CHECKERS TO CLOSE 12 RESTAURANTS AND TAKE CHARGESCLEARWATER, Fla., Jan. 4 /PRNewswire/ -- Checkers checkers, game for two players, known in England as draughts. It is played on a square board, divided into 64 alternately colored—usually red and black or white and black—square spaces, identical with a chessboard. Drive-In Restaurants (Nasdaq: CHKR) today announced it would close 12 underperforming restaurants and take a $4.6 million charge for the write-off of site improvements, settlement of leases and relocation of building and equipment packages for those restaurants. In addition, the Company will take a $5.3 million charge primarily related to the slow down in new restaurant development and the resulting write-off of costs incurred on potential sites and costs related to the delay in opening certain restaurants; employee severances; and the reduction of certain office facilities.
The total fourth quarter charge of $9.9 million, which is substantially a non-cash charge Non-Cash Charge
A charge off, made by a company against earnings, that does not require an initial outlay of cash.
Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. , represents $.12 per common share after tax. The Company indicated that the closings and its 1994 restructuring efforts are expected to improve 1995 earnings, after tax, by approximately $2.2 million. The Company expects to release results of operations for the quarter and year ended January 2, 1995 by late February.
"These actions are consistent with our continued focus on growth in our higher-volume markets, primarily Florida, Philadelphia and Baltimore. Closing twelve unprofitable restaurants allows us to redeploy re·de·ploy
tr.v. re·de·ployed, re·de·ploy·ing, re·de·ploys
1. To move (military forces) from one combat zone to another.
2. approximately $2 million of modular building Modular buildings are sectional prefabricated buildings that are manufactured in a plant, and delivered to the customer in one or more complete modular sections. Modular buildings are considerably different from mobile homes. and equipment packages to improve our return on investment. Some sites that the Company will not be developing will be offered to franchisees who are expected to open 55 to 65 new restaurants in 1995," stated James F. White, Jr., Checkers' Chief Executive Officer.
The Company's operating strategy is being engineered by 23-year restaurant industry veteran, Richard C. Postle. Mr. Postle joined Checkers as President and Chief Operating Officer Chief Operating Officer (COO)
The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. in August 1994, replacing Mr. White, Jr., who became Chief Executive Officer. During 1994, the Company has reduced corporate employees by approximately 30%. The Company is emphasizing superior operations, a strengthened marketing program, and franchise development. Management believes that these efforts should make the Company a more effective competitor in 1995.
"We are concentrating on our existing base of restaurants with an emphasis on operational excellence and value oriented marketing programs. We are redeploying or eliminating assets, programs and personnel that do not contribute immediately to our core strategy. We can't grow our way out of a tough situation. We will rely on our cash flow to cover current debt obligations and provide funds to open new restaurants. We expect to open 20 to 30 Company-operated restaurants in 1995," Postle said.
Checkers develops, produces, owns, operates and franchises quick- service "double drive-thru" restaurants under the name "CHECKERS." In 1994, Checkers opened 60 restaurants and its franchisees opened 68. Checkers has a total of 496 restaurants currently operating.
/CONTACT: Paul C. Campbell, Checkers Drive-In Restaurants, 813-298-2005/
CO: Checkers Drive-In Restaurants, Inc. ST: Florida IN: RST SU:
AD-KM -- FL009 -- 9723 01/04/95 17:16 EST EST electroshock therapy.