Industry News | August 2, 2001

Checkers Reports 2nd Quarter Results

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Checkers Drive-In Restaurants, Inc. (Nasdaq: CHKR), today reported financial results for its second quarter ended June 18, 2001. Checkers Drive-In Restaurants, Inc. reported its fifth consecutive profitable quarter. The Company's net income was $776,000 or $0.07 per diluted share for the quarter ended June 18, 2001. Net income for the two quarters ended June 18, 2001 was $1.6 million as compared to $1.1 million for the two quarters ended June 19, 2000.

Total revenue decreased to $37.2 million for the quarter ended June 18, 2001 as compared to $47.1 million for the quarter ended June 19, 2000. This decrease was primarily due to the sale of Company-owned restaurants to franchisees during fiscal 2000. Accordingly, royalty revenue for the quarter posted a moderate increase of $0.6 million, up to $3.8 million compared to $3.2 million one year ago. EBITDA for the two quarters ended June 18, 2001 was $8.0 million compared to $9.2 million for the same two quarters in 2000.

Comparable Company-owned restaurant sales increased by 13.6% during the second quarter as compared to those units that were operating for the full quarter ended June 19, 2000. Comparable franchise restaurant sales increased 0.4%.

The continued operating success and stock appreciation has provided cash of $507,000 from the exercise of previously outstanding options and warrants during the two quarters ended June 18, 2001. These funds, along with another $3.9 million provided by operating activities, allowed Checkers to retire its high interest $5.8 million Textron debt that came due in June 2001 by paying down $2 million from the operating cash flow, and obtaining of a more favorable $3.8 million loan from Heller Financial, Inc.

Checkers' CEO and President, Daniel J. Dorsch commented, "We have completed another significant quarter in our return to financial health. We continued to upgrade several of our corporate restaurants to bring back that fresh image necessary to compete in the QSR industry. We retired the $5.8 million high interest loan to Textron Financial using $2 million of our cash and negotiating a more favorable $3.8 million loan. We have decreased trade payables by nearly $3 million since January 1, 2001, and continued to rollout the new POS system to company restaurants.'' Dorsch continued, ``We also hosted a fantastic franchisee convention during the quarter in Tampa that everyone in our system feels was a big step in our future with over 500 people in attendance. Beginning mid second quarter, 85% of our markets began advertising on television, which should begin to assist franchise markets with comparable sales during the third and fourth quarters. We made the progress we projected for the quarter even with sharp increases in beef and cheese prices.''

As of June 18, 2001, Checkers Drive-In Restaurants, Inc. and its franchisees own 421 Checkers (R) operating primarily in the Southeastern United States and 426 Rally's (R) operating primarily in the Midwestern United States. Checkers is presently headquartered in Clearwater, Florida, but will be relocating to Tampa, Florida in August 2001. The Company's former Chief Financial Officer and Treasurer, Wendy Beck, resigned her offices effective July 13, 2001. No announcement regarding her successor has yet been made, but is expected in the near term future. For more information about the Company, please visit www.checkers.com.