California Pizza Kitchen Announces Financial Results for the Third Quarter of 2007
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California Pizza Kitchen Announces Financial Results for the Third Quarter of 2007

LOS ANGELES--(BUSINESS WIRE)--Nov. 8, 2007--California Pizza Kitchen, Inc. (Nasdaq:CPKI) today reported revenues and net income for the third quarter ended September 30, 2007. Highlights for the third quarter of 2007 relative to the same quarter a year ago were as follows:


-- Total revenues grew approximately 13.5% to $162.0 million

-- Comparable restaurant sales increased 3.5%

-- Net income of $1.4 million, or $0.05 per diluted share,
including a $0.20 per diluted share charge primarily
associated with store closure costs for four CPK/ASAPs

Rick Rosenfield and Larry Flax, co-CEOs of California Pizza Kitchen, Inc., stated, "We are pleased to have exceeded our sales and earnings estimates given the challenging sales and cost environment in casual dining. We credit our menu and strong operational focus on inventory and labor management which enabled us to achieve 20% restaurant level margins despite rising cheese costs and minimum wage pressures. In addition, we are pleased to have leveraged our general and administrative costs by 60 basis points year over year. These quarterly operating results are a testament to how our great food, notable customer service and brand equity sustain us in challenging times."

Average weekly sales for the Company's 176 full service restaurants increased 3.0% to $68,972 for the third quarter of 2007 compared to $66,971 for the same quarter last year.

In the third quarter of 2007, the Company added six full service restaurants in Roseville, Minnesota; Tempe, Arizona; Lake Grove, New York; Nashville, Tennessee; Seal Beach, California; and Houston, Texas. The Company's domestic franchise partner, HMSHost, opened a CPK/ASAP location in Los Angeles International Airport, while an international franchise partner, Grupo Calpik, S.A. de C.V. of Mexico, opened a full service restaurant in Mexico City.

For the fourth quarter of 2007, the Company intends to add seven full service and two international franchise restaurants. These openings, together with a comparable restaurant sales increase of 2.0%-3.0%, are expected to result in earnings of $0.22-$0.23 per diluted share.

The Company also announced guidance for fiscal 2008 based on the following assumptions:

-- Restaurant revenue growth of approximately 14.0% to 15.0%

-- Eighteen month comparable restaurant sales growth of
approximately 2.0% to 3.0%

-- Approximately 17 new full service restaurants for 2008

-- A minimum of six international full service franchise
restaurants for 2008

-- A minimum of four domestic CPK/ASAP franchise restaurants for
2008

-- One new LA Food Show restaurant

-- Earnings per diluted share of $0.85-$0.92

The Company will hold a conference call today at approximately 5:00 pm ET to discuss third quarter results as well as its updated guidance. A webcast of the conference call can be accessed at www.cpk.com.

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 $13.30. As of November 8, 2007 the Company operates, licenses or franchises 223 restaurants, of which 190 are company-owned and 33 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 Nine Months Ended
September 30, October 1, September 30, October 1,
2007 2006 2007 2006
------------ ---------- ------------ ----------

Statement of
Income:

Revenues:
Restaurant sales $159,665 $140,874 $464,101 $403,996
Royalties from
Kraft licensing
agreement 1,264 1,116 3,050 2,436
Domestic
franchise
revenues 668 541 1,854 1,619
International
franchise
revenues 407 233 947 579
------------ ---------- ------------ ----------
Total revenues 162,004 142,764 469,952 408,630

Costs and
expenses:
Food, beverage
and paper
supplies 39,051 34,904 113,853 100,162
Labor (1) 57,463 50,742 170,574 147,641
Direct operating
and occupancy 31,273 27,591 90,741 79,099
------------ ---------- ------------ ----------
Cost of sales 127,787 113,237 375,168 326,902

General and
administrative
(2) 11,831 11,260 36,828 32,650
Depreciation and
amortization 9,418 7,386 26,981 21,427
Pre-opening costs 2,356 1,112 4,558 2,545
Store closure
costs 8,500 - 9,269 -

------------ ---------- ------------ ----------
Total costs and
expenses 159,892 132,995 452,804 383,524

Operating income 2,112 9,769 17,148 25,106

Other (expense)
income, net:
Interest expense (115) - (117) -
Interest income 73 154 254 666
------------ ---------- ------------ ----------
Total other
(expense)
income, net (42) 154 137 666
------------ ---------- ------------ ----------

Income before
income tax
provision 2,070 9,923 17,285 25,772
Income tax
provision 666 3,272 5,964 8,503
------------ ---------- ------------ ----------
Net income $ 1,404 $ 6,651 $ 11,321 $ 17,269
============ ========== ============ ==========

