Checkers evaluating sale, acquisitions, stock buys

Nation's Restaurant News, May 23, 2005

TAMPA, FLA. -- Checkers Drive-In Restaurants Inc., the 792-unit quick-service chain based here, said it is considering "strategic alternatives," including a sale of the company or acquisitions and "sizeable" share repurchases.

The franchisor of the Checkers and Rally's Hamburger's brands hired Citigroup Global Markets Inc. as its financial advisor and Thelen Reid & Priest LLP as its legal advisor to help find and assess options to enhance shareholder value. Checkers' board said investors are undervaluing the company's stock.

Checkers posted a slight increase in first-quarter earnings on a 6.4-percent jump in same-store sales for company-owned outlets. Keith Sirois, chief executive of Checkers, said it is "somewhat disappointed with the higher food and audit costs, which muted overall results." First-quarter net income was $2.52 million, or 21 cents per diluted share, for the three months ended March 28, versus $2.48 million, or 19 cents, a year earlier.

Checkers' shares rose nearly 12 percent, or $1.43, May 16 to close at $13.43. Its share price had been trending downward since a 52-week high of $14.98 in March. Checkers' shares hit their 52-week low, $9.64, on May 17, 2004.