CKE RESTAURANTS REPORTS SECOND QUARTER FISCAL 2011 RESULTS

CARPINTERIA, Calif. - September 28, 2010 - CKE Restaurants, Inc. announced today its second fiscal quarter results and the filing of its Report on Form 10-Q with the Securities and Exchange Commission (“SEC”) for the twelve weeks ended August 9, 2010.

As previously reported, on July 12, 2010, Columbia Lake Acquisition Holdings, Inc., an affiliate of Apollo Management VII, L.P., acquired all of the outstanding shares of the Company (the “Acquisition”). The accompanying condensed consolidated statements of operations and related information present the Company’s results of operations during the second fiscal quarter for both the period preceding the Acquisition (the “Predecessor” period) and the period succeeding the Acquisition (the “Successor” period). The discussion below compares the results of operations of the combined Successor and Predecessor entities for the twelve weeks ended August 9, 2010 to the results of the Predecessor entity for the twelve weeks ended August 10, 2009. This discussion does not comply with generally accepted accounting principles; however, the Company believes that it provides a more meaningful method of comparison.

Second Fiscal Quarter Results
The Company reported total revenue of $313.9 million for the fiscal 2011 second quarter, a decrease of $22.1 million, or 6.6% compared to the fiscal 2010 second quarter. The decrease was primarily attributable to the sale of the Carl’s Jr.^® distribution business on July 2, 2010. Total revenue, excluding Carl’s Jr. distribution center revenue, decreased 0.9%.

Blended same-store sales decreased 1.1% in the fiscal 2011 second quarter. Hardee’s^® same-store sales increased 6.8% and Carl’s Jr. same-store sales declined 7.4%. To date, the Company’s third quarter blended same-store sales trend is slightly positive.

“While the weak U.S. economic environment, particularly the ongoing high unemployment rate among our core target audience of young men, continued to impact same-store sales at Carl’s Jr., we experienced a significant improvement in same-store sales at Hardee’s. Through period 7, the last period of our second quarter, Hardee’s has now had six consecutive periods of positive same-store sales. We have maintained market share and our restaurant adjusted EBITDA margins remain strong at both brands,” said Andrew F. Puzder, chief executive officer of CKE Restaurants. “We remain focused on maintaining our premium-quality brands and improving same-store sales with innovative products and cutting edge advertising that focuses on the taste, quality, and value of our products.”

Company-operated restaurant-level adjusted EBITDA margin decreased 120 basis points, primarily due to a 100 basis point increase in food and packaging costs as a result of higher commodity costs for beef, cheese, potatoes, and pork. Labor increased 70 basis points, primarily due to the impact of sales deleveraging at Carl’s Jr. restaurants. These cost increases were partially offset by a 50 basis point decrease in occupancy and other expense, resulting from lower repair and maintenance expense and reductions in other operating expenses. The Company defines company-operated restaurant-level adjusted EBITDA margin as company-operated restaurant-level adjusted EBITDA divided by company-operated restaurants revenue. Company-operated restaurant-level adjusted EBITDA is company-operated restaurants revenue less restaurant operating costs, plus depreciation and amortization expense, less advertising expenses, and excludes general and administrative expenses and facility action charges.

General and administrative expense for the second quarter of fiscal 2011 increased $8.7 million from the prior year quarter, primarily due to a $10.9 million increase in share-based compensation expense mainly related to the accelerated vesting of stock options and restricted stock awards in connection with the Acquisition, partially offset by a reduction in other general and administrative expenses.

For the quarter, other operating expenses, net includes $26.8 million in transaction-related costs. These charges are partially offset by a $3.4 million gain related to the sale of the Carl’s Jr. distribution centers.

Based on definitions in the Company’s credit facility and indenture agreement, share-based compensation expense, transaction-related costs and the gain on the sale of the distribution center do not affect Adjusted EBITDA.

Adjusted EBITDA was $42.2 million in the second quarter of fiscal 2011 compared to $43.3 million in the same quarter of the prior year. A discussion of Adjusted EBITDA and a reconciliation of net income (loss) to Adjusted EBITDA accompany the schedule of Adjusted EBITDA included below.

At August 9, 2010, cash and cash equivalents were $31.0 million and the Company had $65.1 million available under its credit facility.

Capital expenditures for the twenty-eight weeks ended August 9, 2010 were $38.4 million, of which $22.8 million related to new store openings, dual-branding, and remodeling projects. Capital expenditures for the twenty-eight weeks ended August 10, 2009 were $57.7 million.

Conference Call Information
The Company will host its second quarter conference call on September 29, 2010, at 10:00 a.m. (PDT). The call-in number is (617) 213-8841. The access code is 52683921. You may also access the conference call at www.ckr.com under “Investors.”

Company Overview
CKE Restaurants, Inc. is a privately held company headquartered in Carpinteria, Calif. As of the end of its second quarter of fiscal 2011, CKE, through its subsidiaries, had a total of 3,149 franchised, licensed or company-operated restaurants in 42 states and in 18 countries, including 1,239 Carl’s Jr. Restaurants and 1,898 Hardee’s restaurants. For more information about CKE, please visit www.ckr.com.

