##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
 For the quarterly period ended August 10, 2009
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
 For the transition period from  to .
 Commission file number 1-11313
 
 CKE RESTAURANTS, INC.
 (Exact name of registrant as specified in its charter)
 Delaware
(State or Other Jurisdiction of 
Incorporation or Organization)
    
    33-0602639
(I.R.S. Employer
Identification No.)6307 Carpinteria Avenue, Ste. A, Carpinteria,  California

(Address of Principal Executive Offices)
    
    93013
(Zip Code)
 Registrants telephone number, including area code: (805) 745-7500
 Former Name, Former Address and Former Fiscal Year, if changed since last report.
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o
 Yes o No þ




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##### 



CKE RESTAURANTS, INC. AND SUBSIDIARIES
INDEX
 Page No.Part I. Financial InformationItem 1. Condensed Consolidated Financial Statements (Unaudited):Condensed Consolidated Balance Sheets as of August 10, 2009 and January 31, 2009
    
    
    3Condensed Consolidated Statements of Income for the twelve and twenty-eight weeks ended
August 10, 2009 and August 11, 2008
    
    
    4Condensed Consolidated Statements of Cash Flows for the twenty-eight weeks ended August
10, 2009 and August 11, 2008
    
    
    5Notes to Condensed Consolidated Financial Statements
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    15Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    29Item 4. Controls and Procedures
    
    
    29Part II. Other InformationItem 4. Submission of Matters to a Vote of Security Holders
    
    
    30Item 6. Exhibits
    
    
    31Signatures
    
    
    32Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




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##### Table of Contents



Part I. Financial Information
 
 Item 1.
    
    Condensed Consolidated Financial Statements
 CKE RESTAURANTS, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 AS OF AUGUST 10, 2009 AND JANUARY 31, 2009
 (In thousands, except par values)
 (Unaudited)
 August 10, 2009
    
    
    January 31, 2009ASSETSCurrent assets:Cash and cash equivalents
    
    $
    19,194
    
    
    $
    17,869Accounts receivable, net of allowance for doubtful accounts
of $471 as of August 10, 2009 and $720 as of January 31,
2009
    
    
    31,567
    
    
    
    40,738Related party trade receivables
    
    
    5,206
    
    
    
    4,923Inventories, net
    
    
    22,708
    
    
    
    24,215Prepaid expenses
    
    
    11,565
    
    
    
    13,445Assets held for sale
    
    
    512
    
    
    
    805Advertising fund assets, restricted
    
    
    19,242
    
    
    
    16,340Deferred income tax assets, net
    
    
    18,000
    
    
    
    20,781Other current assets
    
    
    2,864
    
    
    
    1,843Total current assets
    
    
    130,858
    
    
    
    140,959Notes receivable, net of allowance for doubtful accounts of
$408 as of August 10, 2009 and $529 as of January 31, 2009
    
    
    1,465
    
    
    
    3,259Property and equipment, net of accumulated depreciation and
amortization of $435,205 as of August 10, 2009 and $420,375 as
of January 31, 2009
    
    
    555,398
    
    
    
    543,770Property under capital leases, net of accumulated amortization
of $45,296 as of August 10, 2009 and $48,341 as of January 31,
2009
    
    
    34,198
    
    
    
    23,403Deferred income tax assets, net
    
    
    51,423
    
    
    
    57,832Goodwill
    
    
    24,106
    
    
    
    23,688Intangible assets, net
    
    
    2,422
    
    
    
    2,508Other assets, net
    
    
    8,832
    
    
    
    9,268Total assets
    
    $
    808,702
    
    
    $
    804,687LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Current portion of bank indebtedness and other long-term debt
    
    $
    2,709
    
    
    $
    4,341Current portion of capital lease obligations
    
    
    7,648
    
    
    
    6,389Accounts payable
    
    
    43,501
    
    
    
    60,903Advertising fund liabilities
    
    
    19,242
    
    
    
    16,340Other current liabilities
    
    
    102,400
    
    
    
    91,765Total current liabilities
    
    
    175,500
    
    
    
    179,738Bank indebtedness and other long-term debt, less current portion
    
    
    287,107
    
    
    
    310,447Capital lease obligations, less current portion
    
    
    44,992
    
    
    
    36,273Other long-term liabilities
    
    
    83,325
    
    
    
    83,953Total liabilities
    
    
    590,924
    
    
    
    610,411Commitments and contingencies (Notes 5 and 7)Subsequent events (Notes 8 and 15)Stockholders equity:Preferred stock, $.01 par value; 5,000 shares authorized;
none issued or outstanding
    
    
    
    
    
    
    Series A Junior Participating Preferred stock, $.01 par
value; 1,500 shares authorized; none issued or outstanding
    
    
    
    
    
    
    Common stock, $.01 par value; 100,000 shares authorized;
54,583 shares issued and outstanding as of August 10, 2009;
54,653 shares issued and outstanding as of January 31, 2009
    
    
    546
    
    
    
    546Additional paid-in capital
    
    
    279,471
    
    
    
    276,068Accumulated deficit
    
    
    (62,239
    )
    
    
    (82,338
    )Total stockholders equity
    
    
    217,778
    
    
    
    194,276Total liabilities and stockholders equity
    
    $
    808,702
    
    
    $
    804,687
 See Accompanying Notes to Condensed Consolidated Financial Statements
  3




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##### Table of Contents



CKE RESTAURANTS, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
 (In thousands, except per share amounts)
 (Unaudited)
 Twelve Weeks Ended
    
    
    Twenty-Eight  Weeks EndedAugust 10, 2009
    
    
    August 11, 2008
    
    
    August 10, 2009
    
    
    August 11, 2008Revenue:Company-operated restaurants
    
    $
    257,794
    
    
    $
    267,075
    
    
    $
    600,958
    
    
    $
    625,313Franchised and licensed restaurants and other
    
    
    78,173
    
    
    
    85,415
    
    
    
    181,813
    
    
    
    193,348Total revenue
    
    
    335,967
    
    
    
    352,490
    
    
    
    782,771
    
    
    
    818,661Operating costs and expenses:Restaurant operating costs:Food and packaging
    
    
    73,899
    
    
    
    80,355
    
    
    
    172,401
    
    
    
    185,429Payroll and other employee benefits
    
    
    72,387
    
    
    
    75,429
    
    
    
    169,756
    
    
    
    179,112Occupancy and other
    
    
    61,750
    
    
    
    59,811
    
    
    
    140,587
    
    
    
    137,846Total restaurant operating costs
    
    
    208,036
    
    
    
