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Daniel J. Dorsch, Chief Executive Officer & President commented: ``We continued down the road to building a better company with the best first quarter results reported in over seven years. This first quarter performance coming on the heals of a fabulous fourth quarter should give our investors, vendors, employees, and customers confidence that Checkers Drive-In Restaurants is done talking about being the turn around company. We are now a competitor with great tasting quality food, innovative marketing, profitable for eight quarters, cash in the bank, and a team focused on being the biggest and best drive-thru in the business."
During the first quarter of 2002, Checkers's cost of sales, as a percentage of restaurant sales, decreased from the first quarter of 2001 by 3.1%, or from 65.2% down to 62.1%. Sales from corporate restaurants in the first quarter of 2002 increased 17% to $37.1 million from $31.7 million for the same period in 2001. According to Checkers the increase in corporate restaurant sales was partially a result of the reacquisition of twenty-three franchise stores since the end of the fourth quarter of 2001. Year-over-year, same store sales growth for the first quarter ended March 25, 2002 grew at 0.2% for company-owned restaurants, and 1.5% for franchise restaurants.
Royalty income at Checkers for the quarter ending March 25, 2002 decreased $116,000 or 3.4%, but increased per average franchise restaurant from $5,297 to $5,901 or 11.4%. The top-line decrease of $116,000 was primarily a result of an average of 86 fewer franchise stores since the prior year's first quarter. Moreover, during the same time period, sixty-four franchise restaurants were transferred back to company-owned restaurants.
David Koehler, Chief Financial Officer, stated: ``We are pleased we maintained our sales volume while simultaneously improving our restaurant operating margins by 3.65% over first quarter 2001. Also, available cash flow generated enabled us to pay down high-yielding debt, thus, increasing future potential EPS while de-leveraging our balance sheet. This quarter's performance is especially meaningful given we had four fewer weeks this quarter than in our fourth quarter 2001 due to our fiscal reporting methods."
Other restaurant operating expenses remained fairly stable as a percentage of restaurant sales during the quarter ended March 25, 2002 as compared to the quarter ended March 26, 2001.
The Company continued to strengthen it balance sheet by building cash and paying down debt. Total cash balances increased by 45% since December 31, 2001 from $ 10.5 million to $15.2 million as of March 25, 2002. Checkers prepaid the $2.7 million balance of its 14% note twenty months prior to its maturity, a move that saved the company $346,000 in total interest expense.