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Burger King's profit rises, increases late-night hours

MIAMI Burger King Holdings Inc., parent to 11,200 Burger King restaurants worldwide, swung to a third-quarter profit from a year-ago net loss on the strength of its breakfast value menu and increased unit openings, the company said Friday.

For the quarter ended March 31, net income totaled $34 million, or 25 cents per share, compared with a loss of $12 million, or 11 cents per share, a year earlier. Corporate revenue rose 9 percent to $539 million.

Burger King said it was on target to reach its full-year fiscal 2007 goals including revenue growth between 6 percent and 7 percent and adjusted net income growth of more than 20 percent over fiscal 2006.

The company said its fourth-quarter same-store sales will be driven by the chain's U.S. late-night hours initiative, which will keep restaurants open until at least midnight.

Chief executive John Chidsey said the new operating hours would be a requirement at all U.S. locations by May 10 so that the chain can launch national advertising. Franchisees can meet this requirement by keeping only the drive-thru open.

Systemwide same-store sales for the third quarter rose 3.2 percent, which reflected a gain of 2.6 percent at units in North America. During the quarter, BK's Breakfast Value Menu was introduced and "early results are encouraging," the company said. Same-store sales rose 5.3 percent abroad, driven by "robust" sales in the United Kingdom where the chain introduced a "premium Aberdeen Angus burger."

In the year-ago third quarter, Burger King recorded $40 million in one-time items, including a $34 million "compensatory make-whole payment" that it made in February 2006 to its former private-equity owners prior to the company's initial public offering last May.

Burger King also reduced its debt by $125 million in fiscal 2007 through March 31. It also increased its net restaurant count by 92 units during the past 12 months.

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