    215,595
    
    
    
    482,744
    
    
    
    502,387Franchised and licensed restaurants and other
    
    
    58,333
    
    
    
    65,590
    
    
    
    137,826
    
    
    
    148,657Advertising
    
    
    15,005
    
    
    
    15,699
    
    
    
    35,772
    
    
    
    36,797General and administrative
    
    
    30,971
    
    
    
    32,370
    
    
    
    72,084
    
    
    
    76,881Facility action charges, net
    
    
    1,454
    
    
    
    351
    
    
    
    2,502
    
    
    
    1,424Total operating costs and expenses
    
    
    313,799
    
    
    
    329,605
    
    
    
    730,928
    
    
    
    766,146Operating income
    
    
    22,168
    
    
    
    22,885
    
    
    
    51,843
    
    
    
    52,515Interest expense
    
    
    (2,060
    )
    
    
    (2,399
    )
    
    
    (8,404
    )
    
    
    (6,967
    )Other income, net
    
    
    425
    
    
    
    529
    
    
    
    1,287
    
    
    
    1,521Income before income taxes
    
    
    20,533
    
    
    
    21,015
    
    
    
    44,726
    
    
    
    47,069Income tax expense
    
    
    8,283
    
    
    
    8,675
    
    
    
    18,081
    
    
    
    18,109Net income
    
    $
    12,250
    
    
    $
    12,340
    
    
    $
    26,645
    
    
    $
    28,960Dividends per common share
    
    $
    0.06
    
    
    $
    0.06
    
    
    $
    0.12
    
    
    $
    0.12Income per common share:Basic
    
    $
    0.22
    
    
    $
    0.24
    
    
    $
    0.49
    
    
    $
    0.55Diluted
    
    $
    0.22
    
    
    $
    0.23
    
    
    $
    0.48
    
    
    $
    0.53Weighted-average common shares outstanding:Basic
    
    
    54,584
    
    
    
    52,507
    
    
    
    54,602
    
    
    
    52,467Diluted
    
    
    55,007
    
    
    
    55,074
    
    
    
    55,024
    
    
    
    55,038
 See Accompanying Notes to Condensed Consolidated Financial Statements
  4




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CKE RESTAURANTS, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (In thousands)
 (Unaudited)
 Twenty-Eight Weeks EndedAugust 10, 2009
    
    
    August 11, 2008Cash flows from operating activities:Net income
    
    $
    26,645
    
    
    $
    28,960Adjustments to reconcile net income to net cash provided by
operating activities:Depreciation and amortization
    
    
    37,812
    
    
    
    33,306Amortization of deferred loan fees
    
    
    563
    
    
    
    701Share-based compensation expense
    
    
    4,238
    
    
    
    6,860Recovery of losses on accounts and notes receivable
    
    
    (303
    )
    
    
    (26
    )Loss on sale of property and equipment and capital leases
    
    
    835
    
    
    
    946Facility action charges, net
    
    
    2,502
    
    
    
    1,424Deferred income taxes
    
    
    9,178
    
    
    
    9,474Other non-cash charges
    
    
    19
    
    
    
    19Net changes in operating assets and liabilities:Receivables, inventories, prepaid expenses and other
current and non-current assets
    
    
    11,330
    
    
    
    5,385Estimated liability for closed restaurants and estimated
liability for self-insurance
    
    
    (1,373
    )
    
    
    (3,306
    )Accounts payable and other current and long-term liabilities
    
    
    (4,316
    )
    
    
    (7,014
    )Net cash provided by operating activities
    
    
    87,130
    
    
    
    76,729Cash flows from investing activities:Purchases of property and equipment
    
    
    (49,513
    )
    
    
    (48,451
    )Proceeds from sale of property and equipment
    
    
    3,401
    
    
    
    16,770Collections of non-trade notes receivable
    
    
    2,018
    
    
    
    2,730Acquisition of restaurants, net of cash acquired
    
    
    (485
    )
    
    
    Other investing activities
    
    
    76
    
    
    
    47Net cash used in investing activities
    
    
    (44,503
    )
    
    
    (28,904
    )Cash flows from financing activities:Net change in bank overdraft
    
    
    (5,170
    )
    
    
    (17,085
    )Borrowings under revolving credit facility
    
    
    75,000
    
    
    
    100,500Repayments of borrowings under revolving credit facility
    
    
    (97,000
    )
    
    
    (108,000
    )Repayments of credit facility term loan
    
    
    (2,962
    )
    
    
    (15,140
    )Repayments of other long-term debt
    
    
    (11
    )
    
    
    (103
    )Repayments of capital lease obligations
    
    
    (3,812
    )
    
    
    (3,038
    )Payment of deferred loan fees
    
    
    
    
    
    
    (399
    )Repurchase of common stock
    
    
    (1,340
    )
    
    
    (1,621
    )Exercise of stock options
    
    
    518
    
    
    
    1,580Excess tax benefits from exercise of stock options
    
    
    29
    
    
    
    163Dividends paid on common stock
    
    
    (6,554
    )
    
    
    (6,295
    )Net cash used in financing activities
    
    
    (41,302
    )
    
    
    (49,438
    )Net increase (decrease) in cash and cash equivalents
    
    
    1,325
    
    
    
    (1,613
    )Cash and cash equivalents at beginning of period
    
    
    17,869
    
    
    
    19,993Cash and cash equivalents at end of period
    
    $
    19,194
    
    
    $
    18,380
 See Accompanying Notes to Condensed Consolidated Financial Statements
  5




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CKE RESTAURANTS, INC. AND SUBSIDIARIES
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (Dollars in thousands, except per share amounts)
 (Unaudited)
 Note 1  Basis of Presentation and Description of Business
 ® ® ® ®
  Carls Jr.
    
