California Pizza Kitchen Announces Financial Results for the Fourth Quarter and Fiscal Year Ended December 30, 2007

Management Updates Fiscal 2008 Guidance To Include Accelerated Stock Repurchase

LOS ANGELES--(BUSINESS WIRE)--Feb. 14, 2008--California Pizza Kitchen, Inc. (Nasdaq:CPKI) today reported revenues and net income for the fourth quarter and fiscal year ended December 30, 2007.

Highlights for the fourth quarter of 2007 relative to the same quarter a year ago were as follows:

-- Total revenues grew approximately 11.6% to $162.9 million

-- Comparable restaurant sales increased 1.8%

-- Net income of $4.8 million, or $0.17 per diluted share

Highlights for fiscal year 2007 relative to fiscal year 2006 were as follows:

-- Total revenues grew approximately 14.1% to $632.9 million

-- Comparable restaurant sales increased 3.8%

-- Net income of $16.2 million, or $0.55 per diluted share, including $0.21 per diluted share in charges primarily related to CPK/ASAP store closures

Rick Rosenfield and Larry Flax, co-CEOs of California Pizza Kitchen, Inc., stated, "Despite the current economic environment, California Pizza Kitchen has the advantage of being a premier global brand, capable of meaningful expansion in the U.S. and abroad. Domestically, we will continue to develop full service restaurants with particular focus on high visibility locations. We will also continue to build our relationship with Kraft, particularly with the introduction of exciting new products, and plan to expand our airport presence with additional franchised CPK/ASAP restaurants operated by HMSHost." Rosenfield and Flax continued, "Internationally, we are committed to partnering with high-quality franchisees who are capable of safeguarding our brand equity and pursuing long-term unit growth. This is another important, high-margin business for shareholders and one we believe has significant potential."

Rosenfield and Flax concluded, "As a public company, our responsibility is to enhance long-term shareholder value and we believe our recently announced accelerated stock repurchase demonstrates our commitment to that effort. By returning capital to shareholders in this fashion, we expect our earnings to be positively impacted by approximately $0.02 in 2008. Combined with the growth of our core domestic and international revenue streams we are confident in our ability to drive long-term shareholder value."

Average weekly sales for the Company's 183 full service restaurants increased 0.9% to $66,438 for the fourth quarter of 2007 compared to $65,858 for the same quarter last year.

For the fourth quarter of 2007, the Company added seven full service restaurants in San Bernardino, California; Clinton Township, Michigan; Stamford, Connecticut; Mesa, Arizona; Leawood, Kansas; Brandon, Florida; and Las Vegas, Nevada. In addition, the Company's international franchise partners Global Restaurant Concepts Inc. and Iris Co. Ltd. each added one full service restaurant in Makati City, Philippines and Seoul, South Korea, respectively.

The Company updated its previous earnings guidance for fiscal 2008 to include the recently announced accelerated stock repurchase as follows:

-- Comparable restaurant sales of negative 1.0% to 0.0%

-- Approximately 12 to 13 full service restaurants

-- A minimum of six international full service franchise restaurants

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

-- One LA Food Show restaurant

-- Earnings of $0.56-$0.62 per diluted share, including approximately $0.02 accretion related to the accelerated stock repurchase

The Company will host a conference call today at approximately 4:30 pm ET. 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 $13.37. As of February 14, 2008 the company operates, licenses or franchises 236 locations, of which 197 are company-owned and 39 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 Twelve Months Ended
December December December December
30, 31, 30, 31,
2007 2006 2007 2006
--------- --------- --------- ---------

Statement of Income:

Revenues:
Restaurant sales $160,223 $143,972 $624,324 $547,968
Royalties from Kraft
licensing agreement 1,660 1,255 4,710 3,691
Domestic franchise
revenues 606 519 2,460 2,138
International
franchise revenues 443 225 1,390 804
--------- --------- --------- ---------
Total revenues 162,932 145,971 632,884 554,601

Costs and expenses:
Food, beverage and
paper supplies 40,101 35,686 153,954 135,848
Labor (1) 58,090 52,103 228,664 199,744
Direct operating and
occupancy 33,736 29,460 124,476 108,558
--------- --------- --------- ---------
Cost of sales 131,927 117,249 507,094 444,150

General and
administrative (2) 11,563 10,670 48,391 43,320
Depreciation and
amortization 10,166 8,061 37,146 29,489
Pre-opening costs 2,608 4,419 7,167 6,964
Store closure costs - 707 9,269 707

--------- --------- --------- ---------
Total costs and
expenses 156,264 141,106 609,067 524,630

