Carpinteria / CA. (cke) CKE Restaurants Inc. announced its first fiscal quarter financial results for the sixteen weeks ended May 23, 2011. On July 12, 2010, CKE Holdings Inc., an affiliate of Apollo Management VII L.P., acquired all of the outstanding shares of the Company. As of May 23, 2011, the purchase price allocation related to the Merger remains preliminary and is subject to change. Any subsequent changes to the purchase price allocation that result in material changes to the consolidated financial results will be adjusted retrospectively. The final purchase price allocation is expected to be completed within a one year time period following the acquisition date.
All references to «Predecessor» relate to CKE and its consolidated subsidiaries for periods prior to the Merger and references to «Successor» relate to CKE and its consolidated subsidiaries for periods subsequent to the Merger. The discussion of the Company´s first quarter results compares the results of operations for the Successor sixteen weeks ended May 23, 2011 to the Predecessor sixteen weeks ended May 17, 2010.
Company-Operated Same-Store Sales and Average Unit Volumes
Blended same-store sales increased 5,5 percent in the first quarter of fiscal 2012. Hardee´s same-store sales increased 9,6 percent and Carl´s Jr. same-store sales increased 2,1 percent. At the end of the first quarter, the blended fifty-two week average unit volume for Carl´s Jr. and Hardee´s was 1’231’000 USD. The fifty-two week average unit volumes for Carl´s Jr. and Hardee´s were 1’389’000 USD and 1’088’000 USD, respectively. To date, the Company´s blended same-store sales for the second quarter of fiscal 2012 are positive in the low single digit range.
First Quarter Results
The Company reported total revenue of 400,6 million USD for the fiscal 2012 first quarter, a decrease of 34,6 million USD or 8,0 percent, compared to the fiscal 2011 first quarter. The decrease was attributable to the sale of the Carl´s Jr. distribution business on July 2, 2010. Total revenue, excluding the Carl´s Jr. distribution center revenue in the prior year quarter, increased by 27,3 million USD or 7,3 percent.
«Hardee´s continued to generate strong same-store sales results during the first quarter. The 9,6 percent increase is Hardee´s best quarterly same-store sales result in seven years. Including period four, Hardee´s has now had sixteen consecutive periods of positive same-store sales. Carl´s Jr. also performed well, posting a 2,1 percent increase in same-store sales for the quarter», said Andrew F. Puzder, Chief Executive Officer.
Company-operated restaurant-level adjusted Ebitda margin was flat when compared to the prior year quarter at 17 percent. Food and packaging costs increased 130 basis points as a result of higher commodity costs for beef, cheese, pork and oil. This increase was offset by an 80 basis point decrease in labor costs primarily due to the impact of sales leverage as well as 30 basis point decreases in both occupancy and other expense and advertising expense. Adjusted Ebitda was 51,5 million USD in the first quarter of fiscal 2012, a 4,4 million USD improvement over the prior year quarter, which represents a 9,3 percent increase.
As of May 23, 2011, cash and cash equivalents were 75,9 million USD and the Company had 65,2 million USD available under its credit facility. On June 14, 2011, the Company announced that it will redeem 40,0 million USD aggregate principal amount of its outstanding 11’375 percent Senior Secured Second Lien Notes due 2018 on July 15, 2011 at a price equal to 103,0 percent of the principal amount of the Notes. Upon completion of the redemption, 560,0 million USD aggregate principal amount of the Notes will remain outstanding.
Capital expenditures for the fiscal 2012 first quarter were 13,6 million USD, of which 8,0 million USD related to new store openings, dual-branding and remodelling projects. For fiscal 2012, the Company expects capital expenditures to be between 60,0 million USD and 70,0 million USD. As of May 23, 2011, the Company´s system-wide restaurant portfolio consisted of:
| Carl´s Jr. | Hardee´s | Other | Total | |
| Company-operated | 424 | 470 | 001 | 895 |
| Franchised | 680 | 1’225 | 010 | 1’915 |
| Licensed | 158 | 214 | 000 | 372 |
| Total | 1’262 | 1’909 | 011 | 3’182 |
