Beverly Hills-based Giant Group Ltd., and its chairman Burt Sugarman have teamed up with the parent of the Carl’s Jr. hamburger chain to invest $20 million in Clearwater, Fla.-based Checkers Drive-In Restaurants Inc.
The Giant Group, a somewhat eclectic investment vehicle in the past, is a holding company traded on the New York Stock Exchange. In general, it is not an operating company.
Instead, it purchases stock or debt in other public companies. The primary business strategy of Giant is to take control of other companies, try to improve earnings, and then sell them off.
In recent years, Giant has sold off holdings in the entertainment and cement industries, and today has a 48 percent stake in publicly held Louisville, Ky.-based Rally’s Hamburgers Inc., a drive-through hamburger chain with 481 locations.
The partnership between Giant, Sugarman and Anaheim-based CKE Inc. also controls, through an acquisition of debt, the Checkers chain, with its 475 locations, primarily in the Southeast.
Because of the nature of its business, Giant’s quarterly and annual financial reports are unusual, in terms of revenues and earnings.
For example, the company reported net income of $17.9 million, or $3.48 a share, on operating revenues of $8 million for the calendar year 1996.
That compares with a loss of $22.3 million, or $4.37 a share, on operating revenues of $4.1 million in the year-earlier period.
The earnings and losses reflect sales of assets and tax-loss carryforwards. The operating revenues reflect primarily dividends and other payments from companies in which Giant holds an ownership position.
Benjamin Mark Cole