    
    Hardees
    
    
    Other
    
    
    TotalCompany-operated
    
    
    421
    
    
    
    478
    
    
    
    1
    
    
    
    900Franchised
    
    
    664
    
    
    
    1,231
    
    
    
    12
    
    
    
    1,907Licensed
    
    
    127
    
    
    
    206
    
    
    
    
    
    
    
    333Total
    
    
    1,212
    
    
    
    1,915
    
    
    
    13
    
    
    
    3,140
   Variable Interest Entities
   Note 2  Accounting Pronouncements Not Yet Adopted and Adoption of New Accounting Pronouncements
 Fair Value Measurements
  6




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CKE RESTAURANTS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(Unaudited)
 Business Combinations
 Disclosures about Derivative Instruments and Hedging
Activities Accounting for Derivative Instruments and Hedging Activities
 Determining
Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities Earnings per Share
 Accounting for Assets Acquired and Liabilities
Assumed in a Business Combination that Arise from Contingencies
 Interim Disclosures about Fair
Value of Financial Instruments
 Subsequent Events
 Amendments to FASB Interpretation No. 46(R)
 Note 3  Assets Held For Sale
   7




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CKE RESTAURANTS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(Unaudited)
 Note 4  Purchase and Sale of Assets
 Purchase of Assets
  Related Party Transactions
   Hardees Refranchising Program
  Note 5  Indebtedness and Interest Expense
    8




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CKE RESTAURANTS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(Unaudited)
    August 10, 2009
    
    
    January 31, 2009Balance
    
    
    
    
    
    
    BalanceSheet
    
    
    Fair
    
    
    Sheet
    
    
    FairLocation
    
    
    Value
    
    
    Location
    
    
    ValueDerivatives not designated as hedging instruments:Interest rate swap agreements
    
    Other current liabilities
    
    
    $
    7,767
    
    
    Other current liabilities
    
    
    $
    7,234Interest rate swap agreements
    


    Other long-term liabilities
    

    
    6,077
    
    

    Other long-term liabilities
    
    

    10,356$
    13,844
    
    
    
    
    
    
    $
    17,590
   Twelve Weeks Ended
    
    
    Twenty-Eight Weeks EndedAugust 10, 2009
    
    
    August 11, 2008
    
    
    August 10, 2009
    
    
    August 11, 2008Facility
    
    $
    1,230
    
    
    $
    2,668
    
    
    $
    3,013
    
    
    $
    7,352Interest rate swap agreements
    
    
    (1,079
    )
    
    
    (1,894
    )
    
    
    1,316
    
    
    
    (4,253
    )Capital lease obligations
    
    
    1,267
    
    
    
    1,017
    
    
    
    2,788
    
    
    
    2,379Amortization of deferred loan fees
    
    
    234
    
    
    
    261
    
    
    
    549
    
    
    
    6032023 Convertible Notes
    
    
    
    
    
    
    140
    
    
    
    
    
    
    
    323Letter of credit fees and other
    
    
    408
    
    
    
    207
    
    
    
    738
    
    
    
    563$
    2,060
    
    
    $
    2,399
    
    
    $
    8,404
    
    
    $
    6,967
  9




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CKE RESTAURANTS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(Unaudited)
 Note 6  Fair Value of Financial Instruments
  August 10, 2009
    
    
    January 31, 2009Carrying
    
    
    Estimated
    
    
    Carrying
    
    
    EstimatedValue
    
    
    Fair Value
    
    
    Value
    
    
    Fair ValueFinancial assets:Cash and cash equivalents
    
    $
    19,194
    
    
    $
    19,194
    
    
    $
    17,869
    
    
    $
    17,869Notes receivable
    
    
    3,072
    
    
    
    3,192
    
    
    
    5,406
    
    
    
    5,171Financial liabilities:Long-term debt and bank indebtedness, including current
portion
    
    
    289,816
    
    
    
    251,715
    
    
    
    314,788
    
    
    
    269,186
   Level 1
    

    Quoted prices in active markets for identical assets or liabilities;Level 2
    

    Observable inputs other than Level 1 prices, such as quoted prices for similar
assets or liabilities; quoted prices in markets that are not active; or other inputs that
are observable or can be corroborated by observable market data for substantially the full
term of the assets or liabilities; andLevel 3
    

Unobservable inputs that are supported by little or no market activity and that
are significant to the fair value of the assets or liabilities.
  Quoted Prices inActive Markets for
    
    
    Significant Other
    
    
    SignificantIdentical Assets
    
    
    Observable Inputs
    
    
    Unobservable InputsTotal
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Interest rate swap agreements
    
    $
    13,844
    
    
    $
    
    
    
    $
    13,844
    
    
    $
    
  Note 7  Commitments and Contingent Liabilities
   10




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CKE RESTAURANTS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(Unaudited)
     Accounting for Contingencies
 Note 8  Stockholders Equity
    11




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CKE RESTAURANTS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(Unaudited)
 Note 9  Share-Based Compensation
   Twelve Weeks Ended
    
    
    Twenty-Eight Weeks EndedAugust 10, 2009
    
    
    August 11, 2008
    
    
    August 10, 2009
    
    
    August 11, 2008Share-based compensation expense
related to performance-vested restricted
stock awards
    
    $
    978
    
    
    $
    976
    
    
    $
    978
    
    
    $
    2,278All other share-based compensation expense
    
    
    1,412
    
    
    
    1,953
    
    
    
    3,264
    
    
    
    4,588Total share-based compensation expense
    
    $
    2,390
    
    
    $
    2,929
    
    
    $
    4,242
    
    
    $
    6,866Associated tax benefits
    
    $
    843
    
    
    $
    864
    
    
    $
    1,465
    
    
    $
    2,034
 Note 10  Facility Action Charges, Net
  Twelve Weeks Ended
    
    
    Twenty-Eight Weeks EndedAugust 10, 2009
    
    
    August 11, 2008
    
    
    August 10, 2009
    
    
    August 11, 2008Estimated liability for new restaurant closures
    
    $
    16
    
    
    $
    579
    
    
    $
    525
    
    
    $
    591Adjustments to estimated liability for closed
restaurants
    
    
    (494
    )
    
    
    (195
    )
    
    
    (318
    )
    
    
    (297
    )Impairment of assets to be disposed of
    
    
    
    
    
    
    805
    
    
    
    
    
    
    
    1,115Impairment of assets to be held and used
    
    
    2,023
    
    
    
    780
    
    
    
    2,046
    
    
    
    780(Gain) loss on sales of restaurants and surplus
properties, net
    
    
    (186
    )
    
    
    (1,727
    )
    
    
    22
    
    
    
    (1,020
    )Amortization of discount related to estimated
liability for closed restaurants
    
    
    95
    
    
    
    109
    
    
    
    227
    
    
    
    255$
    1,454
    
    
    $
    351
    
    
    $
    2,502
    
    
    $
    1,424
  Twelve Weeks Ended
    
    
    Twenty-Eight Weeks EndedAugust 10, 2009
    
    
    August 11, 2008
    
    
    August 10, 2009
    
    
    August 11, 2008Property and equipment:Carls Jr.
    
    $
    1,875
    
    
    $
    116
    
    
    $
    1,879
    
    
    $
    116Hardees
    
    
    27
    
    
    
    1,469
    
    
    
    46
    
    
    
    1,7791,902
    
    
    
    1,585
    
    
    
    1,925
    
    
    
    1,895Property under capital leases:Carls Jr.
    
