Checkers Continues to Show Profitability

Checkers Drive-In Restaurants, Inc. reported financial results for its third fiscal quarter ended September 11, 2000. As the merger with Rally's Hamburgers, Inc. on August 9, 1999 was accounted for as a reverse acquisition, Rally's was deemed the acquiring company for accounting purposes. Accordingly, the historical financial results for the combined entity prior to August 9, 1999 are those of Rally's. The results reported for the third quarter of fiscal 2000 include 12 weeks of activity for both Rally's and Checkers while the 1999 financial results represents Rally's for the periods stated and Checkers financial results only for the post-merger four week period ended September 6, 1999.

Results for the third quarter ended September 11, 2000 are as follows:

- Net income increased $2.2 million, to $809,000, or $.08 per diluted share for the third quarter of fiscal 2000, compared to a net loss of $1.4 million or $.19 per diluted share during the third quarter of fiscal 1999.

- Total revenues decreased $7.8 million to $37.8 million for the third quarter of fiscal 2000 compared with revenues of $45.6 million during the third quarter of fiscal 1999. The decrease in revenue is primarily attributable to the sale of 231 restaurants to franchisees during the past 12 months. Same-store sales at the company-owned Checkers and Rally's restaurants declined by 3.1 percent and 8.6 percent, respectively, as compared to the third quarter of 1999.

- On September 29, 2000, the Company completed the sale of 28 Rally's Restaurants in Kentucky to a franchisee for $8.0 million. The Company has used proceeds from this transaction to reduce its borrowings under its credit facility to $17.7 million.

Year-to-date results for the 36-week period ended September 11, 2000 are as follows:

- Net income increased $4.5 million to $1.9 million or $.20 per diluted share for the three quarters ended September 11, 2000 as compared to a net loss of $2.6 million or $.40 per diluted share for the three quarters ended September 6, 1999.

- Total revenues increased $25 million or 22.3% t $137.1 million for the three quarters ended September 11, 2000 compared with $112.1 million for the three quarters ended September 6, 1999. The increase was partially attributable to the operations of the Checkers restaurants as a result of the merger and to an increase in Franchise revenues and fees. However, the increases are offset by lost revenue in the markets that were sold to franchisees. Same-store sales at the company-owned Checkers and Rally's restaurants declined .5% ad 5.5%, espectively, year-to-date compared to the same 36 weeks of the prior year.