Exhibit 99.1
California Pizza Kitchen Announces Financial Results For The Fourth Quarter And
Fiscal Year Ended January 2, 2005 And Reiterates Comfort with 2005 Guidance of
$1.11 to $1.13
LOS ANGELES--(BUSINESS WIRE)--Feb. 3, 2005--California Pizza
Kitchen, Inc. (Nasdaq:CPKI) today reported revenues and earnings for
the fourth quarter and fiscal year ended January 2, 2005. Highlights
for the fourth quarter of 2004 relative to the same quarter last year
were as follows:
-- Total revenues up approximately 19.9% to $115.2 million
-- Comparable store sales increase of 7.7% on an 18 month basis
and 6.3% on a 12 month basis
-- Net income of $6.2 million or $0.32 per fully diluted share
compared to net income of $4.4 million or $0.23 per fully
diluted share in the same quarter last year
Highlights for the 2004 53-week fiscal year relative to the 2003
52-week fiscal year were as follows:
-- Total revenues up approximately 17.4% to $422.5 million
-- Comparable store sales increase of 8.0% on an 18 month basis
and 6.9% on a 12 month basis
-- Net income of $17.7 million or $0.92 per fully diluted share
compared to net income of $8.0 million or $0.42 per fully
diluted share for the prior period
-- Net income before legal settlement reserve, accelerated
depreciation, store closure costs, severance and impairment
charges of $20.7 million or $1.07 per fully diluted share
compared to $0.89 in the prior period
The Company did not record any non-operating charges during the
fourth quarter of 2004 compared to the impairment and severance
charges of $2.1 million during the fourth quarter of 2003. Fiscal year
2004 included $1.3 million in legal settlement reserve, $1.1 million
in accelerated depreciation and $2.7 million in store closure costs
compared to $14.7 million and $1.2 million related to impairment and
severance charges, respectively, in fiscal year 2003.
Rick Rosenfield and Larry Flax, co-CEOs of California Pizza
Kitchen, Inc., stated "We ended 2004 on very solid ground, with
revenue and earnings exceeding our most recent guidance. Our continued
focus on business and operational improvements, together with the
introduction of new menu items, enabled us to leverage performance at
all levels and has strengthened CPK for the long term."
Fourth quarter average weekly sales for the Company's 138 full
service restaurants increased 7.3% to $58,499 compared to $54,496 for
the same quarter last year. Average weekly sales for the three months
ended January 2, 2005 for the 18 and 22 restaurants in the Classes of
2002 and 2003, respectively, were $52,060 and $40,801, compared to
$47,148 and $42,805 in the fourth quarter of 2003, respectively.
Average weekly sales for the three months ended January 2, 2005 for
the 4 restaurants in the Class of 2004 was $57,885.
Rosenfield and Flax concluded, "Our corporate culture has been
further invigorated by our alignment of strategic goals, enhanced
financial performance-based incentives and increased focus on
accountability. This emphasis allowed us to deliver operational
momentum and measured improvement throughout 2004, and we fully intend
the same discipline to impact our development pipeline and
new-restaurant openings as we focus on 2005. We feel confident we have
the right team and strategy in place and believe that CPK has never
been better positioned in the marketplace."
During the fourth quarter of 2004 the Company opened two new
restaurants in Orem, Utah and Rancho Cucamonga, California and
completed a "new prototype remodel" on one existing restaurant.
The Company also reiterated guidance for 2005 based on the
following assumptions:
-- Restaurant revenue growth of approximately 9.0% to 10.0%
-- Eighteen month comparable sales growth of approximately 3.5%
to 4.5%
-- Eight to ten new units to be opened in the first half of the
year, with no less than 15 new full service restaurants for
2005
-- No less than two new ASAP restaurants in 2005, one opening in
the second quarter and one in the fourth quarter
-- Earnings per fully diluted share of $1.11 to $1.13
For the first quarter of 2005, the Company expects to add a
minimum of five new restaurants and remodel one restaurant. The
pre-opening costs associated with new restaurant openings are expected
to be no less than $1.1 million in the first quarter compared to
$64,000 in the same quarter last year. These activities, together with
anticipated 18 month comparable sales growth of 5.5% to 6.5%, are
expected to result in earnings per fully diluted share in the range of
$0.18 to $0.19.