    
    40
    
    
    
    
    
    
    
    40
    
    
    
    Hardees
    
    
    81
    
    
    
    
    
    
    
    81
    
    
    
    121
    
    
    
    
    
    
    
    121
    
    
    
    Total:Carls Jr.
    
    
    1,915
    
    
    
    116
    
    
    
    1,919
    
    
    
    116Hardees
    
    
    108
    
    
    
    1,469
    
    
    
    127
    
    
    
    1,779$
    2,023
    
    
    $
    1,585
    
    
    $
    2,046
    
    
    $
    1,895
  12




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CKE RESTAURANTS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(Unaudited)
 Note 11  Income Taxes
  Twelve Weeks Ended
    
    
    Twenty-Eight Weeks EndedAugust 10, 2009
    
    
    August 11, 2008
    
    
    August 10, 2009
    
    
    August 11, 2008Federal and state income taxes
    
    $
    8,029
    
    
    $
    8,304
    
    
    $
    17,578
    
    
    $
    17,258Foreign income taxes
    
    
    254
    
    
    
    371
    
    
    
    503
    
    
    
    851Income tax expense
    
    $
    8,283
    
    
    $
    8,675
    
    
    $
    18,081
    
    
    $
    18,109Effective income tax rate
    
    
    40.3
    %
    
    
    41.3
    %
    
    
    40.4
    %
    
    
    38.5
    %
   Note 12  Income Per Share
 The table below presents the computation of basic and diluted income per share:
 Twelve Weeks Ended
    
    
    Twenty-Eight Weeks EndedAugust 10, 2009
    
    
    August 11, 2008
    
    
    August 10, 2009
    
    
    August 11, 2008(In thousands except per share amounts)Numerator:Distributed net income for computation
of basic and diluted distributed income
per share
    
    $
    3,273
    
    
    $
    3,152
    
    
    $
    6,546
    
    
    $
    6,295Undistributed net income for computation
of basic undistributed income per share
    
    $
    8,977
    
    
    $
    9,188
    
    
    $
    20,099
    
    
    $
    22,665Adjustment for interest and amortization
costs for 2023 Convertible Notes, net of
related tax effect
    
    
    
    
    
    
    102
    
    
    
    
    
    
    
    236Undistributed net income for computation
of diluted undistributed income per
share
    
    $
    8,977
    
    
    $
    9,290
    
    
    $
    20,099
    
    
    $
    22,901Net income for computation of basic
income per share
    
    $
    12,250
    
    
    $
    12,340
    
    
    $
    26,645
    
    
    $
    28,960Net income for computation of diluted
income per share
    
    $
    12,250
    
    
    $
    12,442
    
    
    $
    26,645
    
    
    $
    29,196Denominator:Weighted-average shares for computation
of basic income per share
    
    
    54,584
    
    
    
    52,507
    
    
    
    54,602
    
    
    
    52,467Dilutive effect of stock options
    
    
    423
    
    
    
    780
    
    
    
    422
    
    
    
    794Dilutive effect of 2023 Convertible Notes
    
    
    
    
    
    
    1,787
    
    
    
    
    
    
    
    1,777Weighted-average shares for computation
of diluted income per share
    
    
    55,007
    
    
    
    55,074
    
    
    
    55,024
    
    
    
    55,038Basic income per share:Distributed income per share
    
    $
    0.06
    
    
    $
    0.06
    
    
    $
    0.12
    
    
    $
    0.12Undistributed income per share
    
    
    0.16
    
    
    
    0.18
    
    
    
    0.37
    
    
    
    0.43Net income per share
    
    $
    0.22
    
    
    $
    0.24
    
    
    $
    0.49
    
    
    $
    0.55Diluted income per share:Distributed income per share
    
    $
    0.06
    
    
    $
    0.06
    
    
    $
    0.12
    
    
    $
    0.11Undistributed income per share
    
    
    0.16
    
    
    
    0.17
    
    
    
    0.36
    
    
    
    0.42Net income per share
    
    $
    0.22
    
    
    $
    0.23
    
    
    $
    0.48
    
    
    $
    0.53
  13




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##### Table of Contents



CKE RESTAURANTS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(Unaudited)
 Note 13  Segment Information
  Twelve Weeks Ended August 10, 2009
    
    Carls Jr.
    
    
    Hardees
    
    
    Other
    
    
    TotalRevenue
    
    $
    201,146
    
    
    $
    134,631
    
    
    $
    190
    
    
    $
    335,967Operating income
    
    
    13,510
    
    
    
    8,598
    
    
    
    60
    
    
    
    22,168Income (loss) before income taxes
    
    
    13,052
    
    
    
    7,611
    
    
    
    (130
    )
    
    
    20,533
 Twelve Weeks Ended August 11, 2008
    
    Carls Jr.
    
    
    Hardees
    
    
    Other
    
    
    TotalRevenue
    
    $
    211,188
    
    
    $
    141,106
    
    
    $
    196
    
    
    $
    352,490Operating income
    
    
    16,672
    
    
    
    6,125
    
    
    
    88
    
    
    
    22,885Income (loss) before income taxes
    
    
    16,397
    
    
    
    5,059
    
    
    
    (441
    )
    
    
    21,015
 Twenty-Eight Weeks Ended August 10, 2009
    
    Carls Jr.
    
    
    Hardees
    
    
    Other
    
    
    TotalRevenue
    
    $
    469,034
    
    
    $
    313,241
    
    
    $
    496
    
    
    $
    782,771Operating income
    
    
    34,007
    
    
    
    17,601
    
    
    
    235
    
    
    
    51,843Income (loss) before income taxes
    
    
    33,259
    
    
    
    15,653
    
    
    
    (4,186
    )
    
    
    44,726
 Twenty-Eight Weeks Ended August 11, 2008
    
    Carls Jr.
    
