Despite Carl’s Jr. Slide, Karcher a Happy Star at Annual Meeting : Corporations: On 50th anniversary in business, the founder wins two standing ovations from shareholders whose profits just fell 50%.

Never mind that profits fell by nearly 50% in the first quarter of 1991 or that the company introduced french fries that look like miniature waffles. Carl Karcher came to be honored Wednesday.

The annual meeting of Carl Karcher Enterprises Inc. was more of a testimonial for its founder on his 50th anniversary in business instead of a dry recitation of achievements and shortcomings of the Carl’s Jr. fast-food chain.

Karcher received two standing ovations from the 200 or so well-dressed attendees. One of them came at the insistence of a shareholder who employed a golf analogy in referring to the 74-year-old former hot dog peddler as a visionary who looks for life’s greens rather than its sand traps.

The company handed out drinking glasses with the company’s “Happy Star” logo in 22-karat gold leaf to some guests and copies of Chairman Karcher’s new autobiography, “Never Stop Dreaming.” The meeting room at the Anaheim Marriott Hotel was decorated with blown-up photographs from Karcher’s life, including a pale yellow 1941 Plymouth that is identical to the one Karcher sold to buy his first hot dog stand in South-Central Los Angeles for $326.

Even with all the adulation, company officials took time out to note lower profits.

The company reported Wednesday that it earned $2.7 million in the first quarter ended May 20, down 49% from $5.3 million in 1990’s first quarter. Revenues were $164.9 million, up 4.9% from $157.1 million in the same period last year.

Donald Karcher, Carl’s brother, told stockholders that the results were in line with the company’s projections and resulted from the effects of recession. He said there are signs that the economy and company sales are picking up, with a 1.7% increase in comparable store sales in the last four weeks of the fourth quarter. The company franchises and licenses 587 restaurants in California, Nevada, Oregon, Arizona, Japan and Mexico.

But Karcher officials continue to say the company refuses to join in the price-cutting war that has jolted the fast-food industry. Taco Bell Corp., the Irvine-based Pepsico unit, announced Tuesday that it was escalating the industry discounting with 39-cent snack-size burritos, tacos and tostadas.

Carl Karcher, in brief remarks, said Carl’s Jr. has to uphold its reputation for quality and larger portions, albeit at higher prices. “There is a niche for that,” he said. The founder said he talked recently to a new franchisee who sold his Taco Bell restaurants to join Carl’s because he believed that quality and quantity are the trend of the future.

Donald Karcher said the company’s new product introductions, the Santa Fe chicken sandwiches and “criss-cut fries,” have been successes. He also said the company is testing variants on its roast beef sandwich and breakfast burritos and is considering introducing a turkey club sandwich.

While Carl Karcher was the focus of attention at the meeting, the biggest bash is yet to come. Karcher will be honored at a black-tie, invitation-only ball next month at the Disneyland Hotel. Bob Hope is scheduled to entertain.

Carl Karcher’s Performance

Carl Karcher Enterprises reported sharply lower net earnings in the first quarter ended May 20 compared to the year-ago quarter, despite an increase in revenue.

(Dollars in thousands, except per-share data)

1991 1990 Revenue $164,880 $157,073 Net earnings $2,682 $5,288 Per share $.15 $.29

Source: Carl Karcher Enterprises