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CKE swings to 2010 loss on merger fees

CKE Restaurants Inc., parent to the Carl’s Jr. and Hardee’s restaurant chains, which together total 3,159 restaurants, swung to a 2010 net loss on going-private transaction costs, larger interest expenses and reduced revenue from the sale of Carl’s Jr. distribution center.

For the year ended Jan. 31, CKE booked a net loss of $36.3 million, compared with a profit of $48.2 million a year earlier. The company recorded more than $30 million in transaction-related costs from its $1 billion merger with an affiliate of Apollo Management in July 2010. The company also paid a transaction termination fee of $14.3 million for pulling out of an earlier deal with Thomas H. Lee Partners.

Annual revenue fell 6.2 percent to $1.33 billion. Blended same-store sales for both chains fell 0.8 percent, including a decline of 4.8 percent at Carl’s Jr. and an increase of 4.4 percent at Hardee’s. The company noted that through mid-April, first quarter blended same-store sales were tracking positive in the low- to mid- single digit range.

TAGS: Finance News
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