020625 CKE Restaurants First Profit in 2 YearsJune 15, 2002Santa Barbara, CA - CKE Restaurants Inc. posted its first quarterly profit in more than two years before a $176 million charge to write off goodwill from the 1997 acquisition of its Hardee's hamburger chain. The results seemed to please investors, even though the charge resulted in a wider net loss for the first quarter ended on May 20. Shares of CKE, which also operates the Carl's Jr. fast-food chain, rose as much as 2.5% on the New York Stock Exchange. The Santa Barbara, California, company acquired Hardee's for $327 million in 1997. It said it took the $175.8 million charge under new accounting rules requiring it to evaluate the recoverability of goodwill -- the difference between the price of an acquisition and the fair value of its assets -- based on brands rather than individual restaurants. CKE, which operates more than 3,400 restaurants worldwide, said its quarterly net loss widened to $162.6 million, or $2.84 per share, from $37.1 million, or 74 cents a share, a year earlier. Before the goodwill write-off, the company posted earnings of $13.2 million, or 23 cents a share -- its first profit in 10 quarters. Revenues for the quarter declined 8% to $434.5 million from $471.6 million a year earlier. Sales in outlets open for more than one year, a key performance measure, rose 4.2% in Carl's Jr., boosted by a promotional tie-in with the new Spiderman movie, CKE said in a statement. Same-store sales at Hardee's edged up 0.3%. Looking ahead, CKE pegged full-year earnings per share of 57 cents to 60 cents, before accounting charges for goodwill. Broken down by quarter, it estimated profits of 17 cents to 18 cents for the second quarter, 15 cents to 16 cents for the third quarter, and 2 cents to 3 cents for the fourth quarter. The company also said its capital expenditures this year will range from $65 million to $75 million.
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