    
    Hardees
    
    
    Other
    
    
    TotalRevenue
    
    $
    487,066
    
    
    $
    331,129
    
    
    $
    466
    
    
    $
    818,661Operating income
    
    
    40,723
    
    
    
    11,593
    
    
    
    199
    
    
    
    52,515Income (loss) before income taxes
    
    
    40,143
    
    
    
    8,919
    
    
    
    (1,993
    )
    
    
    47,069
 Note 14  Supplemental Cash Flow Information
 Twenty-Eight Weeks EndedAugust 10, 2009
    
    
    August 11, 2008Cash paid for:Interest, net of amounts capitalized
    
    $
    11,283
    
    
    $
    10,252Income taxes, net of refunds received
    
    
    2,006
    
    
    
    1,406Non-cash investing and financing activities:Dividends declared, not paid
    
    
    3,275
    
    
    
    3,155Capital lease obligations incurred to acquire assets
    
    
    14,267
    
    
    
    Accrued property and equipment purchases at quarter-end
    
    
    4,756
    
    
    
    8,014
 Note 15  Subsequent Events




14



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##### Table of Contents



CKE RESTAURANTS, INC. AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS
(Dollars in thousands, except per share amounts)
 
 Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
 Introduction and Safe Harbor Disclosure
    New Accounting Pronouncements Not Yet Adopted and Adoption of New Accounting Pronouncements
  Critical Accounting Policies
  Impairment of Property and Equipment and Other Amortizable Long-Lived Assets Held and Used, Held
for Sale or To Be Disposed of Other Than By Sale
   15




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##### Table of Contents



CKE RESTAURANTS, INC. AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS
(Dollars in thousands, except per share amounts)
 Impairment of Goodwill
  Estimated Liability for Closed Restaurants
  Estimated Liability for Self-Insurance
   Franchised and Licensed Operations
  Income Taxes
   Significant Known Events, Trends, or Uncertainties Expected to Impact Fiscal 2010 Comparisons with
Fiscal 2009
   16




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##### Table of Contents



CKE RESTAURANTS, INC. AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS
(Dollars in thousands, except per share amounts)
 Fiscal Year and Seasonality
   Operating Review
  Twelve Weeks Ended
    
    
    Twenty-Eight Weeks EndedAugust 10, 2009
    
    
    August 11, 2008
    
    
    August 10, 2009
    
    
    August 11, 2008Revenue:Company-operated restaurants
    
    
    76.7
    %
    
    
    75.8
    %
    
    
    76.8
    %
    
    
    76.4
    %Franchised and licensed restaurants
and other
    
    
    23.3
    
    
    
    24.2
    
    
    
    23.2
    
    
    
    23.6Total revenue
    
    
    100.0
    
    
    
    100.0
    
    
    
    100.0
    
    
    
    100.0Operating costs and expenses:Restaurant operating costs (1):Food and packaging
    
    
    28.7
    
    
    
    30.1
    
    
    
    28.7
    
    
    
    29.7Payroll and other employee benefits
    
    
    28.1
    
    
    
    28.2
    
    
    
    28.2
    
    
    
    28.6Occupancy and other
    
    
    24.0
    
    
    
    22.4
    
    
    
    23.4
    
    
    
    22.0Total restaurant operating costs
    
    
    80.7
    
    
    
    80.7
    
    
    
    80.3
    
    
    
    80.3Franchised and licensed restaurants
and other (2)
    
    
    74.6
    
    
    
    76.8
    
    
    
    75.8
    
    
    
    76.9Advertising (1)
    
    
    5.8
    
    
    
    5.9
    
    
    
    6.0
    
    
    
    5.9General and administrative
    
    
    9.2
    
    
    
    9.2
    
    
    
    9.2
    
    
    
    9.4Facility action charges, net
    
    
    0.4
    
    
    
    0.1
    
    
    
    0.3
    
    
    
    0.2Operating income
    
    
    6.6
    
    
    
    6.5
    
    
    
    6.6
    
    
    
    6.4Interest expense
    
    
    (0.6
    )
    
    
    (0.7
    )
    
    
    (1.1
    )
    
    
    (0.9
    )Other income, net
    
    
    0.1
    
    
    
    0.2
    
    
    
    0.2
    
    
    
    0.2Income before income taxes
    
    
    6.1
    
    
    
    6.0
    
    
    
    5.7
    
    
    
    5.7Income tax expense
    
    
    2.5
    
    
    
    2.5
    
    
    
    2.3
    
    
    
    2.2Net income
    
    
    3.6
    %
    
    
    3.5
    %
    
    
    3.4
    %
    
    
    3.5
    %
 
 (1)
    
    As a percent of company-operated restaurants revenue.(2)
    
    As a percent of franchised and licensed restaurants and other revenue.  17




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##### Table of Contents



CKE RESTAURANTS, INC. AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS
(Dollars in thousands, except per share amounts)
  Twelve Weeks Ended
    
    
    Twenty-Eight Weeks EndedAugust 10, 2009
    
    
    August 11, 2008
    
    
    August 10, 2009
    
    
    August 11, 2008Company-operated restaurants revenue
    
    $
    257,794
    
    
    $
    267,075
    
    
    $
    600,958
    
    
    $
    625,313Restaurant operating costs:Food and packaging
    
    
    73,899
    
    
    
    80,355
    
    
    
    172,401
    
    
    
    185,429Payroll and other employee benefits
    
    
    72,387
    
    
    
    75,429
    
    
    
    169,756
    
    
    
    179,112Occupancy and other
    
    
    61,750
    
    
    
    59,811
    
    
    
    140,587
    
    
    
    137,846Total restaurant operating costs
    
    
    208,036
    
    
    
    215,595
    
    
    
    482,744
    
    
    
    502,387Franchised and licensed restaurants and
other revenue:Royalties
    
    
    20,288
    
    
    
    20,161
    
    
    
    45,967
    
    
    
    45,165Distribution centers
    
    
    49,409
    
    
    
    56,146
    
    
    
    116,566
    
    
    
    126,835Rent
    
    
    7,852
    
    
    
    8,228
    
    
    
    17,946
    
    
    
    17,848Franchise fees
    
    
    624
    
    
    
    880
    
    
    
    1,334
    
    
    
    3,500Total franchised and licensed
restaurants and other revenue
    
    
    78,173
    
    
    
    85,415
    
    
    
    181,813
    
    
    
    193,348Franchised and licensed restaurants and
other expenses:Administrative expense (including
provision for bad debts)
    
    
    3,208
    
    
    
    3,328
    
    
    
    7,846
    
    
    
    7,909Distribution centers
    
    
    48,645
    
    
    
    56,017
    
    
    
    114,865
    
    
    
    126,563Rent and other occupancy
    
    
    6,480
    
    
    
    6,245
    
    
    
    15,115
    
    
    
    14,185Total franchised and licensed
restaurants and other expenses
    
    
    58,333
    
    
    
    65,590
    
    
    
    137,826
    
    
    
    148,657Advertising
    
    
    15,005
    
    
    
    15,699
    
    
    
    35,772
    
    
    
