990748 Checkers Announces Second Quarter Results

Clearwater, FL - Checkers Drive-In Restaurants, Inc. announced results for the twelve weeks ended June 14, 1999.

The net loss for the second quarter was $1.2 million or $0.02 per share compared to a net loss of $207,000 during the second quarter of the prior year. The prior year results were favorably impacted by the reversal of a disputed sales tax matter in the amount of $500,000. Total revenues were $34.1 million compared to $34.8 million during the prior year. Sales at comparable stores decreased by 5.0% during the quarter. Restaurant level margins were 12.6% of sales compared with 13.0% of sales during the same quarter of the prior year. Advertising expenditures increased $566,000 during the quarter reflecting incremental television and promotional expenditures in various markets.

Year-to-date results for the 24-week period ended June 14, 1999, are as follows:

The net loss was $2.3 million compared with net income of $187,000 for the same period of the prior year. Total revenues were $65.8 million compared with $71.8 million during the prior year. Sales at comparable stores decreased 9.8% during the first two quarters. Restaurant level margins decreased to 12.4% of sales compared with 14.3% of sales during the first two quarters of the prior year due to the sales decrease that has been experienced.

Jay Gillespie, chief executive officer, commented, “Progress was made during the second quarter toward reducing the negative sales trend that was experienced during the first quarter. New menu boards that are expected to accelerate the ordering process and clearly display our value meals were installed at a majority of company-owned restaurants during the quarter. We have also completed the initial test of a limited breakfast menu that features a variety of sandwiches served on sourdough bread. This test will be expanded during the third quarter to further evaluate the economic and operational issues associated with serving breakfast to our customers.”

The company previously announced the execution of an Agreement and Plan of Merger with Rally's Hamburgers, Inc. and an anticipated reverse stock split. The merger, reverse stock split and other matters will be voted upon by the shareholders at the annual meeting to be held on August 5, 1999.

Statements in this release which are not historical facts are “forward- looking” statements and “Safe Harbor” statements under the Private Securities Litigation Reform Act of 1995 that involve risks and/or uncertainties, including, but not limited to, the impact of continued discounting by the Company's substantial competitors, success of the Company's advertising and promotion programs including the breakfast menu test, consumer acceptance of the Company's products, increases in operating costs, availability of adequate numbers of hourly paid employees, decreases in the availability of affordable capital resources and other risks documented in the Company's filing on Form 10- K/A dated May 28, 1999, with the Securities and Exchange Commission.

Checkers Drive-In Restaurants, Inc., along with its franchisees, operates approximately 468 double drive-thru hamburger restaurants primarily in the Southeastern United States.

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