reduce senior credit borrowings to "substantially below $100 million."

Puzder, who took control in September, said the company currently has about $135 million in debt outstanding, down from almost $300 million just over a year ago.

For its fiscal year, CKE lost $194.1 million, or $3.84 a share, compared with the previous year's loss of $29.1 million, or 56 cents a share. Annual revenue dropped 10% to $1.8 billion from $2 billion.

Excluding one-time special charges and a tax impairment, the company lost $32.5 million, or 64 cents a share, last year, compared with the prior year's net income of $20.3 million, or 39 cents a share, excluding one-time charges.

Reuters, Bloomberg News and Dow Jones contributed to this report.

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