Carl’s Jr. Posts Drop in Profit for 3rd Quarter

Carl Karcher Enterprises Inc., which runs the Carl’s Jr. fast-food chain, said Friday that the recession contributed to the drop in profit for the third quarter.

It reported earnings of $1.3 million, or 7 cents a share, down from $1.9 million, or 11 cents a share, for the same period last year.

Revenue also dropped. The chain took in $112.8 million during its third quarter, which ended Nov. 2. A year earlier, third-quarter revenue was $123.6 million.

Most of the chain’s restaurants are in Southern California, where the company said the battered economy hurt earnings. The company also said profit dipped because of the cost of closing a food-processing operation in Anaheim. And buying food from outside suppliers is costing more, the company said.

Sales were off mostly because Karcher Enterprises sold off some company-owned restaurants in Northern California to franchisees during the year. At the end of the latest quarter, there were 380 company stores; a year earlier, there were 427.

For the first nine months, the company earned $7.7 million, or 42 cents a share, on revenue of $389.1 million. That compared to a profit of $8.4 million, or 46 cents a share, on revenue of $417.8 million for the same period last year.

Chairman Carl N. Karcher said in November that he and an investment group plan to buy back all of the company’s stock in a $171-million deal to take the chain private again. Karcher Enterprises began selling stock to the public in 1981.

Carl Karcher’s Quarterly Earnings Slip

Citing a lingering recession, Carl Karcher Enterprises Inc. reported a decline in revenue and profit for the third quarter. The company’s revenue of $112.8 million was down nearly 9% from the same period in 1991. Earnings were off almost 36% from $1.9 million last year to $1.3 million this year. Figures are in thousands of dollars, except per-share data:

3rd qtr 3rd qtr 9 months 9 months 1991 1992 1991 1992 Revenue $123,618 $112,775 $417,785 $389,057 Net income 1,943 1,253 8,373 7,707 Per share 0.11 0.07 0.46 0.42

Source: Carl Karcher Enterprises Inc.