CKE Restaurants Beefs Up Sales

The operator of fast-food chains reverses a loss from a year ago and announces a quarterly dividend payout.
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Fast-food operator and franchiser

CKE Restaurants

(CKR)

said Monday that it swung to a fourth-quarter profit and announced a dividend payment to shareholders.

The company, which runs burger chains such as Carl's Jr. and Hardee's, said it earned $7.1 million, or 12 cents a share, for the quarter. That marks a reversal from last year's loss in the same quarter, totaling $51.7 million, and it exceeded Wall Street's expectations.

Analysts were expecting a gain of 11 cents a share, according to consensus estimates reported by Thomson First Call. The news sent the company's shares up 46 cents, or 3%, to $15.52 in after-hours trading Monday.

Its bottom-line results included a $4.6 million charge related to asset impairments, partially offset by a $2.5 million tax refund.

Also encouraging investors, CKE announced a quarterly dividend of 4 cents a share to be paid on June 13, 2005, to its stockholders of record at the close of business on May 23, 2005. It secured the repricing of a credit facility that will reduce the interest rate it will pay on its term loan by 50 basis points, and its board eliminated any time limitations on its previously approved $20 million share repurchase program.

So far under the plan, the company has repurchased 519,000 shares at an average price of $10.68.

"Based on the strength of our cash flow, we believe it is in our stockholders' best interests to allocate a portion of our available cash flow to dividends," CKE chief executive Andrew Puzder said in a statement. "We also believe that this quarterly dividend, along with the continuation of our existing share repurchase program, underscores our commitment to shareholder value."

During the quarter, Carpinteria, Calif.-based CKE said its sales rose 11.2% to $361.9 million, and its same-store sales rose 4.9% at Carl's Jr. and 4.4% at Hardee's.