    36,797General and administrative
    
    
    30,971
    
    
    
    32,370
    
    
    
    72,084
    
    
    
    76,881Facility action charges, net
    
    
    1,454
    
    
    
    351
    
    
    
    2,502
    
    
    
    1,424Operating income
    
    $
    22,168
    
    
    $
    22,885
    
    
    $
    51,843
    
    
    $
    52,515
  FranchisedCompany-
    
    
    andoperated
    
    
    licensed
    
    
    TotalOpen at August 11, 2008
    
    
    928
    
    
    
    2,172
    
    
    
    3,100New
    
    
    25
    
    
    
    74
    
    
    
    99Closed
    
    
    (19
    )
    
    
    (40
    )
    
    
    (59
    )Divested
    
    
    (40
    )
    
    
    (6
    )
    
    
    (46
    )Acquired
    
    
    6
    
    
    
    40
    
    
    
    46Open at August 10, 2009
    
    
    900
    
    
    
    2,240
    
    
    
    3,140
  18




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##### Table of Contents



CKE RESTAURANTS, INC. AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS
(Dollars in thousands, except per share amounts)
 Carls Jr.
 Twelve Weeks Ended
    
    
    Twenty-Eight Weeks EndedAugust 10, 2009
    
    
    August 11, 2008
    
    
    August 10, 2009
    
    
    August 11, 2008Company-operated restaurants revenue
    
    $
    143,551
    
    
    $
    147,134
    
    
    $
    335,619
    
    
    $
    342,362Restaurant operating costs:Food and packaging
    
    
    40,636
    
    
    
    43,929
    
    
    
    94,772
    
    
    
    100,434Payroll and other employee benefits
    
    
    38,593
    
    
    
    39,582
    
    
    
    90,323
    
    
    
    91,501Occupancy and other
    
    
    34,654
    
    
    
    33,239
    
    
    
    78,858
    
    
    
    76,106Total restaurant operating costs
    
    
    113,883
    
    
    
    116,750
    
    
    
    263,953
    
    
    
    268,041Franchised and licensed restaurants and
other revenue:Royalties
    
    
    7,529
    
    
    
    8,054
    
    
    
    17,287
    
    
    
    18,380Distribution centers
    
    
    44,620
    
    
    
    50,603
    
    
    
    103,956
    
    
    
    113,892Rent
    
    
    5,090
    
    
    
    5,003
    
    
    
    11,469
    
    
    
    11,358Franchise fees
    
    
    356
    
    
    
    394
    
    
    
    703
    
    
    
    1,074Total franchised and licensed
restaurants and other revenue
    
    
    57,595
    
    
    
    64,054
    
    
    
    133,415
    
    
    
    144,704Franchised and licensed restaurants and
other expenses:Administrative expense (including
provision for bad debts)
    
    
    1,575
    
    
    
    1,716
    
    
    
    3,927
    
    
    
    3,876Distribution centers
    
    
    43,982
    
    
    
    50,434
    
    
    
    102,412
    
    
    
    113,331Rent and other occupancy
    
    
    4,323
    
    
    
    4,268
    
    
    
    10,214
    
    
    
    9,865Total franchised and licensed
restaurants and other expenses
    
    
    49,880
    
    
    
    56,418
    
    
    
    116,553
    
    
    
    127,072Advertising
    
    
    8,690
    
    
    
    8,687
    
    
    
    20,319
    
    
    
    20,121General and administrative
    
    
    13,845
    
    
    
    13,461
    
    
    
    32,453
    
    
    
    32,278Facility action charges, net
    
    
    1,338
    
    
    
    (800
    )
    
    
    1,749
    
    
    
    (1,169
    )Operating income
    
    $
    13,510
    
    
    $
    16,672
    
    
    $
    34,007
    
    
    $
    40,723Company-operated average unit volume
(trailing-13 periods)
    
    $
    1,486
    
    
    $
    1,527Franchise-operated average unit volume
(trailing-13 periods)
    
    $
    1,145
    
    
    $
    1,197Company-operated same-store sales
(decrease) increase
    
    
    (6.1
    )%
    
    
    3.8
    %
    
    
    (5.6
    )%
    
    
    3.9
    %Franchise-operated same-store sales
decrease
    
    
    (6.6
    )%
    
    
    (0.3
    )%
    
    
    (6.1
    )%
    
    
    (0.5
    )%Company-operated same-store transaction
(decrease) increase
    
    
    (4.9
    )%
    
    
    (0.3
    )%
    
    
    (4.7
    )%
    
    
    0.9
    %Average check (actual $)
    
    $
    7.04
    
    
    $
    7.10
    
    
    $
    6.98
    
    
    $
    7.00Restaurant operating costs as a % of
company-operated restaurants revenue:Food and packaging
    
    
    28.3
    %
    
    
    29.9
    %
    
    
    28.2
    %
    
    
    29.3
    %Payroll and other employee benefits
    
    
    26.9
    %
    
    
    26.9
    %
    
    
    26.9
    %
    
    
    26.7
    %Occupancy and other
    
    
    24.1
    %
    
    
    22.6
    %
    
    
    23.5
    %
    
    
    22.2
    %Total restaurant operating costs
    
    
    79.3
    %
    
    
    79.3
    %
    
    
    78.6
    %
    
    
    78.3
    %Advertising as a percentage of
company-operated restaurants revenue
    
    
    6.1
    %
    
    
    5.9
    %
    
    
    6.1
    %
    
    
    5.9
    %
  19




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##### Table of Contents



CKE RESTAURANTS, INC. AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS
(Dollars in thousands, except per share amounts)
  FranchisedCompany-
    
    
    andoperated
    
    
    licensed
    
    
    TotalOpen at August 11, 2008
    
    
    408
    
    
    
    762
    
    
    
    1,170New
    
    
    20
    
    
    
    41
    
    
    
    61Closed
    
    
    (5
    )
    
    
    (14
    )
    
    
    (19
    )Divested
    
    
    (3
    )
    
    
    (1
    )
    
    
    (4
    )Acquired
    
    
    1
    
    
    
    3
    
    
    
    4Open at August 10, 2009
    
    
    421
    
    
    
    791
    
    
    
    1,212
 Company-Operated Restaurants
    Twenty-Twelve
    
    
    EightWeeks
    
    
    WeeksRestaurant operating costs as a percentage of
company-operated restaurants revenue for the period ended
August 11, 2008
    
    
    79.3
    %
    
    
    78.3
    %Decrease in food and packaging costs
    
    
    (1.6
    )
    
