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| California Pizza Kitchen Announces Financial Results for the First Quarter of 2007 |
LOS ANGELES--(BUSINESS WIRE)--May 10, 2007--California Pizza Kitchen, Inc. (Nasdaq: CPKI) today reported revenues and net income for the first quarter ended April 1, 2007. Highlights for the first quarter of 2007 relative to the same quarter a year ago were as follows:
Rick Rosenfield and Larry Flax, co-CEOs of California Pizza Kitchen, Inc., stated, "During the first quarter, we delivered one of the strongest comparable restaurant sales and traffic count increases in our sector despite a mixed economy and unfavorable weather patterns across many parts of the country. We consider this a testament to our creative offerings across the entire menu, our exceptional service and the lifestyle component of the CPK brand." Average weekly sales for the Company's 168 full service restaurants increased 4.1% to $65,904 for the first quarter of 2007 compared to $63,293 for the same quarter last year. In the first quarter of 2007, the Company added two new full service restaurants in Austin, Texas and San Francisco, California as well as two CPK/ASAP restaurants in Anaheim, California and Kailua, Hawaii. The Company's franchise partner WDI Corporation also opened its second full service restaurant in Japan. Rosenfield and Flax continued, "We are fortunate to have numerous levers at our disposal to increase stockholder value including restaurant development, domestic and international franchising and our licensing agreement with Kraft. New full service restaurant openings will continue to be our focus in 2007, although the growth of Kraft's CPK-branded business is becoming a larger component of our financial model. Together with international franchising, we are uniquely positioned in the global marketplace to leverage our brand." For the second quarter of 2007, the Company has added one full service restaurant and one domestic franchise and expects to add another full service restaurant and one international franchise location. These openings, together with a comparable restaurant sales increase of 5.0%-6.0%, are expected to result in second quarter earnings per diluted share of $0.34-$0.36. California Pizza Kitchen, Inc., founded in 1985, is a leading casual dining chain. The Company's full service restaurants feature an imaginative line of hearth-baked pizzas, including the original BBQ Chicken Pizza, and a broad selection of distinctive pastas, salads, soups, appetizers and sandwiches. The average guest check is approximately $13.23. As of May 10, 2007 the Company operates, licenses or franchises 212 restaurants, of which 181 are company-owned and 31 operate under franchise or license agreements. The Company also has a licensing agreement with Kraft Pizza Company, which manufactures and distributes a line of California Pizza Kitchen premium frozen pizzas. California Pizza Kitchen, Inc. can be found on the internet at www.cpk.com. This release includes certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include projections of earnings, revenue or other financial items, statements of the plans, strategies and objectives of management for future operations, statements concerning proposed new products or developments, statements regarding future economic conditions or performance, statements of belief and statements of assumptions underlying any of the foregoing. Forward-looking statements may include the words "may," "will," "estimate," "intend," "continue," "believe," "expect," "anticipate" and similar words. Investors are cautioned that forward-looking statements are not guarantees of future performance and, therefore, undue reliance should not be placed on them. Our actual results may and will likely differ materially from the expectations referred to herein. Among the key factors that may have a direct bearing on our operating results, performance and financial condition are changing consumer preferences and demands, the execution of our expansion strategy, the continued availability of qualified employees and our management team, the maintenance of reasonable food and supply costs, our relationships with our distributors and numerous other matters discussed in the Company's filings with the Securities and Exchange Commission. California Pizza Kitchen undertakes no obligation to update or alter its forward-looking statements whether as a result of new information, future events or otherwise.
