Clearwater, FL - Citing his new management team's success in improving restaurant margins and sales, President and Chief Executive Officer Jay Gillespie announced a first quarterly profit since the third quarter of fiscal year 1994 for Checkers Drive-In Restaurants, Inc.
“On behalf of Checkers, it's exciting to announce double successes involving increased same store sales and the first quarterly profit in more than three years,” said Gillespie, who was named Chief Executive Officer in November of 1997.
With approximately 481 double drive-thru restaurants in 23 states, Puerto Rico and Israel, Gillespie said the company's significant sales increase is primarily due to the performance of comparable stores that experienced an 8.9% increase in sales.
Gillespie added, “Our success also reflects a team effort in 1997, led by Joseph Stein and Rick Fortman, to become more operationally efficient by improving our restaurant margins. Our restaurant level margins of 14.8%, excluding advertising costs, in the first quarter of 1998 is a dramatic improvement over the prior year quarter margins of 6.6%.”
For the twelve weeks ending March 23, 1998, the company had a net income of $394,000 versus a net loss of $5.2 million during the same period last year when additional loan costs in the amount of $1.6 million were expensed due to unscheduled debt reductions.
Total net revenues for the company were $37.0 million, which represents a $2.8 million increase over 1997 first quarter net revenue of $34.2 million.
Private Placement Led by CKE
A February 1997 private placement led by CKE Restaurants, Inc., the parent company of Carl's Jr. and Hardee's hamburger chains, brought a $19.5 million cash infusion into Checkers. As a result of Checkers' affiliation with CKE, an exciting number of opportunities have been created. The most significant includes food cost decreases resulting from a purchasing co-op that uses the more than 5,000 restaurants in the CKE family to leverage better pricing.
Checkers' new management team is also focused on creating new menu items, such as the Sirloin Burger and Spicy Chicken Sandwich, which have been favorites among customers in 1998.
“Fresh” New Marketing
In late 1997, Checkers launched an advertising and marketing campaign focused on its fresh food.
“Our tagline and promise of 'Fresh. Because we just made it' is what Americans want and we've been serving it this way since we opened our first double drive-thru,” explained Gillespie. “Our advertising campaign reminds consumers that despite the ever-changing promises of other restaurants, Checkers can always be counted on for great-tasting burgers and fries.”
Meat Industry Insights News Service
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