Net income per
common share:
Basic $ 0.05 $ 0.23 $ 0.39 $ 0.59
Diluted $ 0.05 $ 0.23 $ 0.38 $ 0.58

Shares used in
computing net
income per common
share (in
thousands) (3):

Basic 28,591 28,948 28,974 29,294
Diluted 29,191 29,466 29,889 29,952

Operating Data:
Restaurants open
at end of period 220 197 220 197
Company-owned full
service
restaurants open
at end of period 176 158 176 158
Average weekly
company-owned
full service
restaurant sales $ 68,972 $ 66,971 $ 67,822 $ 65,247
18-month
comparable
company-owned
restaurant sales
increase 3.5% 5.6% 4.5% 5.6%

-------------------------------- ------------------------ ----------
(1) Labor expense for the three and nine months ended September 30,
2007 includes approximately $211,000 and $631,000 of stock-based
compensation, respectively, compared to $202,000 and $706,000 in the
three and nine months ended October 1, 2006, respectively.

(2) General and administrative expense for the three and nine months
ended September 30, 2007 includes approximately $1.3 million and $4.9
million of stock-based compensation, respectively, compared to $1.4
million and $3.8 million in the three and nine months ended October
1, 2006, respectively.

(3) Includes effect of 3-for-2 stock split effective June 19, 2007.

Quarter Ended Nine Months Ended
September 30, October 1, September 30, October 1,
2007 2006 2007 2006
------------ ---------- ------------ ----------

Statement of Income
Percentages (1):

Revenues:
Restaurant sales 98.6% 98.7% 98.8% 98.9%
Royalties from
Kraft licensing
agreement 0.8% 0.8% 0.6% 0.6%
Domestic franchise
revenues 0.4% 0.4% 0.4% 0.4%
International
franchise revenues 0.2% 0.1% 0.2% 0.1%
------------ ---------- ------------ ----------
Total revenues 100.0% 100.0% 100.0% 100.0%

Costs and expenses:
Food, beverage and
paper supplies 24.4% 24.8% 24.4% 24.8%
Labor (2) 36.0% 36.0% 36.8% 36.5%
Direct operating
and occupancy 19.6% 19.6% 19.6% 19.6%
------------ ---------- ------------ ----------
Cost of sales 80.0% 80.4% 80.8% 80.9%

General and
administrative (3) 7.3% 7.9% 7.8% 8.0%
Depreciation and
amortization 5.8% 5.2% 5.7% 5.2%
Pre-opening costs 1.5% 0.8% 1.0% 0.6%
Store closure costs 5.2% 0.0% 2.0% 0.0%

------------ ---------- ------------ ----------
Total costs and
expenses 98.7% 93.2% 96.4% 93.9%

Operating income 1.3% 6.8% 3.6% 6.1%

Other (expense)
income, net:
Interest expense -0.1% 0.0% 0.0% 0.0%
Interest income 0.0% 0.1% 0.1% 0.2%
------------ ---------- ------------ ----------
Total other
(expense) income,
net 0.0% 0.1% 0.0% 0.2%
------------ ---------- ------------ ----------

Income before income
tax provision 1.3% 7.0% 3.7% 6.3%
Income tax provision 0.4% 2.3% 1.3% 2.1%
------------ ---------- ------------ ----------
Net income 0.9% 4.7% 2.4% 4.2%
============ ========== ============ ==========

(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 and 20 basis points of
stock-based compensation in the three and nine months ended September
30, 2007, respectively, compared to 10 basis points in each of the
three and nine months ended October 1, 2006.

(3) General and administrative percentage includes approximately 80
and 100 basis points of stock-based compensation in the three and
nine months ended September 30, 2007, respectively, compared to 100
and 90 basis points in the three and nine months ended October 1,
2006, respectively.

Selected Consolidated Balance Sheet Information
(Dollars in thousands)


Selected Consolidated Balance September 30, December 31,
Sheet Information 2007 2006
------------- ------------

Cash and cash equivalents $ 10,604 $ 8,187
Total assets 362,487 310,513
Total debt 17,000 -
Stockholders' equity 213,074 208,343

California Pizza Kitchen, Inc.
Units Summary


Total Units at Total Units at
-------------- --------------
Third Quarter July 1, Opened Acquired Closed September 30,
2007 2007 2007
---------------- -------------- ------ --------------- --------------
Company-owned
full service
domestic 170 6 - - 176
Company-owned
ASAP domestic 11 - - 1 10
Company-owned LA
Food Show 1 - - - 1
Franchised
domestic 16 1 - - 17
Franchised
international 15 1 - - 16
----------------------------------------------------
Total 213 8 - 1 220
====================================================

CONTACT: California Pizza Kitchen, Inc.
Sarah Grover (media)
or
Sue Collyns (investors)
310-342-5000

SOURCE: California Pizza Kitchen, Inc.

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