    
    (1.1
    )Increase in depreciation and amortization expense
    
    
    0.8
    
    
    
    0.7Decrease in utilities expense
    
    
    (0.6
    )
    
    
    (0.3
    )Increase in labor costs, excluding workers compensation
    
    
    0.5
    
    
    
    0.2Decrease in workers compensation expense
    
    
    (0.5
    )
    
    
    Increase in rent expense
    
    
    0.4
    
    
    
    0.4Increase in general liability insurance expense
    
    
    0.2
    
    
    
    0.1Increase in property tax expense
    
    
    0.2
    
    
    
    0.1Increase in banking costs
    
    
    0.2
    
    
    
    0.2Other, net
    
    
    0.4
    
    
    
    Restaurant operating costs as a percentage of
company-operated restaurants revenue for the period ended
August 10, 2009
    
    
    79.3
    %
    
    
    78.6
    %
      20




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##### Table of Contents



CKE RESTAURANTS, INC. AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS
(Dollars in thousands, except per share amounts)
   Franchised and Licensed Restaurants
       21




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##### Table of Contents



CKE RESTAURANTS, INC. AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS
(Dollars in thousands, except per share amounts)
 Hardees
 Twelve Weeks Ended
    
    
    Twenty-Eight Weeks EndedAugust 10, 2009
    
    
    August 11, 2008
    
    
    August 10, 2009
    
    
    August 11, 2008Company-operated restaurants revenue
    
    $
    114,188
    
    
    $
    119,873
    
    
    $
    265,203
    
    
    $
    282,796Restaurant operating costs:Food and packaging
    
    
    33,237
    
    
    
    36,415
    
    
    
    77,583
    
    
    
    84,945Payroll and other employee benefits
    
    
    33,764
    
    
    
    35,815
    
    
    
    79,364
    
    
    
    87,539Occupancy and other
    
    
    27,059
    
    
    
    26,551
    
    
    
    61,671
    
    
    
    61,690Total restaurant operating costs
    
    
    94,060
    
    
    
    98,781
    
    
    
    218,618
    
    
    
    234,174Franchised and licensed restaurants and
other revenue:Royalties
    
    
    12,623
    
    
    
    11,989
    
    
    
    28,389
    
    
    
    26,484Distribution centers
    
    
    4,789
    
    
    
    5,543
    
    
    
    12,610
    
    
    
    12,943Rent
    
    
    2,764
    
    
    
    3,225
    
    
    
    6,408
    
    
    
    6,490Franchise fees
    
    
    267
    
    
    
    476
    
    
    
    631
    
    
    
    2,416Total franchised and licensed
restaurants and other revenue
    
    
    20,443
    
    
    
    21,233
    
    
    
    48,038
    
    
    
    48,333Franchised and licensed restaurants and
other expenses:Administrative expense (including
provision for bad debts)
    
    
    1,633
    
    
    
    1,611
    
    
    
    3,919
    
    
    
    4,032Distribution centers
    
    
    4,663
    
    
    
    5,583
    
    
    
    12,452
    
    
    
    13,232Rent and other occupancy
    
    
    2,157
    
    
    
    1,977
    
    
    
    4,902
    
    
    
    4,320Total franchised and licensed
restaurants and other expenses
    
    
    8,453
    
    
    
    9,171
    
    
    
    21,273
    
    
    
    21,584Advertising
    
    
    6,315
    
    
    
    7,011
    
    
    
    15,453
    
    
    
    16,675General and administrative
    
    
    17,089
    
    
    
    18,867
    
    
    
    39,543
    
    
    
    44,510Facility action charges, net
    
    
    116
    
    
    
    1,151
    
    
    
    753
    
    
    
    2,593Operating income
    
    $
    8,598
    
    
    $
    6,125
    
    
    $
    17,601
    
    
    $
    11,593Company-operated average unit volume
(trailing-13 periods)
    
    $
    1,006
    
    
    $
    973Franchise-operated average unit volume
(trailing-13 periods)
    
    $
    981
    
    
    $
    961Company-operated same-store sales
(decrease) increase
    
    
    (2.7
    )%
    
    
    3.3
    %
    
    
    0.2
    %
    
    
    1.0
    %Franchise-operated same-store sales
(decrease) increase
    
    
    (0.2
    )%
    
    
    2.0
    %
    
    
    1.6
    %
    
    
    0.1
    %Company-operated same-store transaction
(decrease) increase
    
    
    (0.2
    )%
    
    
    (2.6
    )%
    
    
    1.1
    %
    
    
    (3.1
    )%Average check (actual $)
    
    $
    5.14
    
    
    $
    5.30
    
    
    $
    5.08
    
    
    $
    5.16Restaurant operating costs as a % of
company-operated restaurants revenue:Food and packaging
    
    
    29.1
    %
    
    
    30.4
    %
    
    
    29.3
    %
    
    
    30.0
    %Payroll and other employee benefits
    
    
    29.6
    %
    
    
    29.9
    %
    
    
    29.9
    %
    
    
    31.0
    %Occupancy and other
    
    
    23.7
    %
    
    
    22.1
    %
    
    
    23.3
    %
    
    
    21.8
    %Total restaurant operating costs
    
    
    82.4
    %
    
    
    82.4
    %
    
    
    82.4
    %
    
    
    82.8
    %Advertising as a percentage of
company-operated restaurants revenue
    
    
    5.5
    %
    
    
    5.8
    %
    
    
    5.8
    %
    
    
    5.9
    %
  22




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##### Table of Contents



CKE RESTAURANTS, INC. AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS
(Dollars in thousands, except per share amounts)
  FranchisedCompany-
    
    
    andoperated
    
    
    licensed
    
    
    TotalOpen at August 11, 2008
    
    
    519
    
    
    
    1,398
    
    
    
    1,917New
    
    
    5
    
    
    
    33
    
    
    
    38Closed
    
    
    (14
    )
    
    
    (26
    )
    
    
    (40
    )Divested
    
    
    (37
    )
    
    
    (5
    )
    
    
    (42
    )Acquired
    
    
    5
    
    
    
    37
    
    
    
    42Open at August 10, 2009
    
    
    478
    
    
    
    1,437
    
    
    
    1,915
 Company-Operated Restaurants
    Twenty-Twelve
    
    
    EightWeeks
    
    
    WeeksRestaurant operating costs as a percentage of
company-operated restaurants revenue for the period ended
August 11, 2008
    
    
    82.4
    %
    
    
    82.8
    %Decrease in food and packaging costs
    
    
    (1.3
    )
    