California Pizza Kitchen, Inc., founded in 1985, is a leading
casual dining chain in the premium pizza segment. 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, appetizers, soups and
sandwiches. The average guest check is approximately $11.96. The chain
operates, licenses or franchises 172 restaurants as of February 3,
2005, of which 142 are company-owned and 30 operate under franchise or
license agreements. The Company also has a licensing arrangement 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 press release includes certain "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of
1995. Investors are cautioned that forward-looking statements are not
guarantees of future performance and, therefore, undue reliance should
not be placed on them. Forward-looking statements can be affected by
inaccurate assumptions or by known or unknown risks and uncertainties.
Our actual results may 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 the execution of our expansion strategy, the continued
availability of qualified employees, the maintenance of reasonable
food and supply costs and numerous other matters discussed in the
Company's filings with the Securities and Exchange Commission.
California Pizza Kitchen, Inc. 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 Year Ended
Jan. 2, Dec. 28, Jan. 2, Dec. 28,
2005 2003 2005 2003
--------- -------- --------- ---------
Statement of Operations Data
Revenues:
Restaurant sales $114,027 $94,879 $418,799 $356,260
Franchise and other revenues 1,126 1,190 3,653 3,627
--------- -------- --------- ---------
Total revenues 115,153 96,069 422,452 359,887
Costs and expenses:
Cost of sales 28,572 23,884 103,813 87,806
Labor 40,795 34,650 152,949 129,702
Direct operating and occupancy 23,140 20,084 87,874 73,949
--------- -------- --------- ---------
Total restaurant operating
costs 92,507 78,618 344,636 291,457
General and administrative 8,195 5,755 28,097 21,488
Depreciation and amortization 5,145 4,491 20,277 17,578
Pre-opening costs 450 970 714 4,019
Severance charge - 401 - 1,221
Loss on impairment of property
and
equipment - 1,746 - 14,725
Store closure costs - - 2,700 -
Legal settlement reserve - - 1,333 -
--------- -------- --------- ---------
Operating income 8,856 4,088 24,695 9,399
Other income (expense):
Interest income 197 73 571 317
Equity in net loss of
unconsolidated
joint venture (34) (74) (143) (349)
--------- -------- --------- ---------
Total other income (expense) 163 (1) 428 (32)
--------- -------- --------- ---------
Income before income tax
provision 9,019 4,087 25,123 9,367
Income tax provision (benefit) 2,793 (329) 7,396 1,411
--------- -------- --------- ---------
Net income $6,226 $4,416 $17,727 $7,956
========= ======== ========= =========
Net income per common share:
Basic $0.32 $0.23 $0.93 $0.42
Diluted $0.32 $0.23 $0.92 $0.42
Shares used in computing net
income per common share (in
thousands):
Basic 19,168 18,931 19,125 18,867
Diluted 19,435 19,019 19,267 19,027
