Karcher Enterprises Reports First Profit in 2 Years : Earnings: The company, operator of the Carl’s Jr. fast-food chain, attributes turnaround to restructuring.

Carl Karcher Enterprises Inc. said Monday that it has emerged from an expensive corporate restructuring and long-running battle with the company’s founder to post an annual profit for the first time in two years.

“The past fiscal year was one of extraordinary accomplishment in a very challenging environment,” Donald E. Doyle, Karcher Enterprises chief executive, said in a prepared statement. “The progress that was achieved reflected outstanding teamwork throughout the company and helped set the foundation for what we believe will be an exciting future.”

The immediate future for Karcher Enterprises, which operates the Carl’s Jr. hamburger restaurants, will include a so-called “value menu,” which will offer lower-priced selections. The company has test marketed several value-oriented menus in recent months and hopes to have a competitive menu in place by June.

For the past several years, Karcher Enterprises has been struggling to stay profitable in an increasingly competitive fast-food industry, in which other players have slashed prices to attract new customers.

The struggle to bolster profits also sparked internal conflict at Karcher Enterprises, pitting founding chairman Carl Karcher, the company’s longtime television pitchman, against a majority of the board members, including Doyle, a former KFC executive who became Karcher Enterprises’ chief executive officer in January, 1993.

Doyle is a strong proponent of the “value menu” and publicly disagreed with Karcher’s ill-fated proposal to enhance profits by teaming up with a Mexican fast-food chain.

Two weeks ago, William Foley III, an Orange County businessman who gained a controlling interest in the fast-food company, was elected chairman. Karcher returned to the company last week after a six-month absence in the position of chairman emeritus.

Laurie Lively Smith, an industry analyst with the Seidler Cos., a Los Angeles brokerage, said that making the “value menu” work will be the corporation’s next challenge.

The company “is addressing the right issues,” said Smith. “Consumers want to buy Carl’s food, but in the past it has not been affordable. (The “value menu”) is certainly going in the right direction.”

Smith said the low-cost menu comes at a time when the company has completed a shake-off of costs that have burdened the Anaheim-based firm. Karcher Enterprises was embroiled in an expensive restructuring effort that cost the company about $9.7 million the year before.

For fiscal year 1994, which ended Jan. 31., the company reported profit of $3.7 million, or 20 cents a share, contrasted with a loss of $5.5 million, or 31 cents a share, in fiscal 1993.

“There’s been a huge effort on the part of management to improve profitability,” Smith said of Doyle.

But Smith attributed the fiscal 1994 profit to cost cutting, not increased sales.

In fact, sales at restaurants open for at least a year continue the slide that began several years ago. Smith said same-store sales have declined 8% compared with the previous fiscal year.

Annual revenue was $460.4 million, down from $502.6 million during fiscal 1993.

The most recent fourth quarter produced a loss of $458,000, or 2 cents a share, compared to a quarterly loss of $10.8 million, or 60 cents a share, for the year before. Quarterly revenue was $105.8 million, up slightly from revenue of $105.7 million the year before.

Smith said she expects revenue to rise this year as sales pick up.

“They’ve done a great job at becoming more efficient in all aspects, from payroll to food (purchasing) and packaging,” Smith said. “Sure, there is the challenge to improve sales. But last year they proved they can impact costs and improve efficiencies.”

Karcher Enterprises stock rose 37.5 cents a share Monday on the Nasdaq market to close at $13.875 a share.