    
    (0.7
    )Increase in depreciation and amortization expense
    
    
    1.2
    
    
    
    1.2Decrease in labor costs, excluding workers compensation
    
    
    (0.4
    )
    
    
    (1.1
    )Increase in sales and use tax expense
    
    
    0.2
    
    
    
    0.2Other, net
    
    
    0.3
    
    
    
    Restaurant operating costs as a percentage of
company-operated restaurants revenue for the period ended
August 10, 2009
    
    
    82.4
    %
    
    
    82.4
    %
     23




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##### Table of Contents



CKE RESTAURANTS, INC. AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS
(Dollars in thousands, except per share amounts)
 Franchised and Licensed Restaurants
     Consolidated Expenses
 General and Administrative Expense
    24




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##### Table of Contents



CKE RESTAURANTS, INC. AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS
(Dollars in thousands, except per share amounts)
 Interest Expense
   Income Tax Expense
  Presentation of Non-GAAP Measurements
 Adjusted EBITDA
  Trailing-13Twelve Weeks Ended
    
    
    Twenty-Eight Weeks Ended
    
    
    Periods EndedAugust 10, 2009
    
    
    August 11, 2008
    
    
    August 10, 2009
    
    
    August 11, 2008
    
    
    August 10, 2009Net income
    
    $
    12,250
    
    
    $
    12,340
    
    
    $
    26,645
    
    
    $
    28,960
    
    
    $
    34,641Interest expense
    
    
    2,060
    
    
    
    2,399
    
    
    
    8,404
    
    
    
    6,967
    
    
    
    30,046Income tax expense
    
    
    8,283
    
    
    
    8,675
    
    
    
    18,081
    
    
    
    18,109
    
    
    
    21,505Depreciation and amortization
    
    
    16,514
    
    
    
    14,324
    
    
    
    37,812
    
    
    
    33,306
    
    
    
    68,003Facility action charges, net
    
    
    1,454
    
    
    
    351
    
    
    
    2,502
    
    
    
    1,424
    
    
    
    5,217Share-based compensation
expense
    
    
    2,390
    
    
    
    2,929
    
    
    
    4,242
    
    
    
    6,866
    
    
    
    9,910Adjusted EBITDA
    
    $
    42,951
    
    
    $
    41,018
    
    
    $
    97,686
    
    
    $
    95,632
    
    
    $
    169,322
  25




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##### Table of Contents



CKE RESTAURANTS, INC. AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS
(Dollars in thousands, except per share amounts)
 Liquidity and Capital Resources
          26




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##### Table of Contents



CKE RESTAURANTS, INC. AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS
(Dollars in thousands, except per share amounts)
      Twenty-Eight Weeks EndedAugust 10, 2009
    
    
    August 11, 2008Non-discretionary:Remodels:Carls Jr.
    
    $
    3,219
    
    
    $
    6,126Hardees
    
    
    12,954
    
    
    
    8,935Capital Maintenance:Carls Jr.
    
    
    8,207
    
    
    
    5,679Hardees
    
    
    8,426
    
    
    
    7,342Corporate/other
    
    
    1,438
    
    
    
    3,139Total non-discretionary
    
    
    34,244
    
    
    
    31,221Discretionary:New restaurants/rebuilds:Carls Jr.
    
    
    6,754
    
    
    
    7,265Hardees
    
    
    1,257
    
    
    
    3,701Dual-branding:Carls Jr.
    
    
    461
    
    
    
    393Hardees
    
    
    90
    
    
    
    1,565Real estate/franchise acquisitions
    
    
    2,744
    
    
    
    3,813Corporate/other
    
    
    4,027
    
    
    
    493Total discretionary
    
    
    15,333
    
    
    
    17,230Total
    
    $
    49,577
    
    
    $
    48,451
  27




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##### Table of Contents



CKE RESTAURANTS, INC. AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS
(Dollars in thousands, except per share amounts)
    28




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##### Table of Contents



Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
  Interest Rate Risk
    Commodity Price Risk
  
 Item 4.
    
    Controls and Procedures
 (a) Evaluation of Disclosure Controls and Procedures
   29




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##### Table of Contents



(b) Changes in Internal Control Over Financial Reporting
  
 Part II. Other Information
 
 Item 4.
    
    Submission of Matters to a Vote of Security Holders
   Nominee
    
    For
    
    
    Against
    
    
    AbstentionsCarl L. Karcher
    
    
    32,433,794
    
    
    
    16,526,825
    
    
    
    29,352Jerold H. Rubinstein
    
    
    32,812,625
    
    
    
    16,107,894
    
    
    
    69,452Daniel E. Ponder, Jr.
    
    
    34,527,855
    
    
    
    14,393,070
    
    
    
    69,046
   For
    
    Against
    
    
    Abstentions
    
    
    Broker Non-Votes37,984,046
    
    
    3,660,180
    
    
    
    88,940
    
    
    
    7,256,805
  For
    
    Against
    
    
    Abstentions47,178,868
    
    
    1,764,455
    
    
    
    46,648
  30




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##### Table of Contents



Item 6.
    
    Exhibits
 Exhibit No.
    
    
    Description31.1
    
    
    Certification of the Chief Executive Officer pursuant to Rule
13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.31.2
    
    
    Certification of the Chief Financial Officer pursuant to Rule
13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.32.1
    
    
    Certification of the Chief Executive Officer pursuant to Rule
13a-14(b)/15d-14(b) of the Securities Exchange Act of 1934 and
18 U.S.C. Section 1350.32.2
    
    
    Certification of the Chief Financial Officer pursuant to Rule
13a-14(b)/15d-14(b) of the Securities Exchange Act of 1934 and
18 U.S.C. Section 1350.
  31




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##### Table of Contents



SIGNATURES
  CKE RESTAURANTS, INC.Date: September 16, 2009
    /s/ Reese StewartReese StewartSenior Vice President
Chief Accounting Officer
(Principal Accounting Officer)  32




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##### Table of Contents



Exhibit Index
 Exhibit No.
    
    
    Description31.1
    
    
    Certification of the Chief Executive Officer pursuant to Rule
13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.31.2
    
    
    Certification of the Chief Financial Officer pursuant to Rule
13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.32.1
    
    
    Certification of the Chief Executive Officer pursuant to Rule
13a-14(b)/15d-14(b) of the Securities Exchange Act of 1934
and 18 U.S.C. Section 1350.32.2
    
    
    Certification of the Chief Financial Officer pursuant to Rule
13a-14(b)/15d-14(b) of the Securities Exchange Act of 1934
and 18 U.S.C. Section 1350.