STOCK OF THE WEEK : CHECKERS DRIVE IN

Checkers Drive-In Restaurants, Inc. is the 9th largest hamburger chain and the largest double drive-thru restaurant chain in the United States. Checkers (CHKR) develops, produces, owns, operates, and franchises quick service “double drive-thru” restaurants under the two brand names Checkers (CHKR)and “Rally’s Hamburgers®”. The restaurants are designed to provide fast and efficient service and appeal to guests of all ages. The double drive-thru concept allows Checkers (CHKR) and Rally’s Hamburgers® to capitalize on the fact that approximately 50% of all quick-service food business is drive-thru. Guests can also enjoy a 1950’s flashback with walk-up ordering and outdoor dining in the outside picnic area at most locations. Founded in 1986, Checkers (CHKR) went public in 1991. Headquartered in Tampa, Fl Checkers (CHKR) is traded on the NASDAQ stock market.
Today, there are 203 company-owned and 590 franchised restaurants in 27 states. Most of the restaurants are in the Southern US; they still feature the 99-cent burgers. With chicken and fish sandwiches on the menu, kids love these type restaurants. However, to appeal to the grown ups in the family, Checkers has announced the Jim Beam(R) Double Cheddar burger and Cheddar Chicken sandwiches made with Jim Beam BBQ Sauce. These new adult- focused sandwiches are topped with slow-cooked Jim Beam Bourbon BBQ sauce, grilled red onions, and smoked cheddar cheese.

As the Official Burger and Drive-Thru Restaurant of NASCAR, Checkers/Rally's recognizes the NASCAR NEXTEL Cup Series team with the best pit road performance each week with a $10,000 prize. At the end of the 2005/06 season, Checkers /Rally's will award the $100,000 grand prize to the team that earns the most Checkers/Rally's Double Drive-Thru Challenge wins throughout the race season.

On October 19th Checkers announced earnings for their 3rd quarter ending September 12, 2005. Total revenue, including franchise royalty and fee income, was $43.2 million for the quarter ending September 12, 2005, compared to $45.0 million for the quarter ending September 6, 2004. The first three quarters of 2005 compared to a year ago showed that Company-owned and Franchised same-store sales grew 3.7% and 2.3%, respectively. Company-owned restaurants generated sales of $38.4 million versus $40.7 million in the third quarter of 2004, as the Company operated 7 fewer restaurants this year. The reduction in restaurants was primarily due to the sale of Company-owned restaurants to franchisees. The Company estimates that Company-owned restaurant sales were impacted by $800,000 during the 3rd quarter of 2005 due to store closures related to Hurricane Katrina.

During the 3rd quarter of 2005, Company-owned same-store sales increased 0.2%, marking positive same-store sales results for the Company in eighteen of the last nineteen quarters. Franchise royalty revenue increased to $4.7 million from $3.9 million in the 3rd quarter of 2004, while franchise same-store sales declined 2.0%.

Net income for the 3rd quarter of 2005 was $.10 per share, down $0.03 per share versus last year or $1.2 million versus $1.6 million. Unusual items in the 3rd quarter included $840,000 for Board of Directors fees up from $544,000 in the prior year, and $250,000 hurricane-related insurance deductible expense. In addition, the Company recorded $746,000 in income tax expense for the quarter, although only minimal income taxes are expected to be paid in 2005, as net operating loss carry forwards will be used to offset the majority of taxable income.

Keith Sirois, Checkers (CHKR)Drive-In Restaurants, Inc.'s Chief Executive Officer and President, felt their core operations were solid and their fundamentals remained positive. Significant resources in this quarter went to address the disruption caused by Hurricane Katrina to their Company-owned and franchised operations in New Orleans. The Hurricane closed 20 of their company-operated stores in New Orleans, 8 of which are back in operation with sales currently exceeding pre-hurricane sales of over 15%. However, the recovery and recording of insurance proceeds will benefit future quarters.

Mr. Sirois said "In this cost conscious environment, our ability to convey a compelling price/value proposition is critical to our performance. While we understand the effect high gasoline prices are having on our guests, we also recognize the opportunity it offers us to attract new customers to our brand, as they trade out of full service to quick service restaurants."

Are you willing to drive up and take home lunch or dinner? That is what Checkers/Rally’s is counting on. Their 52 week high and low come within 5 months of each other- High on 9/30/05 @ $15.36 and Low on 4/15/05 @$11.55. Opening today at $14.60, up 21 points, is Checkers on a Rally to beat its competition?