Operating income 6,668 4,865 23,817 29,971

Other (expense) income,
net:
Interest expense (244) - (362) -
Interest income 35 52 289 718
--------- --------- --------- ---------
Total other
(expense) income,
net (209) 52 (73) 718
--------- --------- --------- ---------

Income before income tax
provision 6,459 4,917 23,744 30,689
Income tax provision 1,614 1,186 7,578 9,689
--------- --------- --------- ---------
Net income $ 4,845 $ 3,731 $ 16,166 $ 21,000
========= ========= ========= =========

Net income per common
share:
Basic $ 0.17 $ 0.13 $ 0.56 $ 0.72
Diluted $ 0.17 $ 0.13 $ 0.55 $ 0.70

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

Basic 28,365 28,591 28,843 29,118
Diluted 28,628 29,457 29,609 29,818

Operating Data:
Locations open at end of
period 231 205 231 205
Company-owned full service
restaurants open at end
of period 183 166 183 166
Average weekly company-
owned full service
restaurant sales $ 66,438 $ 65,858 $ 67,461 $ 65,406
18-month comparable
company-owned restaurant
sales increase 1.8% 6.9% 3.8% 5.9%

---------------------------------------------------------------------
(1) Labor expense for the three and twelve months ended December 30,
2007 includes approximately $218,000 and $849,000 of stock-based
compensation, respectively, compared to $210,000 and $917,000 in the
three and twelve months ended December 31, 2006, respectively.
(2) General and administrative expense for the three and twelve
months ended December 30, 2007 includes approximately $985,000 and
$5.8 million of stock-based compensation, respectively, compared to
$1.1 million and $5.0 million in the three and twelve months ended
December 31, 2006, respectively.
(3) Includes effect of 3-for-2 stock split effective June 19, 2007.


Twelve Months
Quarter Ended Ended
December December December December
30, 31, 30, 31,
2007 2006 2007 2006
-------- -------- -------- --------

Statement of Income
Percentages (1):

Revenues:
Restaurant sales 98.3% 98.6% 98.6% 98.8%
Royalties from Kraft
licensing agreement 1.0% 0.9% 0.8% 0.7%
Domestic franchise revenues 0.4% 0.3% 0.4% 0.4%
International franchise
revenues 0.3% 0.2% 0.2% 0.1%
-------- -------- -------- --------
Total revenues 100.0% 100.0% 100.0% 100.0%

Costs and expenses:
Food, beverage and paper
supplies 25.0% 24.8% 24.7% 24.8%
Labor (2) 36.3% 36.2% 36.6% 36.5%
Direct operating and
occupancy 21.0% 20.4% 19.9% 19.8%
-------- -------- -------- --------
Cost of sales 82.3% 81.4% 81.2% 81.1%

General and administrative
(3) 7.1% 7.3% 7.6% 7.8%
Depreciation and
amortization 6.2% 5.5% 5.9% 5.3%
Pre-opening costs 1.6% 3.0% 1.1% 1.3%
Store closure costs 0.0% 0.5% 1.5% 0.1%

-------- -------- -------- --------
Total costs and expenses 95.9% 96.7% 96.2% 94.6%

Operating income 4.1% 3.3% 3.8% 5.4%

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

Income before income tax
provision 4.0% 3.4% 3.8% 5.5%
Income tax provision 1.0% 0.8% 1.2% 1.7%
-------- -------- -------- --------
Net income 3.0% 2.6% 2.6% 3.8%
======== ======== ======== ========

(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 20 and 10 basis points of
stock-based compensation in the three and twelve months ended
December 30, 2007, respectively, compared to 20 basis points in each
of the three and twelve months ended December 31, 2006.
(3) General and administrative percentage includes approximately 60
and 90 basis points of stock-based compensation in the three and
twelve months ended December 30, 2007, respectively, compared to 80
and 90 basis points in the three and twelve months ended December
31, 2006, respectively.

Selected Consolidated Balance Sheet Information
(Dollars in thousands)


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

Cash and cash equivalents $ 10,795 $ 8,187
Total assets 366,211 310,513
Total debt 21,000 -
Stockholders' equity 219,519 208,343

California Pizza Kitchen, Inc.
Units Summary


Total Total
Units at Units at
--------- ---------
Fourth Quarter 2007 September December
30, 2007 Opened Acquired Closed 30, 2007
------------------------- --------- ------- -------- ------ ---------
Company-owned full
service domestic 176 7 - - 183
Company-owned ASAP
domestic 10 - - 1 9
Company-owned LA Food
Show 1 - - - 1
Franchised domestic 17 - - - 17
Franchised international 16 2 - - 18
Sports and entertainment
venues 3 - - - 3
-------------------------------------------
Total 223 9 - 1 231
===========================================


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

SOURCE: California Pizza Kitchen, Inc.

###

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