Selected Unaudited Consolidated Financial and Operating Data
(Dollars in thousands, except for per share and operating data)
Quarter Ended
April 1, April 2,
2007 2006
--------- ---------
Statement of Income:
Revenues:
Restaurant sales $147,844 $128,518
Royalties from Kraft licensing agreement 712 535
Domestic franchise revenues 523 506
International franchise revenues 287 139
--------- ---------
Total revenues 149,366 129,698
Costs and expenses:
Food, beverage and paper supplies 36,376 32,168
Labor (1) 56,199 47,627
Direct operating and occupancy 28,695 25,294
--------- ---------
Cost of sales 121,270 105,089
General and administrative (2) 12,790 10,355
Depreciation and amortization 8,541 6,971
Pre-opening costs 1,350 633
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Total costs and expenses 143,951 123,048
Operating income 5,415 6,650
Other income:
Interest income 86 224
--------- ---------
Total other income 86 224
--------- ---------
Income before income tax provision 5,501 6,874
Income tax provision 1,904 2,268
--------- ---------
Net income $3,597 $4,606
========= =========
Net income per common share:
Basic $0.19 $0.23
Diluted $0.18 $0.23
Shares used in computing net income per common
share (in thousands):
Basic 19,372 19,680
Diluted 20,003 20,290
Operating Data:
Restaurants open at end of period 210 190
Company-owned full service restaurants open at
end of period 168 153
Average weekly company-owned full service
restaurant sales $65,904 $63,293
18-month comparable company-owned restaurant
sales increase 4.7% 6.4%
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(1) Labor expense for the three months ended April 1, 2007 includes
approximately $219,000 of stock-based compensation compared to
$230,000 in the three months ended April 2, 2006.
(2) General and administrative expense for the three months ended
April 1, 2007 includes approximately $2.1 million of stock-based
compensation compared to $1.2 million in the three months ended
April 2, 2006.
Quarter Ended
April 1, April 2,
2007 2006
------------- ------------
Statement of Income Percentages (1):
Revenues:
Restaurant sales 99.0% 99.1%
Royalties from Kraft licensing
agreement 0.5% 0.4%
Domestic franchise revenues 0.3% 0.4%
International franchise revenues 0.2% 0.1%
------------- ------------
Total revenues 100.0% 100.0%
Costs and expenses:
Food, beverage and paper supplies 24.6% 25.0%
Labor (2) 38.0% 37.1%
Direct operating and occupancy 19.4% 19.7%
------------- ------------
Cost of sales 82.0% 81.8%
General and administrative (3) 8.6% 8.0%
Depreciation and amortization 5.7% 5.4%
Pre-opening costs 0.9% 0.5%
------------- ------------
Total costs and expenses 96.4% 94.9%
Operating income 3.6% 5.1%
Other income:
Interest income 0.1% 0.2%
------------- ------------
Total other income 0.1% 0.2%
------------- ------------
Income before income tax provision 3.7% 5.3%
Income tax provision 1.3% 1.7%
------------- ------------
Net income 2.4% 3.6%
============= ============
(1) Percentages are expressed as a percentage of total revenues,
except for cost of sales which is expressed as a percentage of
restaurant sales.
(2) Labor percentage includes approximately 10 basis points of
stock-based compensation in the three months ended April 1, 2007
compared to 20 basis points in the three months ended April 1,
2006.
(3) General and administrative percentage includes approximately 140
basis points of stock-based compensation in the three months ended
April 1, 2007 compared to 90 basis points in the three months ended
April 1, 2006.
Selected Consolidated Balance Sheet Information
(Dollars in thousands)
Selected Consolidated Balance April 1, December 31,
Sheet Information 2007 2006
------------ ------------
Cash and cash equivalents $8,933 $8,187
Total assets 316,411 310,513
Stockholders' equity 216,222 208,343
California Pizza Kitchen, Inc.
Units Summary
Total Units at Total Units at
-------------- --------------
First Quarter December 31, April 1,
2007 2006 Opened Acquired Closed 2007
--------------- -------------- ------ -------- ------ --------------
Company-owned
full service
domestic 166 2 - - 168
Company-owned
ASAP domestic 9 2 - - 11
Company-owned
LA Food Show 1 - - - 1
Franchised
domestic 16 - - - 16
Franchised
international 13 1 - - 14
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Total 205 5 - - 210
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CONTACT: California Pizza Kitchen, Inc. |