Operating Data:
Restaurants open at end of
period 171 168 171 168
Company-owned restaurants open
at
end of period 141 137 141 137
Average weekly company-owned
full
service restaurant sales $58,499 $54,496 $57,509 $54,896
12 month comparable company-
owned
restaurant sales increase 6.3% 2.8% 6.9% 2.5%
18 month comparable company-
owned
restaurant sales increase 7.7% 4.0% 8.0% 3.4%
Quarter Ended Year Ended
Jan. 2, Dec. 28, Jan. 2, Dec.28,
2005 2003 2005 2003
------ ------ ------ ------
Statement of Operations Percentages (1)
Revenues:
Restaurant sales 99.0 % 98.8 % 99.1 % 99.0 %
Franchise and other revenues 1.0 1.2 0.9 1.0
------ ------ ------ ------
Total revenues 100.0 100.0 100.0 100.0
Costs and expenses:
Cost of sales 25.1 25.2 24.8 24.6
Labor 35.8 36.5 36.5 36.4
Direct operating and occupancy 20.3 21.2 21.0 20.8
------ ------ ------ ------
Total restaurant operating costs 81.1 82.9 82.3 81.8
General and administrative 7.1 6.0 6.7 6.0
Depreciation and amortization 4.5 4.7 4.8 4.9
Pre-opening costs 0.4 1.0 0.2 1.1
Severance charge - 0.4 - 0.3
Loss on impairment of property and
equipment - 1.8 - 4.1
Store closure costs - - 0.6 -
Legal settlement reserve - - 0.3 -
------ ------ ------ ------
Operating income 7.7 4.3 5.8 2.6
Other income (expense):
Interest income 0.2 0.1 0.1 0.1
Equity in net loss of unconsolidated
joint venture - (0.1) - (0.1)
------ ------ ------ ------
Total other income (expense) 0.1 - 0.1 -
------ ------ ------ ------
Income before income tax provision 7.8 4.3 5.9 2.6
Income tax provision (benefit) 2.4 (0.3) 1.8 0.4
------ ------ ------ ------
Net income 5.4 % 4.6 % 4.2 % 2.2 %
====== ====== ====== ======
(1) Percentages are expressed as a percentage of total revenues,
except for restaurant costs and expenses, which are expressed as a
percentage of restaurant sales.
Selected Consolidated Balance Sheet Information
(Dollars in thousands)
Selected Consolidated Balance Sheet Information
January 2, December 28,
2005 2003
--------- ----------
Cash and cash equivalents $17,719 $15,877
Marketable securities 26,415 18,904
Total assets 211,489 185,585
Shareholders' equity 168,850 146,113
California Pizza Kitchen, Inc.
Units Summary
Total Units at Total Units at
Third Quarter 2004 Sep 26, 2004 Opened Closed Jan. 2, 2005
---------------------------------------- ------ ------ ------------
Company owned full service
domestic 136 2 1(a) 137
Company owned ASAP domestic 4 - - 4
Franchised domestic 20 - - 20
Franchised international 9 1 - 10
-------------- ----- ------ -------------
Total 169 3 1 171
-------------- ----- ------ -------------
(a) Closed last day of fiscal year, January 2, 2005
To aid in a full understanding of our performance, we provide full
service restaurant class operating data for the 94 stores opened prior
to 2002 (Pre-2002), the 18 stores opened in 2002 (Class of 2002), the
22 stores opened in 2003 (Class of 2003) and the four stores opened in
2004 (Class of 2004).
California Pizza Kitchen, Inc.
