Stockholders Have No Beef at Karcher Annual Meeting
At a shareholder meeting that resembled a corporate pep rally, Carl Karcher Enterprises announced record first-quarter financial results Wednesday and said it will begin paying cash dividends.
More than 400 people turned out at the Anaheim Marriott in an apparent show of support for Chairman Carl N. Karcher and President Donald F. Karcher, who were accused of insider stock trading in a lawsuit filed in April by the Securities and Exchange Commission.
The brothers, along with 13 other family members and a former company employee named in the suit, have denied the SEC’s allegations.
The crowd stood and applauded the brothers at the urging of one shareholder, and more applause followed when the firm announced its financial results and dividend plans.
Profits Jumped 59%
The Anaheim fast-food chain, which operates 453 Carl’s Jr. restaurants in four states, said its profits jumped 59% to a record $6.6 million during the fiscal first quarter ended May 16, compared to $4.2 million in the same period a year ago. Sales for the quarter increased 18% to $123.5 million.
The news also pleased restaurant industry analysts, some of whom had expressed concern that Karcher Enterprises might have trouble improving on last year’s results.
“The performance was above all estimates I’ve heard,” said John Uphoff, an analyst at Raymond, James & Associates, a brokerage firm in St. Petersburg, Fla.
“Nobody can say they’ll be able to keep this up, but they’ve obviously made the right adjustments they needed to do well,” Uphoff said.
He said the dividend announcement is an indication that the company is optimistic about its future. The company said it will pay its first quarterly dividend of 4 cents per share on July 15 to shareholders of record on June 30. The dividends will cost the company about $1.9 million a year.
Profit Wasn’t Her Motive
Shareholder Dorothy Jean of Costa Mesa, who had never before attended a Karcher annual meeting, said she was delighted to hear about the firm’s good fortunes, but the company and its operations were not the reason she attended the meeting.
“I came because I wanted to give my moral support after the lawsuit,” said Jean, who bought Karcher stock with her husband when the company went public in 1981.
The SEC suit alleges that some family members sold stock in 1984 after learning that the company would be announcing lower earnings.
“I don’t believe they’ve done anything wrong,” Jean said.
Shareholders didn’t ask about the suit during a question-and-answer period. But Donald Karcher discussed the allegations in his review of company operations.
“You get your share of surprises in life,” he said. “I can’t get into any details. . . . But neither Carl nor I sold any shares. And we denied any wrongdoing.”
Jane Liekhus of Anaheim described the charges by the Securities and Exchange Commission suit as “plain goop.”