Forward-looking Statements:
Matters discussed in this press release contain forward-looking statements relating to the Company’s strategies to maintain its brand and improve same-store sales, which are based on management’s current beliefs and assumptions. Such statements are subject to risks and uncertainties that are often difficult to predict and beyond the Company’s control. Factors that could cause the Company’s results to differ materially from those described include, but are not limited to, the Company’s ability to compete with other restaurants, delicatessens, supermarkets and convenience stores for customers, employees, restaurant locations and franchisees; changes in consumer preferences, perceptions and spending patterns; the ability of the Company’s key suppliers to continue to deliver premium-quality products to the Company at moderate prices; the Company’s ability to successfully enter new markets, complete remodels of existing restaurants and complete construction of new restaurants; changes in general economic conditions and the geographic concentration of the Company’s restaurants, which may affect the Company’s business; the Company’s ability to attract and retain key personnel; the Company’s franchisees’ willingness to participate in the Company’s strategy; the operational and financial success of the Company’s franchisees; the Company’s ability to expand into international markets and the risks associated with operating in international locations; changes in the price or availability of commodities; the effect of the media’s reports regarding food-borne illnesses, food tampering and other health-related issues on the Company’s reputation and its ability to procure or sell food products; the seasonality of the Company’s operations; the Company’s ability to hire and retain qualified personnel; the effect of increasing labor costs including healthcare related costs; increased insurance and/or self-insurance costs; the Company’s ability to comply with existing and future health, employment, environmental and other government regulations; the potentially conflicting interests of the Company’s sole stockholder and the Company’s creditors, the Company’s substantial leverage which could limit its ability to raise capital, react to economic changes or meet obligations under its indebtedness; the effect of restrictive covenants in the Company’s indenture and credit facility on the Company’s business; and other factors as discussed in the Company’s filings with the Securities and Exchange Commission.

Contact Information:
Beth Mansfield, Public Relations
(805) 745-7741
bmansfield@ckr.com

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⁽¹⁾ Other operating expenses, net includes transaction-related costs consisting of accounting, investment banking, legal, and other costs of $19,661, $7,123, and $26,784 for the four weeks ended August 9, 2010 (Successor), eight weeks ended July 12, 2010 (Predecessor), and twelve weeks ended August 9, 2010 (Successor/Predecessor), respectively.
⁽²⁾ The eight weeks ended July 12, 2010 (Predecessor) and twelve weeks ended August 9, 2010 (Successor/Predecessor) also include a $3,442 gain on the sale of the distribution center assets.

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⁽¹⁾ Other operating expenses, net includes transaction-related costs consisting of accounting, investment banking, legal, and other costs of $19,661, $13,691, and $33,352 for the four weeks ended August 9, 2010 (Successor), twenty-four weeks ended July 12, 2010 (Predecessor), and twenty-eight weeks ended August 9, 2010 (Successor/Predecessor), respectively.
⁽²⁾ The twenty-four weeks ended July 12, 2010 (Predecessor) and twenty-eight weeks ended August 9, 2010 (Successor/Predecessor) also include a $3,442 gain on the sale of the distribution center assets.
⁽³⁾ Other income (expense), net includes transaction-related costs, related to the termination of a prior merger agreement, of $14,283 for both the twenty-four weeks ended July 12, 2010 (Predecessor) and twenty-eight weeks ended August 9, 2010 (Successor/Predecessor).

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CKE RESTAURANTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except shares and par values)
(Unaudited)

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Net income (loss) reconciliation to Adjusted EBITDA
Adjusted EBITDA represents net income (loss) before provision for income taxes, interest income and expense, asset impairments, facility action charges, depreciation and amortization, management fees, pro-forma cost savings as a result of becoming privately held, and certain non-cash and unusual items. Management uses Adjusted EBITDA as an important tool to assess operating performance. Management considers Adjusted EBITDA to be a useful measure in highlighting trends in the Company’s business and in analyzing the profitability of similar enterprises. Management believes that Adjusted EBITDA is effective, when used in conjunction with net income (loss), in evaluating asset performance, and differentiating efficient operators in the industry. Furthermore, management believes that Adjusted EBITDA provides useful information to potential investors and analysts because it provides insight into management’s evaluation of the Company’s results of operations. The calculation of Adjusted EBITDA may not be consistent with “EBITDA” for the purpose of the covenants in the agreements governing the Company’s indebtedness.

Adjusted EBITDA is not a measure of financial performance under U.S. GAAP, is not intended to represent cash flow from operations under U.S. GAAP and should not be used as an alternative to net income (loss) as an indicator of operating performance or to cash flow from operating, investing or financing activities as a measure of liquidity. Management compensates for the limitations of using Adjusted EBITDA by using it only to supplement the Company’s U.S. GAAP results to provide a more complete understanding of the factors and trends affecting the Company’s business. Adjusted EBITDA has its limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of the Company’s results as reported under U.S. GAAP.

Some of the limitations of Adjusted EBITDA are:

While Adjusted EBITDA is frequently used as a measure of operations and the ability to meet indebtedness service requirements, it is not necessarily comparable to other similarly titled captions of other companies due to potential inconsistencies in the method of calculation.

While management believes that this measure provides useful information to investors, the SEC may require that Adjusted EBITDA be presented differently or not at all in future filings the Company will make with the SEC.

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⁽¹⁾ Transaction-related costs include investment banking, legal, and other costs related to the Acquisition, as well as costs related to the termination of a prior merger agreement.
⁽²⁾ Management fees are paid to Apollo Management per the management services agreement by and among the Company, Columbia Lake Acquisition Holdings, Inc. and Apollo Management VII, L.P.
⁽³⁾ Share-based compensation expense includes $12,108 resulting from accelerated vesting of stock options and restricted stock awards in connection with the Acquisition for both the twelve and fifty-two weeks ended August 9, 2010.
⁽⁴⁾ Cost savings reflects pro-forma cost savings amounts expected to be realized as result of becoming a privately held company.
⁽⁵⁾ Other, net includes the net impact of purchase accounting, executive retention bonus, disposition business expense, and adjusted EBITDA from the Company’s distribution business, which it no longer owns or operates.

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