Supplemental Information
(,000)
Weekly (,000) Restaurant Restaurant
Fourth Quarter # of Sales Restaurant Operating Operating
2004 Stores Average Sales Margin (1) Margin % (2)
---------------------------------------------------------------------
Pre-2002
Q4, 2004 94 63,917 83,741 17,778 21.2%
Q4, 2003 94 58,341 71,818 14,278 19.9%
Year over year change 9.6% 16.6% 24.5% 130 bps
Q3, 2004 94 64,731 78,436 15,864 20.2%
Class of 2002
Q4, 2004 18 52,060 13,119 2,028 15.5%
Q4, 2003 18 47,148 11,033 1,334 12.1%
Year over year change 10.4% 18.9% 52.0% 340 bps
Q3, 2004 18 50,899 11,896 1,473 12.4%
Class of 2003
Q4, 2004 22 40,801 12,555 1,138 9.1%
Q4, 2003 22 42,805 11,038 560 5.1%
Year over year change -4.7% 13.7% 103.2% 400 bps
Q3, 2004 22 43,120 12,332 1,001 8.1%
Class of 2004
Q4, 2004 4 57,885 2,911 351 12.1%
Q3, 2004 2 54,462 1,136 22 1.9%
Total full
service
Q4, 2004 138 58,499 112,326 21,295 19.0%
Q4, 2003 134 54,496 93,888 16,172 17.2%
Year over year change 7.3% 19.6% 31.7% 180 bps
Q3, 2004 136 59,237 103,800 18,360 17.7%
(,000)
Weekly (,000) Restaurant Restaurant
Fiscal Year # of Sales Restaurant Operating Operating
2004 Stores Average Sales Margin Margin %
---------------------------------------------------------------------
Pre-2002
YTD, 2004 94 62,983 312,703 63,721 20.4%
YTD, 2003 94 57,644 286,780 58,520 20.4%
Year over year change 9.3% 9.0% 8.9% - bps
Class of 2002
YTD, 2004 18 49,721 47,420 6,163 13.0%
YTD, 2003 18 46,696 43,707 5,053 11.6%
Year over year change 6.5% 8.5% 22.0% 140 bps
Class of 2003
YTD, 2004 22 40,744 47,496 3,101 6.5%
YTD, 2003 22 43,274 22,330 1,053 4.7%
Year over year change -5.8% 112.7% 194.5% 180 bps
Class of 2004
YTD, 2004 4 55,387 5,380 601 11.2%
Total full
service
YTD, 2004 138 57,509 412,999 73,586 17.8%
YTD, 2003 134 54,896 352,817 64,626 18.3%
Year over year change 4.8% 17.1% 13.9% (50)bps
(1) Restaurant operating margin is defined as restaurant sales
less restaurant operating costs.
(2) Restaurant operating margin percentages are expressed as a
percentage of restaurant sales.
The following reconciliation of net income is provided to assist
the reader with understanding the financial impact of the accelerated
depreciation, severance charge, store closure costs, impairment
charges and legal settlement reserve during the quarter and year
(unaudited, in thousands, except per share data):
Quarter Ended Year Ended
Jan. 2, Dec. 28, Jan. 2, Dec. 28,
2005 2003 2005 2003
------- ------- -------- --------
Net income as reported $6,226 $4,416 $17,727 $7,956
Accelerated depreciation - - 1,089 -
Severance charge - 401 - 1,221
Store closure costs - - 2,700 -
Impairment of property, plant and
equipment - 1,746 - 14,725
Legal settlement reserve - - 1,333 -
Income tax benefit - (2,387) (2,182) (6,942)
------- ------- -------- --------
Net income excluding severance,
accelerated depreciation, store
closures and impairment charges $6,226 $4,176 $20,667 $16,960
======= ======= ======== ========
Basic net income per common share:
Net income $0.32 $0.23 $0.93 $0.42
Accelerated depreciation - - 0.06 -
Severance charge - 0.02 - 0.07
Store closure costs - - 0.14 -
Impairment of property, plant and
equipment - 0.09 - 0.78
Legal settlement reserve - - 0.07 -
Income tax benefit - (0.12) (0.12) (0.37)
------- ------- -------- --------
Basic net income excluding
severance, accelerated depreciation,
store closures and impairment
charges, per common share $0.32 $0.22 $1.08 $0.90
======= ======= ======== ========
Diluted net income per common
share:
Net income $0.32 $0.23 $0.92 $0.42
Accelerated depreciation - - 0.06 -
Severance charge - 0.02 - 0.06
Store closure costs - - 0.14 -
Impairment of property, plant and
equipment - 0.09 - 0.77
Legal settlement reserve - - 0.07 -
Income tax benefit - (0.12) (0.12) (0.36)
------- ------- -------- --------
Diluted net income excluding
severance, accelerated
depreciation, store closures
and impairment charges, per
common share $0.32 $0.22 $1.07 $0.89
======= ======= ======== ========
CONTACT: California Pizza Kitchen
Sarah Grover (Media) or Sue Collyns (Investors)
310-342-5000