By null, Times Staff Writer
Dan Dorsch resigns minutes before the company reports stronger earnings.
TAMPA - Forty minutes before a scheduled conference call with Wall Street analysts Tuesday afternoon, Checkers Drive-In Restaurants Inc. made an unexpected announcement: CEO and president Dan Dorsch had resigned, effective immediately.
It was not the only surprise Checkers dished out Tuesday. The Tampa burger chain reported a strong first quarter, with same-store sales at company restaurants up 6.4 percent in the three months ended March 24, and earnings per share of 25 cents, up from 21 cents a year earlier. Net income rose 21 percent to $3.2-million, while revenues increased nearly seven percent to $43.1-million.
Details on Dorsch's abrupt departure were more scarce. A company news release offered only the boilerplate verbiage of such announcements - that he was leaving "to pursue other personal and professional activities." Dorsch, 50, said the same in a brief goodbye during the conference call.
"Not only are we stronger financially than we were three years ago, but our growth has materialized and this quarter is a good example of our progress," he said, shortly before disconnecting from the call. Chairman Peter O'Hara said he would soon appoint an interim CEO to serve while the company conducts a national search for a permanent replacement.
Hired in December 1999 to take over the helm at Checkers, Dorsch inherited a 934-store restaurant chain mired in debt, partly due to a recent merger with Rally's restaurants. The former KFC, Taco Bell and Papa John's franchisee moved quickly, closing or selling underperforming restaurants, retiring debt and inspiring enough confidence that investors began bidding up Checkers' paltry stock price.
A demanding but effective leader who says he flew his private plane to every Checkers and Rally's restaurant in the country, Dorsch slashed the company's executive staff before moving it from Clearwater to cheaper space in Tampa. He leaves behind a leaner, 778-store chain.
He also leaves behind some unfinished business. Since hitting a high of $13.50 one year ago, Checkers' stock has fallen back to earth, closing Tuesday at $6.40, up 5 cents. Few Wall Street firms have shown interest in regularly reporting on the company's performance, though a Tampa company, GunnAllen Financial, initiated coverage last week, calling Checkers a "speculative buy."
Roth Capital Partners analyst Anton Brenner said he thinks investors may consider Dorsch's departure a loss but would be cheered by the company's strong quarterly performance. "I thought he was pretty dynamic and had a lot of good operating ideas that he was putting into place," said Brenner, who rates Checkers' stock "neutral."
Company spokeswoman Kim Francis declined to provide further details on Dorsch's departure or severance package. Last month, a corporation he owns, JNE Inc., began a five-year agreement to sublet nearly 3,300 square feet inside Checkers' Tampa headquarters. Dorsch's farewell deal eventually will be spelled out in filings with federal regulators.
- Scott Barancik can be reached at firstname.lastname@example.org or (727) 893-8751.