STOCK OF THE WEEK : CHECKERS DRIVE IN

Checkers Drive-In Restaurants, Inc. is the 9th largest hamburger chain and the largest double drive-thru restaurant chain in the United States. Checkers (CHKR) develops, produces, owns, operates, and franchises quick service “double drive-thru” restaurants under the two brand names Checkers (CHKR)and “Rally’s Hamburgers®”. The restaurants are designed to provide fast and efficient service and appeal to guests of all ages. The double drive-thru concept allows Checkers (CHKR) and Rally’s Hamburgers® to capitalize on the fact that approximately 50% of all quick-service food business is drive-thru. Guests can also enjoy a 1950’s flashback with walk-up ordering and outdoor dining in the outside picnic area at most locations. Founded in 1986, Checkers (CHKR) went public in 1991. Headquartered in Tampa, Fl Checkers (CHKR) is traded on the NASDAQ stock market.
Today, there are 203 company-owned and 590 franchised restaurants in 27 states. Most of the restaurants are in the Southern US; they still feature the 99-cent burgers. With chicken and fish sandwiches on the menu, kids love these type restaurants. However, to appeal to the grown ups in the family, Checkers has announced the Jim Beam(R) Double Cheddar burger and Cheddar Chicken sandwiches made with Jim Beam BBQ Sauce. These new adult- focused sandwiches are topped with slow-cooked Jim Beam Bourbon BBQ sauce, grilled red onions, and smoked cheddar cheese.

As the Official Burger and Drive-Thru Restaurant of NASCAR, Checkers/Rally's recognizes the NASCAR NEXTEL Cup Series team with the best pit road performance each week with a $10,000 prize. At the end of the 2005/06 season, Checkers /Rally's will award the $100,000 grand prize to the team that earns the most Checkers/Rally's Double Drive-Thru Challenge wins throughout the race season.

On October 19th Checkers announced earnings for their 3rd quarter ending September 12, 2005. Total revenue, including franchise royalty and fee income, was $43.2 million for the quarter ending September 12, 2005, compared to $45.0 million for the quarter ending September 6, 2004. The first three quarters of 2005 compared to a year ago showed that Company-owned and Franchised same-store sales grew 3.7% and 2.3%, respectively. Company-owned restaurants generated sales of $38.4 million versus $40.7 million in the third quarter of 2004, as the Company operated 7 fewer restaurants this year. The reduction in restaurants was primarily due to the sale of Company-owned restaurants to franchisees. The Company estimates that Company-owned restaurant sales were impacted by $800,000 during the 3rd quarter of 2005 due to store closures related to Hurricane Katrina.

During the 3rd quarter of 2005, Company-owned same-store sales increased 0.2%, marking positive same-store sales results for the Company in eighteen of the last nineteen quarters. Franchise royalty revenue increased to $4.7 million from $3.9 million in the 3rd quarter of 2004, while franchise same-store sales declined 2.0%.

Net income for the 3rd quarter of 2005 was $.10 per share, down $0.03 per share versus last year or $1.2 million versus $1.6 million. Unusual items in the 3rd quarter included $840,000 for Board of Directors fees up from $544,000 in the prior year, and $250,000 hurricane-related insurance deductible expense. In addition, the Company recorded $746,000 in income tax expense for the quarter, although only minimal income taxes are expected to be paid in 2005, as net operating loss carry forwards will be used to offset the majority of taxable income.

Keith Sirois, Checkers (CHKR)Drive-In Restaurants, Inc.'s Chief Executive Officer and President, felt their core operations were solid and their fundamentals remained positive. Significant resources in this quarter went to address the disruption caused by Hurricane Katrina to their Company-owned and franchised operations in New Orleans. The Hurricane closed 20 of their company-operated stores in New Orleans, 8 of which are back in operation with sales currently exceeding pre-hurricane sales of over 15%. However, the recovery and recording of insurance proceeds will benefit future quarters.

Mr. Sirois said "In this cost conscious environment, our ability to convey a compelling price/value proposition is critical to our performance. While we understand the effect high gasoline prices are having on our guests, we also recognize the opportunity it offers us to attract new customers to our brand, as they trade out of full service to quick service restaurants."

Are you willing to drive up and take home lunch or dinner? That is what Checkers/Rally’s is counting on. Their 52 week high and low come within 5 months of each other- High on 9/30/05 @ $15.36 and Low on 4/15/05 @$11.55. Opening today at $14.60, up 21 points, is Checkers on a Rally to beat its competition?

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